Meeting date: Wednesday, May 29, 2019
Meeting of the Parliament 29 May 2019
Agenda: Next Steps in Scotland’s Future, Portfolio Question Time, Wind Turbine Construction (Fife), Business Motion, Decision Time, Expanding Scotland’s Railways
- Next Steps in Scotland’s Future
- Portfolio Question Time
- Wind Turbine Construction (Fife)
- Business Motion
- Decision Time
- Expanding Scotland’s Railways
Wind Turbine Construction (Fife)
The next item of business is a debate on motion S5M-17425, in the name of Richard Leonard, entitled “Build them at BiFab”. I call Richard Leonard to speak to and move the motion.14:41
Let me begin by declaring an interest. I am a proud member of both the trade unions that represent the workers who are employed at the BiFab yards in Fife and at Arnish point.
Let me declare another interest at the start. I have been privileged in my life to work for the Scottish trade union and labour movement, representing working people across Scotland. They have taught me a lot. It has been a great education, and they are the people who drive me on when the going gets tough in politics. So much can be achieved by working women and men through industrial organisation and industrial action, but so much more can be achieved through political organisation and political action, which is why we have brought this debate to Parliament today.
Let me make it abundantly clear that Scottish Labour stands shoulder to shoulder with the Fife workers at the construction yards in Methil and Burntisland and fully backs the Fife ready for renewal campaign, which calls for the work that was promised to the Fife yards to be delivered to them.
I first visited the yard at Methil more than 20 years ago, when it was owned by RGC Offshore. In those days, it was bidding for oil and gas contracts in the North Sea. The union convener was the late and much missed Jock Kilbane. The industry was beset by famine and feast, with full order books one year and empty order books the next, and the yard was in dire need of investment.
When I went back to visit the yard 18 months ago, I was shocked to see that there had been little capital investment in the intervening quarter of a century; that although the contracts that were sought were now in the emergent offshore renewable energy industry rather than in the hydrocarbon energy industry, it was still a tale of famine and feast; and that the industrious workforce, caught in this market failure and failure to plan, were enduring a prolonged period of famine. They deserve so much better than this. As in the oil years, they are bidding for contracts on the United Kingdom continental shelf and in Scottish inland waters but seeing the work go to yards overseas. It is as though we have learned nothing.
We used to lobby UK energy ministers for intervention, asking them to act and correct the uneven playing field. The unions are doing that again with Claire Perry, but we should not have to keep fighting the same battles over and over again. It is as though we have learned nothing.
Now, of course, we have this Parliament and an opportunity not simply to protest, but to govern; not simply to lobby about the economy, but to plan the economy; and not simply to pass motions, but to take action.
If ever there was a case for proving the need for a Scottish industrial strategy that was made in Scotland, this is it. Here we have millions of pounds of public expenditure through subsidies and levies from consumers being invested in renewable energy to harness a natural resource, but there is no public accountability and, all too often, too little economic benefit.
Our economy should not be a democracy-free zone. Companies such as EDF should not be exempt from responsibility. Promises made should be kept. Communities such as those in Fife should benefit directly from the jobs dividend that renewable energy should bring. There is no point having a green industrial revolution or a green new deal if the new deal is the same as the old deal, if the outcomes of the new deal are the same as the outcomes of the old deal, and if the green industrial revolution ends up simply being driven by the market, in which transnational corporations can sell out working people in Scotland and offshore jobs to the far east.
If, on the other hand, the green industrial revolution means that an interventionist state acts on behalf of the people and our industrial communities so that we go beyond the market, I declare myself to be a revolutionary. If it is simply a revolution of the market and more laissez-faire economics all over again, I declare myself to be a counter-revolutionary.
It will be nothing short of a betrayal if the work on EDF’s offshore wind farm Neart na Gaoithe, which will be worth up to £2 billion and located just 10 miles off the Fife coast, is sent around the world to Indonesia. That work has the potential to create 1,000 green jobs in Fife, fulfilling the promise to the hundreds of skilled former BiFab workers who stand ready to work. For EDF to send those jobs elsewhere would be a betrayal not only of those workers but of an entire community and of Scotland’s commitments on climate change. As I have said previously in Parliament, the Scottish Trades Union Congress put it well when it said that the transportation of those structures from south-east Asia back to Scotland would generate emissions equivalent to an extra 35 million cars on the road. What does that do for the climate emergency?
In the midst of the climate crisis, we must send a clear message to EDF: if it wishes to be part of Scotland’s renewable energy future, it must stand by the promises that were made to the communities and workers of Fife. Meeting the challenge of the climate emergency requires more than words. We must match our ambition with action.
When it comes to our response to the climate emergency, the driving force of change is first and foremost determined by who owns and controls our economy, so we have to ask whether our economy, our systems for producing energy, our transport systems and our use of land and agriculture are operated purely for profit, or whether they are planned for the common good. That is the fundamental question that we must ask, and it should be central in the consideration of the award of all renewable energy job contracts. We will not secure the transformative change that we need to see by leaving it all to market forces.
Those who need further convincing should read the hard-hitting report entitled “Broken Promises and Offshored Jobs”, which was presented to the STUC at its congress in Dundee just last month. I quote from the opening pages of that report:
“the STUC is absolutely committed to building a low-carbon economy and meeting climate change targets. However, we are criticising the failure of industrial policy to ensure that workers, businesses and Government in Scotland benefit from Scotland’s natural resources.”
Scottish Labour is clear: for us, it is not just a failure of industrial policy, but a complete failure of Governments—British and Scottish—to develop an industrial strategy in the first place.
The BiFab workers are now feeling all too keenly the effects of what happens when, as a nation, we do not make every effort to ensure that it is the people who benefit from our natural resources, rather than private profit.
The owners of the NnG contract are EDF, the French state-owned energy company and nuclear giant. EDF is one of the world’s largest producers of energy, with revenues in 2018 of around £60 billion. It promotes its better plan for “sustainable and responsible energy” and “Building stronger communities”. The EDF renewables website says:
“We also use companies local to a wind farm during the development of a site, whenever possible, to ensure the local economy benefits from its build too.”
Unfortunately for the BiFab workers, it seems that, in this case, EDF is all talk.
We cannot repurpose the Scottish economy and deliver the green new deal that is needed without a serious step change in how we do things. Old ideas about rolling back the state and privatisation simply no longer cut it when it comes to how we plan our economy and so meet our climate targets.
If we are serious about climate change, why would we accept that the construction of turbine jackets for renewable energy wind farms that are only 10 miles off the coast of Fife should be shipped around the world, when there is a skilled local workforce that is unemployed but ready and willing to take up the task?
Making that a reality would involve an innovative state. It would mean the Scottish Government using its powers of procurement and planning to make sure that low-carbon developments such as the EDF project, which could benefit thousands of people in Fife, bring economic benefit to local communities.
There is a growing restlessness across all generations, and a rising determination, which this Parliament must reflect, on the need for urgent action to tackle the climate change challenges that face us. I am optimistic that we can achieve the transformative change that is required, but achieving a planned and just transition to green jobs requires us to take action now—today—to ensure that these jobs are here for tomorrow and the future.
That is why, today, we unequivocally back the Fife ready for renewal campaign, and why a Scottish Labour Government would ensure full trade union involvement in economic and industrial planning. We back the calls for a review of the contracts and the supply chain process of the offshore wind sector deal, to ensure that it brings significant work to the Fife yards during the construction phase of all those projects.
That is why I urge the Scottish Government to join us today in calling on EDF to rethink its decision, to invest in the communities, workforce and people of Fife, and to invest in those skills and a future for those yards. Let us make sure that those jackets are fabricated at BiFab.
That the Parliament supports the Fife - Ready for Renewal campaign calling for work to be delivered to the Fife construction yards in Methil and Burntisland; notes that EDF’s Neart Na Gaoithe (NnG) Offshore Wind Farm, worth up to £2 billion, will be located 10 miles off the Fife coast, as well as Inchcape and Seagreen offshore wind farms, worth further billions; further notes that hundreds of skilled, former BiFab workers in Fife stand ready to work; believes that continuing public support for Scotland's climate change targets requires that people see local community benefit from the transition; congratulates the trade unions, community groups and environmental organisations that have come together to fight for a green energy revolution that brings benefit to workers and communities; believes that it would be bad for the climate if turbine jackets had to be shipped from overseas, and calls on the Scottish and UK governments to support the Fife - Ready for Renewal campaign and to review the contracts for difference and supply chain process as part of the Offshore Wind Sector Deal to ensure that it brings significant work to the Fife yards during the construction phase of all projects.14:54
I welcome the opportunity to publicly discuss our support for Scotland’s offshore wind sector and the action that we are taking to maximise Scottish supply chain content. I also welcome the constructive approach of both the Labour Party and the STUC to the debate, and I will try to maintain that consensus throughout. I refer all members to our energy strategy, which includes ambitions on supply chain and local content.
It is important that we do not let developers off the hook today, because I believe that they are watching.
The debate offers us a timely opportunity to send, as a united Parliament, a strong message to the sector on the subject of fabrication and industrial jobs as we make this just transition. We all know the opportunity that we face. The waters around the UK currently have the largest installed capacity of offshore wind anywhere in the world. The offshore wind sector deal sets out an ambition to see offshore wind contributing up to 30GW of capacity by 2030, and the UK Committee on Climate Change stated that the UK might need up to 7,500 offshore wind turbines by 2050 in a net-zero world.
We therefore agree with the view that the UK and Scotland have not been securing the levels of economic benefits and jobs that we deserve from these projects. However, despite key powers lying outwith our control, this Government is determined to maximise the job opportunities and economic benefits in Fife and across Scotland. That is exactly why I chaired a supply chain summit at the start of this month, bringing together Governments—although I was disappointed that the UK Minister of State for Energy and Clean Growth was not in attendance, despite her assurance that she would be—unions, offshore wind developers and supply chain representatives. At that summit, I made the position of the Scottish Government clear.
I will address my proposed actions shortly, but first I wish to deal specifically with BiFab. The Scottish Government’s on-going commitment has given BiFab the best possible chance of winning contracts and securing new work. We have provided strong support to DF Barnes since its acquisition of BiFab. However, we have been clear from the outset that there remains hard work ahead in order to secure the long-term future of the company. BiFab is a competitive yard with a highly skilled workforce.
Scottish Enterprise has invested in the yards over a number of years. Can the cabinet secretary advise members whether it will continue to invest in the yards in order to modernise and upgrade fabrication facilities?
Meetings will be held with a range of stakeholders and partners to try to enable further investment in the yards. Of course, that investment must be state-aid compliant, as long as we are complying with those rules as part of the European Union. However, I am looking for every possible opportunity to allow further investment by Scottish Enterprise in the yards, and we will, of course, continue to explore those opportunities and seize them as and when they arise.
I am particularly concerned about reports of low-tender bids from outside the UK. Those bids suggest that those companies, alongside other supply chain companies in the sector, are not on the level playing field that we try to comply with during these processes. I have repeatedly engaged with industry stakeholders, including EDP Renewables, EDF Renewables, SSE and tier 1 contractors to emphasise the importance of using the Scottish supply chain, and I will continue to do so.
I remain cautiously confident that contracts will be secured for BiFab that will see work return not only to Arnish but to Methil and Burntisland, and I repeat the pledge that the Scottish Government will do everything possible to support those yards.
Returning to the summit, members of the offshore wind sector have committed to undertaking a strategic capability assessment of fabrication in the UK to ensure that we fully understand the actions that are required by all parties to overcome the key barriers that are faced by the supply chain and the issues that they say are difficult.
In relation to Scottish content, I believe that the sector has let us down, and I will not be simply hoping for improvement. That is why the Scottish Government is exploring a range of potential regulatory instruments, levers and powers that we will seek to use. The Scottish ministers are working with Crown Estate Scotland to explore ways by which the new ScotWind leasing round can incentivise the use of the Scottish supply chain.
Can the cabinet secretary explain why that measure was not put in place in previous rounds? Why are we not seeing Crown Estate leases reflecting the need for local content?
The powers have just been devolved to the Scottish Parliament. We are therefore using new devolved powers that we did not have when previous contracts and consents were awarded. Now that we have those powers, I propose to explore their use to achieve the outcome that I hope that we, as a Parliament, will unite on today. I propose to use the ability to do those things—which we did not have before—to achieve that outcome; although exploration is required, I think that there is a willingness to use the powers in that fashion.
