The next item of business is a statement by Alasdair Allan on a just transition for Aberdeen and the north-east. The minister will take questions at the end of his statement, so there should be no interventions or interruptions.
14:16
Aberdeen and the north-east have been an energy powerhouse for 50 years. As we transition from the boom years of oil and gas towards the renewables revolution that is on the horizon, I think that all of us in Parliament can acknowledge the opportunities that a just transition can now bring.
At the heart of that transition is our oil and gas workforce—experienced, highly skilled workers who are passionate about their work and their industry. Those workers are the latest in a long line of people who have had opportunities to provide for their families, experience work overseas and build a modern, successful city in Aberdeen through the oil and gas industry. Beyond anything else, a just transition must exist primarily for them. It must ensure that they have good, well-paid jobs, so that they can thrive in the region and be proud to live and work there.
This statement has been prompted by the publication of the Just Transition Commission’s report into Aberdeen and the north-east. I thank the commission for its work, especially in travelling around the country and speaking to those who are directly impacted by the transition to net zero. However, it would be remiss of me not to acknowledge that the report follows on from a concerning series of announcements that affect jobs in the region, especially in the oil and gas industry.
As members know, most of the key policy levers for the North Sea oil and gas sector, including decisions on licensing, consenting and the associated fiscal regime, are matters that are reserved to the United Kingdom Government, so it is not surprising that much of the report is addressed to that Government.
The UK Government has recently concluded several periods of consultation on key aspects of the future of the North Sea. We, along with industry, workers and other stakeholders, are awaiting its next steps. Those steps will be of vital importance for all aspects of the energy transition, including the workforce.
We are content to accept in principle the headline recommendations in the commission’s report. However, as the commission recognises, clarity on the direction of travel from the UK Government will be vital before we can undertake some of the planning that the sector needs. That is not a process that the Scottish Government can do alone. In order to support workers and create an improved environment for investors, the UK Government needs urgently to provide stability and certainty in several key reserved areas.
First, the UK Government holds the powers to act in areas of taxation for the North Sea oil and gas sector. We therefore continue to call on it to listen carefully to concerns that are being expressed by businesses about the impacts of its energy profits levy. The energy profits levy was always supposed to be a temporary measure, and we must see an end date for it, as it is now affecting investment and jobs in the north-east.
Given that we are now seeing adverse effects of that policy, the UK Government should be considering when the earliest possible end date could be in order to avoid more decisions such as the one that we saw from Harbour Energy last month. The UK Government must urgently work with industry through its recent consultation, which closed on 28 May, and more widely, to set out a stable long-term fiscal regime for the North Sea. The aim must be to give the offshore energy sector much-needed certainty and to treat it fairly alongside other parts of the UK economy.
Secondly, on decisions on the licensing and consenting of North Sea oil and gas projects, which are, of course, also reserved to the UK Government, we continue to call on it to approach those decisions on a rigorously evidence-led and case-by-case basis, with climate compatibility and energy security as key considerations. The UK Government needs to bring forward its finalised positions from recent consultations on the future regulatory regimes as soon as possible to provide businesses and workers with much-needed certainty and stability.
Thirdly, it is essential that the UK Government provides clarity and certainty for the Acorn project in the upcoming spending review. A positive final decision on Acorn and the Scottish cluster, including announcing a full funding package and a clear timeline to achieve a final investment decision, is required so that investors can continue their work in developing that vital project. We stand ready to work constructively with the UK Government and to increase our funding for Acorn. If the UK Government commits, we will work with it and industry to ensure the fastest possible deployment of the Acorn project and the Scottish cluster, so that a just transition for our energy workforce can be secured.
Although clarity from the UK Government is needed in the key areas that I have mentioned, that will not stop us taking the actions that are possible within our devolved competence. Our £500 million just transition fund for the north-east and Moray is currently open for new applications, with £8.5 million of new funding available this year. I once again call on the UK Government to match our investment in that area. In the next session of Parliament, we will meet the remaining commitment for the fund and work with partners to deliver strategic investment in the region.
As part of the fund, we have been prioritising skills investments through the industry-led offshore energy skills passport and the energy transition skills hub. We have also supported key projects in the region through our energy transition fund and we are currently working with the UK Government to develop a new regional skills pilot scheme for Aberdeen City and Aberdeenshire. The expansion of offshore wind represents a significant opportunity to create thousands of high-quality jobs, offering opportunities for those who are entering the job market for the first time and for those who want or need to change careers, including as part of a just transition.
