Official Report 1201KB pdf
The next item of business is a debate on motion S6M-19894, in the name of Douglas Lumsden, on backing oil and gas. I invite members wishing to participate in the debate to press their request-to-speak buttons now.
I call Douglas Lumsden to speak to and move the motion. You have up to seven minutes, Mr Lumsden.
14:54
Today is a really dark day for the oil and gas industry and for the north-east of Scotland. We have seen headline after headline in The Press and Journal this week on the damage that the energy profits levy is having. I assure Labour Party MSPs that that was not scaremongering—we must all brace ourselves for what is coming next.
My party has called it an “oil and gas emergency”, and that is by no means overdramatic. It is an emergency, and we need to brace ourselves for a tsunami of job losses across the sector after today’s budget.
As the Office for Budget Responsibility revealed earlier, the EPL will remain, but the intake from it is tailing off dramatically as it kills off the industry and thousands of jobs with it. It is completely wrong.
I have met many energy companies over the past few weeks—I guess that the Cabinet Secretary for Climate Action and Energy has done so as well, but no one from the Labour Party ever seems to attend the meetings that are called. The energy companies tell me time and again how bad things are, that they are not replacing people who leave, their order book is reducing, they are focusing on work overseas, they are moving their skills overseas and they are downsizing and getting rid of offices. The sad and frustrating part is that that decline is self-inflicted and driven by political policy. It is a classic case of shooting ourselves in the foot.
It is not just the north-east that is suffering—the news from Grangemouth and Mossmorran is a result of the North Sea contracting, with less product flowing to them. I was at a meeting last night about Mossmorran, and I was told that the reasons for closure are Government policies. The plant pays carbon tax of £20 million per year, with that amount due to double. It has high energy costs and there is less ethane available because of the North Sea shutdown. We were told that the ethylene that Mossmorran produces is 50 per cent more expensive than that of its competitors abroad. How can the plant compete in that market?
When global companies are choosing to walk away from Scottish energy and manufacturing because policy is hostile and uncertain, that is not a transition—it is economic vandalism. We should brace ourselves for more, because as Governments force the decline of home-grown hydrocarbons, more and more large pieces of infrastructure will become unviable. The gas plants, the pipelines and the terminals are all at risk.
Does Mr Lumsden agree that we should take a leaf out of Norway’s book, given that Equinor has just announced plans to drill 250 new wells, invest $5.9 billion a year and maintain production up to 2035 at 2020 levels? Should we not be following Norway’s example?
I could not agree more with Mr Ewing. The sad fact is that not only is Norway producing more, it is actually selling to us. Norway is producing oil and gas from the basin where we are choosing to leave them in the ground.
I also get angry with the Scottish National Party. If we have a presumption against new oil and gas, this is where it leads us. We cannot say that we do not want home-grown oil and gas and then shed crocodile tears when no new oil and gas means that jobs are lost, infrastructure is no longer needed and the only transition that people face is moving from Scotland to Stavanger.
Our motion puts it plainly: Scotland’s Government has adopted a
“presumption against new oil and gas exploration and production”—
an approach that is not only economically reckless but blatantly disconnected from Scotland’s energy reality. The SNP says that it is about climate leadership, but its own documents admit that we will need oil and gas for some time as part of the journey to a transition. The truth is unavoidable. If we turn off domestic supply, Scotland will not consume less oil and gas—we will simply import more foreign energy at higher carbon intensity, supporting jobs abroad.
The SNP’s position is not climate leadership but climate hypocrisy. Meanwhile, communities in the north-east—my constituents—are paying the price. The SNP supports a just transition, but it cannot explain why the north-east has lost three oil and gas jobs for every one clean energy job that has been created over the past decade. It cannot explain why more than 13,000 Scottish oil and gas jobs have been lost in a single year, with employment now almost half of what it was in 2013. It is time to call this out for what it is—an ideological campaign against a sector that Scotland still relies on.
What about the SNP’s energy strategy and just transition plan? It will soon be three years since it produced the draft. Where is it? Is the SNP Government incompetent or untruthful?
Both.
Does the SNP no longer have any idea what should be in the plan, or does it fear the backlash when people realise what is in it? I agree with Mr Carson—I think that it is both.
The SNP does not want to be honest with offshore workers on its position on oil and gas. It does not want to be honest with our rural communities about the impact that the scale of expensive renewables will have on our countryside, whether that is monster pylons, battery storage or substations. It does not want to be honest with our fishermen about the impact that offshore wind will have on fishing grounds, nor does it want to be honest with households about the true cost of renewables and their impact on bills. Instead of the cabinet secretary jetting off around the world, she should meet communities and hear people’s concerns.
Scotland is blessed with one of the most highly regulated, low-carbon oil and gas basins in the world. The North Sea is not the problem; it is part of the solution. The public agree: 84 per cent of Scots support continuing domestic oil and gas production during the transition. Therefore, the Parliament must send a clear message today: that it does not support the SNP’s presumption against new oil and gas, it does not support Labour’s punitive energy profits levy and it stands with Scotland’s workers, Scotland’s energy security and Scotland’s economy.
This country needs a transition that is built on realism, not ideology. The SNP refuses to give clear support to the industry and Labour says that our future is not in oil and gas. However, we say plainly that Scotland needs its domestic oil and gas industry, it needs energy security and it needs a fair and affordable path to net zero. That begins with backing our own workers, our own resources and our own future. I urge colleagues across the chamber to back my motion.
I move,
That the Parliament regrets the Scottish Government’s ideological drive to end North Sea oil and gas exploration and production; notes the negative impact on oil and gas jobs, energy security, the economy and the environment of the Scottish Government’s failure to pursue an informed, data-led, evidence-based North Sea policy; demands the immediate and unequivocal reversal of the Scottish Government’s presumption against new oil and gas exploration and production, and calls on the UK Government to immediately abolish the Energy Profits Levy.
15:01
The Parliament debated oil and gas policy just two weeks ago, and we now return to that policy in the light of significant United Kingdom Government announcements that have been made over the past hour—or, I should say, in the light of the lack of announcements, because the omissions from the chancellor’s budget statement are more significant than what was included.