We are also reviewing the process for the submission and approval of offshore wind decommissioning programmes. Once Marine Scotland has received a decommissioning programme, certain securities for decommissioning more than £2.5 million require approval by the Finance and Constitution Committee of the Scottish Parliament. If the committee is content with the financial liability and the measures that are in place to reduce that liability, it can approve the decommissioning programme, which will then be submitted to the Scottish ministers for final approval. However, I am determined to ensure that both the Scottish Government and the Scottish Parliament have clear sight of the overall costs and benefits to the public purse—including those in the supply chain—when considering the financial liability that the Scottish taxpayer may ultimately carry. In other words, if the Scottish taxpayer is to provide financial guarantees, we expect developers to deliver for the Scottish economy in return. That demonstrates our commitment to explore all the policy levers at our disposal to increase local content from energy projects in Scotland—a real just transition.
However, given our lack of devolved powers in the area, the UK Government must also act. The UK Government’s contract for difference supply chain process provides an ideal opportunity to hold developers to account and to give clear assurances to the UK supply chain. That will be essential if the target of 60 per cent UK content by 2030—which was committed to in the offshore wind sector deal—is to be achieved. The UK Government must show the path to get to that policy ambition with the levers that it has.
The UK Government must consider current and future CFD allocation rounds to ensure that the project owners and developers deliver, and if they do not, there should be repercussions. The CFD process should also be reviewed to ensure that it delivers value for money for the whole economy. Although the competitive process has driven ever-lower prices for electricity, it has encouraged a race to the bottom that will inevitably see work go to yards outside of the UK—that is not acceptable. Supply chain companies themselves have a role to play, and I commit Scottish Enterprise support to allow them to up their game and collaborate and focus on the opportunities together.
I hope that members are assured of the new steps that we are taking to ensure the success of BiFab, and the wider supply chain in Fife and right across the country, enabling them to take full advantage of the opportunities that are presented by the offshore wind industry in Scotland and beyond. If we unite as a Parliament, I am sure that the industry will watch and respond accordingly.
I move amendment S5M-17425.3, to insert at end:
“, and recognises the efforts of the Scottish Government to bring together trades unions, the UK Government and industry representatives at a summit on 2 May 2019 to ensure that all opportunities are taken to deliver supply chain work in Fife and across Scotland.”
I advise members that if they take interventions, I will let them make up their time until I run out of time—that speaks for itself.15:03
I start by referring to my entry in the register of interests in relation to a smart meter company that is based in England.
This is an important debate on the future of BiFab and renewable energy projects in Scotland. We will vote for both the Labour motion and the Scottish National Party amendment today. We also firmly support the STUC’s Fife ready for renewal campaign.
The Scottish Conservatives share the real concerns of the STUC, BiFab and other stakeholders that the sponsor of the NnG project—EDF—plans to subcontract the manufacturing of wind turbine jackets overseas, rather than place the work with yards in Fife. Those concerns come at a critical time for the project, which is worth more than £2 billion, is located less than 10 miles from the coast of Fife and will generate enough electricity to power a city the size of Edinburgh. The Scottish Conservatives are clear that there are compelling reasons to bring the jobs and investment to Fife. The yards in Methil and Burntisland are ready for the work, which could create jobs for up to 1,000 people and unlock much needed growth and investment in the Fife region. The workers in Fife have the proven skills and experience to deliver on the project, and DF Barnes—the owner of BiFab—has the global experience to deliver.
Another vital consideration is the carbon emissions involved in having turbine jackets shipped from 7,000 miles overseas to Scotland instead of their being built just 10 miles from the wind farm.
For those reasons, the Scottish Conservatives agree with calls that have been made across the chamber, and we will join the other parties in calling for the manufacturing of the turbine jackets to take place in Fife.
We also call on the Scottish Government to follow through on the undertakings that it gave following the supply chain summit on 2 May. At that summit, the cabinet secretary said that he would use every lever and power at his disposal to ensure that Scotland’s renewable supply chain will benefit from the expansion of offshore wind energy in Scottish waters. That could include attaching supply chain conditions and incentives to procurement contracts, leases and other project approvals granted by the Scottish Government.
In his speech, the cabinet secretary did not really go into specific actions that he would take now to ensure that work is placed at the Fife yards or how the Scottish Government will change its policy to secure more Scottish content, including changing procurement practice and policies in Scotland.
Will the member give way?
I was going to say that I look forward to hearing about more concrete actions from the cabinet secretary, but it looks like he is about to explain how he will ensure that more work is given to the yards in Fife.
I have a little formal thing to say. Both of you should not be standing at the same time.
I am particularly eager, Presiding Officer.
It does not matter whether you are eager—you do not do that.
Point taken, Presiding Officer.
I have raised two key areas. We have been exploring exhaustively all the powers that we could use, and the new elements relate to decommissioning—specifically, what has to be put to the Parliament—and the use of the Crown estate, which has been devolved to Scotland. I cannot use some of the other things that have been suggested, but I am determined to use what is within our competence, and I will seek consensus in the Parliament to progress with those things as we explore them, to make the culture of expectation about investment in Scotland real and meaningful, rather than simply wait for the sector to deliver. Those are the two key areas that I have outlined.
We will work together with the cabinet secretary on those areas. I appreciate that some powers came to the Scottish Parliament and the Scottish Government recently, but that begs the question: what has the Scottish Government done to secure more work with the powers that it has had for a long time?
I make it clear that the UK Government also has responsibility for securing more work in the supply chain, and we are calling on it to take steps to encourage EDF to award work to the Fife yards and elsewhere in Scotland. I have written to the UK minister in order to meet her to explore what actions can be taken.
Will the member give way?
I would like to make a bit of progress, but I will give way a bit later.
The risk that the turbine jackets will be built overseas is the latest example of how the Scottish Government has failed to realise the potential in the renewables sector. Earlier, we heard about the GMB report, which sets out a history of broken promises to the renewables industry in Scotland. The report shows that over the past decade, there have been many promises of a jobs and manufacturing bonanza in the sector. In 2010, the SNP’s low-carbon economic strategy promised 130,000 jobs in renewables by 2020.
Will the member take an intervention?
No. Let me continue.
Alex Salmond proclaimed that Scotland would become the
“Saudi Arabia of renewable energy”.
In reality, according to the latest Office for National Statistics figures, there are just more than 21,000 full-time jobs in renewable energy in Scotland. That is fewer than 20 per cent of the jobs that were promised.
Will the member take an intervention?
I am sorry; I have only seven minutes.
We also have a negative balance of trade in the low-carbon and renewables sector in Scotland: we import £230 million more than we export. That shows that the manufacturing base in Scotland is not benefiting from the growth in renewable energy.
The failure to realise Scotland’s potential in renewables has also been evident in the Scottish Government’s track record of investments in the sector. In 2014 and 2015, we saw the failure of the tidal wave companies Pelamis Wave Power and Aquamarine Power, with the loss of more than £40 million of taxpayers’ money. Those failures show—other members have highlighted this—that the Scottish Government lacks a clear long-term strategy for the renewables sector in Scotland. The most productive action that the Scottish Government can now take is to work together with the UK Government under the industrial strategy, the clean growth strategy and the offshore wind sector deal to maximise opportunities for the sector in Scotland.
According to DF Barnes, the owner of BiFab, the UK Government’s sector deal is a laudable initiative, and it welcomes the commitment to achieve 60 per cent of UK content in projects. The UK sector deal also provides visibility on future contracts for difference auctions, with support of more than £0.5 billion being available and the next auction coming on stream later this month. That is in addition to the subsidies that the UK has provided to the renewables industry, which total some £52 billion since 2010. The UK sector deal also commits to increasing UK content to 60 per cent, increasing exports fivefold to £2.6 billion by 2030 and increasing the representation of women in the sector to one third by 2030.
Does Dean Lockhart support conditionality being attached to contracts for difference under the wind sector deal to ensure that local supply chain content is guaranteed, rather than just hoped for?
You are now in your last minute, Mr Lockhart.
The UK minister who is responsible for the deal has made it clear that each CFD must be looked at on its own merits. We should not put in place a blanket system of conditionality. As the cabinet secretary knows well, that is not how the sector works.
The renewables sector in Scotland has benefited from the significant financial support of the UK Government and from the billions of pounds in subsidies through CFDs. However, as we have heard, that support has not translated into the jobs, manufacturing opportunities and investment that the SNP promised. That is because, as we saw clearly earlier today, the Scottish Government has only one priority, and it is not the renewables sector in Scotland.
I move amendment S5M.17425.2, to insert at end:
“, and further calls on the Scottish Government to work with the UK Government to take advantage of the opportunities under the Offshore Wind Sector Deal, which builds on the UK’s global leadership in offshore wind, maximising the advantages for the Scottish offshore wind sector from the global shift to clean growth.”15:11
I thank the Labour Party for securing the debate. This subject reflects Scotland’s climate emergency, and it is where rhetoric meets reality and where communities and workers are either left behind in the fossil age or become the leaders of the renewables revolution under a green new deal. We all know the lessons of history, from the decimation that was caused by the closure of coal mines in the 80s to the alienation of communities, which the Brexiteers so cruelly parasitized in the EU referendum.
Communities in Fife are now crying out for a just transition to a bright future, whether that involves phasing out Mossmorran, reconnecting with rail in forgotten towns or ramping up low-carbon manufacturing. The Greens back the Fife ready for renewal campaign, and it would be an utter scandal if EDF constructed a wind farm just a few miles off the Fife coast, in sight of Methil, where former skilled workers at BiFab have to walk past a mothballed yard every day on their way to try to find new work. Where is the climate justice in that? Where is the just transition? If EDF cannot support jobs in the very communities that host its developments, we should hit the company where it hurts, including through divestment campaigns.
Two years ago, we were hopeful that the pipeline of wind farms on the horizon would deliver jobs at BiFab. It was just a matter of bridging the gap for six months and keeping finances afloat during a traumatic few years for the company before contracts would flow once again. However, there has been a co-ordinated attempt by state-backed contractors to manipulate procurement rules and lock BiFab out of the work. Such companies are acting against the spirit and the detail of their energy consents, which demand local content and local jobs.
Alongside those of the consenting bodies, the role of Crown Estate Scotland, as the landlord, is critical to finding a way to resolve the betrayal. Therefore, I am pleased that the recent offshore wind summit zeroed in on the Crown Estate’s role, and I very much welcome the cabinet secretary’s comments about his desire for ministerial direction in that regard.
However, we need to learn lessons, because state-backed companies will always find it easier to accept financial guarantee risks. They are able to accept losses, with a strategic eye to longer-term growth in markets, and they can bear the risks in jumping on the back of new markets such as floating wind. We also need a state that can create those new markets, that invests and shares in the rewards of investment and that takes the lead in crowding in finance from the private sector. The state needs to carry the risk, particularly in the early development of new technology, but it must not fall into the trap of socialising all that risk only to step back and watch the rewards become wholly privatised.
I am conscious that the Arnish yard in my constituency has had some more positive news, but does the member agree that, to ensure the future for that and other yards, we need to maximise apprenticeships and other training opportunities into the long term?
Absolutely. Linking in education and apprenticeships will be critical to the green new deal that we need to create in Scotland. That is very much the case in Fife. I have met so many exciting young people coming through Fife College who are looking to get into the renewable energy industry but who are simply not finding the apprenticeships that will carry them into those careers.
The great Labour pioneer Tom Johnston would be spinning in his grave to see the dismantling of the state as the thinker, researcher, planner, financier, builder and operator of our energy infrastructure in the UK, with the legacy of his revolutionary hydro board, which was established under Churchill’s government, deregulated and flogged off. It is clear that the future is wind, and the deployment of offshore wind will need to grow, with the project pipeline at least doubling by 2030. Within 10 years, wind will be providing the lion’s share of the energy that we will need to heat, to travel and to power our society, and we need to plan out exactly what that means at the sort of granular level that can deliver investor confidence.
