Chamber and committees

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.

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.

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.

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.

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.

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 must make a little progress just now—I might come back to the member.

I welcome the UK Government’s recent working paper, which seeks views on the introduction of a mandatory community benefit scheme for low-carbon energy infrastructure—a question that is currently reserved to the UK Government.

As Fergus Ewing recognised amid the thundering delenda ests of his peroration, there are several areas in which the Scottish and UK Governments can co-operate. Although he pointed out—in Latin—that we must “festina lente”, or hurry slowly, the Government recognises that we need to move a posse ad esse: from potentiality to actuality.

The Scottish Government has long called on the UK Government to consult on mandating community benefits for onshore renewables, and I welcome that consultation as a step forward. We will continue to engage to ensure that Scotland’s interests are fully represented. That represents our long-standing leadership in championing community benefit from renewable energy developments. Jackie Dunbar mentioned the importance of tackling fuel poverty as being at the heart of all those efforts, and Alex Rowley referred to that issue, too. They recognised that, in many cases, areas of fuel poverty are also the areas that host projects.

The Scottish Government is committed to growing the community energy sector in Scotland, and the community energy generation growth fund represents an exciting step forward in the development of the community energy pipeline in Scotland that we all wish to see.

We have seen, through CARES, that communities are enthusiastic to do more. I know how important community energy projects are in supporting local economic investment and empowering communities to take ownership of their energy future.

Craig Hoy refers to offshore projects, for instance. The Scottish Government has very developed procedures in place to ensure that, as taxpayers, we do not find ourselves in the situation that he describes. However, he raises important issues that will be faced by many communities when it comes to replacing infrastructure in the future.

This will come as a surprise to Douglas Lumsden, but I agree with his point about the importance of the efforts that are made by volunteers in communities and the fact that that can place a great strain on individuals and communities. I wish to recognise the exceptional efforts that have been made by the community in North Yell, which Beatrice Wishart referred to. I have visited it, and it is a formidable organisation.

We continue to advocate and act for Scotland’s communities to ensure that they receive a just and equitable outcome from our energy transition. Whether that is through community energy, shared ownership or community benefits, it is essential that communities see a positive and lasting legacy.

A number of members asked how smaller local authorities are to cope with large-scale planning issues and the scale of work that is involved. The Scottish Government certainly seeks to support local authorities that are in that position.

Will the member give way?

Alasdair Allan has identified an error in his contribution and provided the following correction.

At col 63, para 5, line 3—

Original text—

I listened carefully to Patrick Harvie’s comments about local control and culture change. In the past 12 months, more than £30 million-worth of benefits have been offered to Scottish communities, supported by our voluntary good practice principles. We agree that, as a Government, we must do more.

Corrected text—

I listened carefully to Patrick Harvie’s comments about local control and culture change. In the past 12 months, more than £29 million-worth of benefits have been offered to Scottish communities, supported by our voluntary good practice principles. We agree that, as a Government, we must do more.