The future of North Sea oil and gas remains of vital importance for Scotland’s energy transition, energy security, economy and society. Oil and gas still play an important role in Scotland’s energy mix and will continue to do so for decades to come. That role is declining as we reduce demand through decarbonisation of the systems that we rely on to live, and given the geological maturity of the North Sea basin.
The previous debate focused on consenting for offshore projects that are already in development—decisions that are reserved to the UK Government. Today’s motion focuses on licensing for exploration to identify new oil and gas fields and the associated fiscal regime. Those are, again, reserved matters.
On licensing, within the past hour, the UK Government has published its “North Sea Future Plan”, which includes how it will approach future oil and gas licensing in the basin. The Scottish Government did not receive prior sight of that document, so I will need to take time to carefully consider the detail and its implications for Scotland. We will continue to call on the UK Government to approach all its reserved decisions on North Sea oil and gas projects on a rigorous, evidence-led, case-by-case basis, with climate compatibility and energy security as key considerations.
The environmental compatibility report for Rosebank has been available for some weeks now. Does the SNP Government back Rosebank—yes or no?
It is getting a bit tiresome explaining the Scotland Act 1998, the Electricity Act 1989 and all the reserved functions of the UK Government to the Conservative energy spokesperson, who I would have thought would be familiar with the detail of those.
Meanwhile, we will continue the oil and gas transition training fund to support the industry-led energy skills passport and provide enhanced training opportunities for oil and gas workers via our colleges. We have already invested more than £120 million in the north-east through our just transition fund and energy transition fund to support the region’s transition to net zero. That funding has helped to create new jobs, support innovation and secure a highly skilled workforce for the future. We are on the side of energy workers.
I turn to the omissions from the chancellor’s statement this afternoon, which I referenced earlier. That means turning to the fiscal regime in the North Sea, which is—again—reserved to the UK Government. I am deeply disappointed by the UK Government’s budget announcements a few hours ago, but, more than that, I am deeply worried. Do not just take my word on that; I have the response from David Whitehouse, the chief executive of Offshore Energies UK, who said:
“Today, the government turned down £50 billion of investment for the UK and the chance to protect the jobs and industries that keep this country running. Instead, they’ve chosen a path that will see 1,000 jobs continue to be lost every month, more energy imports and a contagion across supply chains”.
I totally agree with him.
On the other side of things, I want to explain how the situation is affecting communities, because the levy is not just a tax on companies.
Will the minister give way?
I will come to Fergus Ewing in a second, after I make this point.
Communities are being affected not just in the north-east but across Scotland. Donna Hutchison, the chief executive of Aberdeen Cyrenians, has made clear the real-world consequences. She said:
“Every job lost in the energy supply chain lands somewhere—in a home, a family, and a community. It can mean rent arrears, foodbank visits, or a parent quietly skipping meals so their children don’t have to.”
Would the way to avert those job losses not be to preserve and create the 1,000 jobs that would come from Cambo and Rosebank?
Equinor’s analysis is that 12 or 13kg of CO2 is emitted per barrel of oil, which reduces to 3kg if there is electrification. That compares with 80kg for fracked gas or liquefied natural gas.
I will use the short time that I have to make one point to Fergus Ewing. I am fully in favour of electrification of production platforms. The decrease in production emissions is important and should be taken into account when all licences are considered.
I am deeply worried, because the UK Government did not even mention EPL in the budget statement today. The situation is worse than simply not heeding warnings from the industry. The Labour Government has not taken the offer of Offshore Energies UK to reform the levy in a way that would prompt renewed investment while creating longer-term tax receipts for the UK Treasury. It did the work for the Government. It presented a plan and a way out that would lead to more revenue coming to the Exchequer, but it was not even referenced. As far as I know, it has not even had a response.
The EPL is affecting investment in offshore wind and the stability of the energy supply chain, as well as causing job losses well beyond oil and gas producers. It is having a ripple effect on communities in the north-east, Grangemouth and Fife. Furthermore, it is preventing the decommissioning of obsolete assets, with all the jobs that would come with that.
You need to conclude.
It is simply a tax on the industrial workers and communities of Scotland. I am appalled that it has not been scrapped.
There is one more thing to say before I sit down. The Tories have a brass neck. They introduced the EPL, but they did not even mention that, or that they extended it. It is shameful that they cannot fess up. [Interruption.] They would rather just mislead the public.
I move S6M-19894.3, to leave out from first “the Scottish” to end and insert:
“that the Conservative Party, while in the UK Government, extended the Energy Profits Levy and failed to replace it with a sustainable fiscal regime that supports a just transition, and recognises that communities in Scotland are now paying the price of the UK Conservative administration’s levy on Scottish industry.”
Can we please make sure that we can hear the person who has the floor? A bit of response and reaction to what is being said is one thing, but barracking in that way is not acceptable.
I call Sarah Boyack to speak to and move amendment S6M-19894.4. You have up to four minutes, Ms Boyack.
15:07
I am pleased to open the debate for Scottish Labour. Today’s debate should have been an opportunity for Parliament to come together and set out a clear, credible path for Scotland’s energy future. However, once again, we are confronted with a motion from the Conservatives that is more about political theatre than about serious long-term planning.
From the SNP, we see the same pattern.
Will the member take an intervention?
No, thank you.
It is not about political theatre; it is about—
No, thank you. I had four minutes, and now I have less time than that.
There has been a complete absence of SNP strategic leadership. Let me be clear from the outset that Scotland’s oil and gas industry has made a profound contribution to our economy, to workers’ livelihoods and to energy security for decades. The people who built that industry—the engineers, the offshore workers and the supply chain businesses—deserve a future that is every bit as strong as its past. Instead, they have been given years of neglect. The Conservatives at Westminster and the SNP at Holyrood have both stood by without any plan for what comes next. Our amendment makes that point clearly. We regret that the SNP and the Tories have let Scotland’s oil and gas sector down, with no plan for the future.
Scotland should be a global leader in the energy transition. We have the engineering expertise, the offshore skills, the natural resources and the public support, but we have lacked leadership. That is why we welcome the UK Government’s plans, which are deeply rooted in energy security, fairness and a realistic path to net zero. Labour is clear that oil and gas will continue to be part of our energy mix for decades to come, because turning off the taps tomorrow is not an option. That would undermine energy security, push up bills and make us even more dependent on imports from other countries. We also need to make—
Will the member give way?