We are investing up to £500 million over five years to support market certainty, to create a highly productive and competitive offshore wind economy and to support thousands of jobs. We are providing funding to colleges in 2025-26 to establish an offshore wind skills programme, helping to create region-specific training hubs for offshore wind skills, and we have convened a short-life working group with industry and public sector partners to develop and deliver an evidence-based offshore wind skills action plan at pace.
That activity by the Scottish Government could be even more impactful with the appropriate UK Government actions that I have mentioned. To secure project delivery in Scotland, as well as investor and supply chain confidence, the UK Government must prioritise the critical reforms that are necessary to improve the contracts for difference scheme, make transmission charges fairer and bring forward grid connection dates.
At this end—the Scottish Government end—we are increasing the impact of the UK Government investment that is being provided. The north-east investment zone will unlock a funding package of up to £160 million from the UK Government over 10 years to invest in a range of interventions that are designed to attract investment, boost innovation and create jobs. The Scottish Government will also provide a package of non-domestic rates retention at the sites, which the regional economic partnership can use to further investment in the zone and associated economic infrastructure.
In addition to all that, the Scottish and UK Governments have worked together on the Aberdeen city region deal, on initiatives such as the offshore energy skills passport and now on the investment zones.
We know that joint working will be essential in order to unlock the potential of the north-east and the city of Aberdeen during the transition. As I said at the beginning, we can all acknowledge the opportunities that can be unlocked through a just transition, and the Scottish Government will continue to take forward efforts in the areas that are in our power as we await clarity from the UK Government on its next steps.
I look forward to contributions from members and their matched support for our calls on the UK Government as we express our collective commitment to the industry and workforce that has made Aberdeen and the north-east so economically important to our country.
The minister will now take questions on the issues raised in his statement. I intend to allow about 20 minutes for questions, after which we will move on to the next item of business. I would be grateful if members who wish to put a question were to press their request-to-speak buttons.
I thank the minister for advance sight of the statement. It is clear that he has his head in the sand, because the north-east faces an emergency. The Just Transition Commission report needs to be a wake-up call for this devolved Government, because it sets out something that we already know and have been warning about. It says:
“There is still no transition plan for oil and gas workers.”
We know that because the just transition plan and energy strategy were meant to be delivered years ago. I have repeatedly asked when they will be published, but it is clear that the minister and the cabinet secretary simply do not have a clue.
While that uncertainty continues, thousands of jobs in the north-east are being lost. The Scottish National Party cannot keep passing the buck, because we need an affordable, commonsense transition. The front page of today’s Press and Journal lays bare that 400 jobs are to go every fortnight over the next five years. That is like a Grangemouth facility closing every two weeks. The SNP is doing nothing to stop that, and it is continuing with its presumption against new oil and gas.
Does the minister accept that there can be no transition if oil and gas jobs are lost because the SNP is demonising the industry? Will he apologise to the people of the north-east for his Government’s failure to plan properly and publish its energy strategy and just transition plan?
I could begin by saying that many of the plans that have been referred to exist in draft form. I could talk about the fact that some of the plans are dependent on court decisions at UK level. However, more relevantly, I will respond to the real and significant points that Douglas Lumsden raised about the challenges that the north-east of Scotland and his constituents face.
Douglas Lumsden mentioned the idea that the challenges that the industry faces are somehow the consequence of being demonised by Government policy. I have to push back very strongly against that, and I merely point to the fact that the north-east of Scotland faces real challenges, as he and I both acknowledge, due to the maturing of the North Sea basin and the changes that will come regardless of Government policy. All Governments—the Scottish Government and the UK Government—have to prepare for that and are devoting real resources, as I have set out today.
I thank the minister for advance sight of his statement. Will he acknowledge the critical points that were made in the Just Transition Commission report about the need for significant acceleration of the development of offshore renewables in order to give confidence to those investing in supply chains and renewables manufacturing, which will create the jobs and deliver the skills that we urgently need?
I am told that we need 8,000 welders, so where is the training coming from? Will the Scottish Government act to speed up the process for renewables projects and work to ensure that jobs in offshore renewables are attractive enough in quality to retain workers with oil and gas experience? The Just Transition Commission highlighted the role of trade unions in negotiating decent terms and conditions, but the minister did not mention that.
