That this House has considered transitional support for North Sea oil and gas workers.
I appreciate the chance to have this debate, Sir Desmond, because this is an incredibly important time for the oil and gas industry and those employed in and around oil and gas. I will lay out the context and where we are right now, and then talk about my key asks for the Government, given the current situation and people’s worries about the direction of travel.
I want to start with a quote from the seventh carbon budget:
“As of 2021, direct employment in oil and gas in Aberdeen has declined by nearly one-third since 2015. Household disposable income has fallen and poverty has increased…Some estimates indicate that around 14,000 people in the region will need to have moved to other roles or sectors between 2022 and 2030.”
That is such a stark comment from a well-respected organisation, which has produced an incredibly useful and informative report. It says that household disposable income has fallen and that poverty has increased, albeit not in line with the national average—everybody is feeling the pinch of the cost of living—but as a direct result of changes to the energy industry and the lack of pick-up in the renewables sector to compensate for that.
As a result of political uncertainty, the current situation and direction of travel, there is a real lack of confidence in the energy industry. We expect companies that have previously majored in oil and gas to fund a significant part of the renewables revolution. We expect them to put their money in and fund the offshore wind power that we will need. We expect their skilled workers to transfer into those industries. We are at the point now where we risk losing the significant edge that we have in skills, manufacturing capabilities and people. We risk losing that if the Government do not take action now to ensure that the transition is just and, importantly for this debate, managed properly.
As a result of the lack of confidence, final investment decisions by oil and gas companies, or companies working specifically in renewables and not so much in oil and gas, are being pushed back. Whether that is to do with their inability to get grid connections right now or the Government’s changes to the energy profits levy and extension of the windfall tax—which, by the way, has been stopped in every other country that had such a tax—companies feel that the Government are not going the right way.
Aberdeen and Grampian Chamber of Commerce’s energy transition survey shows that political uncertainty and concern about the political direction of travel has gone from the seventh top worry to the top worry in just two years. Whatever the Government think they might be doing, and whatever rhetoric they might use, the industry does not believe that they have quite got it right, so they need to change where they are going.
The hon. Lady speaks about the way in which other countries have ended their windfall tax, but does she accept that the basic rate of tax that was being applied by the previous Government to the oil and gas industry in the North sea was the lowest in the world, and that it is only with the windfall tax that it comes up to the global average?
I had concerns about the windfall tax in the first place. I thought that a windfall tax should be applied, but that it should have applied across the board to all those companies that made significant profits during covid, whether that was supermarkets, Amazon or oil and gas companies. Singling out the oil and gas industry was the wrong thing to do at the time. In terms of the comparative level of the tax, I do not know the answer, and I do not want to say something that is not right, but I felt that it was wrongly applied. A number of other companies made significant profits, and the oil and gas industry felt singled out, as though it was somehow different. I accept that it is different from other industries in a number of ways, but the levels of profit were not as high as they were in 2014, for example, and singling that industry out when supermarkets were making a much higher percentage profit than they had in previous years did not seem like the right thing to do.
I appreciate the Government’s work on a skills passport for the industry. That is important, but there is no point having a skills passport if the jobs are not there. We have not seen the offshore wind industry increase at the pace we would like it to, and we cannot do all the work necessary to reduce the amount of oil and gas without those jobs for people to move to. In response to ET40, the 40th energy transition survey by the Aberdeen and Grampian chamber of commerce, one company said that
“Forcing the end of oil and gas for our company before offshore wind is ready to replace the lost revenues”
is one of its biggest concerns. That is how a significant number of companies feel right now.
Companies are struggling to find people with the skills they need, whether in oil and gas or offshore renewables. The people who will be building offshore renewables will be working three-on, three-off shifts, in the same way that oil and gas workers do. It is really difficult to adjust to life on three-on, three-off shifts—it is not easy for workers to change their lives and ensure that someone is home looking after their kids if they have a family. Oil and gas workers have that transferability, because their lifestyle is already set up to do that.
The hon. Member is making a very good speech, and I congratulate her on it. She talked about fabrication skills. We have those skills in my constituency, but they are ageing. There will come a time when these people retire, and then those skills could be lost.
We have a huge amount of work to do, particularly with young people. When I talked to Developing the Young Workforce North East recently, I was heartened to hear that a significant number of young people in north-east Scotland still want to go into engineering, which is incredibly important, whether that is in fabrication or not, because engineering is involved in all of it. I am worried that we will lose that, because the industry is ageing, and the same thing is happening in offshore oil and gas. People see that their uncle, cousin or grandad was made redundant in oil and gas, and they worry about going into engineering.
If young people are not excited and passionate about the future of renewables, we will not be able to build the amazing tech that we need to ensure that renewables deliver a profit and work commercially, so I am concerned about skills. One of the key things that the Government could do is ensure more UK content and fabrication. We have amazing fabrication works—not so much in Aberdeen, but around the north-east and the rest of Scotland and the UK. That is a point that I wanted to make: this is a significant problem not just for Aberdeen but for the rest of the UK, given that only 25% of the jobs in offshore oil and gas are in the north-east of Scotland.
My hon. Friend is making an excellent speech, as always. On fabrication, does she see the connection between the universities, colleges and education sector and the transition? There has been some excellent work on fabrication in Arbroath and Broughty Ferry and Dundee, but of course more can always be done.
I absolutely agree, and my hon. Friend would expect me to talk about the University of Aberdeen and Robert Gordon University in my constituency. Along with North East Scotland college, they have been doing really important work as part of the Aberdeen city deal and the energy transition zone to ensure that we have skills for the future. Aberdeen council has created a significant number of jobs and things like foundation apprenticeships to encourage young people into the sector, but we need people to think about tech as well as make it. We have the right ingredients, but we need to ensure that everybody has confidence in the commitments that are being made. That is where the gap is. I have spoken to the Minister about that, and I have no doubt that he is strongly committed to that, but my concern is that the industry does not believe that the Government are strongly committed to a just and managed transition.
About 12% to 17% of people in Aberdeen city are directly employed in oil and gas, and a significant number are indirectly employed, but there has been a massive reduction in jobs since 2014. We have recently seen an increase in offshore wind revenue, but there are 4,000 fewer jobs so something is going wrong. My key ask is that the Government listen to people and have a plan.
The world looks very different now from how it looked in July 2024. When the Government were elected, Donald Trump was not in the White House and we did not have the global uncertainty caused by that. Something like 20% of the liquefied natural gas that we import comes from the US, and we are involved in global trading markets for oil and gas, so the increase in global volatility means that we need to think more seriously about energy security. We have had to do that since Russia invaded Ukraine and since covid, but the situation is even more desperate now. To ensure energy security, we must take control of everything we can, and we must not rely as significantly on imports as we will if the Government maintain their current direction of travel, particularly given that we do not have gas storage and are basically using LNG ships as offshore floating storage.
It is an honour to serve under your chairship, Sir Desmond. My thanks go to the hon. Member for Aberdeen North (Kirsty Blackman) for securing this vital debate.
The fate of the skilled workers of the oil and gas sector hangs in the balance, and nowhere more so than in Grangemouth in my constituency. Once known as Scotland’s boomtown, Grangemouth has refined oil for more than a century. The refinery has been a generational employer for local families—a destination that has provided transformational opportunity for local people. It has provided world-class training and good pay, leading to improving living standards and community prosperity.
