Labour’s plan to block all new oil and gas explorations would cost the Scottish economy an estimated £6billion by 2030 – around £1,100 for every single Scot.
UK party leader Keir Starmer announced at the weekend that, if he wins the next General Election, Labour will refuse to grant licences for any new domestic projects, a move which the Scottish Conservatives claim would “devastate” North East Scotland.
The £6billion figure – highlighted by David Whitehouse, the chief executive of Offshore Energies UK – is based on the Scottish Government’s energy strategy report.
And – while the SNP and Greens are also against new oil and gas licences being awarded – because such decisions are reserved to Westminster, it’s Labour’s policy that threatens to decimate the North East economy.
Rather than distancing themselves from Keir Starmer’s announcement, Scottish Labour seem to have endorsed it.
Liam Kerr, the Scottish Conservative shadow secretary for net zero, energy and transport, described the policy as “economically illiterate, short-sighted and a betrayal of the North East”, adding that only his party would stand up for the region and protect Scotland’s energy security.
Scottish Conservative shadow secretary for net zero, energy and transport Liam Kerr MSP said: “Keir Starmer’s pledge to block all new oil and gas production would devastate communities across the North East and hammer every Scot to the tune of £1,100.
“Labour’s policy is economically illiterate, short-sighted and a betrayal of the North East – and I’m astonished that Anas Sarwar is happy to endorse it.
“We all want to see a just transition to net zero but it’s utterly reckless to turn off the taps in the North Sea immediately, especially when renewable sources don’t come close to meeting the country’s energy needs.
“Labour’s policy means, of course, we’d need to import oil and gas from overseas to meet our energy needs, which would increase our carbon footprint, as well as throwing tens of thousands of skilled workers under the bus.
“We already knew that the SNP and Greens had abandoned oil and gas workers but, as it’s the Westminster government who decide on granting new licences, it’s Keir Starmer and Labour who would deliver a hammer blow to Scotland’s economy if they won the next General Election.
“The public know that only the Scottish Conservatives will deliver a just transition to net zero that safeguards communities, jobs and Scotland’s energy security.”
Notes
Labour’s policy to end new oil and gas exploration could cost the Scottish economy up to £6billion. David Whitehouse, chief executive of Offshore Energies UK, said: ‘Fundamentally what the Scottish Government's document does show is a loss of value to the economy in the region of about £6billion to 2030.’ The Scottish Government’s energy strategy supported an effective ban on new oil and gas developments, a policy that Labour now support with a party source saying: ‘We are against the granting of new licences for oil and gas in the North Sea.’ (Scottish Government, Just Transition Review of the Scottish Energy Sector, Summary Report, March 2023, link; The Herald, 6 March 2023, link; Sky News, 28 May 2023, link).
Ending oil and gas exploitation early will cost each person in Scotland nearly £1,100 by 2030. The per capita loss to each household by 2030, based on £6 billion lost GVA in Scotland divided by the approximate number of people in Scotland, which is around 5.5 million, is £1,094.91 (Just Transition Review of the Scottish Energy Sector Summary Report, March 2023, link; NRS mid-2021 population estimates, 13 July 2022, link).
Labour are putting at risk the 90,000 oil and gas jobs that were located in Scotland in 2022. This was a mix of direct (25,400), indirect (42,300), and induced (22,300) jobs. Labour’s policy would mean there is no room for growth in this industry if they are now against new oil and gas development (OEUK, p.8, 2022, link)
The oil and gas industry is a high value export with the average wage of a direct job £88,000 – significantly above the £29,000 average Scottish wage. Most of the production exported either to the rest of the UK or globally. Salaries are well above the Scottish average with a direct job having an average wage of £88,000 and £51,000 in the supply chain. This compares favourably to the Scottish average of £29,000. Further, ‘Of the 25,000 direct O&G jobs, 98% were located within Aberdeen City and Aberdeenshire.’ This means a decline will affect it more markedly. (Scottish Government, Just Transition Review of the Scottish Energy Sector, Summary Report, March 2023, link)