It is clear that workers need the Scottish Government to invest now and deliver the transformation that is promised by its £500 million just transition fund. Given the warnings from Robert Gordon University about the need to act now, why is the minister kicking the investment that is urgently needed into the next parliamentary session?
The member rightly pointed to the RGU report, which I am sure the UK and Scottish Governments will draw many important lessons from.
Sarah Boyack will be aware of the investment that the Scottish Government has made, working with the UK Government, in initiatives such as the offshore skills passport and in many other wider projects that are within our responsibility—not least the wider investment in Aberdeen and the Aberdeen area through the £125 million that has been allocated for its economic development. I accept what the member says about the importance of the RGU report. We will learn from it, and we hope that the UK Government will, too.
The extension of the energy profits levy, previously by the Conservatives and now by the Labour Government, has had an adverse effect on Scotland’s industry. Aberdeen and Grampian Chamber of Commerce has said that 10,000 North Sea jobs have been lost since 2022 because of the levy. As Westminster policies inflict hardship on Scotland’s workforce, will the minister give details of any engagement between the Scottish and UK Governments on the issue?
Publicly and privately, the Scottish Government has made plain to the UK Government its position that the levy must have an end date and that we have concerns about the increase in the levy and the impact that it clearly has, as the member is only too aware, on investment decisions that are made in the sector in the north-east of Scotland. We will continue to make that position clear publicly and in our engagements with the UK Government.
A 2010 report found that offshore wind could create 28,000 jobs in Scotland by 2020, but, 15 years on, the latest figures show that fewer than 4,000 jobs have been created. Today’s RGU report, “Striking the Balance”, says that up to 400 North Sea oil and gas jobs could vanish every two weeks over the next five years. What precise steps is the minister taking to address the Government’s failure to create offshore wind jobs for oil and gas workers to transition to? What are the measurable outputs and when will they be delivered?
The member will not be too surprised to know that I do not accept every premise of that question—[Interruption.]
It is a stat.
Let us hear the minister.
As I just said, some areas are within our responsibility, but some are matters for conversation between the two Governments and some are plainly reserved to the UK Government—the member is only too keen on that fact—and we must get adequate or helpful decisions from the UK Government on everything from the Acorn project to licensing and all manner of areas that are within the UK Government’s responsibility—[Interruption.]
Let us hear the minister.
One of the messages that come through clearly from both reports that we are talking about today is that we need to avoid a gap in the coming on stream of offshore wind jobs and in addressing the issues that have been caused by the decline of the North Sea basin, as I mentioned.
In the areas for which the Scottish Government has responsibility, everything that we are doing—from the investment in the north-east that I mentioned to working consistently with offshore wind developers—will contribute to minimising the gap and addressing the real issues to which the two reports point.
The RGU “Striking the Balance” report and the potential job losses are stark and worrying for people in Aberdeen and the north-east of Scotland. Has the Scottish Government had any indication from the UK Government that the UK Government will help to attain a just transition by making changes to the energy profits levy to save oil and gas jobs, by giving the go-ahead for the Acorn carbon capture project or by match funding the Scottish Government just transition fund—or does it not care?
The Acorn project, which the member referred to, is not only vital in supporting decarbonisation in Scotland; as the member has made clear, it is an opportunity for new industry, as has been outlined in project willow, among many other places. Business leaders including Sir Ian Wood have made it very clear that any further delays to Acorn would have serious economic consequences for Scotland.
The UK Government has, it must be said, acted swiftly south of the border, and it is now vital that it takes action to support Acorn and avoid a cliff edge of job losses in Scotland. It must also provide a full funding package and timeline for the Acorn project in next week’s comprehensive spending review.
On the member’s other points about the billions of pounds that will be added to the Scottish and UK economies if we get the transition right, I can only concur.
The UK Labour Government has listened to and acted on industry concerns over activity in the North Sea basin, and I am very sure that it will continue to do so—in fact, it is vital that that happens.
What is the Scottish Government going to do about the skills shortages that are already undermining the prospect of employment in the north-east? Sarah Boyack highlighted a shortfall of 8,000 welders, and a question just a few minutes ago also related to the Government’s performance in that area. In the budget, there was a welcome announcement of a very small sum of money for an offshore wind skills programme in colleges, but progress has been grindingly slow—as in so many of these areas—in actually seeing the money on the ground. When will that money be available to colleges in the north-east?