However, the owners, INEOS and PetroChina—the petrochemical wing of the Chinese state—have decided to call time on Grangemouth and Scotland’s refining capability. The first set of redundancies start in just a week’s time, and the thousands of job losses that will happen show the precarious position workers are in when private capital and a foreign Government own such a vital piece of infrastructure.
Regarding the refinery, I do not want to hear anyone insult the intelligence of the Grangemouth workers and utter the phrase “just transition”. Jobs will be lost, and the new energy industries are just not ready. That is the very definition of an unjust transition. I also do not want the Government to say that the £100 million growth deal for Falkirk and Grangemouth is the solution—not when the refinery is worth over £400 million a year to the Scottish economy. The £200 million from the National Wealth Fund that the Prime Minister announced at the Scottish Labour conference to entice new industries is welcome, but that money is conditional on private capital investment coming in with no planned Government ownership, meaning that workers, communities and Scotland will be in mercy of private capital and foreign ownership—again. Why are the Government not learning any lessons?
The refinery’s influence goes beyond the town. Grangemouth oil keeps Scotland’s 5.5 million people moving. I do not need to ask the Minister whether the refinery closing will compromise Scotland’s fuel security, because it obviously will. Scotland will now order oil in from mainland Europe—it will arrive, go through a vastly reduced quality control process, and then be distributed from the new import terminal at Grangemouth. Scotland will be dependent on European transportation logistics; an energy-rich nation will lose self-reliance—a farcical and dangerous set of circumstances.
I thank the hon. Member for Aberdeen North (Kirsty Blackman) for securing the debate. To say that it is really important does not really do it justice; what we are seeing in the North sea—job losses, investment drying up and companies folding or choosing to end their UK operations—is not us being alarmist or pessimistic or over-exaggerating. As most of us in this room understand, although that is sadly not the case across the House, those are the cold, hard facts.
Across the UK, approximately 120,000 people are employed in the oil and gas sector, of whom approximately half are in Scotland. The average oil and gas worker is in their mid-40s. This is their transition—not a future transition—and it matters now. In the UK, one in every 200 people is employed either directly or indirectly in the offshore energy sector, and that is significantly weighted towards oil and gas work. Those people work offshore on rigs and floating production storage and offloading units or onshore as geologists, geophysicists and petrophysicists and in our crucial supply chains. That increases to one in 25 across Scotland, about one in five in north-east Scotland and one in three if induced jobs are included.
The impacts of a poorly managed transition will be felt not just in Aberdeen, Aberdeenshire or north-east Scotland; the entirely of the UK will suffer. No other UK cluster has the energy capability of north-east Scotland—the skills, supply chains, university specialisms or experiences. If we in north-east Scotland lose our brightest, best, most innovative and most experienced energy workers in the transition from oil and gas to renewable energies, they will be lost to the whole of the UK.
We must not pretend, or mislead ourselves and others into thinking, that transferring to renewable energies is in any way incompatible with continuing to produce oil and gas from the North sea. It is not. More than that, continuing to support our domestic oil and gas sector will only help any transition to renewables to succeed. Will we still need oil and gas for years to come? Yes. It seems that that point is largely uncontested, and the Government have certainly confirmed it. So why—I still have not heard a coherent answer to this—are they effectively ensuring that we do not have a viable oil and gas sector? Removing investment allowances, increasing and extending EPL levels beyond those for any other mature basin and banning new licences do not support the sector, help domestic supplies or protect jobs.
I think this is the first time I have had the pleasure of speaking under your chairmanship, Sir Desmond; I am very pleased to have you in the Chair. I congratulate the hon. Member for Aberdeen North (Kirsty Blackman) on securing this important debate.
It is said that if you remember the ’60s, you were not really there—but if you were there in the ’80s for the closure of the pits, you will never forget. You will never forget the violence; you will never forget the politicisation of the police; you will never forget the devastation of communities. That was an energy transition—I was not just picking up on the remarks of the hon. Member for Gordon and Buchan (Harriet Cross).
This debate takes place at a key point in the transition away from oil and gas production in the North sea. With the Government’s consultation on building the North sea’s energy future under way, and with the clean energy mission driving forward at some pace, securing clean energy generation and the wealth creation and jobs that will go with it is non-negotiable if we are not to repeat the same unjust transition as before.
It is a simple truth that the North sea basin is in terminal decline. That is not a political choice; it is a geological reality. For too long, the previous Government buried their head in the sand and watched as jobs supported by the UK’s oil and gas industry more than halved over the past decade. That is why this Government are right to finally draw a line under new licensing and the illusion of endless new oil and gas.
The stone age did not come to an end for the lack of stone, and the oil age will not come to an end for the lack of oil. It will be because energy can be produced more cleanly and cheaply by renewable technologies. The demand for hydrocarbons is expected to peak globally in the next five years, but energy companies are still adopting business models focused on growing output volume rather than on maximising shareholder value. Creating the stranded assets of the future is bad management, and failing to build the skills base for tomorrow’s future is bad business planning.
What a pleasure it is to see a fellow St Andrean in your august position, Sir Desmond. I am sure that the hon. Member for Brent West (Barry Gardiner) agrees.
I congratulate the hon. Member for Aberdeen North (Kirsty Blackman) on her comprehensive speech. It is greatly encouraging that one of our colleagues understands the situation as thoroughly as she clearly does—well done her.
I want to look at the historical perspective. I am of such great age that I can remember the time before North sea oil. Far too many in my class at Tain academy went south when they left school. They disappeared: they were part of the highland clearances, if you like, in latter years. My father said to me, “When you leave school, you’ll find your best employment chances down south, not up here in the highlands.” Then North sea oil came and everything changed massively. The Nigg oil fabrication yard was constructed near my hometown of Tain. There was one at Kishorn in Wester Ross, there was one at Ardersier near Inverness, and there were many other sites in Scotland and England. It meant that local people could find high-quality employment; they had not had that opportunity before. There were highly paid and skilled jobs. People learned skills such as rigging and welding, as the hon. Member for Aberdeen North referred to.
I worked at the yard at Nigg. At the height of it all, no less than 5,000 people worked there, constructing the mighty Conoco Hutton production platform. Those were the great old days. Since then, as others have alluded to, the situation has changed. Today, like the hon. Member for Aberdeen North, I have many constituents who work offshore. However, the same opportunity or perhaps necessity is there for those who are considering moving abroad. It is the same story. Very often they move south because it is easier to get to wherever they want to work, which could be in Kuwait or wherever. We face that old dread demon of highland depopulation—people leaving again. We have an ageing population, and we do not have as many younger carers as we would like. Families are beginning to go, and that is part of the tragedy.
It is a pleasure to serve under your chairship, Sir Desmond. I thank my hon. Friend the Member for Aberdeen North (Kirsty Blackman) for securing this important debate and for her thoughtful and passionate speech introducing it. Many colleagues have made excellent speeches, and I will not repeat their points.
