The general election is over and Sir Keir Starmer is prime minister. The many businesses that were opposed to the Labour Party’s approach to the energy transition remain as concerned about the future as they were before the country went to the polls.

Last month, 200 businesses from North East Scotland wrote an open letter to the Labour Party. They urged the party to drop its manifesto pledge to ban new North Sea exploration licences before it has a plan to replace the jobs that will be lost.

Hoteliers to jewellers. Bakers to dog groomers. All said their businesses would be devastated if the transition away from fossil fuels towards cleaner energies was not just.

“The oil and gas industry is a hugely important employer, providing good quality jobs for local people, on whose custom businesses like ours depend. Its future represents the future of our community,” the letter, which was co-ordinated by the trade union Unite stated.

“UK Labour’s current policy on net zero for the North Sea is to ban all new licences but currently, they have no detailed plan on a fair workers transition to greener energy and to save 30,000 jobs in Scotland.

It went on to warn imports could increase. “Secondly, there is still absolutely no plan on wind power manufacture, in Scotland and the UK, or commensurate new green jobs for North Sea workers.”

New jobs

Collectively, they asked that a Labour government invest in the creation of 35,000 new energy-transition jobs in Scotland by 2030. It should ensure those jobs are prioritised for those currently working in the North Sea and commit to making the UK energy system self-sufficient.

“We are calling on our politicians to have a concrete plan for jobs, conditions and security for our North Sea workers,” they said.

The King’s Speech, which outlined the Labour government’s plans for the year ahead, made plenty of mention of energy. However, it failed to answer the one key question about the longstanding promise many in the North East believe holds the key to their future: the location of GB Energy.

It confirmed the government would bring forward legislation to establish the state-owned energy company. But the speech gave little additional detail on the scheme other than that it will be capitalised with £8.3 billion of public money over the course of the parliament. It will use that money to co-invest in clean energy projects with the private sector and it will “manage and operate clean power projects up and down the country”.

Windfall uncertainty

Labour have previously made it clear the Energy Profit Levy (EPL) will fund GB Energy. Further uncertainty has been created by the fact there was no mention of the EPL in the King’s Speech.

OEUK CEO David Whitehouse says confirmation that the government will press ahead with GB Energy is “an important development for the UK economy and our sector’s people”. But he warned that without certainty over how they are going to be taxed, the companies the government will be relying on to help drive the transition – and provide the jobs – will be less likely to invest.

It comes after reports that energy secretary Ed Miliband was to impose an immediate ban on all new drilling in the North Sea. The implication being that the veto would apply not just to new licences but to projects where licences have been issued and extraction has not yet begun.

Miliband’s department was quick to deny he had made such an order. And there was no mention of a ban either on drilling or new licences in the King’s Speech. However, with a veto on any further exploration included in the Labour Party manifesto, it has still had a chilling effect on the sector.

“The industry remains concerned about the impact of wider proposals for a further windfall tax and an end to new oil and gas licences,” Whitehouse said.

“The practical details of these proposals, alongside improvement to the regulatory and fiscal environment, are fundamental to creating the investment conditions the UK needs to build a secure low-carbon energy future.”

*The semi-submersible drilling rig Transocean Sedco 704 seen at sunset. Shutterstock / Navin Mistry*

No ban without a plan

It is against this backdrop that Unite’s “No ban without a plan” campaign continues. The businesses that have signed up argue that the suffering will be felt far beyond the oil and gas sector if the transition is not handled correctly.

Norman Ward, who has run Wilsons Sports Bar in the centre of Aberdeen for the past 22 years, said his business has suffered hugely in recent years. If the damage that began when the oil price slumped a decade ago is allowed to continue, it will impact across the whole of the North East, he said.

“We were doing a lot of business before the oil slump and we’ve lost a lot of business since the Covid lockdown. It’s chalk and cheese now,” he stated.

“If they stop oil altogether people will lose their jobs. These people have worked hard and put their lives in danger, going away on helicopters, leaving their families, and it seems the government is just going to dump them.”

Aberdeen “will be a dead city. It’s heading that way already. Union Street used to be heaving with people on a Saturday but people don’t go near it now. I’m quite lucky because I have quite a lot of regular customers and I do a lot of sports stuff. We’re still surviving but it’s nothing like it used to be.”

Location location location

Part of the solution, he said, would be for the government to locate GB Energy in Aberdeen. This would ensure employment remains in the area as fossil fuel businesses wind down. He is not hopeful the government will look to the North East though. Ward reckons the Central Belt – which voted Labour while Aberdeen stuck with the SNP and the surrounding constituencies stayed Tory – is the more likely political choice.

Another signatory is Mark Milne, an oil and gas worker who also owns the Spider’s Web pub in Dyce. He went further, saying that the government should invest in the sector for as long as there is oil to be extracted – and as long as that oil is required as part of the energy transition.

“Now that the election is over, my hope is that the new administration will see the potential in the oil and gas sector,” he said.

“I would like to see a return to growth in the industry starting with exploration and leading to a long-term future for the diverse supply chain and thousands of high-quality jobs which it currently supports across the UK.”

Industry value

The industry’s specialist skills are one of the UK’s great exports, he said. “My hope is that the government recognises the value of the industry and the many people who rely upon it for their family’s future.”

Joe Rollin is a senior organiser for Unite’s No ban without a plan campaign. He welcomed confirmation from Miliband that he is not looking to prevent new drilling, where a licence has already been issued.

However, it seems clear that no further licences are going be issued. Rollin stressed that it was imperative that the government brings forward its plan on a transition for the workforce.

“Although the Department for Energy Security and Net Zero have strongly rejected accusations about stopping drilling right away, they have confirmed they will not issue new licences to explore new fields,” he said.

“Unite along with over 200 local businesses are saying we must see a clear plan of how to transition the thousands of workers into alternative green jobs, and our campaign will continue until we see that plan. Labour has a historic opportunity to invest in the green technologies needed to protect jobs, communities and the planet – we can’t afford to see oil and gas communities face the same deprivation the mining communities did.”

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