Meeting of the Parliament 20 January 2016
The fundamental problem with Mr Harvie’s argument is that he assumes that the only use to which we put hydrocarbons is to burn them. We put hydrocarbons to many other uses. If he visits the Ineos plant in Grangemouth, he will see that they are used as the raw material in the production of a whole range of products. There is hardly anything that we use in the modern world that does not include some element of hydrocarbons as a source material. Therefore, we have an industry that produces material not just to burn, but to provide essential components in virtually every area of modern life.
Not unlike other members of the Economy, Energy and Tourism Committee, I am well aware of the decline in the sector, with some 65,000 jobs thought to have been lost so far and new job losses being announced almost on a weekly basis. However, we also know that the industry is cyclical in nature. If we look back at changes in the oil price over the past 40 years, we see that prices go up and down. Although none of us can accurately predict the future, we can expect that there will be a recovery sooner or later and that there will be an industry to support in the coming decades. Our role today is to ensure that the industry gets the support that it needs in the interim.
There are three areas where action is required. The first is in driving out cost inefficiencies, on which the industry is already taking action. Undoubtedly the low oil price is a driver in making that happen more quickly than otherwise would be the case.
The second is relates to tax. The industry was very pleased with the changes that were brought in by the chancellor in the budget last year. Although there is always room for more changes to be considered—I know that the chancellor will be considering the issue in the run-up to this year’s budget—the evidence suggests that further tax changes are not high on the list of industry demands at the present time.