The just transition must be both just and fair, so that sectors and communities are not left on the industrial scrapheap as they were during the Thatcher years. If the just transition means anything, it must mean something for the north-east of Scotland. It cannot be left to the market alone to sort those things out. To give one small example, I have recently been lobbied by the plumbing industry. A crisis is coming in a few years’ time because the financial problems facing the training and education sector mean that it cannot possibly meet its demands. One thing the Minister could do is nudge the private sector to invest in apprenticeships in those areas, so that we are preparing alternatives for young people as North sea basin declines.
The Scottish Government set up their Just Transition Commission in 2018 to provide scrutiny and advice on delivery. Northern Ireland is currently consulting on setting up its own commission; Wales established its commission in 2013. Where is the UK-wide just transition commission? The UK Government launched their North sea consultation in March as
“a dialogue with North Sea communities”
to develop a plan for making the best of this transition. I trust that in his closing remarks the Minister will tell us how that is going.
The chairman of GB Energy—perhaps the flagship project of this Government, with its headquarters in Aberdeen—described its work as “a very long-term project,” with the much-promised 1,000 new jobs taking perhaps 20 years to realise. Even then, it will be a mere drop in the North sea when it comes to replacing the jobs that will be lost in the years ahead. Unite’s Scottish secretary Derek Thomson recently said:
I welcome the opportunity provided by the hon. Member for Aberdeen North (Kirsty Blackman) to debate transitional support for oil and gas workers, who are already bearing the brunt of the North sea’s disorderly decline as reserves have dwindled without a clear agreed plan. In my first ever job in the renewable energy sector in 2008—17 years ago now—I co-wrote a report on the huge potential of British North sea ports to move into the renewable energy industry as locations where offshore wind turbines and associated infrastructure are manufactured and then shipped. While some of that has been realised, a lot of opportunities were missed as jobs went overseas. The need for action is now urgent.
We already know that new oil and gas projects are incompatible with averting the worst impacts of climate catastrophe. If the goal is also to provide North sea workers and communities with the long-term security that they deserve—and it must be—new oil and gas fields are still not the answer. Even with hundreds of new licences issued and new field approvals granted in the past decade, jobs supported by the UK oil and gas industry have more than halved already, and multiple sources predict a continued decline. We must protect those workers and provide security for that workforce, but in a declining basin that will not come from desperate attempts to double down on new drilling.
Let us take the specific example of the Rosebank oil field. Setting aside the significant climate harm that Rosebank would cause, the claim that the project will create thousands of jobs is inflated. Equinor’s own estimate suggests that only 255 direct jobs would be created in the UK over its entire lifetime. Equinor has decided to construct the main offshore vessel for Rosebank in Dubai, and unions are rightly furious that the project has yet to create a single UK design or construction job.
Meanwhile, analysis shows that properly investing in British clean energy supply chains could create over 20,000 jobs for workers in key areas such as Scotland’s oil and gas communities, many of whom, as Members have pointed out, have a lot of the transferable skills we need. Rather than bowing to the industry’s last-ditch calls for new drilling, will the Government do what is needed to protect workers? For too long, oil and gas companies have been in the driving seat of the North sea transition. Time and again, they choose to prioritise their own short-term interests over the long-term needs of workers and their communities.
As always, it is a pleasure to serve under your chairship, Sir Desmond. I thank the hon. Member for Aberdeen North (Kirsty Blackman) for raising this issue. Although we will not always be aligned on all things—I can think of one in particular—the need to support workers is something we can certainly share a view on. What an introduction by the hon. Lady, who set the scene so well with detailed information and incredible knowledge. It is a great pleasure to see the Minister in his place. His commitment is never in doubt, and I think we will be reassured by his answers. It is also a pleasure to see the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie). We look forward to his contribution, too.
The North sea oil and gas industry employs an estimated 150,000 to 200,000 workers in the UK. A significant portion is concentrated along the east and north-east coast, but I remind everyone that, while that may be the thrust of where the industry seeks its workers from, I have a number of constituents who have worked in the North sea oil fields for 20, 30 or 40 years—probably all their working lives. Indeed, I was coming home on the plane three or four weeks ago and the guy alongside me had previously been in Dubai, which the hon. Member for Aberdeen North referred to, and had also worked in the middle east. On the occasion I met him he was coming from Libya back to Northern Ireland. The sector employs people from all across Northern Ireland. I know about those from my constituency, but there are others from elsewhere too.
Although new projects and licensing rounds have been approved, they are unlikely to reverse the declining production and workforce in the North sea, as most of the remaining reserves are in existing developments. The industry also supports a larger workforce indirectly through the supply chain, so the impact will be felt across this great United Kingdom of Great Britain and Northern Ireland.
Those workforce figures mean that the Government must seriously consider questions of our energy supply and their implications, and I believe that they are doing so; indeed, I know that this issue is on the Minister’s agenda. The Government’s own data on the situation is telling, most helpful and encouraging, and I know that he will sum it up shortly.
It is an honour to serve under your chairship, Sir Desmond. I thank the hon. Member for Aberdeen North (Kirsty Blackman) for securing this critical debate and for her compelling speech, in which she laid out the situation in her constituency in terms of the number of job losses and the increasing poverty. As my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) did later, she also talked about the loss of skilled workers and jobs to overseas countries.
Managing the transition from a North sea dominated by oil and gas to a North sea with a future for commercially viable renewable energy is critical to the UK’s reaching its climate targets by 2030. The North sea can have a new and bright future if we get things right, which will enable us to strengthen our energy security, reduce skyrocketing energy prices for our households and businesses, secure the UK’s global leadership in floating offshore wind and, importantly, rebuild our manufacturing and port capacity while delivering transitional skills, pathways and jobs for the highly skilled workers and for the thousands of people currently employed in the supply chains for oil and gas.
We Liberal Democrats are opposed to the new oilfields at Jackdaw and Rosebank, and we want the Government to commit to the winding-down of the oil and gas industry, as was agreed among all countries at COP28. The reality is that new drilling will not provide jobs or protect workers in a declining basin.
It is estimated that Jackdaw could provide 5% of the UK’s gas needs. Would the hon. Member, and the Liberal Democrats, prefer that we imported that LNG from elsewhere instead?
As I consistently said during the debate about the new oilfields at Jackdaw and Rosebank, none has provided the jobs predicted, which were all offshored to Dubai. On the gas dependency that we have talked about, it is critical that we make sure that we have homegrown energy so that we can take Putin’s boot off our necks. That is the way.
After 50 years of intensive extraction, the North sea is now an ageing and expensive basin. The transition away from oil and gas production is already under way, with reserves in terminal and irreversible decline. Jobs in the UK’s oil and gas industry have more than halved in the past decade: 227,000 direct roles have disappeared, despite the issuing of 400 new drilling licences and record profits for the major oil companies. Moreover, losses in supply chains far outnumber those in the industry. That is neither fair nor just. We must act now to ensure that the transition ahead supports the workers and communities who, as my hon. Friend the Member for Caithness, Sutherland and Easter Ross so eloquently said, have powered Britain for generations, and ensure that they are not left behind.
The future of the North sea can be bright: we boast some of Europe’s best sites for renewable energy. Our current installed capacity of 50 wind farms already accounts for about a quarter of global offshore wind capacity, and our offshore wind potential surpasses our projected energy demand, making it key to our energy security. However, the Liberal Democrats have always been clear that the only way to create long-term, secure jobs is to invest in supporting workers to transition into clean energy industries. The unjust transition of the oil refinery at Grangemouth is a clear illustration—a warning of what happens without early Government intervention and investment, showing that such decisions cannot be left to industry alone.