However, it is no good Scotland being the Saudi Arabia of the renewables revolution if the kit to power it is being built in Saudi Arabia. There are still issues that need to be resolved in the offshore wind supply chain. Like Richard Leonard, I first visited the Methil yard some time ago—back in 2004—and I remember being handed a tatty photocopied Scottish Enterprise marketing leaflet about the site and its investment potential. The reality is that the level of Scottish Enterprise investment needed in simple things such as a concreted hard standing and paint shop just has not happened. Our yards should not be oil and gas museums; they need facilities that are capable of producing at a bigger scale, 24/7, 365 days a year. Investment in and the doubling of production at CS Wind in Campbeltown should give us the confidence to bash on with the ambitious investment that is needed in all parts of the sector.
The role of the courageous state is to make things happen that otherwise would not, and there are so many opportunities that lie ahead. I will pick just one: the UK Committee on Climate Change said that moving the ban on the sale of new fossil cars forward to 2030 was a no-brainer, and even Michael Gove indicated to me at a recent meeting of the Environment, Climate Change and Land Reform Committee that the UK’s target date is under review. However, are we acting fully on the opportunities that will come from that? Are we focusing on developing the next generation of charging technology here in Scotland? What about the vital role that electric vehicles and home battery usage will play in feeding back into the grid at peak demand? There are technologies and energy services to be developed that can spin out of academia, even though venture capital and markets might at the beginning be cautious to invest in such new areas.
The strategic thinking, detailed planning and co-ordination that are needed have to come through a green new deal for Scotland to maximise all these opportunities. The climate emergency demands a level of transformative ambition that has never been seen before, but it must come with hope, a just transition and livelihoods for the workers at BiFab.15:17
Given that Neart na Gaoithe will be 10 miles off the coast of my constituency and that, at the other end, we have the Methil and Burntisland shipyards, this issue is important to Fife. Indeed, it is important to Scotland, too.
Andy Kinsella, chief executive officer of Mainstream Renewable Power, which applied for permission for the wind farm at Neart na Gaoithe, said:
“we can finally focus on delivering the very significant benefits this project brings to the Scottish economy and its environment.”
According to Mainstream’s economic breakdown of the project, an estimated 500 jobs would be created in the three-year build phase and at least £550 million of the total project cost would be spent in the Scottish supply chain. The company also expected a further £1.8 billion to be spent in operating and maintaining the array over the projected 25-year lifetime, as well as the creation of around 100 roles, and it set up the Neart na Gaoithe coalition, which was made up of about 60 organisations that supported the development. Alan Duncan, the spokesman for the coalition, said:
“This means the only major infrastructure project that is ready to build in Scotland next year can now go ahead, creating 2,000 jobs for each year of its four year construction process as well as hundreds of long-term permanent jobs.”
Mainstream then commissioned a Fraser of Allander institute report that estimated that NnG would contribute 0.6 per cent of gross domestic product—or £827 million—to the Scottish economy over the project’s lifetime, creating thousands of jobs during the construction phase and more than 230 operations and maintenance jobs for the 25-year lifetime of the wind farm.
The carrots were dangled. Local people were encouraged to speak up. There were adverts in the local and national newspapers and local politicians such as me were put under pressure and courted. Ministers were put under considerable pressure to support the NnG scheme. Now is the time for the new owners to deliver for Scotland. The obligations and promises made by Mainstream were inherited by EDF, which should deliver now, as we were promised. If that does not happen, that will be a huge mistake for EDF and for the industry more widely, because it will send a message very loud and clear that its promises mean absolutely nothing.
EDF is rumoured to be awarding the contract for constructing the jackets for the huge turbines to the Italian industrial giant Saipem, which would manufacture them in Indonesia, on the other side of the planet. The environmental footprint of shipping those massive structures right the way round the world would be significant. It is supposed to be an environmental project, so why on earth would we construct them so far away and commit so much energy to get them here in the first place?
Is the member relying on EDF’s good will or does he feel that more pressure should be put on it and that what he asks for should be a contractual commitment?
Yes, there should be a contractual commitment. It is a mistake not to have one. Similar things have been done in contracts in other parts of the energy sector, so I simply do not understand why on earth it has not been done for this contract. The loss to the local economy would be significant.
Of course the BiFab yards need to be upgraded and investment is required. Efficiency and capacity need to be improved so that the yards can cope with the demands of the NnG contract. Change is required to ensure that the yards are ready not just for this contract but for other contracts in future.
Gary Smith speaks with great clarity on the issue. Before the latest problem occurred, he said:
“promises made by politicians a decade ago over Scotland’s renewables industries will amount to nothing more than a puddle of snake oil.”
He went on:
“we don’t have the ‘Saudi Arabia of renewables’ we were promised”.
Importantly, he said:
“the taxpayer pours billions of pounds of subsidies into an industry that lines the pockets of other countries and private financiers, instead of redistributing wealth into our own communities.”
If the contract goes abroad, real anger will be felt in the communities of Fife. The disconnect is real. How do we ensure that Scotland does not lose out again?
For any investors and developers that are investing in Scotland or planning to do so and that are watching and listening to the debate, will Willie Rennie agree that it would make their lives easier if they would just invest in Scotland and then they would not be getting the berating that they are getting this afternoon?
That is right. They should listen very carefully. They should not make bold promises and put adverts in newspapers right across Scotland, encourage ordinary working people and communities to back their plans and then ship the jobs abroad. They should never ever do that if they want those contracts in future. There is a big lesson for them to learn.
That is why we support the Fife ready for renewal campaign. The work should be awarded to Fife and Scotland, because that is what we were promised.15:24
I welcome the debate. The future of the Fife construction yards in Methil and Burntisland is important to me, and I have had a relationship with the workforce and their trade unions since I was first elected to Parliament. My first regional office was in Methil, just along Wellesley Road from the Fife energy park, where BiFab is located.
I first visited BiFab at a time of prosperity for the company with the then member of Parliament Lindsay Roy and the then Secretary of State for Energy and Climate Change, Ed Miliband. Over the years, I have witnessed the ups and downs of the business, the struggle for global competitiveness in the renewables manufacturing sector and the tenacity of a company that was determined to compete at a challenging level to secure work for the yards. There have been strongly mounted campaigns over the years, and there have been times when the workforce has been greatly reduced. During such times, I have worked with members of the GMB and Unite at Methil to apply political pressure, and I have garnered political support by working with my fellow MSPs and the Scottish ministers.
For me, this is not about saving a company for its shareholders or about increasing its profits or company profile. My involvement with and commitment to the yards are for the excellent workforce, whose employment is important to Methil, Levenmouth and Fife, and for providing the cornerstone of a positive economic future for the area. If any area in Scotland should benefit from the growth of the renewables sector, this area should, as it has a proud history of manufacturing, a strong industrial heritage and a skilled workforce, but it is too often hampered by underemployment, in-work poverty and a lack of opportunity.
When BiFab was on the brink of collapse, in November 2017, the march on Parliament was a powerful demonstration of the passion and the commitment of the workforce, their families and their community. I recognise the role that the Scottish Government played in the company’s continuing to operate and its ability to complete its work for the Beatrice contract, which was vital for the reputation of the company and the workforce. The rescue package enabled the takeover of the company by DF Barnes, and I very much welcome the positive relationships with the new owners that are reported by the trade unions. I recognise the new owners’ commitment to making a success of the business and securing work for the Fife yards. However, it is hugely frustrating and damaging for the local economy that the yards are sitting empty. The work that has been secured at Arnish is welcome and demonstrates the ability of the company to gain work, but there is capacity to take more work at the yard—and, crucially, we need to see employment in the Fife yards.
I will briefly mention Scottish Enterprise. BiFab leases the yard from Scottish Enterprise, and there is a need for investment in the infrastructure of the yard. Over the years, there have been discussions about that. I understand the commercial relationship that exists, but there is an opportunity to add value and there is a workforce who are capable of delivering the yard improvements if the Scottish Government, through Scottish Enterprise, would commission the work.
I acknowledge the recent summit that was held by the Scottish Government and the round-table session that was held by the Economy, Energy and Fair Work Committee. Our motion calls on the Scottish and UK Governments
“to review the contracts for difference and supply chain process as part of the Offshore Wind Sector Deal to ensure that it brings significant work to the Fife yards during the construction phase of all projects.”
Concerns have been raised about the weaknesses of the deal. If the deal is to deliver—not only to reduce emissions, but for our communities—it needs to set conditions that work will be secured in the UK and, in particular, that it will support the Scottish market, in which we are seeing growth and a pipeline of projects.
I make the point again that CFD is reserved to Westminster. It is for us to consent, but we cannot attach conditions when we do so. However, conditionality could be attached to CFD. Doing so may come at a cost, but it would be welcome for Scottish investment. Would the Labour Party join us in calling on the UK Government to allow such conditionality in contracts for difference, which could be absolutely pivotal in ensuring work for Scotland?
I accept the cabinet secretary’s points, and I recognise the role of the UK Government in the matter. However, the summit that he held brought together the UK and Scottish Governments, so I ask the Scottish Government to apply any pressure that it can to make the sector a better one for Scottish companies to compete in.
We need to show greater ambition for expansion in the sector and ensure that our skilled manufacturing base sees the benefit of it. We cannot continue to see companies take advantage of Scotland’s natural resources but not invest in the people of Scotland and our communities.
The Economy, Energy and Fair Work Committee’s evidence session outlined the problems that BiFab faces as it competes in what is often described as a tangled mess of contracts and payments. The witnesses expressed clear concerns over the abuse of state aid rules and the lack of a level playing field. Serious questions were asked about the status of consent letters from Marine Scotland and about the subsequent failure to see the conditions, which were described as “expected” and “likely”, realised. As the Government has explained, the devolved Crown Estate powers present us with opportunities and we need to make the best use of them.
The bitter disappointment of losing out on the Kincardine and Moray contracts means that the yards in Fife are lying unused. Workers have not been in the yards for a year—the yards have been mothballed and have become a symbol of missed opportunity and stilled potential. However, that has not dampened the commitment of the workforce and their trade unions. The launch of the Fife ready for renewal campaign deserves the support of us all.
The idea that EDF will award the contracts for wind turbine jackets for the NnG offshore wind farm, which sits off the coast of Fife, to Indonesia and that those jackets will be shipped thousands of miles to Scotland is just not acceptable. That people in Fife will see the wind farm from their windows but get none of the economic benefit, even though they are paying into the project, is completely unacceptable. I urge EDF to do the right thing and honour the commitments that it has made to local investment to support the Scottish industry. In return, it will find a highly skilled, committed workforce and will be able to demonstrate a commitment to reducing our carbon footprint and prove its green credentials.
A significant majority in Parliament recognises that, around the globe, we are facing a climate emergency and that we, in Scotland, have an important role to play in tackling climate change. Changing our economy and reducing our use of fossil fuels is critical to that. We support a zero-carbon economy, and our renewable output is a huge factor in achieving that, but our communities and our workforce have not been feeling the benefit of that transition.
When the Fife energy park opened, there was optimism and the promise of well-paid, highly skilled jobs that would re-energise Levenmouth and Fife. However, as the STUC report “Broken Promises and Offshored Jobs” shows, fewer than a third of the jobs that were promised in Scotland have been delivered. That is a poor legacy for the industry so far. We all need to take responsibility for doing business differently, and EDF could take a lead by ensuring that these valuable green jobs come to Fife. I urge it to do so.15:31
I am pleased to have been called to speak in this important debate. As the MSP for Cowdenbeath, I am 100 per cent behind the BiFab workers, whose skills are second to none. I am also very pleased to note that the Scottish Government has, once again, reiterated its commitment to stand by BiFab and to strain every sinew to secure a long-term future for the yards.
It is precisely because of the intervention by the Scottish Government, in addition to the extraordinarily impressive fight by the BiFab workers themselves, that BiFab still exists. I submit that the Scottish Government is no mere bystander as far as workers are concerned; indeed, it has the backs of workers in Scotland. Whereas the UK Government is now entirely engulfed in Brexit chaos and Tory Party leadership machinations, we, in Scotland, are fortunate to have a Government that is getting on with the job, and the job that it is doing in connection with BiFab is to fight for the work, the jobs and this growing industry in Scotland.
In that context, the BiFab campaign Fife ready for renewal, which was launched recently by the GMB, Unite and the STUC, is to be applauded, for it is vital that supply chain work comes to BiFab. Of key importance in that regard, in the short to medium term, is the EDF NnG offshore wind farm, which is to be located just 10 miles off the Fife coast. It would surely be as nonsensical as it would be an absolute travesty if BiFab did not receive the work for the wind turbine jackets for this significant infrastructure project. Much has been made of the environmental cost of transporting the jackets from Indonesia—which is rumoured to be in the mix for the contract—back to 10 miles off the Fife coast. Surely, the environmental costs must be factored into the overall total cost of the project over its lifetime.