No, thank you. I just want to be clear on this topic—it is a short debate.
Scotland’s huge renewables potential must be unlocked by maximising the opportunities from offshore wind, accelerating onshore wind, expanding green hydrogen and investing in the carbon capture and storage projects that the Tories delayed for years—projects that would have delivered thousands of jobs across the north-east and at Grangemouth.
We must also address the climate and nature emergencies, which are beginning to affect households across the country. For example, let us look at heating our homes. Scotland’s 2.5 million homes account for 13 per cent of our total greenhouse gas emissions, so we need action now from the Scottish Government—I say that on fuel poverty awareness day. Our councils need support to invest in that area, so that we get new, well-paid jobs across the country. Midlothian Energy Ltd is looking at delivering low-carbon energy projects and investment. Its heat network will supply 3,000 customers. The work has started, but we are not seeing the development to take it to the next level. I therefore call on the Scottish Government to deliver on the statutory undertaker rights that were included in the Heat Networks (Scotland) Act 2021. Their implementation has been delayed, so heat network projects are not able to proceed. We will not see new jobs being created unless we have a plan or cross-Government action, which is vital.
Here is something that I agree with Douglas Lumsden on—shock, horror! A draft energy strategy was announced nearly three years ago. Businesses are crying out for clarity, supply chains need to be able to invest now, and, crucially, workers need to know where their future lies. A credible energy strategy must include a real skills and training plan, so that workers in oil and gas can transition; well-paid jobs; clear investment pathways for renewables; and green hydrogen that is linked to local production and supply chains and is not imported from foreign manufacturers. I call on the SNP Government to publish its energy strategy and just transition plan now.
I move amendment S6M-19894.4, to leave out from first “the Scottish” to end and insert:
“that the Scottish National Party (SNP) and the Conservative and Unionist Party stood by for years and let Scotland’s oil and gas industry decline with no plan for the future; welcomes the UK Labour administration’s plans to ensure that oil and gas continue to be key parts of the country’s energy mix for decades to come, while working to unlock Scotland’s huge renewable potential; condemns the two decades of SNP failure to turn this enormous potential into jobs, wealth and social good for communities across Scotland, and calls on the Scottish Government to urgently publish its Energy Strategy and Just Transition Plan, and to invest now in skills development and the green jobs of the future.”
15:11
The green voting sheet for this afternoon’s debate was not difficult to fill out. Very obviously, we will oppose the motion. The Scottish Conservatives are here to serve the interests of the profit-hungry, climate-wrecking, lethal fossil fuel industry, and they make no attempt to hide it. Equally obviously, we will oppose the SNP’s demands for a massive tax cut for the same lethal fossil fuel industry. Just as obviously, we will oppose Labour’s amendment, which comes on the day of Labour’s capitulation to the fossil fuel industry and its backtracking on its already weak position on new oil and gas.
Sarah Boyack started off by blaming others for party political posturing and then indulged in exactly the same thing. None of the other parties has put the blame where it belongs, which is fairly and squarely on the fossil fuel industry itself—those who have extracted not only vast amounts of oil and gas, which they have pumped into the atmosphere, but vast amounts of profit, and who are now happy to put their workforce on the economic scrap heap.
I thank the organisation Uplift for the briefing that it circulated. It rightly points out that North Sea developments are made economically viable only
“with massive state support”
and that the industry’s claim that half of the UK’s oil and gas demands could be met from the North Sea is misleading. The industry admits that it is
“‘considered to be beyond realistic assumptions’”
and would require
“massive tax breaks.”
The industry has a long history of choosing to prioritise its shareholders over its workforce and, certainly, of prioritising profit over planet.
Will Mr Harvie take an intervention?
No. I do not have time.
My real worry at the moment is that the Tory and Labour position—the new antagonism to any kind of credible climate policy—not only is bad in its own right and harmful in indulging the interests of the fossil fuel industry and rebooting climate denial, but is worse because of the effect that it is having on both the Labour and SNP Governments. They are clearly reaching the conclusion that they can persuade people to compare them to those who are looking to rip up climate legislation instead of being judged against what the science demands. In reaching that conclusion, they have clearly decided that they can get away with doing the absolute minimum on climate policy or even going into reverse.
That is why the Scottish Government thinks that it is fine to scrap road traffic reduction targets, scrap any halfway-serious action on clean heating, reject the UK Climate Change Committee’s advice on agriculture, and demand a massive tax break for the fossil fuel giants that have brought the world to a state of climate emergency. Clearly, it is also why the UK Government thinks that it is fine to betray the trust of those who thought that the Labour manifesto commitment on oil and gas meant something. I was always sceptical, but I know that there were those who thought that “no new licences” was a pledge worth having. Now it is clear that the UK Government will always put the interests of the fossil fuel giants first, and it does not care much for the last shreds of climate credibility that it once had.
It is easy to forget that it is only a few years since the Scottish Parliament had complete consensus in recognising the reality of the climate emergency. The public still want climate action, and growing Green parties in all the nations of the UK will continue to call out those who back the multinationals. We will stand up to the fossil fuel profiteers, and we will show that a fairer, greener and more equal society is the only viable path ahead of us.
15:15
In what was quite a unique collaboration, Offshore Energies UK and Scottish Renewables joined forces recently and called for the energy profits levy to be scrapped and replaced. They said:
“Unless we slow the pace of decline in North Sea oil and gas while simultaneously accelerating the scale and speed of renewable energy deployment, we face a widening gap in jobs, investment and capability that will weaken our economy.
Ultimately, this will make the government’s energy ambitions harder to achieve, and cause long-term damage to our communities.”
Does Willie Rennie agree that decommissioning has not been mentioned enough in the debate? Much of the activity that the supply chain and workers would have been doing relates to decommissioning, but they do not have the headroom to do it. That is another area that is costing jobs.
For years, we have talked about a just transition, and we now have it—live—in front of us but lacking a joined-up approach. Last night, I was at the Mossmorran working group, which I thought was quite an open and reflective event, but the deal was already done, the jobs have gone and there is no just transition plan for Mossmorran, as had been promised.