What jobs are we talking about? We are talking about new jobs within the new manufacturing supply chain and our own domestic green energy supply chain. The UK has consistently failed to seize the full economic benefits of our leadership in offshore wind. As we have heard today, the vast majority of Britain’s offshore wind capacity is owned by foreign companies, and the typical North sea turbine still contains three times more imported material than UK-made content. We need to make sure that our turbines are manufactured here and that our port capacity, in both manufacturing and fixed and floating offshore capacity, is enabled, or that will also be given to other countries. That could create an estimated 23,000 good green jobs, both directly and through supply chains.
I appreciate the hon. Lady’s remarks. Does she agree that one way in which Britain could help ensure that the transition is not only just, but orderly and managed, would be to do what countries such as Denmark have done—join the Beyond Oil & Gas Alliance?
Yes, we should join the Beyond Oil & Gas Alliance. We very much support that. Following COP28, we are looking forward to COP30. Hopefully, the UK can once again demonstrate global leadership, as part of an alliance of other countries that finally has a clear transition pathway.
Our UK port capacity is currently one of the key bottlenecks slowing our renewables roll-out. UK ports and dock-side facilities urgently require upgrades so that they can handle industrial-scale floating offshore wind, including access channel size, landside availability and crane capacity. The Government’s proposed National Wealth Fund is welcome, but we need to see that it is secured and even expanded.
We need to make sure that workers are prioritised as part of the new manufacturing industry and the supply chains. Research has shown that over 90% of the UK’s oil and gas workforce have transferable skills, but face a lack of support in transitioning to the clean pathway. As vice-chair of the all-party parliamentary group on climate change, I was pleased to meet an oil and gas worker from Aberdeen last month as part of a roundtable to discuss the challenges and opportunities facing workers. She described how Aberdeen has an abundance of STEM skills ready to drive forward the transition to clean energy, but workers are having to pay out of their own pockets to gain new qualifications, often duplicating qualifications that they already have.
It is clear that more concrete support is needed to support workers in finding and moving into alternative employment, from improving the energy skills passport to addressing training barriers and, more broadly, delivering a new deal for the North sea that has workers’ needs at its core. Will the Minister commit and show us how the Government plan to ensure that clear, accessible pathways are in place to support workers to move between industries?
In conclusion, Putin’s barbaric and illegal invasion of Ukraine exposes the risks of relying on countries that may seek to exploit our dependence on fossil fuels and use it to their advantage. Oil and gas workers built the foundations of Britain’s energy system. As we chart a new path forward, it is our moral and economic duty to ensure that they are not abandoned but empowered, respected and placed at the very centre of that journey.
It is a pleasure to serve under your chairmanship this morning, Sir Desmond. I congratulate the hon. Member for Aberdeen North (Kirsty Blackman) on bringing such an important issue to Westminster Hall today and on opening the debate with such an eloquent and passionate speech on behalf of her constituents.
For many of us here today, this is a deeply personal debate. We all know or are related to people employed in the oil and gas industry off the north-east coast of our country. Finding a solution and ensuring that the transition is indeed just for those workers is vital for our constituents. We often talk about needing the North sea for our energy security, to produce the tax revenue for the Exchequer and to support supply chains and local economies. It sounds incredibly intangible at times, but for the 200,000 people employed in the oil and gas industry, directly or indirectly, the impacts of the transition in the North sea will be very tangible indeed. As the decline accelerates, we risk seeing lost incomes and lost futures in whole communities without a purpose. That is 200,000 employees up and down the entire United Kingdom: the oil and gas supply chain touches nearly every single constituency in the United Kingdom, but more than 68% of all direct employment is in Scotland, and more than 80% of that is in the north-east of Scotland, in and around Aberdeen.
In my own constituency of West Aberdeenshire and Kincardine, everybody knows someone who relies on the offshore industry for their livelihood. Just last week, during recess, I was in Westhill speaking to companies. That town is the subsea exploration capital of the world and home to Total, Technip, Tetra, Subsea7 and more. The oil and gas industry is the lifeblood of the north-east of Scotland. That is evident to anybody who visits.
Although I pay tribute to the hon. Member for Aberdeen North for the passion that she brings to the debate and her concern for her constituents, I cannot help reflecting on the rhetoric emanating from the Scottish Government over the past few years and their presumption against oil and gas, which has contributed to an increasingly pessimistic outlook for the North sea. When we engage with oil and gas companies, it is the language and the tone that we use to describe the situation in the North sea that they say is driving away the investment that they need to drive forward new technologies such as offshore wind, whether floating or fixed bottom. When we say “decline”, “ageing” or “terminal”, that does not give investors from overseas a thriving and attractive investment picture. We need to address that language.
Of course, the hon. Gentleman is right that it is a declining basin—everybody is aware of that—but we must be careful about the language we use about it. We should point out the positives that can be achieved through further investment and recognise the profits being realised by energy companies engaged primarily in the extraction and exploitation of oil and gas underneath the North sea. They will be investing in those new technologies, and they need to convince shareholders—who are deciding whether to invest in the middle east, south-east Asia, the United States of America or elsewhere in the globe—that the North sea is still an attractive place to invest.
The language that we use about that basin and the industry in the United Kingdom is incredibly important, so I urge the hon. Gentleman to engage with the industry and speak to individuals—as I have; I know that the Minister, the hon. Member for Aberdeen North and others do too—because that is exactly what they tell us. They want to contribute to the transition—indeed, they lead it—but they want the negative atmosphere overshadowing the North sea to change. That means changing some of the rhetoric and language used to describe the industry, which is so important to the economy of the north-east of Scotland.
I appreciate the hon. Gentleman’s point about the choice of language, but will he confirm whether he and his party still believe in net zero and the drive towards achieving our climate targets?
Yes, of course we believe in net zero, but not in setting arbitrary targets and dates that are unachievable without making this country poorer or more reliant on foreign imports for our energy supply. The fact is that imports of LNG have doubled just to keep the lights on as we actively accelerate the decline in our own North sea oil and gas industry. That is nonsensical—it is madness. It is an act of national self-harm. We should revert to our policy of maximum economic recovery from the North sea while doing all we can to ensure that the companies involved invest in new technologies.
I could not resist; I thank the hon. Gentleman for giving way, given the time limit. He is talking about how important language is, but is it not considered to be an act of national self-harm to talk down the incredible opportunity for the North sea to be a global leader?
I am not in any way trying to talk down the North sea. What we need to do is talk up those companies—especially those in the supply chain—the technologies and the skilled workforce, which rely at present on a successful and profitable oil and gas industry, because we will need them to develop new technologies in the North sea. The ships engaged in drilling for rigs, for example, will be used to work on the new offshore wind farms. Right now, as work is drying up in the North sea as a result of the accelerated decline, those assets are being sent to other parts of the world and being redeployed or redesigned.