Last week, I wrote to the chief executive of EDF, making those very points. I stressed that the BiFab yards at Methil and Burntisland are ready and able to take on the work. I also highlighted the importance of that work to the Fife economy. I took that up with the cabinet secretary, too, for it is, to my mind, imperative that people in Scotland see the maximum benefit from the new generation of renewable energy technologies that are now coming on stream. It cannot be the case that we might miss out on what should be a major boost for, in the case of the NnG project, the Fife economy, and, in the case of other projects, Scotland as a whole.
The supply chain must work hard to seek opportunities by, for example, making strategic investments and considering appropriate collaborations when putting in tenders for contracts. I am pleased to note that the Scottish Government is committed to maximising the sector and that its recently convened special summit involving key developers and suppliers was a success. It is a pity that the UK energy minister was not able to attend, but I know that the trade unions were there.
I understand that the industry has agreed that collective action is needed to ensure that supply chain companies are well positioned to benefit from upcoming offshore wind projects. I also understand that the industry accepts that a bit of a sea change is needed to meet the ambitious 60 per cent local content targets that the UK has set in its offshore wind sector deal. On that key point—about which the cabinet secretary posed a very pertinent question to both the Conservatives and the Labour Party—without conditionality and the contract for difference process, how on earth will we get those large companies to do that? This is not a game that we are playing; this is people’s livelihoods. We must have conditionality in the process. It is nonsensical not to have it, and I am disappointed that the Tories, in particular, have just disregarded that proposition.
It is essential that the Scottish Government continues to work with the trade unions and others, as well as with the UK Government, to ensure that Scotland gets its fair share of the renewables manufacturing bonanza that we all wish to see. Although I understand that, further to the summit, the UK Government is to look again at the contract for difference and supply chain process, it is essential that conditionality is ensured. It is a pity that this Parliament does not have that power—what a difference we could make to drive the industry forward.
I commend the unstinting efforts of the GMB, Unite and the STUC, and I commend the BiFab workers, whose skills, commitment and impressive dignity are the best adverts for the future of the yard. This contract is vital for the workers, for the company and for Fife. I know that the Scottish Government will continue to do everything that it can to secure the work, and I welcome the cabinet secretary’s pledge to that effect, which he has stated again this afternoon. Today, our Parliament in Scotland is sending a strong message: EDF should honour the promises that it made and bring this vital work to Fife.15:36
I ask members to note my entry in the register of members’ interests relating to renewable energy and manufacturing.
Considering that the SNP recently announced that it is stepping up its action to combat climate change, I am sure that the Scottish Government will be keen to implement actions that will support our renewable energy sector as much as possible. I welcome the opportunity, in this debate, to promote our offshore wind sector and to state the importance of our renewable energy industry’s contribution to the Scottish and UK economies. It is important that skilled workers such as those at BiFab are employed, so that we can boost our local economy and, importantly, retain skilled workers in Scotland.
However, disappointingly, the SNP Government is still dragging its feet. Although it will say in every media release that it intends to invest in tackling climate change and in our renewable industry, the action is lacking.
Will the member give way?
Both the Fuel Poverty (Target, Definition and Strategy) (Scotland) Bill and the Climate Change (Emissions Reduction Targets) (Scotland) Bill simply do not go far enough in their ambitions.
Will the member take an intervention?
No. I think that we have heard enough from the SNP about its priorities today.
In the case of the Fife ready for renewal campaign, we cannot escape the fact that constructing parts for Scotland’s offshore wind farms halfway round the world and transporting them here would have a carbon cost. Transport emissions are barely falling and made up a third of Scotland’s emissions in 2016.
Alex Rowley (Mid Scotland and Fife) (Lab) rose—
We need to take bigger steps by ensuring that local companies are awarded contracts to reduce our impact on the climate. Not only that; we need to boost our local economy and provide jobs for skilled workers. The sector has shrunk in every quarter for the past two years, shrinking by 3.5 per cent in the last quarter alone, which is the largest fall on record.
Last year, in a debate on apprenticeship week, I noted the importance of encouraging people into the sector.
What about Alex Rowley?
Thank you, cabinet secretary, but I am chairing the meeting.
Will the member take an intervention?
We will soon have a shortage of workers, with more than half of those in the industry reaching retirement age.
As we will hear from many members today, this is about more than just one firm; it is about the wider environment for businesses and the need for us to do better in supporting it. Scottish Renewables noted that offshore wind expansion will provide huge potential for hundreds of supply chain companies, ports and communities that all feed into those offshore projects.
The offshore wind sector is one for Scotland and the UK to be very excited about, and its UK content is expected to reach the target of 50 per cent by 2020. It is currently at 48 per cent, which is a 5 per cent increase on the 2012 figure, which shows that it is moving in the right direction. Earlier this year, the UK energy minister announced the offshore wind sector deal, which will further reduce emissions and protect the environment. That is a landmark agreement between the UK Government and the offshore wind sector, and it is suggested that the UK could reach 30 gigawatts of offshore wind capacity by 2030.
In the public gallery today, there are workers who have been competing against state-owned companies from overseas. There is not a level playing field. There is a view that, while they have been trying, the UK Government has been sitting on its hands. Will Alexander Burnett push the UK Government to intervene, to put the resources in and to create a level playing field?
We are all aware that there are state aid restrictions on investment.
That was my point.
Maybe after Brexit, there will be opportunities to give support. [Interruption.]
Cabinet secretary, you may show passion but I warn you to keep a lid on it.
There will be not only investment of up to £250 million in building a stronger UK supply chain but social equality commitments such as increasing the representation of women in the industry to at least a third. With an expected increase in the number of green jobs in the industry from 7,000 today to 27,000 by 2030, that is a great deal for the UK. Importantly, a significant number of those jobs are expected to be in Scotland. We need the SNP to show its commitment to the renewable energy sector, to support businesses such as BiFab to gain contracts, to encourage companies such as EDF to recognise its environmental impact and to take bigger steps in its ambitions to combat climate change.
Scotland currently has the lowest rate of economic growth of any country in the EU and the lowest rate of jobs growth of any region or nation in the UK, and there has been no improvement in our productivity level since 2007. As a country, we have so much to offer but we are not showing it. We have the tools to make those statistics change, and I believe that Scotland can be back on top. Thanks to the UK Government, in 2019-20, Scotland’s budget is increasing by £521 million in real terms, with the block grant rising by 1.7 per cent. Therefore, there can be no excuse that the SNP does not have the resources to help. I ask the SNP Government to invest in our climate change economy and to use that extra cash to stick to its commitment to maintain Scotland’s reputation as a global leader in tackling climate change.
I am disappointed but not surprised that, so far, it has been all talk and no action. I hope that the SNP is determined to tackle the climate emergency that our generation faces and that we can work together to achieve our ambitious climate change targets.15:42
I do not want to get involved in party politics on this subject, but the speeches from Tory members this afternoon have been appalling and have shown no commitment to Scotland whatsoever.
Will the member take an intervention?
I am not taking any interventions from Tory members.
Yet again, Scotland has to beg multinational companies to get control over our own resources. This is not the first time that we have been in this situation. Thirty and 40 years ago, the Scottish people did not benefit from the great wealth from the oil in the North Sea—not just in relation to the revenue, but in relation to the jobs, the technology and the order book. We never got our fair share. To be fair, the Labour Government of Harold Wilson and Jim Callaghan tried to rectify that by creating the Offshore Supplies Office and the British National Oil Corporation—not to go and beg, but to take ownership of our resource and turn it into wealth creation for Scotland and other parts of the United Kingdom.
One of the first things that the Thatcher Government did when it came to power was to sell off the BNOC and get rid of the Offshore Supplies Office. The consequence of that was that we never realised our full potential from oil. Here we are again—history is repeating itself. We have a massive asset in the North Sea, which, as the cabinet secretary said, has huge potential for wind power generation. We are not reaping the benefit of that because we do not have the power to impose conditionality. If the Parliament had that power, we would have a clear majority to impose conditionality and that would solve the BiFab problem almost overnight.
However, we do not have that power and until we get it we have to look at other ways to address the situation. That falls into two categories. First, we have to fight, ideally on a united front, for the BiFab workers and their families. If that means that in the meantime we have to beg EDF, we have to beg and try to persuade it. We have to try to get the energy minister in London to exercise her power while we maximise the use of our power. We should do all of that and I think that most members in this chamber are agreed.
Secondly, we have to make sure that Scotland never gets into this position again. If we look back at our history with hydro power—that huge resource that is concentrated in the north of Scotland—as Mark Ruskell said, we did not wait for some EDF from another country to manage and develop our hydro resource; we did it. Tom Johnston set up the North of Scotland Hydro-Electric Board during the war at the most difficult time to get the money to do that.
I say to the Scottish Government: if we are not going to get the powers that we need, let us look at repeating the model of the hydro board and set up a Scottish national renewable energy company. It should not just bid for contracts from big multinationals but develop the wind farms onshore and offshore, take control of the whole process and use that power to buy in the resources of BiFab, give BiFab and other Scottish companies their orders and build up an export industry in wind farm development, in terms of the technology and all the rest of it. We should mobilise our resources. We have vast pension funds in the public sector in Scotland and we should get them to invest in that kind of dynamic process—in a new national company to manage, own and develop our wind power capability. Then we will not need to go and beg.
The other thing that we should do, in addition to all the excellent work that the Scottish Government has already done both with BiFab and in its general development of renewables, is to review every power that we have including planning powers, legislation relating to emissions control, environmental powers and financial powers to look for every possible way to secure the work for BiFab in the meantime and to make sure that in the longer term we are never treated like this again. Our people are entitled to benefit from our natural resources. Let us unite behind a practical programme to make that happen.15:48
I agree with the majority of what comrade Neil said, because
“As the windiest country in Europe, we should be angry and embarrassed that every single turbine around us has been imported.”
Those are the words of the former UK energy minister Brian Wilson, and he is right. We should be angry: angry that we have empty yards here in Scotland that are very able to produce and deliver the platforms for the offshore renewable projects that are being built off the coast of Scotland. We have seen contracts to provide those platforms being placed with companies in Belgium, Spain and the United Arab Emirates while Scottish yards lie empty and Scottish workers struggle to find jobs.
The trade unions Unite and the GMB say that they simply want to see a level playing field. Both have previously criticised the failure to deliver renewable supply chain benefits to Scottish yards and workers. They have said that the jobs of the future, which are critical to delivering the green energy revolution and a sustainable planet, are being carved up by big businesses that do not care about Scottish workers, our communities and our future—and they are right.
That is why the Parliament must unite behind ensuring that the next big Scottish renewables project—an offshore wind farm worth a staggering £2 billion, which will be located less than 10 miles from the Fife coast—brings jobs to Scotland and to Fife. As others have said, it seems that the owners of the site, EDF, the French state-owned energy company, have a preference for awarding the contract to build the platforms to manufacturers on the other side of the world, in Indonesia. That would seem to be madness, given that, as Richard Leonard has pointed out again and again, it is estimated that bringing the structures from there would involve more than 300 journeys, which could generate emissions equivalent to those of 35 million cars on the road.
Surely that makes a mockery of any claims of being focused on tackling the climate emergency, and such hypocrisy must be not only exposed but brought to an end. We cannot have a situation in which workers are told that they have to pay the price for a greener climate while the speculators, multinationals and state-owned foreign companies rake in the profits. Let us be clear: as Richard Leonard has said, Scottish firms are not benefiting fully from the opportunities that are available in the renewable energy sector. That was shown in the STUC’s report “Broken Promises and Offshored Jobs”, which highlighted that less than a third of the jobs that were promised in Scotland’s renewable energy sector have been delivered.
The trade unions are working with communities in Fife and across Scotland, and their message is clear: we have our own better plan for EDF, which would work for Fife, Scotland and our planet. It is really simple: we should build the turbine jackets in Fife. The yards here are ready and waiting to get started on work that could create jobs for more than 1,000 people, unlocking much-needed investment and growth for our future. That would be good news for local communities and our economy. If the bulk of the wind turbine jackets were to be built in yards just 10 miles from the wind farm, it would mean less shipping and significantly fewer carbon emissions over the lifespan of the project. That would be more good news for our environment and for the future of the planet. Fife is ready for renewal and the NnG project is the opportunity that we need. We have the yards and the skills, and the communities are ready to play their part in tackling the climate emergency. EDF must think again and do what is right for Fife, Scotland and our environment.
