22/03/2012 Newsnight Scotland

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