SIR KEIR Starmer has insisted work in the North Sea oil and gas sector will continue “for decades to come” as he addressed industry fears about his plans for a ‘proper’ windfall tax.
Aberdeen played a prominent role in the Labour leader’s Scottish conference speech yesterday as he responded to criticism from Aberdeen & Grampian Chamber of Commerce and 800 business and civic leaders who signed an open letter last week.
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Scottish Labour leader Anas Sarwar was also challenged on the letter during a live BBC interview yesterday, where he vowed to engage and work with the industry.
Labour has proposed extending and increasing the energy profits levy by three percentage points to 78%, and would also cut investment allowances and ban new drilling licences.
Unions have spoken out to raise their concerns about the plans, while analysts at investment bank Stifel have since suggested that anywhere between 20,000 and 100,000 jobs could be at risk if North Sea investment is to cease.
‘North sea will continue for decades to come’
Sir Keir addressed the concern directly in his speech yesterday, saying the energy innovation race was one Britain “can and must win”.
He said: “I went to Aberdeen recently. Met the workers who maintain the pipelines. 100 miles long – stretching all the way back to the oil and gas fields.
“They’re proud of what has been built in the cold waters of the North Sea. Proud of their work – hard work, against the odds and elements – that built a legacy for this nation. Part of the Scottish story.
“So I’ve said before – and I say again – that work will continue for decades to come.
“But they also told me about the legacy they can build for Scotland’s future. The pride they have in a new opportunity. Converting this infrastructure into a thriving Carbon Capture and Storage industry.
“Literally putting the carbon back in the ground it came from. And giving their community a future – not just for the short-term – but for decades.”
‘We must work together’
In a letter to the Labour leadership – published in The Times on Friday – the Chamber demanded urgent clarity about the party’s proposals to extend the windfall tax on the North Sea oil and gas sector and remove crucial investment allowances
It stated: “If you proceed with these plans, up to 100,000 people could lose their jobs – redundancies on a scale not seen in this country since the pit closures of the 1980s. You have repeatedly pledged to deliver a fair and just energy transition for workers, however your current position will bring about the cliff-edge end to North Sea production you promised to avoid.”
Speaking to the BBC’s Sunday Show yesterday, Mr Sarwar responded to the letter, which followed a stinging editorial in the P&J last week which depicted the party as television’s ‘Traitors’.
“I can understand people’s concerns because they have seen what happens when you don’t manage a transition correctly,” he said.
“When you get a transition wrong, you can devastate communities for generations. We cannot afford to make that mistake when it comes to our oil and gas industry.
“Of course we need to have dialogue, but more than that we need to have partnership, because the transition we are talking about is only going to be possible if you leverage in the support and the investment of the oil and gas industry.”
He added: “All of our energy policies will be driven by four principles. One is more jobs, not fewer jobs, Second, we want lower bills, not higher bills. Third, we want greater energy security, not more reliance on despotic regimes like Russia, and fourth, crucially for Scotland, we want to demonstrate climate leadership.”
Reaction
Ryan Crighton, policy director at Aberdeen & Grampian Chamber of Commerce, said: “We agree entirely with the principles set out by Labour at the weekend and share their ambition to create more jobs in the energy sector and to make our country more energy secure. We also welcome the party’s offer to work with our region and the wider energy sector to achieve this.
“However, as things stand, the party’s windfall tax, exploration ban and removal of investment allowances undermine what Sir Keir Starmer is promising. The outcome of these proposed policies could be anywhere between 20,000 and 100,000 job losses according to analysts – and even trade unions are drawing comparisons with closure of the UK’s coal pits in the 1980s.
“We need to dispel the myth that accelerating the decline of the North Sea gets us to net zero quicker. It does not – it makes the energy transition even harder, decimates the workforce and supply chain, and leaves us even more reliant on foreign energy imports.
“It is welcome that Labour has this weekend acknowledged that the energy transition will only be possible if you leverage in the investment and support of the oil and gas industry. We need engagement and dialogue, starting today, to agree a path which protects jobs and helps Labour achieve its green prosperity plan, should it form the next government.”