To all the parties in the Parliament, I say that we need a proper manufacturing strategy for Scotland, in which the state plays a key role in securing the aim that we supposedly agree upon: a just transition. There is no reason that we cannot have a local or regional benefits agreement model in place for the Scottish energy sector, as is done in Canada, and even here in Scotland through the community benefit clauses in local government procurement contracts.
In concluding, I reiterate that the plan put forward by Unite and the GMB, which would help to secure jobs in Fife and be better for our planet, is the right one, and that the Parliament should support it. Let us build the new turbine jackets in Fife, find a way to jump-start the renewable supply chain in Scotland properly, and reap the benefits of a new green industrial revolution for a new generation.15:55
I welcome the Labour Party’s motion, which asks Parliament to support the Scottish Trades Union Congress’s Fife ready for renewal campaign. I fully support that campaign. I also welcome the cabinet secretary’s commitment to BiFab and the support that the Scottish Government has given and will continue to give to the company’s Methil and Burntisland yards, both of which are in my constituency. The ready for renewal campaign highlights the benefits that the securing of contracts in the renewables sector would have for BiFab, its staff and the local communities of Methil and Burntisland.
I thank the Scottish Trades Union Congress, Unite and the GMB for their continued work with the Scottish Government and BiFab’s owner—the Canadian fabrication company DF Barnes—to help to secure the future of the BiFab yards. Their continued message of positivity through difficult times for the company and its workforce has helped to keep momentum and focus on the Fife fabrication sector.
The need for new contracts to revitalise the yards has been deeply felt across my constituency. There has been a great impact on the local economy, particularly in the community around BiFab’s Methil yard, where 41 per cent of individuals live in one of the 20 per cent most deprived areas in Scotland. That is more than twice the figure for Fife as a whole. The yard is vital in creating local employment and providing employees with highly sought-after skills. Even more important, it brings local young people into modern apprenticeship schemes in a skill sector that is transferable to engineering sectors across Scotland and even the global manufacturing industry.
I have visited the yards a number of times during my terms in office, and I have learned at first hand from employees there about the importance of the employer to the local area and the difference that employment in highly skilled and well-paid positions makes to the lives of those who live in this area of multiple deprivation. The sooner that BiFab’s 1,200-strong workforce can return to the yards in Methil and Burntisland, the better.
The lack of contracts also has knock-on effects for the many local businesses that serve the yards, from suppliers and transportation services to local accommodation and plant hire. Those businesses have all missed out on revenue due to the lack of contracts and employment.
Renewable projects such as the £2 billion NnG offshore wind farm, which, once constructed, will generate enough energy per year to power the whole of Edinburgh, only add to the important role that manufacturing plays in the Scottish economy. The NnG wind farm would continue to support and enhance the Scottish manufacturing and fabrication sector, and that in turn would create highly skilled jobs and boost the economy of both the local area and Scotland as a whole.
Scotland is a world leader in renewable energy and we have the most ambitious emissions reduction targets of any nation, but there is no sense in striving for greatness in those areas and not capitalising on the opportunities that they create. They have the potential to benefit the entire Scottish manufacturing supply chain, to breathe life back into yards such as BiFab’s and to give hope back to the communities that they support. The Scottish Government, along with the UK Government, must use all the available powers to maximise the ability of Scottish companies such as BiFab to benefit from contracts that are awarded in the renewables sector.
Many of my constituents ask me why BiFab is not winning contracts. The answer is simple. How can we expect it to compete with companies such as Navantia, which is allowed to run at a loss by its Spanish Government owner and can therefore offer prices that are far below what can be offered by a Scottish company that strives at the very least to break even while producing high-quality work that is done by well-paid employees? We cannot expect BiFab to tender for and win contracts when it is not competing on a level playing field.
The Scottish Government’s strong support for BiFab is the reason why we are able to debate the topic today. Without the Government’s intervention in the company and its commitment to BiFab’s sustainability, there would not be the hope for the future of the company that exists today. By becoming a minority shareholder, the Government brought the company back from the brink of closure. Additional investment from the well-established DF Barnes has revitalised the vision for the Burntisland and Methil yards to maintain consistent contracts and become the stable employers that they once were.
The First Minister has personally visited the yards and the people on the ground who are fighting to keep the fabrication industry alive. The Government has repeatedly demonstrated its commitment to the yards, and I, as well as a large number of my constituents, appreciate that continued support.
I am aware of the investment that Scottish Enterprise has put into the Methil yard to modernise it and update the facilities to keep up with the demands of modern fabrication. BiFab now needs that support to result in new opportunities for fabrication and construction in the marine renewables and energy sector in Scotland, because it is in Scottish taxpayers’ best interests and because the people of Methil and Burntisland desperately need the morale boost of a newly awarded contract.
The Scottish manufacturing supply chain must see the benefit of the Government’s commitment to renewable energy and emissions reduction, and the billions of pounds of contracts that that commitment will bring. The sector’s highly skilled workforce must be given the opportunity to contribute to that cause and to benefit from creating a better and more sustainable Scotland. Employment from the renewable sector will benefit the BiFab yards in Methil and Burntisland, as well as the wider manufacturing and fabrication sector across Scotland.
EDF Energy has a moral duty to support the Scottish supply chain and grant the economic benefit of the production of the NnG wind farm to the very area that it will call home. After all, once the NnG wind farm is complete, EDF will make billions of pounds of profit during the site’s lifespan. It would be a shameful mark on Scotland’s industrial history if BiFab received no work as a result of the country’s commitment to carbon neutrality and investment in the renewable energy sector.16:01
I refer members to my entry in the register of members’ interests and the fund with energy industry holdings.
Today’s debate comes as Scotland builds its renewable energy sector in onshore and offshore wind, solar and hydro power. Many of those energy initiatives are realised through competitive international contracts, and it is through a spirit of collaboration that the industry has seen huge development over the years.
However, our economy is struggling. The Government’s labour productivity statistics show that Scotland has not improved its productivity in global league tables since 2007, and growth is forecast to be slower than that of the UK as a whole from 2020 to 2023.
Add to that the threat to BiFab in Fife and people could be forgiven for thinking that this is just another example of a sector trying to grow under tough economic conditions. However, last week, Parliament was made aware that fewer than one third of the jobs in Scotland’s renewable energy sector that the SNP Government promised have been delivered.
Nevertheless, Scotland’s renewable energy sector has strong support from a number of industries and corporate bodies that are committed to seeing the country continue to lead the way in creating a greener and more energy-efficient world. Scotland’s growing capacity for renewables has translated into a significant increase in renewable electricity output, which more than tripled between 2007 and 2018. Turnover from renewable energy activity in 2017 was approximately £5.5 billion and, perhaps most significantly, the renewable energy sector accounts for 17,000 jobs across Scotland.
Such growth is supported by industry bodies including Scottish Renewables and initiatives such as the offshore wind sector deal, which was implemented by the UK Government. That deal pledges to drive the transformation of offshore wind generation, boosting the productivity and competitiveness of the UK supply chain.
Can Mr Bowman name a single legal measure that we could have taken that we have not taken that would have secured work for BiFab or any other yard?
Proving a negative is a difficult exercise. The Government has to work with the UK Government to find areas in which measures can be implemented.
Despite the Scottish Government’s pledge to help our renewable energy sector grow, we are seeing the consequences of a lack of structural investment and industry foresight, which leaves our Scottish renewable industries at a disadvantage compared with European competitors.
Furthermore, it is not just the workforce that is affected. Local businesses are also feeling the squeeze, which makes the example of BiFab about more than just one firm. It is about the wider environment for businesses and the SNP Government’s failing approach to the economy.
The example of BiFab is depressing on many fronts. The overlooked yards are a devastating situation for the local economy. They are ready and waiting to get started on work that could create jobs for more than 1,000 people, unlocking much needed investment and growth for the region’s future.
Parliament shares the concerns of the STUC, which understands that little of the work fabricating jackets for wind turbines will come to Fife. It is encouraging to see the efforts of Scottish Enterprise, which has invested in hard-standing infrastructure and piling works along the Fife quayside, and GMB Scotland and Unite, which have launched the ready for renewal campaign. Those efforts will help to ensure that construction of parts for Scotland’s offshore wind farms do not happen halfway round the world.
Our renewable energy sector is crying out for help to fulfil the demands that we place on it. Feedback given to the Economy, Energy and Fair Work Committee highlighted a lack of
“an industrial strategy ... for offshore wind and ... more broadly for the whole renewables sector”.—[Official Report, Economy, Jobs and Fair Work Committee; 23 April; c 18.]
It is crucial that we start to grow our economy and put infrastructure in place to allow the renewable energy sector to reach its potential. However, that can only be achieved through a change in mind-set.
The motion focuses on Fife, but the offshore wind farms are in range of the Forth and Tay ports. In my region, Dundee and Montrose have the credentials to be considered for oil and gas decommissioning work and the construction and maintenance of wind farms. We need to include such facilities in a joined-up approach to supply-chain management.
Last year, Dundee City Council’s leader said that he hoped to bring £1.8 billion in investment to the city to build 54 turbines. However, the First Minister admitted to the STUC conference last month that the Government has not been as successful in winning contracts as it had hoped.
It is a long time since the Tay was home to many of the finest wood, iron and steel shipbuilding workshops in the world. However, the strategic positioning of Dundee, along with the need for high-quality construction jobs in the wake of difficulties elsewhere, makes it an ideal place to build and decommission renewables.
We want to see Scotland at the forefront of new jobs in renewables, but the SNP Government’s muddled approach to supporting businesses puts that at risk. We on the Conservative benches are proud to be part of a UK that is reducing emissions faster than any other G20 country—by 29 per cent in the last decade alone.
Scotland was once the workshop of the world. With more involved direction and financial support, we can continue to lead the way as the renewable energy innovator of the world.16:06
I start by offering support to our friends in Fife from everyone in Inverclyde. We whole-heartedly support the campaign to get the work and jobs in Fife. It is so important for Scotland’s industrial strategy and for its industrial future as well. I say that because—as colleagues will know—in my community in my Greenock and Inverclyde constituency, we have gone through a huge amount of change over the years.
In 2014, Ferguson Marine Engineering in Port Glasgow closed down and it was the support of the Scottish Government that actually brought that shipyard back to life. When I talk to people in my constituency, they absolutely understand the importance of manufacturing for Scotland’s economy, but also for Scotland’s future.
Part of the motion before us from the Labour Party highlights the emissions that would be generated by potentially transporting the final product from Indonesia to 10 miles off the coast of Fife. The issue is similar to one raised by the heritage rail sector in the UK—I admit, on a very much smaller scale—because coal for that sector is shipped from Columbia over to the UK. Thankfully the level of coal being shipped has reduced, because the sector itself is reducing the amount used in its particular rail engines, but the situation is similar.
I cannot understand the whole idea of shipping the jackets over to Scotland; the emissions that that would generate would fly in the face of what the final product is for—to help the environment.
I want to touch on a second point. Richard Leonard spoke earlier about wanting an interventionist state. Were it not for the Scottish Government in 2014, Ferguson Marine Engineering would not have come back into being and Liberty Steel would not be operating in Lanarkshire. There have been many examples—
Will the member take an intervention?
One moment, if I may. There have been many examples of the Scottish Government helping either to bring an industry back or to save an industry.
A further example from my constituency is Texas Instruments in Greenock. A task force was set up and joint working between the Scottish Government and Inverclyde Council enabled some type of solution to the issues that it faced to be found.
We applaud the defensive rescues that have been mounted by the Scottish Government in relation to steel, aluminium, Ferguson’s and so on. However, does the member accept that there is a need for a forward-looking industrial strategy that is not just defensive and reactive but is proactive?
That is one of the things that the Scottish Government has been doing in recent years—it has been planning ahead. I do not know whether Richard Leonard saw the recent announcement of the £14 million advancing manufacturing challenge fund. That money is supported by the European regional development fund. Richard Leonard and I are actually on the same page on this issue, and we do not have to fight about it. The Scottish Government is doing the work that Richard Leonard is asking it to do.