That happens over and over again. I understand that the Scottish Government will point to the Westminster Government, but the reality is that we do not have a plan whereby things work together in a joined-up way to make the transition work. Today, the UK Government has buried on page 71 of its budget document the replacement for the EPL, the oil and gas price premium, which is projected to be replaced by 2030, with a consultation in the year 2026-27. However, the UK Government is so far behind the curve that the OBR does not even have projections for what tax that would raise.
We need to get real. We can see, right now, the impact of jobs going in the north-east—the Aberdeen Cyrenians have already been referred to—and it is a handbrake on the region’s economic prospects. We have seen the impact at Mossmorran, on my doorstep, and at Grangemouth, where Petrofac is going into administration with 2,000 jobs. Many of those people will not go for other opportunities in Scotland; they might just disappear abroad, and we will lose the skills base that might be essential for developing the renewables potential that this country clearly has. The transition must be managed.
Will the member give way?
I am sorry, but I do not have the time.
The North Sea oil and gas basin in the United Kingdom is, of course, a declining resource—that is a geological fact—but we are not making that decline any better by having such an aggressive EPL tax regime. The UK Government needs to understand that, if we are going to live with this for generations, we need a more sensible arrangement. I will admit that we supported a levy on excess profits back in 2022. We thought that it was the right thing to do at the time, because the profits were excessive. That does not mean that we were committed to it forever, though, ignoring the reality on the ground of an extended windfall tax arrangement irrespective of the impact on people and their livelihoods.
The UK Government and the Scottish Government must get their act together and work on a proper just transition, so that we do not end up arguing polar opposites but can have a—to some degree—boring, managed plan; so that people can live and work here and pay their taxes; so that we can have energy security in this country; and so that, all together, we can deliver on our climate change obligations. Is that too much to ask for? It sometimes seems that it is.
We move to the open debate.
15:20
I welcome the opportunity to speak today, given the unquestionable—but often overlooked—importance of the oil and gas sector to the Highlands and Islands. My region has been at the forefront of the Scottish oil and gas industry since it began.
Last week, the First Minister’s remarks to the Parliament showed that he sees the future of the industry in terms of managed decline. That is quite a turnaround for a man who, not long ago, was talking about a second oil boom and about how more than half of the value of the North Sea’s resources was still to be extracted. With the odd honourable exception, members on the SNP benches have spent the past decade with a policy on oil and gas that mirrors their much-ridiculed views on an independent Scotland’s currency: one that is unclear and constantly changing. Labour, too, has found itself speaking with two faces: one presented to the workers, another to its environmentalist support. Although they may be useful political tactics in the short term, the equivocation about our oil and gas sector at the UK level from Labour and in this Parliament from the SNP—with its friends in the Scottish Greens—has cost investment. It has also cost jobs, and it will continue to cost jobs unless things change.
Grangemouth and Mossmorran may dominate the headlines, but facilities such as the Flotta and Sullom Voe oil terminals are vital to our communities in the Highlands and Islands. I have raised the futures of those terminals with UK and Scottish ministers and will continue to do so, but we cannot pretend that they are local matters—the issue is one of wider policy. I urge SNP ministers in this place and Labour ministers at Westminster not to let those places become another Grangemouth or Mossmorran. They should not wait until crisis forces them to act. They should not wait until it is too late and then create another constitutional fight over who is to blame. Talks on the future of both those sites, and others, should be on-going; they should be happening now, and in detail.
Disastrous though it may be, the Green prescription for Scotland at least has the merit of being consistent, as Patrick Harvie highlighted. The same cannot be said of the policies of the SNP and Labour, which seem to want the tax revenues and jobs without the inconvenience of the industry. That position cannot stand. As the Scottish Affairs Committee noted last month, there is little sense on the ground of a just transition happening. We are haemorrhaging jobs, and the once-promised green jobs revolution has not materialised on anything like the scale that the SNP suggested. Meanwhile, the vital transferable skills that could contribute to clean energy roles are also being lost. It is clear that, even if the long-term promises of the transition were realised, on its current trajectory many skills from our oil and gas sector will disappear. Skilled workers are retiring, retraining or leaving the country for better prospects elsewhere.
What must be done? Well, abolishing the energy profits levy, as our motion calls for, would have been a start—but, yet again, Labour is not listening. There will be no silver bullet for the industry; global economic forces will not stop at our borders. What this Parliament—and Governments both here in Edinburgh and down in London—must do is get behind our oil and gas industry, without equivocation, and move to a strategy that clearly emphasises maximising production. As Fergus Ewing highlighted, although its Rosebank development west of Shetland faces opposition from Government, Equinor is pushing ahead with plans to drill 250 oil and gas exploration wells in Norwegian waters in the next decade.
We need to get licences approved and ensure that there is a fair taxation system in place—one that lets the industry function while delivering a sensible and realistic contribution to public spending. We should recognise that oil and gas are going to continue to be in demand for the foreseeable future. The alternative would be devastating and is wholly unrealistic. There is no merit in offshoring production and destroying our own industry for the sake of statistics. A transition that simply means a greater reliance on imports in the short and medium terms is one that fails to address our energy security. It harms not only our current industries but our future industrial and economic potential—all to satisfy a paper-thin illusion of greater progress towards net zero.
15:24
The budget is a little over two hours old, and I have already had a number of messages and communications from constituents and family members about the content of that budget and the fact that the energy profits levy will remain. I have been told, “They are destroying Scotland’s energy future,” and, “They are taxing my job out of existence.”
Mr Lumsden seems to have forgotten that it was his party that introduced the energy profits levy in the first place. Rather than strutting about on his high horse, Mr Lumsden and the entire Tory party should be on their knees apologising to every single oil and gas worker for the horrific damage that the Tory energy profits levy has done to the industry. The Tories have gone, but, whether in relation to Brexit, eye-watering household bills or the energy profits levy, the promise of change has brought change for the worse under Labour.
The offshore industry desperately needs change for the better, and it desperately needs the energy profits levy to be abolished, not in 2030 but now. The levy needs to be abolished to keep oil and gas workers in jobs, to support the transition to net zero, to boost the economy and to protect communities in the north-east of Scotland.
