Britain's Conservative party has been in government since 1979.
The Labour party, the chief opposition, has changed dramatically in the meantime. Of late, Labour has been consistently ahead of Conservative in opinion polls.
Until the early 1980s, Labour was a socialist party, disliked by industry because of its policy of market intervention. So what will happen to the oil industry if Labour wins the next general election, expected in 1997?
Labour's detractors have deemed its recent policies to be watered down Conservative ideas with a more humane flavor. A sample of Labour thinking on oil came at Aberdeen's recent Offshore Europe exhibition.
Martin O'Neill, Labour's front bench spokesman on energy, told the conference the party has no plans to change the current U.K. petroleum industry fiscal regime.
"It was the Labour governments of 1974-79 which laid the foundations for the British North Sea oil industry," O'Neill said. "They only got one thing wrong: They lost the 1979 general election and provided the incoming Tory government with the means by which they could act out their monetarist fantasies in the economic adventure playground that was Thatcherism."
Tax position
O'Neill said structural change can be disruptive to business and is best avoided, and oil taxation must take account of oil prices.O'Neill said, "Two of the principles governing Labour's approach to tax are that it should be equitable and it should promote long term productive investment.
"In the context of taxation of North Sea oil, this means equity both to the public and the industry and therefore taxing a fair share of the economic rent without affecting companies' decisions concerning development and investment."
Tilted field
O'Neill said Labour has definite plans for change in two other aspects of the U.K.'s offshore industry: award of fabrication and supply contracts and conditions for workers.He said, "There have been several examples recently of U.K. firms failing to obtain contracts that they should have got. We need to look carefully at the way our European partners are supporting their fabrication yards and press for a level playing field at the highest level if necessary.
"Labour will want to look again at the funding packages a number of our European partners seem capable of assembling. We want to see how the slope of the playing field can be adjusted."
During the reign of Margaret Thatcher, trade unions, which wielded such a strong influence on the way Britain was run during the 1970s, had much of their power removed through legislation.
Some U.K. oil companies no longer recognize trade unions and carry out their wage negotiations more or less on an individual basis. That could change if Labour regains power.
O'Neill said, "Labour firmly believes offshore union recognition is essential, not least because cooperation will be needed to resolve issues currently being debated at a European level. Norwegian companies work side by side with unions perfectly happily. We see no reason why the same should not apply in the U.K." Copyright 1995 Oil & Gas Journal. All Rights Reserved.