I was genuinely disappointed by the contributions from Dean Lockhart and Bill Bowman. If that was them attempting to take a team Scotland approach, I do not know what they are like when they are trying to be oppositional. I was surprised by the tone.
Will the member take an intervention?
At the outset, Dean Lockhart stated that his party was going to support the motion and the Scottish Government’s amendment. However, he and Mr Bowman went on to tank the Scottish Government in their speeches. As I said, that was disappointing. I grew up in Port Glasgow and, as a child, I witnessed the decline of the shipbuilding industry and most of the industry in my community. Like many thousands of kids in my community, I was affected by that, and it was really disgusting to hear some of the comments that were made today.
I will take the member’s intervention.
Mr McMillan is in his last minute, so it had better be a short intervention.
Just to clarify, most of our comments were based on the GMB’s report, “Broken Promises and Offshored Jobs”. They were not comments from us; they reflected the views of stakeholders on the failures of the Scottish Government in the renewables sector.
Once again, selective comments from the Conservative Party—very much so.
I know that I speak for my community when I say that my constituents will want the work to go to Fife. It is a good thing for Fife, it is a good thing for Scotland and it is certainly a good thing for Scotland’s industrial future. I am sure that that is something that every single person here—even the Tories—can agree on today.16:12
Neart na Gaoithe—the power of the wind—could stand for more than just a way of generating electricity; it could become a symbol of energy transition, too, if the operator of the wind farm in the Firth of Forth chooses to make it so. That operator is EDF—Électricité de France. As we have heard, it is a state enterprise from another European country, and, like Equinor from Norway and Vattenfall from Sweden, it now plays a major role in offshore wind in Scotland.
Of course, Neart na Gaoithe is not EDF’s only interest in Scottish renewables. The company operates onshore wind farms from Sutherland to Galloway, among a total of 35 sites across the UK. On the Isle of Lewis, EDF has developed plans for major onshore wind farms. One of them has been taken forward with the community landowner, Stornoway Trust, through Lewis Wind Power, and the other, in Uisenis, is being taken forward by the owners of the Eishken estate. Only last week, Lewis Wind Power applied for a new consent for the Stornoway wind farm, precisely in order to make it more able to compete with offshore wind farms such as Neart na Gaoithe in the North Sea.
The Isle of Lewis is particularly relevant here for two reasons. First, the planned site of the Stornoway wind farm is close to the Arnish fabrication yard, operated by BiFab, so EDF is already well aware of BiFab from a Lewis as well as a Fife perspective. Secondly, the success of Lewis Wind Power and all other renewable developers in the islands depends on being able to sell power to customers right across the British mainland, which is going to happen only when Lewis is connected to the GB national grid.
I met EDF last year to discuss the strategic importance of islands’ wind in meeting renewable energy targets for Scotland, the UK and the European Union. I have made representations to Ofgem on behalf of Scottish Labour, and I know that the Scottish Government and others have done precisely the same.
We all agree that the regulator, Ofgem, needs to be more ambitious in supporting renewable energy development in the Western Isles, and that it needs to endorse plans for an interconnector from Lewis to the mainland that can carry 600—rather than just 450—megawatts of renewable electricity. We have argued for a larger capacity interconnector because we want to stimulate and encourage more renewable energy on the islands—not just large-scale onshore wind, but potentially wave energy and community renewables as well. EDF wants that, too. Of course, it also has a commercial interest in securing the means to carry future additional power to the British mainland. There is nothing wrong with that commercial interest, but allying commercial interests with policy objectives cannot be a one-way street.
EDF is itself a state-owned enterprise. It wants to work with Governments and political parties to take forward policy objectives that converge with its own commercial interests. That is fine, but it also needs to use its commercial clout in support of wider policy objectives that will benefit the renewable energy sector as a whole. That is what we are calling on EDF and other renewable energy developers to do today. As the STUC put it last week, a company that has benefited from development consents and that seeks political support on policy issues also needs to be a company that does the right thing. The right thing in this context is to maximise the economic benefits of renewable energy by placing major fabrication contracts with Scottish yards. In the case of Neart na Gaoithe, that means the BiFab yards at Methil and Burntisland.
As Richard Leonard reminded us, over many years, Burntisland Fabrications in Fife and Lewis Offshore at Arnish were major suppliers of offshore infrastructure for the oil and gas industry. Those days are gone. When Lewis Offshore ran out of work, it was bought out by BiFab; and when BiFab ran into trouble, it was bought out by DF Barnes. DF Barnes is also a company with years of experience in oil and gas fabrication—in Atlantic Canada and elsewhere—and it has made a conscious decision to diversify into offshore renewables here in Europe. That choice deserves support and, even more than the company, the workers at BiFab deserve support—not just from Government, but from the renewable energy sector itself. That has to start with EDF at Neart na Gaoithe and with tier 1 contractors such as Saipem, which has also been mentioned today.
It is difficult to see how transporting offshore production jackets from East Asia to the Firth of Forth could be more profitable than fabrication here in Scotland, unless the terms and conditions of the workers in Indonesia are truly dire and workplace safety non-existent. That can hardly be the right thing to do. If production in East Asia on that basis really is price competitive, it will only undermine other fabrication yards that do the right thing, not just in Britain but across the European Union. I hope that ministers are seeking to co-operate on those issues with not just the UK Government but the EU, because there is an interest in preventing the undermining of commonly accepted working conditions.
Ministers in the Scottish and UK Governments have real clout in their relationships with offshore wind developers, as onshore and offshore licensing authorities. I was pleased to hear much of what Derek Mackay had to say. Governments need to work together to develop a shared strategy for offshore wind that requires not just warm words about local content, but actual delivery. If, in spite of some of things that we have heard today, ministers in both Governments can take a joined-up approach, and if, as a result, EDF chooses to do the right thing, Neart na Gaoithe can also be Neart airson Math—the power of the wind, and a force for good.16:19
Scotland is a country of engineering and innovation. Scotland’s engineering and manufacturing past was the bedrock of employment for generations of people—from the bridges that we have built all over the world, and the ships that we have built that have sailed all over the world, to the oil and gas platforms that give so much work to the people in my constituency and beyond—and it has engendered experience that we have exported all over the world.
We are now on the next wave of engineering and innovation, with our pressing need to create more renewable energy. As we address the climate emergency, we will need to stop burning hydrocarbons, and to heat our homes and to power our transport with clean energy. It is estimated that demand for clean electricity will therefore at least double, and we are committed to that power coming from renewables.
I fully support the Fife ready for renewal campaign, and I fully agree with the calls for the associated manufacturing work that will produce the Inch Cape Offshore Ltd and Seagreen Wind Energy Ltd offshore wind farms to be won by local firms including BiFab.
My constituency, of course, contains the Aberdeen offshore wind farm, which is currently producing enough clean electricity to power hundreds of thousands of homes—I think that it produces 70 per cent of the needs of Aberdeen city every day. However, it has been well documented that the wind turbines and subsea structures that make up that wind farm were manufactured elsewhere. It would be a great shame if the workers and people of Fife found themselves to be unable to benefit directly from projects off their coastline. I whole-heartedly agree that importing hardware from across the world is completely at odds with our efforts to reduce the emissions that we want to avoid, as we move towards a low-carbon future that is powered by that hardware.
We should be doing everything in our power to squeeze every last drop of economic activity out of large infrastructure projects, for local workforces. If we do not have the appropriate power, we should be campaigning together to have it devolved to the Scottish Parliament. In the meantime, we should work together to get the UK Government to do the right thing. I am delighted to hear that the Scottish Government will use the powers that are now in place through the recent passing of the Scottish Crown Estate Act 2019 to incentivise the supply chain for such projects being in Scotland.
The ability to harness the economic potential of the renewable energy revolution with the onshore wind farm subsidy, contracts for difference, contract conditionality and energy taxation lies with Westminster. The cabinet secretary has outlined the implications for Scottish manufacturers of management of those powers being at UK level. In doing so, he schooled Dean Lockhart on those matters.
I share Stuart McMillan’s frustration about the Tory speeches. He might be disappointed; I am just completely bored with them. I am of the same generation as Stuart McMillan; my parents were at the sharp end of what the Tory Government did to manufacturing in Clydebank in the 1980s.
I pay tribute to the work of the energy journalist Dick Winchester, who writes for Energy Voice and has long been a campaigner to get manufacturing of renewables infrastructure based in Scotland.
In many ways, what has happened with BiFab is a watershed moment. If things do not change, local companies will lose out time and again, as we fulfil the wind infrastructure needs of the future. Conditionality is not completely in our gift, but maybe it should be, for all our sakes.
As well as lamenting the missed manufacturing opportunities of the Aberdeen offshore wind farm, Dick Winchester has pointed to the development of projects including the Batwind project, which involves a battery-based energy system. The technology comes from Younicos—a German-American technology company. Dick Winchester has pointed out that there are companies in Caithness that could have won that contract. Places throughout Scotland should be able to share in the potential that exists. Heaven help us if that is left to the Tories.
The Scottish Government’s welcome and speedy commitment to reducing the emissions that have caused the climate emergency provoke mixed feelings in my part of Scotland. I have to be honest about that. I am on record as having talked in the chamber about the potential economic and social implications that a transition away from burning of oil and gas could have for the hundreds of thousands of north-east people who make their living from exploration for and production of hydrocarbons, or in the supply chain. The transition must be just, managed and invested in. Both Governments have to do that.
The establishment of the just transition commission by the Scottish Government is of huge importance to the north-east. I cannot overstate how important it is that the relevant skills of people in the north-east and Fife be harnessed in the transition to renewables, and that serious efforts be made to ensure that we transition justly and fairly. The prizes are there. There are massive opportunities, and we do not want them leaking out of Scotland.
I agree on the importance of the just transition commission, but is it important that it is put on a statutory basis to stop the Tories decommissioning it and getting rid of it if they are ever in government in Scotland?
Mark Ruskell knows my feelings about that, because I sit with him on the Environment, Climate Change and Land Reform Committee. I am not completely convinced that putting the commission on a statutory basis would make much difference. I would like the Government to be held to account for what happens with the just transition commission.
I gently suggest to Labour that it, too, should be mindful of the fact that the Aberdeen wind farm was awarded €40 million of funding from the European Union. With a hard Brexit on the horizon, the loss of such funding could mean that large renewables projects are put in jeopardy, along with the jobs that come with them. Let us work together to avoid that situation.16:25
I am pleased to have the opportunity to participate in this debate on the Fife ready for renewal campaign, which seeks to secure for BiFab the contract for production of wind turbine parts.
We recognise the need for more renewable energy, as part of a balanced mix of energy sources, to help us to cut emissions. We are clear that central to that aim is that we ensure security of supply, affordability and decarbonisation. With the right investment in innovation, and with cutting-edge technology in our renewable energy sector, we can ensure that we meet our renewable energy targets while also creating jobs. That is the vital point that we are discussing today. We are talking about jobs, the economy and the livelihoods of people in Fife and other parts of Scotland. I pay tribute to BiFab’s workforce for the work that it has done to support the economy across Fife and other regions.
Given that we are seeking to tackle climate change, it seems to be rather ironic that many of the parts for renewable energy sources such as offshore wind farms are being built halfway around the world and then transported to Fife. That makes no sense to anybody: many members have talked about the nonsensical situation in which we find ourselves. Transport emissions remain high, and made up a third of Scotland’s overall emissions back in 2016. When we have, here in Scotland, a company such as BiFab that has the capability and capacity to build parts for wind turbines, and which supports local jobs and communities, it seems to be completely mad for us to even consider having production take place elsewhere, given that the wind farm will be located just 10 miles off the coast of Fife.
As we have heard, some people fear that without the contract the survival of the yards will be in question, and that the associated jobs in the area will be lost. To that end, we support the calls for BiFab to be awarded the contract for wind turbine parts, so that they are built at home. It is important that we have discussions with the Scottish and UK Governments, so that we can encourage EDF Renewables to ensure that work on the offshore wind farm is possible and practical.
It is encouraging that the campaign that has been built up includes community groups, the workforce, elected representatives from the council, the Scottish Parliament and other places, and environmentalists. I pay tribute to the trade unions, which have worked together to put on pressure. We acknowledge that they have made a massive impact, and all of us have worked alongside them to put pressure on EDF Renewables to consider its decisions.
