Yes. I am coming on to that point now. I have spoken about carbon capture and storage many times and I will continue to do so. We fully support that. However, there is a requirement, which the shadow Secretary of State talked about, to have the review and the strategy in place before it can be imposed as one of the principal objectives of the OGA. If we dilute the core functions of the OGA, we distract from that attention. We should remember that the OGA and the Wood review come from a time when oil was over $100 a barrel. Those were the circumstances required to support the industry, which was going through difficult times, at a very high oil price. Those pressures are much higher today. I agree that we need to allow the OGA to bed in. Perhaps in future, once there is a strategy in place and it can be demonstrated that it has the support of the Government from both a financial and strategic point of view, that might be something we want the OGA to do. At the moment, however, I think that is premature.
As I said, the Wood review comes from a time, two years’ ago, when oil was $110 or $115 a barrel. It is now $29 a barrel. The game has changed significantly. We have to accept that, while this is a vital step in supporting a vital industry, it will not be enough in and of itself. We need fiscal changes to the tax regime, particularly on incentives, and to review the tax level as a whole.
Immediately following the autumn statement the Oil & Gas UK economics director, Mike Tholan, said:
“Since the last Budget, the oil price has declined further, and we must continue to do as much as we can to help boost confidence and encourage investment in the UK Continental Shelf. If the oil price continues to be lower for longer, there is little doubt that alongside industry’s own concerted effort to improve its efficiency, we will need to work with Treasury on additional measures, including revisiting the current headline tax rate—consistent with the government’s commitment to the sector’s tax rate falling over time.”