22/03/2012 Newsnight Scotland


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will do. Thank you for joining us Tonight on Newsnight Scotland, deep


water drilling for oil off the coast of Shetland is given the go-


ahead. BP says that safety is its absolute priority, but given the


company's involvement in the Deepwater Horizon disaster two


years ago, should the rest of us take that seriously?


There has been an outcry at changes to pensioner taxes in the Budget.


Why shouldn't the elderly help to pay the costs of austerity?


No sooner has the Chancellor announced billions to support new


investment in oil extraction West of Shetland, then his Government


gives the go-ahead for a massive new deep sea oil well West of


Shetland. The energy minister has told BP that they can go ahead and


drill in water that is 1300 metres deep, which is a similar depth to


the well in the Gulf of Mexico. Media coverage of the oil industry


over the years has tended to be negative, because apart from the


danger of accidents on oil rigs, the fear of pollution has been a


constant issue. In the 60s, this disaster of the South coast of


England killed thousands of seabirds. The Epsom bar these oil


spill Row and part of Alaska's coastline. -- ruined part of


Alaska's coastline. An explosion in the Gulf of Mexico shattered BP's


reputation in America two years ago. The Government was at pains to


point out how carefully they had scrutinised their plans and


proposals for dealing with an emergency. Friends of the Earth


said that the proposal was extremely alarming and that any


Government money should be going into renewable energy. I am joined


by David Hunter from an energy group. Apart from the controversy,


can you explain why they want to do deep sea oil drilling? There are


oil fields already that have not use this technology. I think they


are. They have been around for 20 years. It is about extending the


life of the UK continental shelf in the North Sea and this is the last


frontier, if you like, of new exploration. Many people will be


worried about this because of what happened two years ago. Do you


think people are right to be worried? I think people are


absolutely right to be concerned about what happened. It was a human


and environmental tragedy. People have to look at the balance of risk


and the record in the UK continental shelf in the North Sea


has been pretty good over the years, when you consider the amount of oil


that has been extracted. BP as a company has learnt lots of lessons


in particular. This has been analysed to the nth degree, so we


can have a reasonable degree of confidence. Sure, but I am not an


expert on conditions in the South of Mexico, but I would imagine that


the sort of weather conditions that you get in the Atlantic off


Shetland are considerably more severe, apart from hurricanes in


the Gulf of Mexico obviously. It is not clear why we should be terribly


relaxed about this, no matter what they have done. There is always


going to be a risk. There is always going to be a risk. If you look at


who is best placed to do it, the Scottish industries probably have


the global expertise and the skills to do that. There are risks. It is


about throwing the technology and understanding that it to mitigate


the risks. Do you know what they will do now that they were not


doing when this disaster happened a couple of years ago? It has been


reviewed by BP and governments and the Treasury select committee. They


looked at this at the start of last year and they felt that the


existing regulatory arrangements that were in place were robust and


lessons had to be learnt. For example, the real trigger for the


disaster in the Gulf of Mexico alter that he was the blare out


prevent and the blind shear Ram on it. -- ultimately was. It is simple


things like don't let the batteries run out. That could have stopped


the tragedy from happening. having back-up parts, was an that


one of the issues? They could not get something quickly enough to put


in its place? When it had failed, there were significant difficulties.


They need to double up and improve the fail-safe. Assuming this goes


well, what effect could this have on UK oil reserves if deep sea


drilling off the West of Shetland takes place? Perhaps it could


happen elsewhere as well? Deep Sea drilling is also an area of


expansion. There are concerns about the stability of the regime over


decommissioning costs. Extracting more life out of existing oil


fields will be important. Some people believe that in money terms


there is slightly more to be extracted from the North Sea than


we have up until now. Deep Sea drilling is an important part of


that? It is, absolutely. Is it just to the West of Shetland? Are there


other areas? Presumably the North Sea is too shallow. Could you do it


elsewhere? In terms of the UK, the West of Shetland is the principal


area. Other developments that we are likely to see is getting


residual oil out of other existing fields. Presumably this technology


is very expensive and it must depend on oil prices staying at


roughly, well, what are they? $120 a barrel. Something like that. If


that falls, do you not go ahead? These investment decisions are


long-term decisions, so once they are in, I guess they are in, to an


extent. That might stop new investments. Saudi Arabia balances


its Budget on $90, so we can expect high prices for some time to come.


Thank you for joining us. You cannae shove your granny aff a


front page. There was universal media condemnation today for what


the Chancellor probably thought was a neat sleight of hand when he both


froze and withdrew tax allowances for the over 65s. After all he was


putting up the state pension by over a fiver. Ever since, he's been


harangued by Britain's elderly like a mugger chased by a handbag-


wielding granny. But, as Derek Bateman reports, that doesn't make


If you were born in the 1950s you were part of the post-war birth


boom in the Western world. Improving health, burgeoning


economies and optimism led to decades of feel-good living,


including pensions. But now it is the age of austerity. They have to


be supported by those still working and his own wealth is diminishing


and whose pensions will be somewhere between poor and... What


pension? The elderly already have many benefits. Often they are


benefits that the over-sixties can afford to live without, like a bus


pass. And here is mine. And there is a convention that the elderly


deserve to be protected, but do they? Well, up to a point. In fact,


they are a growing global menace. And at what price? That is the


million dollar question. First you have to decide what to quality of


living you want your older population to have and whether you


can afford this. There is a big concern we cannot afford what we


have now. We will have to encourage people to save more, work longer


and we will have to become more selective on what -- on whom we


give these benefits to. Westminster decision was echoing


around Holyrood. It is the 330,000 current pensioners who will be


affected. By 2016-17 the effect will be �220 more in income tax and


the number of pensioners affected will have risen to 500,000. I say


to the member, that is half a million pensioners backed his party


has punished. -- and that his party has punished.


