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The North Sea oil and gas industry must adopt a "more sophisticated approach" to arguing the case against tax increases, according to former UK Energy Minister Brian Wilson

Speaking in Aberdeen yesterday, the high-profile industry figure said he expected "concessions around the edges" on George Osborne's budget tax hike.

However, he warned that the industry needed to make "an ongoing case which demonstrates that crude tax increases actually reduce revenues rather than increase them, in anything other than the shortest of terms".

Mr Wilson said: "Rhetoric is not going to win this argument. The industry needs to demonstrate to the Treasury the downside of increased flat-rate taxation and also show that there can be a more sophisticated approach, depending on the characteristics of individual fields, which allows Government to meet their objectives while not damaging North Sea investment."

He was guest speaker at an ‘Energising the Economy’ boardroom lunch hosted by Brewin Dolphin, industry-leading specialists in investment planning and wealth management. The round-table event included business leaders from Senergy, AMEC, Hydrus Group and Leddingham Chalmers as well as industry bodies Subsea UK and OPITO.

Mr Wilson suggested that work done by Professor Alex Kemp of Aberdeen University could be used as "a template for that debate: "Three major tax increases in a decade have led to a huge loss of trust between industry and Government. Some fresh thinking is needed to prevent this becoming a permanent stand-off".

Mr Wilson also condemned the proposed helicopter tax as "another unhelpful provocation" to the industry. He said it was a matter of common sense that airlifts between shore and offshore workplace were not avoidable passenger journies, whereas APD is supposed to be an environmental tax.

On the day before All-Energy, the former energy minister also said that Scotland needs to take a ‘reality check’ on its current energy landscape: “Renewables are important and I agree that we should be ambitious. But now the elections are out the way, there has to be a reality check and the focus on renewables should not be at the expense of other technologies. Realistically, new nuclear now looks like a non-starter in Scotland. So that leaves CCS as the other major objective to pursue.

“Targets are easier to set than to meet. The reality is that renewables still equates almost entirely to onshore wind plus, in Scotland, hydro which has been around for a long time. There is not a lot of evidence that anything else will contribute much by 2020 so the rhetoric has to be balanced by reality.”

He added: “Aberdeen is firmly established as the UK and European oil and gas capital. That has given it a huge head start in widening the role to become Energy capital. The potential for oil and gas experience and technology to be transferred into renewables has been talked about for a long time, but has been slow to develop. Maybe it is now happening on a bigger scale and that will help to keep Aberdeen in the forefront of the energy sector.”