My understanding is that the college money has just recently been approved. The member makes an important point about skills and the transfer of skills. The Scottish Government certainly recognises the critical importance of providing the current and future workforce with the lifelong skills that they need.
The recently published 2024 “Green Jobs Barometer” shows that
“Scotland continues to lead the way in the creation of green jobs, with new data showing the number of”
such green jobs
“advertised has tripled since 2021.”
We will continue to work on areas such as the skills passport, which I mentioned, and on areas with the UK Government, to ensure that we have in our workforce the skills that we need for the future.
Between 1990 and 2022, Scotland’s emissions halved, while the economy grew by 66.6 per cent. That shows us that climate action and economic growth and prosperity can be achieved simultaneously—Scotland has already done it.
Ensuring the future security and prosperity of our oil and gas workers must be at the heart of our plans for a just transition towards net zero. How will the Scottish Government ensure that that is the case, and what is the minister’s message to the sector?
First, the member is quite right to point to the fact that economic growth and the decarbonisation of our economy go hand in hand. We are committed to achieving net zero by 2045, and we are proud of our record of climate action to date.
Any further decisions in this area have to be got right, and have to be the product—as I have mentioned many times—of co-operation between Governments. That is why we continue to call on the UK Government to approach decisions on, for instance, the North Sea oil and gas projects case by case, led by rigorous evidence.
A truly just transition will involve building on our strengths as an energy powerhouse, utilising—as I have mentioned many times—our skilled workforce. There are real economic opportunities around net zero and, as I have said, our record in Scotland is one of marrying up our aims on the environment with real economic growth.
Last month’s Just Transition Commission briefing report on “A Just Transition for Aberdeen and the North East” is pretty scathing. It states:
“There is still no transition plan for oil and gas workers”
and no clear training plan to retain skills. It notes that accelerating
“offshore clean energy is essential”
and it states that regional planning with genuine community participation is vital.
The minister did not mention communities once in his statement. Can he say how communities can expect to benefit from the collective commons that are our renewables as we harness them for our future, and how communities will be involved in the planning that must happen now with urgency?
The member is right to say that communities must be involved in the planning of those matters. That is one of the reasons why the Scottish Government is committed to initiatives around the environment within communities.
The point that has been made about planning for skills is clearly important, too. In the programme for government for 2025-26, the First Minister reaffirmed that point, committing to
“Introducing a new Scottish Government-led approach to national skills planning, and strengthen regional skills planning, to ensure that post school provision”
is aligned with and
“responsive to Scotland’s strategic skills needs”
in this area.
I thank the minister for early sight of his statement, which pointed to a number of areas where action and direction from the UK Government are required—and that is not unreasonable, not least in relation to the decision on the Acorn project. However, he will be aware of the action and direction that are needed from the Scottish Government as well. In that context, and in relation to the offshore energy skills passport, the project needs to be industry led, but there are concerns around the exorbitant retraining costs. What steps is the minister taking to engage with the sector to ensure that the funding that is available is directed to where it is most needed?
The member is right to point to the areas that are within our responsibility, which we take seriously. Not least, he has mentioned our involvement in the skills passport, the aim of which is to be a free-to-use tool, which addresses his point about the need to ensure accessibility. The Scottish Government has previously provided £3.7 million of funding from the just transition fund to support industry-led development of an energy skills passport—as the member is right to mention. We will continue to work with the UK Government and industry to develop that.
The minister has already referred to the repeated delays that we have experienced with the progression of the Acorn project: delays that were caused by the previous Conservative Government and indecision, causing further delay, by the present Labour Government. Does the minister recognise that one of the real risks of those repeated delays is that investors in the project might start to back out, such that the partnership could break up? If the Acorn project does not move forward at an urgent pace, what does the minister believe will be the economic implications for the north-east of Scotland and for the rest of the country? What will happen to the economic importance of carbon capture and storage in the North Sea to meeting our net zero targets?
All those concerned—including, as far as I can see, the Climate Change Committee—acknowledge that carbon capture, utilisation and storage is essential to meeting the net zero aim that we all have for Scotland. I do not want to point too much to the negative scenario that the member outlines, although he is right to outline the risks. However, if we are to find alternative industries in Grangemouth and the member’s part of Scotland in the future, and if we are to develop the infrastructure that is needed for carbon capture, utilisation and storage, decisions at UK Government level are needed. I do not say that to make a political point, but they are simply needed. The decisions have been made elsewhere in the UK, and it is time for them to be made regarding Scotland now.