When we call on those assets to help speed up the deployment of new offshore wind farms, they will not be there—the skilled workforce that we will need to develop wind farms and other technologies will be overseas because those people will be offered high-paying jobs in existing energy sectors in the UAE, Qatar, Australia, North America and south-east Asia. We cannot just flick a switch and expect all those workers and the supply chain to be there. That is why we need a profitable and successful energy industry. Like it or lump it, at the minute that is reliant on continued investment in our oil and gas industry. That is good for our energy security and the Treasury, so it makes abundant sense to continue to support it.
The highly paid jobs in renewables that are going to exist simply do not exist yet—that is a fact. We were promised that by 2020 there would be 130,000 green manufacturing jobs, but frankly only a fraction have materialised. The hon. Member for South Cambridgeshire (Pippa Heylings) talked about the need to expand capacity in our ports. Aberdeen South harbour, in the port of Aberdeen, was built specifically to take advantage of the investment that it was assumed would come from the expansion of the deployment of offshore wind, but still to this day only 1% of its overall profit is driven by offshore wind and renewables, whereas 60% comes from the oil and gas industry. Until the balance shifts, we need to ensure that the companies driving that investment continue to invest in the North sea, but I am afraid they will not do so if this Government’s policies continue.
It is a pleasure to serve under your chairship, Sir Desmond. I join others in congratulating the hon. Member for Aberdeen North (Kirsty Blackman), not just for securing this important debate but for the tone with which she introduced it. Her seriousness and passion came through in her contribution. I genuinely thank her for that, as well as for all the conversations we have had on this important topic.
It has been a wide-ranging debate, but at the heart of all the contributions have been three key things, which I will try to sum up. First, we may all disagree on the timing, pace and detail of the transition, but there is an acknowledgment and understanding that a transition in the North sea is under way. It is important to recognise that. Secondly, if we accept that, as it seems we all do, then we need a credible and detailed plan for how to manage the transition. The hon. Member for Aberdeen North put it well by saying that the transition needs to be managed properly, and I will come back to that point. Thirdly, the workforce must be at the heart of any plan and transition. The shadow Minister made the point well: this is deeply personal for anyone with a job in the oil and gas sector, but particularly in north-east Scotland, where there is a significant concentration of workers in the industry.
Many Members have spoken about the importance of oil and gas in our energy story. A few months ago, I was pleased to be at BP’s headquarters to celebrate the 60th anniversary of the first licence being issued in the North sea, and there was a powerful video of the history of some of BP’s offshore infrastructure. The engineering skill that it has taken to extract oil and gas from extremely difficult North sea waters over the past 60 years is extraordinary and, as I have said on a number of occasions, we should be very proud of that workforce and everything it has achieved.
Oil and gas will continue to play a critical role in our energy mix and economy for decades to come. However, as we and the world embrace the clean energy transition, I want us not just to be proud of the history of the North sea but to be hugely ambitious and excited about the opportunities in the next chapter of our energy story. Our clean power mission is about not just driving forward clean power in this country but creating the jobs in manufacturing and industry that go along with it, and it is critical that those jobs materialise in the communities that have been mentioned.
The trade unions and others have made a case for £335 million a year to be invested in skills and training to ensure that workers are not unpaid on their training days, among other things. What conversations can the Minister have with colleagues to ensure that that happens?
I thank my hon. Friend for his contribution to the debate. He is right that it is about not just the passporting and the training available but, importantly, the ability of workers to access it. I will take away that point, which also came up in the roundtable with trade unions. We have launched a number of skills pilots in four areas, of which Aberdeen and Aberdeenshire is one. The process there is slightly different from that for the other three, because skills are devolved to the Scottish Government, so the UK Government’s role is slightly different, but we want to work in partnership to ensure that we deliver. I will take away the point away and come back to it.
I pay tribute to the Minister’s continued commitment to and engagement with the industry and the region. It seems, given the amount of times he is in and out of the north-east of Scotland these days, that he may be buying a second home in my constituency. Of course, we welcome that, because any engagement with the Government is positive. The tone with which the consultation on the future of North sea energy was launched was incredibly positive and has been warmly welcomed. However, there is also an ongoing Treasury consultation on the post-EPL fiscal framework; what engagement is the Department having with the Treasury on what that will look like? Is there any opportunity to speed up the process by which we can replace the energy profits levy?
I thank the shadow Minister for making that point. We deliberately launched the consultation on the future of energy and the Treasury consultation on the future of the EPL at the same time, because we want to bring them together to give certainty about the future of industry. My hon. Friend the Exchequer Secretary has been in Aberdeen a number of times and, indeed, we have we have had many of the same engagements, dealing with the fiscal forum and others and having the conversations. I engage with Treasury colleagues regularly on this question. The EPL, which has changed many times under both Governments, has not given industry the confidence it is calling for. We have been clear that it will end post 2030, and we want to put in place a regime that gives confidence about what the landscape looks like but still has the recognition of excess profits built into it. The consultation is open for, I think, another two or three weeks.
The taxation regime is critical to the ability of companies to make profits in the North sea. We have the lowest base rate of tax on oil and gas production companies in the world, and it is only because we have the windfall tax that we take the rate up to the average. The Minister needs to look at the investment that would be available were we not subsidising the operations from the public purse. It is not quite the zero-sum game that he suggests.
I thank my hon. Friend for his contribution, but he tempts me into both concluding a consultation and speaking on behalf of the Treasury—two things that I absolutely will not do. But he made an important point. The purpose of the consultation—again, it is an open consultation with all those in the sector—is to get to the heart of some of these questions.
Will the Minister agree to consider the timescale of the consultation outcomes so that people have the earliest possible notice, in advance of next year’s budgets, if possible?
I was going to come to that point, which has been well made. In both consultations, we are looking internally at how quickly we can turn around the responses. Clearly, there is a balance to be struck, particularly in respect of the consultation on the future of the North sea. It is a hefty document and we expect a significant number of responses, which is a good thing. There is also a balance to be struck between turning around a response quickly and having a credible, detailed look at all the evidence that has been submitted, but we are trying to move as quickly as possible with both consultations.
I want to turn briefly to the point about the future, and the points that a number of Members made about investment in clean energy. It is right to say that the future of the North sea has enormous potential for offshore and floating offshore wind, and for a number of other industries, such as hydrogen and carbon capture. Since coming into government we have moved as fast as possible to drive that forward, including establishing, as the hon. Member for Aberdeenshire North and Moray East (Seamus Logan) mentioned, Great British Energy in Aberdeen—although I cannot help but notice that the SNP did not support that. It is all about driving investment, not just by creating jobs in Great British Energy’s headquarters but through the investments it makes in supply chains and developments throughout the country, particularly in the north-east of Scotland.
We oversaw a record-breaking renewables auction and, as many Members mentioned, we are currently working through the process of the clean industry bonus, which is designed to reward investment in good manufacturing jobs and clean supply chains. This gets to the heart of the point made by many Members about how we bring the benefits of the clean power mission to the UK, delivering the industrial jobs that too often have been missing in our transition. Of course, the clean power action plan will drive £40 billion a year of private investment towards our goal of clean power by 2030.
I am conscious of the time, but I want to reflect on two brief points that the hon. Member for Aberdeen North made in her closing remarks. The first is about listening to communities, which is important, and I will continue to do that, as will my colleagues. The second is about the oversight and management of the plan, which is a question we are looking at. I am always slightly resistant to simply saying that setting up a taskforce or a commission is the answer, but the point that the Just Transition Commission made, and that the hon. Lady also made, is right: we need to grasp it at the heart of Government, and we are actively looking at that.
