EDINBURGH, Scotland, March 16 (UPI) -- The Scottish government is calling for a fundamental overhaul in the way oil and natural gas is taxed, the country's deputy first minister said.
Deputy Minister John Swinney said in a letter to British Chancellor George Osborne that the government in London has a chance to "right a wrong" by advancing a more transparent fiscal regime over the regional oil and gas sector.
"The underlying problem is that successive U.K. governments have placed too much emphasis on maximizing the short-term tax take from the industry," the Scottish minister said Sunday. "This has negatively impacted on business confidence, and undermines the industry's need for a stable long term fiscal environment on which to base their investment decisions."
Scotland pegged its future during a bid for independence on revenue from oil and gas reserves in the North Sea. The bid failed last year and the government in January said the region's energy sector needs a predictable set of governing policies in order to thrive.
Scottish Energy Minister Fergus Ewing said reforms could stimulate investments by as much as $55 billion and support as many as 26,000 jobs.
The British government is expected to announce tax policies for North Sea operations later this week.
A February report from North Sea regulator Oil and Gas Authority spelled out industry guidelines to revitalize the region's offshore energy sector. The report said that, while the country remains a "substantial" oil and gas producer, companies are scaling back their investments in both infrastructure and exploration.
"The oil and gas industry makes a valuable contribution to both the Scottish and U.K. economies and public finances," the Scottish minister said. "With the correct fiscal and regulatory framework it will continue to be a significant source of employment and economic activity for decades to come."