The Aberdeen and Grampian Chamber of Commerce estimates that 100,000 jobs will be lost if the UK Government does not get its boot off the neck of the oil and gas sector. It is not only the offshore oil and gas workers who will brave the perils of the North Sea or the Atlantic to ensure that the lights stay on and our homes stay warm this winter who will be affected; the tens of thousands of workers in the supply chain in every corner of Scotland and beyond will also be affected. The job losses have already begun. Just the other week, the Port of Aberdeen announced redundancies due to oil and gas activity falling by 25 per cent.
Labour must not do to the oil and gas workers what Thatcher did to our coal miners. Labour must stop following the Thatcherite blueprint of industrial decimation that has blighted Scotland’s pit villages. Instead, it must listen to Offshore Energies UK and unlock £50 billion-worth of UK oil and gas projects, which will sustain tens of thousands of jobs and, over time, deliver higher tax receipts while supporting our energy security and net zero ambitions.
This is about the ambition to reach net zero. We cannot transition to net zero without the investment, expertise and skills of our offshore industry and our oil and gas workers, because today’s offshore oil and gas workers are tomorrow’s offshore renewables workers. Today, the chancellor had the opportunity to abolish the energy profits levy, and I am gutted that she did not, as are thousands upon thousands of people who I and others represent. It is likely too late, but the chancellor could think again and abolish the energy profits levy. However, I do not think that she will, as neither she nor the Labour Party gives a flying futret for Aberdeen and the north-east of Scotland.
15:28
What an absolutely dreadful speech that was by Kevin Stewart. I will pick up on a number of the points that he made in it in a moment, because it was completely blind to his own party’s failings on the issue.
However, I want to start on another point. Douglas Lumsden, in his excellent opening speech, and Willie Rennie both mentioned Mossmorran. I just cannot get past this point, so I will use the debate to ask for a very simple answer from the cabinet secretary. In April 2024, her predecessor, Màiri McAllan, said that the Government was developing a just transition plan for Mossmorran. Where is that plan?
I think that Douglas Ross has been given the answer to that question. Màiri McAllan announced that a just transition plan for Mossmorran would be worked on after the deployment of the Grangemouth just transition plan, which is only a couple of months old.
What we did not see coming was what ExxonMobil has done. The UK Government knew about that a good few months in advance of us, and Kate Forbes is on record as saying when she was told about ExxonMobil’s decision in relation to Mossmorran. The just transition plan would have made no difference to this announcement that we did not know about.
Cabinet secretary, that was a very long intervention.
That was a very long answer. First of all, we do not know what difference it would make, because no one has ever seen the plan. The Government made a commitment—it made a pledge in the chamber—to develop a just transition plan. I would like the cabinet secretary to review her answer after the debate, because my understanding, from a request made under the Freedom of Information (Scotland) Act 2002, is that the Scottish Government said that the plan was in progress. That was more than two months ago. If the cabinet secretary is saying that it was starting to do that work in just the past couple of months, she has potentially misled the Parliament. However, the issue is not going away, because this is typical of the SNP: it makes grand announcements in the chamber, it does not do the work, and then it cries foul and blames other people when problems such as this occur.
I want to use the remainder of my time to focus on the rant that we heard from Gillian Martin at the end of her speech, about the EPL and the Conservatives, and the disgraceful speech that we just had from Kevin Stewart. SNP speaker after SNP speaker has criticised the energy profits levy, but not one of them has been honest enough to say that they called for it; they demanded it. They said there must be—
Will the member take an intervention?
I am not going to give way to Kevin Stewart. I certainly will not waste my time on Kevin Stewart, but let Kevin Stewart listen to what some of his own SNP members had to say about an energy profits levy. If he turns round, he can ask Jackie Dunbar what on earth she was thinking when she said:
“We must extend the windfall tax”.—[Official Report, 9 November 2022; c 97.]
If he turns back round and looks to the front bench, he can ask Gillian Martin what she was thinking when she said:
“We need to put a windfall tax in operation”.—[Official Report, 18 May 2022; c 36.]
When he travels back to Aberdeen, he can ask Stephen Flynn why he lodged a motion in the House of Commons that said that the Government should implement a windfall tax on companies.
[Made a request to intervene.]
No, I am not giving way to Kevin Stewart.
When Tom Arthur, an SNP minister, comes into the chamber, maybe he can say why he not only supported the energy profits levy, but said that he wanted it to be broadened. He said:
“a strengthened windfall tax should be an important source of funding”—[Official Report, 26 October 2022; c 56.]
and that it should be broadened.
John Swinney, now the First Minister, said:
“We have been clear that an enhanced windfall tax should fund that support in place of increased borrowing or spending cuts.”—[Official Report, 2 November 2022; c 25.]
I will take no lectures from the SNP. It wanted the EPL, and it called for it. It cannot now cry foul when it is implemented.
15:32
It is clear that we will continue to depend on hydrocarbons for many years to come. These are precious resources, and we must redouble our efforts to stop using them for transport and heating and to develop substitutes for their use in products where there are not yet alternatives.
Ahead of the debate, I believed that we all agreed that we should not use all our reserves. We need to recognise that these are finite resources and that, if we do not take steps to move away from their use, they will run out—something that the Conservatives and the SNP have ignored in today’s debate so far.
The Conservatives and the SNP have also not taken account of damage caused to the planet by burning hydrocarbons and releasing more carbon into the atmosphere. That is not news—we have known about it for decades—and yet we are still far too dependent on those resources. We need to increase the pace of our development of alternatives, and we need to develop other industries in order to have a just transition for our workers.
However, that does not mean selling off our resources to the lowest bidder. The ScotWind auction is a case in point. I thought that the objective of an auction was to find the highest bidder. Whose idea was it to set a ceiling on the auction? The Government’s response to that question is that it was intended to leave more money in the bidders’ coffers for local workforce development and jobs. That is spurious, because there is no onus on those companies to do that. What that approach did was boost the profits of the multinational companies, with no return for the Scottish people.
The £700 million that was raised at the auction could have been £8 billion to £10 billion, which would have covered the SNP’s black hole and left plenty to fund a just transition—something that the Scottish Government has failed to do. It could have funded our further education sector, which is crucial to a just transition. Colleges are the vehicles that will transition the skills of our workforce from oil and gas to renewables. What a wasted opportunity.