I thank all Members, especially the Minister, for their considered comments. This issue is bigger than politics—it is more important than kicking around a political football. I am glad that so many people focused on the jobs. We want to ensure that we can take advantage of the opportunity and not just try to avert total disaster, because there is a prize to be won. I will finish with a quote from Paul de Leeuw from Robert Gordon University, who has said that the “urgency has shifted dramatically.” Therefore, Minister, the time to take action is now, in order to protect those jobs.
Question put and agreed to.
Resolved,
That this House has considered transitional support for North sea oil and gas workers.
We are at a tipping point. The risk is that these highly mobile, highly paid oil and gas workers will go abroad. The responses to the ET40 survey show that a significant percentage of these people are moving to postings abroad either within company or in other companies. Despite the massive disparities in disposable income, an unbelievable number of people who live in Aberdeen North have been on holiday to Dubai. The majority of Members in this room will not have many constituents who have spent holidays in Dubai, whereas I have heaps, because they have that level of transferability and portability—they can up sticks and move to another country, because drilling is the same there. They might be doing it at a higher carbon cost and with fewer terms and conditions, but they are still getting a highly-paid job. They can uproot to do that, because they are used to moving around the world.
If we do not take control of the situation now, we will lose the skills we need to power the renewable future, which is incredibly concerning. One of the UK Government’s founding missions is to grow the economy. We will not be able to grow the economy if we do not take advantage of this situation, and the time is now.
My key ask is for the Government to listen to people. The Minister does go out and listen to people, but they are saying that the Government are not getting it right. They are perfectly happy with some of the rhetoric, but they are concerned that action will not follow. They do not yet trust the Government’s commitment to a just and managed transition. Whatever the Government’s views—whether they are committed to a just and managed transition or not—they need to ensure that people believe they are.
That is the gap, and my suggestion for dealing with it is in line with the North Sea Transition Taskforce’s “Securing the Future of the Energy Transition in the North Sea” and Offshore Energies UK’s most recent report: we must ensure that there is a kind of mission control, so that there is somebody in charge of this. I appreciate that the Minister, the Secretary of State for Scotland and the Under-Secretary of State for Scotland are talking about that and are willing to answer my questions, but nobody seems to be in control. There is no oversight at a governmental level; there is no one person in the Government about whom everybody can say, “That person is in charge of the just and managed transition.” There is no group that has been set up.
We have all seen just transition plans from many organisations, including the Government, but nobody seems to be saying, “This is the just transition plan. This is what we are following. This is where we want to go.” A commitment from the Government that they would be willing to look at the key asks from the OEUK and in the North sea transition plan would make a big difference. We need to say, “This person is designated the just transition mandarin”—or however we want to style them—“and they are in charge. This is who we go to if we have a concern. This is who will ensure that decisions are being taken across Government to protect these jobs.”
There are other things the Government could do in terms of the £28 billion commitment and the spending review. There will be uproar if that £28 billion is cut during the spending review. I beg the Government not to cut that money. There is a Department for Energy Security and Net Zero consultation that has closed, and there is another consultation on the fiscal regime. My slight concern on those is about the timing. Oil and gas companies will make final investment decisions and plans for next year perhaps in August or September this year. If we do not have an outcome by that point, particularly on the fiscal regime, companies will say things are too uncertain and will not invest next year. Again, we will see the loss of jobs as a result.
The timing is key. The Government may not be able to announce their final decisions—around the fiscal regime, for example—but if they could give industry a direction of travel in advance of investment decisions and financial plans being made, we would not lose next year. I am really worried that we are at the point where we will lose next year and all the associated jobs as a result.
The Government are not yet getting this right. They need to do more listening and to ensure that they are taking control. The facts and the context have changed in the past year, because of the global changes and the job losses we continue to see. I am not asking the Government to row back on what they planned; I am asking them to consider that the context and the facts have changed and, therefore, that the plan needs to change to recognise that.
This is not about having to walk back from where we believe we should be. This is about ensuring that people in my constituency, and people across the country, who are employed in oil and gas—75% of workers are employed in the rest of the UK—have a secure future. We cannot see a gap as oil and gas jobs go down and renewables jobs go up, because we will lose all that talent and the incredible bonanza that we are at the best point to take advantage of. We might lose that just because people do not believe that the Government are committed enough. Now is the time to take these decisions and to ensure that people believe that the Government are committed to a just and managed transition.
Grangemouth only wants consistency, and that means the Government treating Scotland’s only oil refinery in the same manner as Scunthorpe steel. I put it to the Minister that the recall of Parliament showed that when there is a political will, things can get done. A Government can intervene and save jobs, a community and an industry. The argument that Grangemouth should be treated differently to Scunthorpe is total nonsense. The similarities are strikingly clear.
The Government could, and should, do the same for Grangemouth. It is the right thing to do for workers, communities and a nation’s security. That should be enough reason to intervene, but if it is not, I suggest that the Government have a look at the political implications: Scotland is watching, and our party will get a rude awakening at the ballot box in May 2026 over this issue. The Government should step in, save the jobs and extend the life of the Grangemouth refinery until the new energy industries are ready.
OEUK suggests that 50% of domestic oil and gas needs could be supplied from the North sea until 2050, but only if there are policies to allow oil and gas to be extracted. Brent oil is today at $68 a barrel—almost half the $123 a barrel it peaked at in 2022, and below the EPL price floor of $71 a barrel. Why does the Minister expect North sea businesses to continue in the UK when they are being penalised for their product, despite the Government’s saying that we need it? As others have asked, how can the UK arms of multinational companies compete for funding and investment with energy sectors in other countries, which are so much more supported and encouraged and which offer far greater returns? When investment goes abroad, jobs follow, or are lost. It is that simple. I say it again: our oil and gas sector is vital to the UK’s energy transition.
When I speak to people involved in or with the sector, the vast majority talk about timing. Timing is the most crucial thing in supporting the energy transition, and I would like the Minister to reflect on it in his remarks. For offshore wind, for example, the RGU Energy Transition Institute estimate is an increase from approximately 11,000 jobs in 2024 to 46,000 in 2025. On the face of it, that looks great—35,000 new jobs—but more or less all those jobs will come on stream post 2030, by which time, on the current trajectory of job and investment losses, we are expected to lose 60,000 oil and gas jobs, 50% of which will be in Scotland. No skills passport will bring those jobs back. That is not a fair or just transition; for north-east Scotland, it is a disaster waiting to happen.
The issue is not just when the jobs need to come on stream; it is the type of jobs, as well as whether companies in the north-east will have remained afloat in the interim. At the moment, there are two main categories of jobs: the vast majority of our energy work is in operational activities, such as the day-to-day operations of the industry, while the remaining third—roughly—are in the capital expenditure, such as the building and manufacturing of kit. However, the manpower requirements for running and operating a rig far exceed those of, for example, a wind farm. Until the UK can increase its manufacturing base for wind infrastructure, allowing jobs to be created in capital work rather than just operational work, there is no prospect of transferring tens of thousands of workers from oil and gas to wind or other renewable energy sectors.