The Chancellor may have thought the elderly would not notice his tax-


relief switch. It leaves are those 65 just after April 13th without a


age-related tax allowance but there will still get a personal allowance


of over �9,000. Someone turning to 65 just before April 30th will give


a personal allowance 1,200 pounds higher. I feel we are being ignored.


Not ripped off but just ignored. The problems were being ignored.


looks as if the next generation is going to be the first one in living


memory that will be worse off than before? Absolutely. I do not have


an answer for that. What I am here to talk about just now it is I am


very aware we have the highest level of child poverty in this


country for about 20 years, which is absolutely shocking. But it is


also shocking when we get pensioners without a decent income


being rationalised might be a word. But I would say probably got act.


And just, perhaps, but the evidence is all around us that everyone is


not equal in society. It makes no sense to me that people who can


live comfortably in their old age are paid the same pension as


someone who does not have that luxury. We have to be more


selective. The top end of the state pension does not have really impact.


So if you have an occupational pension, you may be disbarred from


also taking a state pension. Unless they raise the dawning of a new age,


constant financial support for huge numbers of the retired will remain


a baby boomers' psychedelic dream. I am a joint from Edinburgh by a


Callum Chomczuk, senior policy officer for a Scotland, and by Alex


Massie, who writes for the Spectator, and today published a


title elegantly titled -- an article elegantly titled Soak The


Old. The Institute for Fiscal Studies has been clinched today


that actually pensioners are not that much affected. Individually,


grannies are great. Collectively, they are an enormous problem. We


spent �104 billion on pensions last year and that will increase. When


we think of grannies living alone in a freezing it flats existing on


cat food is a terrible image but the reality is that most pensioners


do not live like that. This is the wealthy his generation of


pensioners this country has ever known. It is likely to remain so.


They have a better standard of living, more comfortable, that is


likely to be faced by young people today. Asking pensioners to give up


a little bit of their benefits at a time when everybody is being


hammered by the Chancellor does not strike me as being a wholly


unreasonable thing. Why shouldn't - - why should pensioners receive


more generous allowances than on pensioners? It is not just general


allowances, is it? The Financial Times did some research where they


found that for the first time people in their 60s and seventies


were earning more, have more disposable income than people in


their twenties and thirties. It is absolutely true, there was a large


number of pensioners with a great deal of wealth but there is huge


inequality among the pensioner population and some really are


living on the poverty line. Yesterday's announcement from the


Chancellor will really exacerbate that for many of them. Hang on,


let's be clear. It went because the any pensioners who will be affected


by the changes in the tax thresholds are the relatively well


off pensioners. Now, if you have an income of just over �10,000, you


are -- you expected income could drop by �5 per week and if the


Chancellor was to announce a �5 per week drop in the state pension


there would be riots on the streets. Of course, the better of pensioners,


he has just announced a rise in the state pension by making the whole


thing a flat rate, so it is no longer means tested. We still have


to wait for more details. We have heard it for quite some time about


plans to bring in a flat-rate pension but the detail behind at...


Yes, but... You would accept Alex Massie's general principle, there


was no reason that the elderly should not share... You argument


would be if you are going to help - - target the elderly, targeted at


poor pensioners. We will see as a piece to discuss, young people are


suffering through the economic climate and older people are quite


comfortable but this is a really short-sighted point that the


Chancellor has pursued here. The principle of having a tea at tax


limit for older people is they do not have the potential to increase


their income which the working population do. That does not exist


for older people. Also the Chancellor really undermined the


point of savings. Alex Massie, what are you are doing, that there


should be some change? It has been quite striking that a lot of the


protest today, you have heard of are to people with pensions saying


they should not be paying any tax at all. A pensioner on �20,000 a


year pays approximately 200 -- �2,300 of tax. A working person


pays approximately �3,800 in tax. Quite a difference. Pensioners are


already exempt from National Insurance which most people do not


our problem with. But the basic state pension is also due to a rise


-- a rise by approximately 40% during the course of this


Parliament. There is nobody in the private or public sector who will


enjoy a pay increases of that sort of magnitude. But it gets very


moralistic... And economic problem is what it is. Its there is and


demo Gromit problem you can solve it by things like, for example,


immigration. Yes, we will need more immigrants in the next 30 or 40


years to deal with some of the consequences of a rapidly ageing


population. But this is not about hammering the poorest pensioners.


The poorest pensioners are not affected by this. But fundamentally,


at some point we will also have to look at whether we maintain a


system of universal benefits. you, both.


The front pages for tomorrow. The Scotsman. 1.3 million forced to pay


higher income tax. This is people being brought into the higher tax


band by the Budgets yesterday. It claims the... For the Financial


Times, Osbourne bites back in row over granny tax, it says. And the


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