We need to reset the energy market. Energy prices are totally dependent on oil and gas prices.
Will Rhoda Grant take an intervention?
I am very short of time.
We need to move our energy on to a different footing, and we have the opportunity to do that, but it is not being grasped. We know that communities get compensation for hosting renewables in their areas. We also know that those communities can develop their own renewables and get 35 times more from that investment—funds that they can use to tackle fuel poverty and build community resilience. That is community wealth building in practice.
I was disappointed that the Scottish Government did not lease the Cruach Mhor wind farm in Argyll and Bute to Cowal Community Energy. That community energy company would have used the profits from the development to benefit its community. That is another wasted opportunity. The Scottish Government also rejected an amendment to the Land Reform (Scotland) Bill that would have ensured that that could never happen again.
If Rhoda Grant will take an intervention—
Do I have time?
No, there is no time in hand.
I am sorry.
We need to ensure that, in future, priority is always given to community bids for leases and repowering opportunities for renewable energy on publicly owned land. That should be a right.
The Conservatives bring the debate to the chamber having abjectly failed to decrease our dependence on hydrocarbons to prepare our country for the future and protect our planet for future generations.
Stuart McMillan joins us remotely.
15:36
Every MSP recognises the economic impact that the oil and gas sector has had on the wider economy since the 1970s. Clearly, there has also been an environmental impact. Although the sector is based in the north-east, it involves workers from across the country, in addition to companies in the supply chain. Therefore, the debate on the oil and gas sector and the energy sector as a whole is for every MSP.
I have family who work in the sector or who have previously worked in it, and I have friends who work in the sector. I have long since heard their concerns about the sector’s future. I recognise that their views on renewable energy are not that positive, but that is not the case for every worker in the oil and gas sector. It is essential that the just transition happens. Douglas Lumsden stated earlier that Scotland needs a transition based on reality, and I very much agree.
The cabinet secretary has previously highlighted her family background as coming from Clydebank. She was right to highlight the absolute carnage that was wrought on the communities along the banks of the Clyde when the shipbuilding industry was decimated by the Conservatives in the 1980s.
Communities such as mine are still struggling to fully deal with that. There has been 44 years of population decline because industry was shut down. Thousands of jobs were lost and yards were torn down, with retail units, fast food outlets, some offices and flats being built in their place. Those facilities are cleaner than the shipyards and heavy engineering that once stood there, but there was no concept of a just transition at that time. The enterprise zone that was installed delivered some successes, but very little was of long standing.
My community suffered as a consequence of a Conservative Administration that was hellbent on destroying working-class communities. I do not want that to be replicated in the north-east of Scotland—where some of my family now live, as they were forced to get on their bikes as per the demands of Norman Tebbit.
The energy profits levy was useful in the short term, but the fact that the past Conservative Government never replaced it with something more sustainable is yet another example of the utter chaos that was emblematic of the Conservatives’ time in government. The SNP amendment states:
“and recognises that communities in Scotland are now paying the price of the UK Conservative administration’s levy on Scottish industry.”
My only challenge to my party on that amendment is that the energy profits levy is the present-day equivalent of what the Tories do to Scotland any time that they are in power. The systematic demolition of industry and communities, or the raking in of finance from cash-cow communities when it suits them, will always be fair game to the Conservatives.
Whether under the Conservatives or Labour, Westminster has failed to provide the oil and gas industry with certainty or stability. That approach is in direct opposition to supporting jobs and the just transition, which would safeguard energy security and lower bills.
Fundamentally, the energy profits levy should be scrapped and a proportionate tax regime should be established. There was a time when oil and gas giants were making windfall profits in the UK, but that is not the case now. They are global companies, and the vast majority of their profits are made outwith the UK. All that the windfall tax is doing is costing jobs and driving a more rapid decline in the North Sea. In a nation that is as energy rich as Scotland is, it should be a disgrace that so many of our citizens are so energy poor—and every single MSP should be appalled at that.
Although Labour promised to cut energy bills by up to £300 per year, the reality is that bills have risen and the blame lies squarely at Westminster’s door. Key powers over industry, trade, industrial relations, employment law and energy are all in Labour’s hands. That is why it is vital that we remain steadfastly behind the renewable energy revolution and maximise the investment and opportunities that it will bring.
If Westminster repeats the mistakes of the past and allows Scotland’s immense natural resources to be mismanaged, we will all risk the same fate. I do not want other communities to suffer 44 years of decline and—
Thank you. I call Graham Simpson to speak for up to two minutes.
15:41
What a disgrace the budget was. What a disgrace it was that Rachel Reeves did not listen to calls to scrap the energy profits levy. It appears that she liked what the Conservatives started and she is doubling down on it.
Thousands of jobs are being lost in the North Sea thanks to the measure that was brought in under the Tories and made worse under Labour. Rachel Reeves should be ashamed of herself. She might have sounded the death knell for the oil and gas industry in Scotland, but the SNP cannot get off the hook, because its anti-oil and gas rhetoric has had an impact. The workers of Grangemouth, Mossmorran and elsewhere know who they have been let down by.
The cost of living is among the top concerns of voters across the UK, but we would not know it from the utterances of ministers in Holyrood. The SNP is currently demanding that Ed Miliband vastly increases the subsidies that are on offer to renewables. That is because, as the Tory motion rightly says, the SNP has an “ideological drive” to end production in the North Sea. It is a case of, “It’s Scotland’s oil, as long as you don’t touch it.” What renewables advocates do not tell us is that, since the subsidies are recovered through electricity bills, increasing subsidies means higher electricity bills for everyone, at a time when households are already feeling the pinch.
So, well within my two minutes, I say that, despite the hypocrisy of the Tory motion, I will support it and reject the amendments.
We move to closing speeches.
15:43
What a curious debate we have had. At times, I have felt as though I am the only atheist in the room as holy war breaks out and religious schisms emerge.
There has been so much performative disagreement between all the other parties when in fact they agree on so much. They all want to expand fossil fuel extraction; they just have different degrees of enthusiasm about how much they are willing to advocate for it. They are all slowing down and backtracking on climate policy and they all seem to share the common delusion, expressed by many members across the chamber, that the fossil fuel industry is investing in the just transition.