Similarly, timing is vital if companies are to keep their order books, if not full, then at least ticking over with traditional oil and gas contracts—again, assuming that the Government’s policies are changed to support the sector—before offshore wind contracts truly pick up. I recently spoke to the chief executive officer of a supply chain company, who had very real concerns about a void in contracts, which the company would not be able to get across, in the next two to five years. What company can retain a workforce if it has no work? These companies are vital to the transition, and we cannot afford to lose them to an expediated, unmanaged decline of oil and gas.
The RGU estimates that 80% of the oil and gas supply chain is transferrable to adjacent sectors, but the reality is that the supply chain will survive only if the transition is managed. If we run down production too quickly and before wind is effectively scaled, the capabilities and expertise will be lost. I end with a brief quote from the North Sea Transition Taskforce, which warns:
“Unless governments act swiftly, there will be no transition; the old North Sea will fade away, along with the skills of individuals and the entrepreneurial skills of businesses in the North Sea supply chain.”
The myth that North sea licences are the answer to our energy security is a dangerous one. Hundreds of licences have been issued over the past decades and there has been just 16 days’ worth of gas to show for it. We are lucky to have an abundance of renewable resources in the UK. That is the only route forward to deliver for the workers and communities who are tied to a declining oil and gas industry.
The current North sea transition deal is not fit for purpose. It places far too much responsibility on the companies themselves. Those companies are not delivering what is needed: a mere seven out of the 87 North sea oil and gas operators are even considering investment in renewable energy by 2030. We cannot outsource the future of our workers and our energy security to the very companies whose current business model is failing. We need a radical shift. The time for a coherent deal for the North sea is now. It is vital that the Government commit to bringing forward a bold and ambitious plan with the urgency that this time demands.
Beyond extraction lies an immense opportunity to build a world-leading offshore wind manufacturing sector here in the UK. Our existing wind farms, many of which are in Scotland, provide a fifth of global capacity. They prove what is possible. But it is a scandal—a scandal that the previous Government allowed—that the average North sea turbine is overwhelmingly built with material from abroad. We are exporting jobs and prosperity.
Great British Energy and the National Wealth Fund must be laser-focused on building up a thriving manufacturing sector. A properly resourced clean industry bonus is not just good policy; it has the potential to create 10,000 permanent, direct jobs and 13,000 indirect ones in areas that need it, such as the constituency of the hon. Member for Aberdeen North. Can the Minister confirm what conversations he has had with Cabinet colleagues about the clean industry bonus? Is there any scope to boost the funds behind the bonus to truly seize the moment?
Our renewable ambition is crippled by outdated ports and dockside facilities. The £1.8 billion in the National Wealth Fund is a good start, but if we are to truly lead in home-grown energy, it is crucial that it be expanded. The funding must be safeguarded and expanded, and the Government should be taking equity stakes in ports as critical national infrastructure.
The unjust transition at the refinery in the constituency of my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) and the situation in Port Talbot are warning signs that early Government intervention and investment are paramount if we are to secure the future of our workers. They deserve to experience a smooth transition. Over 90% of the UK’s oil and gas workforce have transferable skills, but they report a lack of support for transitioning into other industries. The energy skills passport is a start, but workers are footing the bill for their own retraining, which often duplicates their existing qualifications. The Government need to commit to streamlining the process. Crucially, the Minister should meet with the Treasury to deliver the £335 million-a-year training fund that unions and climate groups are rightly calling for—a fund that provides paid time off for workers to retrain.
We live in a volatile world. The era of relying on global fossil fuel markets is over. True energy and worker security lies in our own abundant renewable resources. The opportunity to create thousands of high-quality jobs in a new green economy is here. It is within our grasp. I urge the Minister to seize it.
The reason I came down on the Saturday when Parliament was recalled is that British steel means everything in constructing oil platforms, and possibly floating offshore wind structures. Safeguarding the industry is hugely important to me, which is why I made the journey there and back to vote in support. However, as the hon. Member for Brent West pointed out, far too many wind turbines are made of steel that is not made in this country. Far too many parts of those turbines are not made in this country either.
Our great, shining hope is that one day we will be using the skills to which I referred to train young people to start building turbines, cells and blades here in the UK. We are not doing nearly enough as we should, yet at Nigg we have one the finest graving docks in Europe. It is a perfect site. Kishorn has been revived, yet we are still not making the bits and pieces that we should. Yes, we are putting them together and putting them into the North sea—the Beatrice field off my constituency is an example—but there is much more to do.
In the minute and a half that I have left, let me echo the hon. Member for Aberdeen North in saying that the world has changed since Putin and Trump. Oil is a strategic asset. We are lucky enough to have it. We should not talk it down all the time. We should look on the new discoveries as cash in the bank for the future. Oil is not just about burning hydrocarbons, but about pharmaceuticals and many other uses. We should always remember how fortunate we are that the good Lord gave us this strategic asset.
I will conclude where I began. So many of my class went away. In more recent decades it has been different: people have stayed. Every single job in oil and gas is crucial to remote highland communities. It is the people coming back from working three on, three off, or whatever, who keep the lights on in the straths and glens of some of the remotest parts of the highlands.
“If you look at how many jobs are going to go in the north-east, if GB Energy does not pick up the pace and start to move workers in there and start to create proper green jobs, then I’m afraid we could be looking at a desolation of the north-east.”
“Speeding ahead” is an interesting choice of words for the Secretary of State in this context, given that any decision on funding the Acorn project at St Fergus is now in a most uncertain position in the June spending review.
I have been asking about this since I was elected. The UK Government were able to find £22 billion for carbon capture schemes in Merseyside and Teesside last autumn, but they could not dig deep enough into their pockets for Scotland, which has much of the infrastructure already. I await June’s announcement with trepidation as speed and commitment to North sea communities in the north-east of Scotland have been thin on the ground so far from the UK Government. Will the Minister please give us a clue about the Government’s plans?
The Acorn project, the new power station at Peterhead and the investments in key strategic ports at Peterhead and Fraserburgh are key components of the just transition. A Robert Gordon University review of UK offshore energy workforce skills transferability showed that 90% of the oil and gas workforce have transferable skills to work in adjacent energy sectors. The just transition needs buy-in from the UK Government. It cannot be left to market forces, which are even more unpredictable in the current political climate, thanks to Trump and the ongoing energy crisis, and of course Putin too.
Households are facing a third rise in energy costs since Labour came to power. Indeed, the vast majority of the UK’s offshore wind capacity is owned by companies outside the UK. The typical North sea turbine contains more than three times as much material from abroad as it does from domestic manufacturers. The wider context is an energy market that is, paradoxically, working against both the interests of the consumer and the companies and investors who want to realise the green energy industrial revolution. If Members do not believe me, they should take a deep dive into zonal pricing.
The clean industry bonus, an extra revenue support in contracts for difference rounds, has the potential to bring quality jobs to the UK and in particular Scotland and the north-east of Scotland, but there is an absence of detail on whether specifics such as job quality will be a requirement for investors to receive financial support from the Government. Does the Minister acknowledge that private investment does not necessarily guarantee good, secure jobs? How will he ensure that the clean industry bonus delivers good-quality jobs in Scotland and supports workers currently reliant on the North sea oil and gas industry?
