Labour’s North Sea gamble: Starmer knows how high the stakes are

The change that’s coming to Aberdeen is not going to be stopped.

Aberdeen harbour (via Richard Johnson/ Shutterstock)

When St Luke wrote in his gospel that, "there will be more joy in heaven over one sinner who repents than over ninety-nine righteous persons who need no repentance”, it’s unlikely that he had The Guardian newspaper in mind. 

And yet, there it is: an article by Jillian Ambrose from Saturday’s edition that spells out the dangers of Labour’s policy towards the North Sea and its oil and gas. Ambrose represents the story through the city of Aberdeen and the concerns that Aberdonians have over the government’s determination to tax the North Sea out of existence and turn the UK into, in their words, a green energy superpower. It’s a sympathetic, rounded piece that tries to do its best by everyone involved. And, as Ambrose points out, it’s not just oil and gas workers that are affected. As those workers leave Aberdeen, it’s the hotels, cab drivers, shops and restaurants and others that are hurt by less oil money being spent in the Granite City. 

Ambrose’s article is fairly gentle and a lot gentler than oil industry legend Malcolm Webb, former head of Oil & Gas UK, who laid into the government today in the Aberdeen Press & Journal. As he wrote, “No industry can long survive under such a regime. It is a toxic formula designed to bring an industry to its knees. It is an aggressive move to end the production of oil and gas in the UK, presumably in the mistaken belief that this will advance the cause of net zero. It will do no such thing. Billions of barrels of UK oil and gas reserves will simply remain in the ground to be replaced by non-UK production.” 

To be fair to Keir Starmer and Ed Miliband, they are wholly aware of what they are doing, whether you think they are misguided or not, and they are actively seeing to ameliorate the economic and social impact of their plans by headquartering their uber-Quango, GB Energy, in Aberdeen. There’s no doubt either that there will be new opportunities in the green economy for those workers that are left behind; building 60 GWs of wind turbines will take a lot of manpower. But they won’t be the same jobs and won’t have the same allure. Servicing wind turbines surely doesn’t have the appeal of being a roustabout on the drill floor when you’re on the hunt for Black Gold. 

Perhaps that’s too romantic? Working on an oil rig in the Atlantic Ocean to the west of Shetland means living for weeks on end in some of the toughest and roughest seas anywhere on the globe – it’s not for the faint-hearted or those that like a dram of an evening. Of course, this unique environment explains why so many oil and gas workers were able to and wanted to splash the cash in Aberdeen when they got back on to dry land. How many Reaction subscribers have been on a plane out of Dyce airport with rig workers who are heading home? Let's just say that it's a unique experience. 

With the majority that Labour has and their Lib Dems pals alongside them, the change that’s coming to Aberdeen is not going to be stopped. You can be certain that Starmer and Miliband will be, a la George Osborne, in helmets and hi-vis in Scotland on a very regular basis as they talk about the investment that they (we) have made and how they have, “crowded in” (the phase de jour currently) private investment at the same time. 

They persuaded Iberdrola, which owns Scottish Power, to issue a press release ahead of the recent investment summit which contained an awful lot of recycled material about the investment this Spanish behemoth is prepared to make in Scotland, and they’ll want to be seen to deliver on that. Furthermore, we know that renewable investment at scale only happens when the government, and this is all governments by the way, provide subsidies to those prepared to invest, hence the generous offshore wind auction that was held earlier this year. 

So Labour is up to its eyeballs on this and ministers have been told about the social, economic and geopolitical risks that they are taking in the North Sea many, many times. This is not the same as Mrs Thatcher vs the coal miners where change was always coming; no, this is a decision that they have made in full understanding of what is going to happen and who gets the blame if it all goes wrong.