The Scottish Government has a role to play in the campaign, and the cabinet secretary has said that that role is being taken seriously—rightly so. The Scottish Government has a stake in BiFab, so the taxpayer has a stake in BiFab, which is an important point to acknowledge. Therefore, the Scottish Government has an obligation to ensure that the future of BiFab can be secured. As politicians, we have an obligation to do all that we can to help, including by holding discussions with UK Government ministers about what can be done.
It would be naive of us to think that the debate is about one single firm, because it is not. The Government in Holyrood is presiding over the wider economic environment, and we have heard about the difficulties that have been encountered and the decline that has taken place in some parts of Scotland, which has caused continual disruption across many sectors.
Our growth is forecast to be slower than growth in other parts of the UK until 2023, and we have the lowest growth of any country in the European Union. Over the past decade, we have had the lowest jobs growth of the regions of the UK, and there are some worrying trends in the economy, as far as the Scottish Government is concerned. In particular, it has failed to ensure—
Will the member give way?
No. I want to make some progress.
Back in 2010, the then First Minister claimed that the offshore wind industry would create 20,000 jobs in Scotland over the following 10 years, but those jobs have not materialised. The Government has also claimed that it has supported renewable energy financially, but some companies have had to go into administration because it removed all its public funding back in 2014, while other companies have had to reduce their workforces.
We must acknowledge that everybody is not getting this right; there is fault on both sides, and we need to work together for the communities that we represent. The UK Government is committed to going further, and its offshore wind sector deal will bring £250 million into the sector, and is forecast to quadruple the number of jobs and to increase global exports fivefold.
The Scottish Conservatives have supported, and will continue to support, the efforts that have been made with our energy mix with regard to our economy, and we recognise that offshore wind farms are a vital component of that work. Given our attempts to reduce emissions, it simply makes no sense to commission parts for wind farm development from halfway around the world.
It is up to us all to support BiFab and ensure that the yards, the jobs and the communities that depend on both are looked after. I again pay tribute to the GMB and Unite for all their work. We must do all that we can to support and secure Fife and its economy, and the UK Government and the Scottish Government must play their parts.16:31
I add my voice to the many that we have already heard in support not only of BiFab, but of local businesses in general getting as much work as they can.
I agree with a number of Richard Leonard’s remarks, including those on the failure of the various owners of the BiFab facility over the years to make a plan, and his suggestion that profit rather than the common good has been the driving factor.
I also agree with a number of points that Derek Mackay made. It is encouraging to hear that the Government is exploring the powers of, for example, Crown Estate Scotland, as we now have control over the Crown estate, and that, if there are to be Scottish guarantees in the future, there must be benefits to the local economy. However, as the cabinet secretary said, the UK Government has more levers and powers in this area, especially in relation to CFD.
The Economy, Energy and Fair Work Committee, of which I am deputy convener, held a round-table evidence session on BiFab on 23 April. At that meeting there was certainly a strong suggestion that some overseas operators are, in effect, being allowed to run at a loss every year. Indeed, it was claimed that 35 per cent of turnover could be in the form of a loss. If that is the case, it is not surprising that our businesses are unable to compete. That is certainly state aid, as far as I understand the term.
It has also been suggested that if other countries can bend the rules, so should we. I agree that we should be neither naive nor particularly legalistic in our approach, when other people ignore some of the rules or, at least, interpret them in a more relaxed fashion. However, I also argue that the rules are there for a good reason, so surely the best solution is for everyone to follow them, and for the EU or whomever to ensure conformity.
In its briefing for today’s debate, Scottish Renewables has said that the
“procurement processes are tightly governed by UK and European legislation and are focused on providing the best possible value for money for Scottish and UK energy consumers.”
When I asked at the round-table session whether it is part of Scottish Enterprise’s role to follow up such matters and to complain when state aid rules are being broken in other countries, the answer that I got was a bit on the vague side. D F Barnes, which was represented at the session, pointed out that in Canada, for example, there are penalties; if local benefits are not delivered as promised, somebody has to pay.
However, in this country, there seems to be very little comeback if local organisations and individuals do not get the benefits that they have been promised. In that regard, I was a bit disappointed by some of Dean Lockhart’s comments. If I heard him correctly, he said that the UK Government should “encourage” EDF. The cabinet secretary intervened on him, but Dean Lockhart avoided saying that there should be a commitment or that the UK Government should force a commitment, which was somewhat disappointing. When I intervened on Willie Rennie, he agreed that there should be binding conditions, although Claire Baker suggested that we “urge” EDF. I say that if we had the power, we should do a little bit more than just “urge” it. However, one of Alex Neil’s many good points made it clear that we just do not, at the moment, have the power to impose conditions.
The EU regulations exist to protect decent businesses from unfair competition, and to protect taxpayers from paying over the odds for contracts for someone’s cronies. We can all think of times in the past when, in this country and others, contracts were awarded not on the basis of the cheapest price or even best value, but because there was an unhealthy close link between those who were awarding the contracts and those who were awarded them. Whatever happens with Brexit, we must not throw the baby out with the bath water and go back to those times. We need to strike the right balance; there must be fair competition and value for money on the one hand and, on the other, we must absolutely support local businesses and jobs. Lewis Macdonald made the relevant point that workforce pay and conditions in other countries must be a factor in that.
I think that we agree that we need to focus on what we are best at. It has often been said that we cannot compete in mass producing the cheapest products—food, engineering products or anything else—but we can compete at the top end with the best innovation and the most specialised high-quality products. That is what we believe BiFab and others can do. The briefing from Scottish Renewables gives the example of CS Wind UK in Campbeltown, where a £27 million investment in 2016 has upskilled the workforce and improved the equipment so that it can now produce best-in-class turbine towers for the UK and Europe, and has doubled its productivity between 2017 and 2018.
I was disappointed by some of what Bill Bowman said. When he was intervened on, he failed to suggest what steps the Scottish Government could take, or should have taken, to do more on the issue. I suggest that it is his party’s commitment to an unrestricted free market that has caused a lot of the current problems. For example, Scottish Power was privatised: it could have been a state-owned player.
There is a lot of agreement today. I hope that we will stay in the EU and be part of the single market, but perhaps we need to look more closely at what our competitor countries are doing, and either challenge their behaviour or learn from it.16:38
It is clear that the level of involvement, or lack of involvement, of Scotland’s businesses in Scotland’s renewables supply chain is a matter of concern and anger across the chamber. As we have seen in the debate, the issues that BiFab faces are set within a wider context of problems with how we support the energy sector, and those problems go beyond the ones that are detailed in Labour’s motion.
As Scotland’s onshore wind sector grew, with significant support from the public sector, it became clear that much of the work was not falling to businesses here at home. People are rightly concerned that we risk the same thing happening in relation to offshore wind. As we look to the future, the clear worry is that Scotland will serve as a base for renewables and that Scottish research will make great strides in developing the energy technologies of the future but businesses here simply will not benefit as they should.
It would be foolish to ignore the fact that we operate in a global marketplace. Competition is healthy. It helps to drive down the wholesale cost of energy and provides benefits that can carry over to the consumer. However, when major projects are taking place in our own back yard, people will reasonably ask why much of the manufacturing work is done overseas, with the jobs being created there.
Will the member take an intervention on that point?
I would like to make progress.
We have heard of the expertise that exists in Scotland, much of which is the legacy of our oil and gas industry, which has been reasonably successful in creating skills, jobs and industry in several parts of the country. It appears that we all agree that Scottish businesses should be able to win the contracts, build up local supply chains, create jobs and provide benefit to their communities, yet, despite assurances, it seems that yards are lying empty while work begins elsewhere.
Although this is not a committee debate, the work of the Economy, Energy and Fair Work Committee is significant in relation to the discussion. Other members have touched on some of the committee’s activities, but it is important to reflect on what it has done to bring together representatives from across the sector. When we met them, we heard about a number of issues. There was confusion about the application of state aid rules in the industry—the businesses felt that some competitors were not complying with the rules as they and, it seems, enterprise agencies understood them. When additional support is given elsewhere, we risk creating an unlevel playing field—as the cabinet secretary rightly called it—with competitors having undue commercial advantage. Equally, although panellists acknowledged that there was a responsibility to challenge breaches, there did not seem to be a great deal of clarity over how to do so or who would do so.
The committee was provided with a written update from the cabinet secretary on the supply chain and fabrication work that was identified by the Scottish Government following the offshore wind summit at the beginning of the month. That was welcome, particularly the recognition of the need for a collaborative approach by the Scottish Government and the UK Government, as both the cabinet secretary and Dean Lockhart mentioned. However, those commitments must be matched by detail and action.
Although specific problems exist in BiFab, the Scottish Government’s approach to supporting business clearly has a far wider impact on our economy. Not only is it in the renewables sector that we are seeing skills and capacity go to waste, it is in the renewables sector that we are seeing opportunities to build a strong domestic supply chain lost, time and again, through a lack of preparation and joined-up thinking.
On that point, surely Jamie Halcro Johnston has to agree that, when Government policy ensures that there is a vast reduction in training, such as apprenticeships, as happened in the 1980s, there will be a shortage in the workforce when there is a change in the economy and there is more opportunity to build in the manufacturing sector.
The responsibility for apprenticeships and skills and training has been with this Parliament since 1999. Will Mr McMillan clarify his point, as I do not want to misrepresent him?
I will explain briefly. In the 1980s, Government policy changed, and apprenticeships were scrapped and the youth training scheme was brought in, which was nowhere near the quality of apprenticeships. Therefore, how can we build ships and wind turbine jackets when there is a shortage of people in the workforce to go and do the job?
Mr McMillan is arguing that apprenticeships were lost 40 years ago and, in the period since, somehow our hands have been tied. [Interruption.]
That is a nonsensical position. The SNP members today have focused on what they cannot do and have said nothing about what they can do.
Will the member take an intervention?
No, I will not. We have heard a lot from the cabinet secretary speaking from a sedentary position. I would like to get on.
I am speaking from a standing position.
Well, the cabinet secretary should be in a sedentary position, because I am still standing.
In his speech, my colleague Dean Lockhart noted the concerns of various stakeholders around the Neart na Gaoithe project off the coast of Fife and the compelling reasons for bringing jobs and investment to his region. The economic impact would indeed be transformative; the skills are there and the environmental case is clear.
Looking wider, Alexander Burnett spoke about the pressing need to support the renewables sector to combat climate change. He also rightly highlighted the need to build the skills that are required for the future, if we are to have a successful industry in Scotland, which is a point that was heard by the committee.
As Willie Rennie and other members highlighted, in order to supply green energy machines in this country, parts of the machines are being shipped from the other side of the world. Claire Baker and Alexander Stewart spoke passionately about the impact of such decisions on their areas and Claire Baker talked about her visit to the site. I visited the site many years ago with former Mid Scotland and Fife MSP Ted Brocklebank, not long after the Kværner yard had closed, when the impact was still being felt.
As I said, there has been no shortage of SNP speakers today, but it was rather left to Alex Neil and to John Mason to talk about ideas, rather than just the limitations.
Scotland has the potential for billions of pounds’ worth of investment in renewables, stretching forward for decades to come. In my region, Orkney and Shetland are looking not simply at wind energy as part of the changes around remote island wind but into the future at innovations in wave and tidal energy. Both communities have previously shown how the oil and gas industry sector can make a significant difference to our remote communities.
Now, communities across the Highlands and Islands stand ready to take advantage of the potential opportunities for renewables. It is right that those communities benefit and that direct and supply chain jobs accompany renewable energy. By taking advantage of the superb facilities across Scotland, particularly those in the Highlands and Islands, where former oil and gas yards are ready for use for manufacturing, fabrication and servicing offshore renewables, we can help rebalance the central belt focus of Scotland’s economy.
It will be disappointing if the Scottish Government cannot work to seize these opportunities and if we see another industry based in Scotland but not built in Scotland. If we are to lose out on future investment, sustainable jobs and the chance to boost some of the communities in Scotland that need it most, that really will be a tragedy.16:45
This has been for the most part a valuable and timely debate, highlighting the importance that the Parliament places on harnessing Scotland’s tremendous offshore wind resource to decarbonise our energy system in line with Scotland’s energy strategy. It has also highlighted the strength of the resolve across the chamber to achieve a fair share of the economic benefit of the construction and operation of offshore wind installations.