Nothing could be further from the truth. The oil and gas industry is failing to invest in the solutions that will enable the transition. Three quarters of North Sea companies plan to invest solely in oil and gas production between now and 2030. Globally, the oil and gas industry invests nothing more than marginal amounts in renewables and other transition technologies. Across the chamber, members have been trading quotes from the fossil fuel industry and its representative body as though they all believe that the Parliament is elected to represent them and their shareholders.
As they express a shared anger at the lack of a just transition, all the other political parties are pointing fingers at each other, instead of looking at who the truly bad actors in this scenario are—those who have extracted vast profits from fossil fuels and who have zero interest in investing in the transition.
The Green amendment, which was not selected for debate, also expressed regret. However, unlike the Conservatives, who expressed regret about an ideological opposition to oil and gas, we expressed regret about the Conservative Party’s ideological opposition to credible climate policy. There would be immense opportunities for Scotland in relation to long-term jobs, energy security, the economy and environmental improvements if the Scottish and UK Governments pursued what we described in our amendment as an informed, worker-led and evidence-based just transition to a sustainable economy.
We agree that the Scottish Government should finally publish its energy strategy and just transition plan, but it must include the continued presumption against new oil and gas exploration and production.
Will Patrick Harvie take an intervention?
I do not have time.
We have called on the UK Government to ensure that those in the fossil fuel industry, who have generated vast profits while causing the current climate emergency, pay enough tax to make a serious contribution to the cost of the transition, instead of the costs falling on the state alone. Fundamentally, that is what is missing from every other political party’s position on the crisis.
The central reason why an unjust transition is taking place is that no Government is willing to hold to account the billionaires who sit behind the fossil fuel industry—those who have lined their pockets and are now putting their workers on the economic scrap heap, despite having caused an environmental crisis that will threaten all our futures. What is needed for a just transition is to hold economic power democratically accountable, instead of leaving things to the self-interest of billionaires.
15:47
On several occasions in the past few weeks, we have discussed the need for leadership and action to deliver a fair transition, with new jobs across the country, while supporting those in the oil and gas sector. Therefore, I welcome today’s announcement by the chancellor that she will tackle the cost of living for working families by cutting the cost of energy bills by, on average, £150 a year from April.
Will Ms Boyack give way on that point?
No.
The UK Government is backing Scottish industry and jobs, including through £14.5 million for Grangemouth, £20 million for Inchgreen dry dock and the North Sea future plan for a fair, managed and prosperous transition. That will be critical, and it followed extensive consultation with workers and unions.
The UK Government will establish the North Sea jobs service, a world-leading national employment programme that will offer tailored end-to-end support for members of the workforce who are seeking new opportunities, including in clean energy, defence and advanced manufacturing. The service will provide support at every step of a worker’s career journey, and it builds on the discussion that we have had in this Parliament about the energy skills passport. Funding of up to £20 million will be provided by the UK and Scottish Governments, following demand for the Aberdeen skills pilot to help oil and gas workers to retrain. Transitional energy certificates will be critical in supporting the management of existing North Sea fields for the entirety of their lifespans, and a new jobs brokerage service will offer end-to-end career transition support. That will result in more skilled Scottish jobs and more opportunities for the green industries of the future to drive our economic growth.
We need our Governments to work together, whether in relation to project willow for Grangemouth or support for the workers at Mossmorran. We also need a joined-up approach when considering the benefits of capturing heat from waste and from data centres, to ensure that we use the additional electricity, instead of paying £1.5 billion in constraint payments. We must ensure that we make the right investment.
I agree with the cabinet secretary about the opportunities to decarbonise existing oil and gas platforms, including through making links to offshore floating wind, considering low-carbon technology and investing in new shipping.
Rhoda Grant’s comments about ScotWind were bang on. It could have delivered so much more in terms of both income and Scottish manufacturing.
Our approach is rooted in partnership with workers, businesses and communities. Part of me is not surprised that, today, the SNP has focused on the EPL. The SNP has criticised Tory austerity and ignored the additional public spending that our Labour Government has already delivered. That is £5.2 billion already this year, and my understanding is that, when we add in what was announced in today’s budget, there will be £10.3 billion in total for the Scottish Government.
We can continue with the decade of division, delay or missed opportunity, or choose a path where oil and gas workers are supported; renewables are accelerated; people’s bills come down; and we have a clean, green energy powerhouse that is built in Scotland. That is the future to which Scottish Labour is committed, maximising the opportunities, with new jobs created right across the country delivering confidence in supply chains; supporting new manufacturing opportunities; investing in renewables; and making our homes, buildings and transport, and our industry, fit for the challenges of the future. That is the future that our Parliament should back today.
15:50
I did not really expect to have to correct quite a lot of misinformation that is coming through in the debate—[Interruption.] Actually, I will rephrase that. I did not think that I would be using a lot of my time to respond to some of the accusations that have been put to me—[Interruption.] I would also like to be able to hear myself speak as I rebut some of the comments—[Interruption.]
It is all very well for members to quote from a debate in 2022, when we were all in agreement that there had to be a levy on excess profits. Every member across the chamber agreed in 2022 that there were excess profits, but, by spring 2023, those profits were absolutely plummeting, and that was starting to affect investment. The Scottish Government, along with others, therefore called for the EPL to be scrapped. That is the fact of the matter, and I make no apology for initially supporting what was meant to be a temporary situation where there were excess profits.
I had an issue with the fact that other sectors that also had excess profits were not being taxed in the same way, and I commented at the time that I thought that it was unfair to single out one particular sector when others were making so much profit—
Will the cabinet secretary give way?
No, I will not, because Craig Hoy did not contribute to the debate.
I also make no apology for focusing—
Will the cabinet secretary take an intervention?
Is the cabinet secretary taking any interventions from the gentlemen who have just offered to intervene?
No—I am going to continue, because I ran out of time in my opening speech, and I am not going to run out of time in this one.
I make no apology for focusing on the energy profits levy, because it is the single issue that every single supply-chain company, whether it works with renewables, oil and gas or a mixture of the two, has continually highlighted to me and to others. Those companies say that the effect of the EPL is damaging their viability, and they are seriously worried about the impact that that is having.
