OIL oil and gas bosses breathed a sigh of relief yesterday after the Chancellor of the finally committed to doing something to help an industry hit hard. Philip Hammond announced plans to look at the tax regime, and how that could be changed to help firms sell off fields in the North Sea to smaller companies who could then “maximise the exploitation of remaining reserves”.

The move comes after pressure from trade body UK Oil & Gas and the Scottish Government to do more, and to look at how best to spread the cost of decommissioning between industry and government.

Callum McCaig, the SNP’s Westminster energy spokesman, accused the Treasury of moving at a glacial pace. Under current rules, oil and gas firms can apply for tax relief on the cost of decommissioning. Plugging wells and dismantling the platforms is a complicated and expensive process.

The size of the investment allowance depends on how much tax the operator has paid during the life of the asset being decommissioned.

Industry leaders say this will put off potential buyers because anyone taking a field over to “exploit” cannot claim relief on taxes paid by the previous owner.

An estimated 10 to 20 billion barrels of recoverable oil remains in the North Sea, but getting at it is costly, and for operators to be interested, the government needs to allow the industry to be competitive. Forecasts for oil and gas revenues between 2017/18 and 2021/22 were revised down in the Budget by £2.7 billion compared to the Autumn statement.

Deirdre Michie, chief executive of Oil & Gas UK, was positive about much in the Budget: “We welcome the Chancellor’s response to our call to resolve the tax issues slowing down asset transfers and his recognition of the need to maximise recovery of remaining UK oil and gas reserves.

“The industry is slowly emerging from a very challenging period and it is crucial that the North Sea is successful in attracting investment in the near term to sustain production and stimulate new activity.”

McCaig, the MP for Aberdeen South said: “While any action is welcome, the Chancellor has moved at a glacial pace. The fact the Chancellor is just getting around to this now shows an alarming lack of urgency and a gives the industry a clear sense of where this Tory Government’s priorities lie.

“Where was the Chancellor when thousands of oil and gas workers were facing redundancy, and why didn’t the Tories listen to repeated and sustained calls from the SNP throughout this time for a more stable, competitive fiscal regime?”