Bailout announced for the oil industry

£500m for the Scottish oil industry

The UK and Scottish government’s today announced funding of more than £500m in order to support the ailing oil industry. The money will be used to improve rail links, upgrading the harbour, fund energy research and broadband services. It is clear that the UK government needs to offer additional support following the collapse of the oil industry. What is also clear is that governments have to plan better for the future during relatively healthy times. When industries that are inevitably ‘temporary’ and volatile industries are cashing in, the government needs to maximise tax revenues and use such income to boost regional development more generally.

A link to the story can be found here.

The following is an extract from the Guardian:

“The UK and Scottish governments are to pour more than £500m of extra investment into Aberdeen to help it cope with the job losses and economic impact of the collapse in global oil prices.

David Cameron visited Aberdeen Thursday afternoon after ministers from both governments signed a “city deal” agreement to spend £250m on energy research, infrastructure and upgrading thecity’s harbour.

Scotland’s ministers are to top up that cash with a further £254m to improve rail links, roads, housing and broadband services in the Aberdeen area, which has lost thousands of jobs and seen a steep fall in orders after the oil price slumped to less than $30 a barrel.

Fending off accusations that the £250m fund was too small, Cameron said it was “real cash behind a vital industry of Scotland and for Britain”, which established the UK government’s commitment to shore it up.

“Obviously it’s a difficult time for the oil industry because of the oil price decline, but what this shows is that the British government is 100% behind this industry, behind Aberdeen, behind Scotland in making the best of the opportunities we have,” he said.”

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