What actually happens when we have an oil and gas industry that has no headroom to invest or to do anything other than just keep production at a low level? The industry does not invest in decommissioning, which would create thousands of jobs. Decommissioning was supposed to fill the gap between the decline in the production of oil and gas and the ramping up of ScotWind. However, it is not happening, because the companies do not have the headroom to do it given the 78 per cent profits levy that they currently face.
The supply chain starts to lose confidence, as well. Many supply-chain companies let people go, and people lose jobs. The people who have lost their jobs go elsewhere, to other parts of the world, and we will be lucky to get any of them back. We increase our demand for importing natural gas from elsewhere to heat our buildings for as long as they are heated with natural gas, because we are not producing enough of it domestically.
I understand why Sarah Boyack and Rhoda Grant did not want to dwell on the EPL—they must be secretly disappointed that there was not an announcement in Rachel Reeves’s budget statement today.
I see that Sarah Boyack is shaking her head; she is obviously pleased that the EPL continues. However, as long as the EPL continues in its current form, 1,000 jobs will be lost each month. That will not affect oil and gas workers directly; those jobs will be in the supply chains, and in cafes, restaurants and cinemas—the other sectors in the community that depend on their clientele and people having money in their pocket. It will affect the community that I represent, as well as Fife, Grangemouth and further afield. It is not just a north-east problem or an oil and gas problem; it has a wide reach.
To be honest, people need to wake up to the fact that this is not about ideology; it is about protecting people’s lives in a managed just transition that must happen—but it must happen without cliff edges. It is fine when cliff edges appear on the horizon, because we can prepare for them, but when they are introduced by punitive fiscal policies, which ExxonMobil accused the Labour Government of, hell mend us all. To have a just transition, we need a fiscal policy that supports workers in the supply chain and beyond.
15:55
Douglas Lumsden’s motion opens by regretting the
“ideological drive to end North Sea oil and gas exploration and production”.
Nothing in the debate contributions or in the amendments to the motion from the SNP, the Greens, or Labour suggests that those parties have the least recourse to the facts or, indeed, practical reality. They have failed to confront a simple, but overarching, truth: our society runs on oil and gas. When Rhoda Grant makes facile comments about not using oil and gas, she utterly fails to recognise the demand for oil and gas to heat our homes, power our factories and run the trains—
Will the member take an intervention?
Not just now, thank you.
You mentioned me.
Not just now, thank you.
Oil and gas is also required to make plastics, which make our medical equipment, food packaging, phones, cars, and the turbine blades and nacelle covers of wind turbines. Demand for plastics is not falling; it is rising. Plastics are entirely synthetic and are made from oil and gas. They drive 12 per cent of global oil demand. By 2030, it will be a third, and by 2050, it will be half.
My colleague is making a good point. Does he agree that the oil that is extracted from the North Sea is very high grade? It is used in the petrochemical industry and is probably in all our clothes. Without it, the national health service would collapse.
Brian Whittle makes exactly my point: there is no debate about whether we use oil and gas; we are debating where we get it from. Conservative colleagues have made the positive case for why that must be from the North Sea. I argue that the SNP and Labour’s position, both today and in years past, is an ethical failure. Patrick Harvie absolutely missed that, since demand will not reduce, all reductions that the UK makes in North Sea oil and gas must necessarily be replaced by imports from countries such as the United States, Qatar, or Russia. In Fergus Ewing’s intervention, he gave members hard data on the fact that oil and gas from those countries carries a far higher carbon footprint. The result is that, although we cut domestic production, global emissions rocket.
Will the member take an intervention?
Perhaps in a second, Mr Harvie.
What of the human cost of the domestic cut? In a typically measured way, Willie Rennie told us of the jobs that will go, and are already going—hundreds of thousands of jobs, both direct and indirect. When Sarah Boyack speaks of a transition, I remind her of the Scottish Trades Union Congress analysis, which shows that wind energy creates just one job for every £1 million that is spent, in contrast to more than 13 jobs per every £1 million that is spent in oil and gas.
One of the few correct things that Kevin Stewart said in his speech was that there is no transition without the oil and gas industry. The SNP and Labour’s ideological closure of the North Sea does nothing to reduce global consumption; it just slashes British jobs and, as Jamie Halcro Johnston flagged, it torpedoes the economy.
Will the member take an intervention?
Can I see whether I have time at the end, please?
To continue on the human cost, North Sea operations are among the most tightly regulated in the world. They have strict emissions standards, strong worker protections and transparent oversight. Replacing North Sea oil and gas with imported hydrocarbons transfers the environmental impact, the industrial risk and the human burden to countries that have weaker regulations, labour standards and safety enforcement. It is an out of sight, out of mind approach, and I find that morally unjustifiable and ethically indefensible.
As I was challenged on the issue of imports and exports, I will simply point out something that I think the member already knows, which is that the large majority of domestic production goes to export. It is not used in this country. Even the small proportion that is used in this country is at a price that is set on global markets, so this is not about displacing other exports.
I am afraid that Mr Harvie has shown his ignorance in that intervention because, in reality, the issue is about where we refine the oil, and a report that was published by Wood Mackenzie this week shows that 65 per cent of UK-exported crude comes back to the UK as refined product. We have to get real about this, and we have to get data and evidence into the debate, because, as the motion notes, ideology will not cut it.
We will continue to use oil and gas for plastics, for industry, for heating and for the transition to renewables. The ethical question is not whether we use those resources but where we source them from.
As Scottish Conservative speakers have set out, using the North Sea is environmentally beneficial and economically prudent, it supports hundreds of thousands of jobs and it helps our energy security. Ending North Sea oil production, which the SNP’s presumption and Labour’s appalling budget from today will make happen, means that demand will increasingly be satisfied by imports, an approach that increases emissions, exports harm, funds dubious regimes, undermines energy security and erodes trust in climate policy. It is unethical policy disguised as environmental virtue signalling. Accordingly, this Parliament must vote for the motion in Douglas Lumsden’s name and reject the amendments in order to force the immediate and unequivocal reversal of the Scottish Government’s presumption against new oil and gas, and continue to demand that Labour reverse course on the energy profits levy.
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