Oil Companies’ Tax Breaks: Why They Do Not Translate To Happy
Oil & Gas Workers
North Sea oil producers have much to celebrate, following a cut
in taxes worth Â£1.3 billion. As a response to industry pleas and
the plunge in crude prices, UK chancellor George Osborne completely
rolled back a tax hike he imposed in 2011.
This part of a rescue package was welcomed by UK operators that
have been affected by the increasing tax burden. Now, they can
finally see a reversal in the North Sea’s long-term decline.
While the oil industry benefited from tax breaks, offshore
workers find little reason to join the revelry. As oil prices
plunged at its lowest in the last 5 years, the supply continued to
increase, while the demand continued to drop. This led to consumer
benefits, but major losses in the energy industries. Despite the
tax breaks, job cuts are still foreseen to continue, which means
oil and gas workers are at risk of losing their jobs.
The North Sea has greatly suffered from plunging oil prices and
hundreds of job cuts have already been announced. In fact, it was
feared that investments would also drop, causing oil fields to be
decommissioned faster than anyone predicted.
According to some offshore workers in Aberdeen, they would have
to work an extra week for the same pay. This coincided with what
Jake Molloy, regional organizer at the RMT Union, and who
represents over 5000 North Sea workers, said. “Rig workers are
being asked to work more hours for the same pay across the
industry. Mr Osborne put a bundle of cash in big oil shareholder’s
pockets…it’s a pretty disappointing day for the guys at the sharp
Industry executives have informed Molloy to “expect more pay
cuts and redundancies”. The oil services company Wood Group has
also announced its intent to cut jobs. Its owner, Sir Ian Wood, has
forecast that, in the next 18 months, up to 10,000 jobs could be
This may contradict consultancy EY’s report last year that
nearly 10 percent of UK offshore oil and gas jobs will be lost over
the next five years, but the fact remains that workers have plenty
of reasons to worry about.
George Baxter, a 65 year old oil worker, said that if he were
still starting out, he would not choose a career in oil. “Say I was
a young 20-year-old, I’d be thinking of an alternative in the
energy sector. I think it has got to be windfarms, things like
that, or fracking.”
As oil prices affect global company, problems in oil and gas
jobs are also happening to the rest of the world. Thousands of
energy workers in the U.S. have already been laid off, and from
jobs that paid healthy wages. Due to depressed oil and natural gas
prices, workers in Wyoming have also become redundant.
The situation continues to threaten the livelihoods of people
that have been enjoying a previously booming oil and gas industry.
Businesses are also at risk of closing since people who lose their
jobs would rather not spend their money, as much as possible.
While consumers celebrate in the drop of oil prices, and
companies revel in the tax breaks, more oil and gas workers are now
unemployed. When this happens, they also lose access to the health
benefits and other incentives that companies provide.
As one laid-off employee said, consumers don’t realize what is
really going on and fails to see the bigger picture.