At the current glacial rate of investment, it would take the SNP Government until 2083 to spend the so-called just transition fund. The cabinet secretary will be 114 years old, and the minister will be 112 years old. Against that background, could the minister outline how the SNP Government will meet the remaining commitment for the fund in the next session of the Parliament?
It would be ungallant to try to work out what the member’s age would be in that scenario, were I to accept the premise of the question, but I do not accept the scenario or the premise. The commitment of up to £500 million over this period has been given. Our track record in providing other investment, such as the £125 million for Aberdeen and that area, shows that our commitment is real.
Learning from the just transition for Aberdeen and the north-east, can the minister advise how communities and businesses across Scotland will benefit from the just transition to net zero and how the Scottish Government will ensure a greener, fairer future for all?
The just transition to net zero is clearly a huge economic and social opportunity, not just for the north-east—which we have quite rightly been focusing on today—but for Scotland as a whole. Communities are uniquely placed to play a critical role in shaping and driving forward that transition to a low-carbon and climate-resilient economy.
That is why the Scottish Government has committed up to £6 million of funding this year for our network of 24 climate action hubs. We are delighted to see the impact that the hubs are having in enabling communities to make positive changes for a more sustainable and resilient future.
Additionally, the just transition fund for the north-east and Moray has, so far, allocated £75 million to supporting projects and communities across the region to create jobs, support innovation and secure the highly skilled workforce of the future that, throughout this debate, we have rightly pointed to.
There are additional requests to ask questions. If members are concise, we can get more in.
According to the report published today by Robert Gordon University, 400 people in the oil and gas industry will lose their jobs every fortnight. The only transition that those 400 people will face every fortnight is a transition to take up a job in the Emirates, Houston in the US, Norway or other countries that believe in developing their own oil.
The windfall tax must surely end now—there is no windfall; it is just a tax—and consents to our own gas and oil reserves must be granted. My question to the Scottish Government is this, minister: when will you come off the fence? We know that there is evidence that Rosebank and Jackdaw will emit in their production a fraction of the fracked gas that is supported by Donald Trump. Why are we becoming Donald Trump’s little helpers? Why are we not pressurising the Labour Government to do what everybody in Aberdeen can see must be done without delay, because we are in the biggest jobs crisis that this country has seen?
Always speak through the chair.
Fergus Ewing will appreciate that nobody in the chamber is disputing the enormity of the problem for any individual or family in the north-east of Scotland who is facing the kind of situation that he describes. I do not want to minimise that in any shape or form.
Fergus Ewing is well aware that the Scottish Government has no role in the consents process, other than that we believe that they should be subjected to not only economic but environmental tests.
I think that Fergus Ewing and I are in agreement on the windfall tax: the point is passing at which it could be described as a windfall tax or at which its current level could be described as such. The Scottish Government has made it clear that the UK Government needs to clarify its position on that now.
Will the minister confirm that it was the SNP Scottish Government that called for the energy profits levy to be introduced? When does he think that it should have been removed?
As Douglas Ross is well aware, we supported the levy as a temporary measure. We do not support the increase in the levy to its current rate, and we do not support the fact that the UK Government appears to have put no end date on it.
I thank the minister for advance sight of his statement. We have heard from several members today about the new report by Robert Gordon University in Aberdeen, which warns that the energy workforce could shrink by 400 jobs every two weeks for the next five years. However, instead of using his statement to outline a much-needed industrial strategy for the north-east, the minister tries to blame job losses on the redistributive windfall tax on the obscene profits made by Shell and other oil and gas multinationals. In all the years of rampant profiteering, my constituents in the north-east were no safer from economic shock, energy poverty or job insecurity. It does not trickle down. Why does the minister want us to believe that it does?
I am not sure what kind of conversations Mercedes Villalba is having with industry, the workforce or, for that matter, her constituents in the north-east of Scotland. All I can say is that I receive regular representations about the levy and the fact that it constrains much-needed investment not only in the oil and gas industry but in decommissioning work.
That concludes the ministerial statement. There will be a brief pause before we move to the next item of business.
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