As the hon. Member for Brent West (Barry Gardiner) said, alarmingly, just seven of the 87 North sea operators plan to invest anything at all in UK renewables between now and 2030. Instead, these companies are on a sunset ride, maximising profits from oil and gas while they still can, regardless of what that means for the rest of us. That lack of investment has clear consequences for workers, who are demanding clear pathways out of high-carbon jobs and into the renewable energy industry, where they know they have a longer-term future.
Oil and gas companies like to blame the windfall tax for preventing them from investing, but they had been failing to invest long before that levy was introduced. We have also seen companies choosing to make workers redundant while simultaneously banking excessive profits and issuing their shareholders huge payouts—more proof that they continue to prioritise their own private interests over the workforce.
Does the Minister agree that it is time to stop betting on private oil and gas industry companies doing the right thing? How does he plan to ensure that the interests of workers and communities, rather than just those of oil and gas bosses, are served in the Government’s plan for the North sea? The need for the Government to step in and manage the transition in the public interest is now urgent, and the current approach, which is overwhelmingly focused on de-risking private investment, is wholly insufficient to achieve that aim. It risks recreating the inequalities and failures of our current energy system, where wealth and jobs flow overseas.
The unjust closure of the Grangemouth oil refinery without plans to support workers is a damning indictment of that failed industry. To ensure good, secure jobs for workers and build wealth that lasts in communities that are already experiencing the sharp edge of the transition, we need an entirely new approach—one that plans ahead before private companies decide to abandon their workers. Alongside a clear, worker-led plan for the North sea, unions and climate groups are calling for the Government to commit to an emergency ringfenced funding package in the spending review. Will the Minister meet the Chancellor to ensure that those ringfenced funds are secured, and will he ensure that past mistakes are not repeated in the North sea transition?
The Department for Energy Security and Net Zero digest of UK energy statistics shows a 72% reduction in UK oil and gas production between 1999 and 2023, and the North Sea Transition Authority projects an 89% drop in UK oil and gas production by 2050. These statistics cannot be ignored; they show a trend. Analysis by the Office for National Statistics shows that direct jobs in oil and gas extraction fell by around a third between 2014 and 2023. Meanwhile, the findings of the 2023 Robert Gordon University study, “Powering up the Workforce”, included an estimate that the offshore renewables workforce—including those employed in offshore wind, carbon capture and storage, and hydrogen—could increase to between 70,000 and 138,000 in 2030.
That last figure, which shows the potential that exists, cannot be ignored. Indeed, the hon. Member for Aberdeen North clearly set out the transition from where jobs are today to jobs for the future. The Robert Gordon University study also found that over 90% of the UK’s oil and gas workforce have medium to high skills transferability and are well positioned to work in the adjacent energy sector. That cannot be ignored. It shows where we think we are; indeed, it has been the focus of everybody in this debate so far. The issue that the hon. Lady raised is clear. The Government are aware of the impending opportunity—or, if they do not take action, the impending unemployment problem. They must act urgently.
Oil and gas companies must have support for diversification training and help for staff to ensure that communities of oil and gas workers do not end up in a similar position to the coalmining communities who were abandoned when we knew of the difficulties, which took generations to combat. We have an opportunity today—the Government have an opportunity today—to act and see through the transition, taking advantage of the transferable skills that we have all referred to in this debate.
I believe that the North sea has more to yield than many Members have said today. Our opinions can differ on that, but we must be united in looking to the care of the sector in the near and medium term, and the Government must take the lead on that today. It is important that we look at the bigger picture. I referred to those from Northern Ireland, including some of my constituents, who have worked in the oil and gas sector for some 30 or 40 years. Their sons and others will look for opportunities. I want to make sure that, when the Government bring forward their thoughts about what is taking place, the opportunities for training and jobs will exist for us all. I always say that the United Kingdom of Great Britain and Northern Ireland has many talents and much work to do together. Let us continue to do just that.
We need a just transition. As ever, the hon. Member for Alloa and Grangemouth (Brian Leishman) spoke eloquently about his constituency. Workers in Grangemouth, who are looking with great trepidation at what the future holds, tell us that there is nothing just about the transition as it stands. It is incumbent on the Government to do what they can to ensure the safety and security of jobs, the continued profitability and investability of our oil and gas industry as it seeks to transition into the technologies of the future, and the economic success and sustainability of north-east Scotland and the Scottish economy as a whole.
It is right that we recognise that tens of thousands of jobs have been lost in the sector over the past 10 years. The truth is that we should have been planning for this transition a long time ago. My hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) talked about Grangemouth. There is no greater example of the failure to plan for the transition than Grangemouth: we knew years ago that it was in a precarious position and should have been planning for the workforce at that point. My driving purpose in my role is ensure that we do not make the same mistake again in the wider North sea sector.
The hon. Member for Aberdeen North asked whether the Government are listening, so I want to say how much we have engaged with the sector and how much time I have spent in Aberdeen listening to the industry—not just the oil and gas companies themselves, but the companies involved right through the supply chains, in decommissioning and in training. I had an interesting visit to a training provider and met apprentices who are working in oil and gas in the immediate term but will transition into renewables. They are being trained both on oil and gas platforms and on the renewables jobs that come next. Exciting work is going on, and we need to capitalise on it and speed up such projects across the city and the north-east.
We have a fantastic opportunity to utilise the skills that are already in Aberdeen, which many Members have mentioned. Given the global race for skilled workers and for much of the equipment and the supply chains for the clean power missions around much of the world, we have a real opportunity to capitalise on that in Aberdeen. I suspect that the ears of Robert Gordon University will be burning after this debate, given the number of times it has been mentioned. I had a fantastic visit there a few months back to go through some of the data in great detail, and it was fascinating.
Members made the point about the number of jobs that are transferable from oil and gas into renewables. That presents us with an enormous opportunity to provide long-term, sustainable jobs for people. The pace at which we do that, and the methods we use to support the workforce to transition, are key, which is why, when we came into government, we were determined to work with the Scottish Government and with industry to move forward on skills passporting, and we have launched the first phase of that. There is clearly more work to do on expanding the passporting process, but that is a sign that we are taking practical action to support the workforce to transition.
The hon. Member for Aberdeen North asked about a plan for the transition, which was a good point to make. We have launched our consultation on the future of energy in the North sea. We were keen for that to be a genuinely open conversation with industry, communities and trade unions about what the future of energy in the North sea should look like—not a conversation focused narrowly on a series of specific questions. The consultation is still open: there is a week left for those who have not had a chance to submit their responses—I am sure that many thousands are watching this debate online—so please do submit them. It is a key opportunity. We have deliberately asked open, broad questions so that we can have a genuine conversation about the future of energy in the North sea.
The first section of the consultation deals partly with the data and the science about the decline of the North sea basin. The shadow Minister rightly made the point about language. I have always been careful about the language that I use, but it is important to recognise that the declining nature of the basin means that we have to start planning now for what comes next. As part of my engagement on the issue I have had a number of roundtables, including with trade unions a few weeks ago, to look at the specific support that is necessary for the workforce now.
I again thank the hon. Member for Aberdeen North for her important contribution. The future of the North sea is incredibly important for all our communities, particularly in the north-east, but also for our energy and our economy in a wider sense. We are determined to deliver a credible, just and prosperous plan for the future, for the workforce now and in generations to come.