My colleague Derek Mackay outlined the routes that Scottish ministers, Crown Estate Scotland and Marine Scotland are exploring to further support the Scottish offshore wind supply chain. I do not know whether Jamie Halcro Johnston just switched off or was out of the chamber, but he clearly was not listening to the cabinet secretary’s speech.
I will close for the Government by discussing the work that is being undertaken through our reinvigorated industry working group. Before that, though, I emphasise our view that the UK Government must show greater leadership in areas where powers are reserved, such as securing local content through the contracts for difference mechanism, which is the main route to market for offshore wind, both fixed and floating, and which is a power that is reserved to the UK Government.
The offshore wind sector deal is welcome, and I will speak more about it in a moment. However, I gently point out to all the Conservative speakers that energy policy is fully reserved. It is the UK Government’s action that led to the axing of renewables obligation certificates, the axing of Scotland’s ability to set Scottish ROCs, the removal of the feed-in tariff regime, the axing of the minimum for the marine energy sector, which was promised by David Cameron and axed by Theresa May without a general election, and the recent restriction on the renewable heat incentive. Therefore, we will take no lessons from the Conservatives about support for the renewable energy sector.
Will the minister take an intervention?
I will not take an intervention from the Conservatives. Mr Lockhart refused to take an intervention from me, so he should please sit down.
Mr Burnett talked about inaction, but in 2018 Scotland generated the equivalent of 74.6 per cent of our electricity from renewables, while the UK generated less than 30 per cent from renewables, so I ask Mr Lockhart and Mr Burnett who is showing leadership on renewables.
As John Mason highlighted, Bill Bowman was not able to identify one clear step that we could have taken to do more to secure procurement of a Scottish supply chain with the powers that we had prior to the Crown Estate being devolved. The cabinet secretary outlined how we are now using those powers to our advantage.
We are ensuring that the Scottish industry is able to take full advantage of the opportunities that are presented by the sector deal through restructuring what was previously known as the offshore wind industry group to create the more strategically focused Scottish offshore wind energy council, which I now co-chair with Brian McFarlane of SSE. That group provides a forum for representatives of all areas of the sector to lead key work streams, which will ensure that the work of SOWEC is aligned to the deal and will ensure that Scotland’s strong existing and potential supply chain offer is recognised.
The supply chain element of SOWEC will champion the two Scottish supply chain clusters and explore ways of strengthening and expanding our supply chain to increase local content in future offshore wind projects. Although SOWEC is largely shaped around the sector deal ambitions, it can of course also react to any other industry issues as and when they arise.
Conservatives members are seen to have a total disconnect from the process of the CFD. The CFD support mechanism, which I remind them is run by the UK Government, theoretically offers significant opportunities for our talented workforce and supply chain companies such as BiFab, CS Wind, which we have heard about, and Global Energy Group in Nigg, with three Scottish offshore projects due to bid into the imminent CFD round.
However, UK ministers have created a policy environment through CFD that encourages rapid cost reduction; that might be welcome, but the commercial risk has been pushed down into the lower tiers of the supply chain, with no measures to protect the small and medium-sized enterprises that are worst affected. Scotland has a pipeline of more than 4GW of offshore wind consented in our waters, with further licensing opportunities being considered by Crown Estate Scotland. However, by focusing so clearly on price alone, UK ministers are failing the wider economic interest with CFD. It is vital that UK ministers utilise the powers that they have to ensure that greater weight is given than at present to supply chain plans that they collect as part of the process when allocating CFD contracts and that they attach conditionality, as the cabinet secretary and others have said.
At present, maximum weight is placed on the price per MWh, which has reached a low of £57.50 per MWh at a time when far more generous funding of £92.50 has been provided as the strike price for new nuclear power in Somerset. There is a clear inconsistency in how UK ministers approach technologies; far greater emphasis on the total value added to the UK economy could be achieved if supply chain plans were reflected and conditionality attached as part of rebalancing between price per MWh and the quality of the bids that are received.
As we have heard, the sector deal that was launched by UK ministers set an industry agreed target of 60 per cent UK content by 2030, which was a key finding of Martin Whitmarsh’s supply chain review. Although we welcome the sector deal, we recognise that it will take significant collaborative effort from industry and Governments to ensure that it results in meaningful improvement. However, it is essential that developers uphold their commitment under the sector deal to deliver target levels of local content and we expect to see substantial increases, particularly in the capital expenditure phase of those projects. Supply chain investment under the aligned offshore wind growth partnership is welcome but insufficient in of itself to achieve what we need to achieve.
However—and the Tories should listen to this—the review also recommended that UK ministers should deliver twice the quantum of financial support for offshore wind, with visibility of auctions out to 2030. Given the more recent Committee on Climate Change advice to the effect that the UK now needs up to 75GW of offshore wind by 2050, supporting the supply chain now could net the Scottish and UK economies a far greater return over the longer term.
Will the minister give way?
I will not.
Regrettably, the Department for Business, Energy and Industrial Strategy has applied a mere 6GW cap to the next CFD auction, making it unlikely that the full £60 million budget will be accessible to industry. I say also to the Tories: more investment now can mitigate the impact of anticipated slippage in the delivery of Hinkley C.
Without the CFD mechanism delivering a strong and visible pipeline of work at the necessary volume, the offshore wind supply chain will struggle to maintain momentum and increase competitiveness, which would be a missed opportunity to deploy and develop a supply chain that could compete globally. The UK Government controls that pipeline, and I hope that we have made clear today that there is a role for the Scottish Government and also a role for the UK Government.
The Scottish Government is using all the levers at its disposal to support the sector, and we will ensure that platforms such as the supply chain summit that the cabinet secretary chaired and SOWEC deliver the fundamental changes that are required to strengthen our supply chain and secure the just transition that we all want to see. However, importantly, UK ministers should take the action that is necessary to address the weaknesses in the CFD process and review the process—I hope that we can unite on that today.16:52
The swell in support for climate change action lately has been heartening. I welcome the Scottish Government shifting to a responsible net zero target for the Climate Change (Emissions Reduction Targets) (Scotland) Bill. It is exciting to see a growing acceptance from all parties for the need to justify any policy in any portfolio against the climate imperative.
I pay respect to the school strikers and young people around the world who are driving forward public backing for this work and further focusing the minds of politicians. This is a climate and environment emergency, and that message is getting through. However, Scottish Labour cannot emphasise enough that a just transition must be the ultimate driver. Scotland’s pathway to the net zero economy must be paved by the labour movement, safeguarding workers and communities and securing new opportunities for the benefit of our new economy across all sectors.
My party is clear on those terms. That is why it has been a year since Scottish Labour set a net zero greenhouse gas emissions target, which the SNP at that point refused, and—inextricably linked—it has also been a year since we called for a statutory just transition commission to serve us well into the future. The just transition partnership, which was formed by Friends of the Earth and the Scottish Trades Union Congress and joined by others, has worked tirelessly to push that message and to make sure that we design industrial policies to that effect. However, the Scottish Government somehow remains unclear as to the need for that, despite considering the merit of the commission being in the climate change bill. The current lifespan and footing of the commission fundamentally misunderstands the concerns of workers and the requirements for a resilient future economy. I was relieved that the Government agreed to consider a statutory commission, but as stage 2 of the climate change bill draws closer, I am concerned that that concession might be wavering and waning.
Workers and communities must not be thrown to the wind. A short-term arrangement can only be a short-term strategy setter and is not fit for purpose. We need vision and direction setting for the long term. All future Governments need to be held to account until we reach net zero emissions across all sectors. We need clever policy design and support mechanisms so that we come out on the other side with a fairer society.
Scottish Labour supports the Fife’s ready for renewal campaign by GMB and Unite, supported by the STUC, and the Parliament is, as we have heard, united in backing them. Along with Richard Leonard, other Labour MSPs and members from other parties, I met shop stewards today from Unite, GMB and the STUC. The workforce stands ready and determined to work on this contract.
Claire Baker, who has worked closely with the Fife yards over the years, has made clear the importance of jobs for Fife and made clear that promises must be delivered. I welcome her analysis today.
Here is a test for the Scottish Government. It is also a test for all members in the chamber—[Interruption.]
A lot of quiet conversations are going on but, cumulatively, the effect is noisy. I ask members to keep their conversations to a minimum.
As we have heard time and again in the debate, a Scottish yard sits ready and waiting. It has the skills, the facilities and the labour. Crucially, it holds the opportunity to kick-start decent manufacturing work in the clean energy economy, from which so many jobs have already slipped through our fingers. As Lewis Macdonald said, what are the working conditions in Indonesia?
We have had a fragile promise to consider a statutory just transition commission. We have had votes in favour of a green new deal but no further information. We have been assured that the Scottish national investment bank will have a green investment focus, but will the bill deliver?
The First Minister assured the chamber that she supports the BiFab yard and its workforce, but the workforce has feared redundancy for years and, time and again, contracts have been missed.
When does the Scottish Government expect our manufacturing base to begin to flourish and Scotland’s green energy revolution to take off? When will this pattern of offshoring jobs end, if not now, with a capable company in which this Government is a substantial shareholder?
As Richard Leonard stated, the green revolution must mean an interventionist state acting on behalf of the people and our industrial communities.
The STUC report “Broken Promises and Offshored Jobs” found that past promises of jobs in the low-carbon and renewable energy economy have not been realised, because we have not developed a Scottish supply chain that produces domestic content. Alex Rowley stressed that the unions say that they want a level playing field.
Some of those issues are not the ones that the stakeholders and trade unions that I have engaged with have addressed with me. Others have chosen to put cost before conditionality of supply chain content coming from Scotland. That change needs to come first from the UK Government. Will the Labour Party support me in taking forward the further actions in relation to Crown Estate Scotland and Marine Scotland that I have revealed today? That will create the culture of expectation for work to come to Scotland.
In the case of the NnG offshore wind farm and more broadly, does the cabinet secretary agree that those community and environmental externalities that we all know about must be factored into procurement processes to ensure that Scottish workers and communities benefit from the green revolution? As Richard Leonard stressed, through subsidies and levies, millions of pounds of public expenditure are invested in renewable energy to harness a natural resource, but there is no public accountability and little economic benefit.
Alex Neil is right that everything, from planning to finance, should be reviewed. The cabinet secretary is right that it is important that we do not let the developers off the hook.
I welcome the commitment, if belated, on the Crown Estate licences. Surely that could have been written into the Scottish Crown Estate Act 2019. I also welcome the decommissioning arrangements that were highlighted. However, Scottish Government expectations for the supply chains are not enough. It is public money, and support must not be given if the work is not to be done in Scotland.
The review of contract for difference must be robust and must respect the necessity of investment in Scottish yards. I note the Tory recognition of that need. However, Paul Wheelhouse has stressed that the price alone cannot be the criterion. Inconsistency cannot go on; the quality of the bid must be taken into account.
Lewis Macdonald stressed that EDF and, by implication, other companies in the sector like to have political support when it suits them, but now they need to do their bit. More broadly, he emphasised how important it is that companies moving away from oil and gas into offshore renewables deserve Government support. The renewables sector and EDF are certainly part of that. Both Governments need to develop consenting strategy to tie licensing to UK and Scottish content.
More broadly again, can the cabinet secretary and his colleague John Swinney ensure that the right skills, both initial and transferable, are being identified, so that workers are ready here in Scotland for the green jobs that are here and coming? Scottish Labour is committed to working with a UK Labour Government, when we reach power, to create 50,000 green jobs, and 15,000 of those could—I stress “could”—be in offshore wind. That will be supported by our Scottish Labour industrial strategy in Scotland and we will make sure that that is driven not by the market but by an innovative state, as Richard Leonard stressed.
Changing position on air departure tax was the right thing to do. That policy was calculated to be the equivalent of 30,000 new cars on the road, yet EDF’s plan to manufacture and ship from Indonesia is said to be the equivalent of 35 million cars on the road. The company should be ashamed. Scotland will not hide away from its international responsibility. We are now working together across the chamber to make sure that we reach the ambitious global target of limiting temperature rise to 1.5°.
Those commitments are right and in line with principles of justice for future generations and for the global south. The principle of the just transition must not be left behind in this climate zeitgeist. It is time to support the industries of our future and the workers and communities of today, and that must start with the BiFab contract. Together we can do this.