The other day on the doorstep, I got into a conversation with a man who was facing redundancy in the oil and gas sector, we discussed the work being done by the Energy Jobs Taskforce, set up by the Scottish Government, and he said he was pleased to see support coming to the North East via the extended investment in the City Region Deal, and support for individuals to retrain.
As we chewed the fat he asked me, pointedly, ‘When are the Tories going to give something back for all we have put in?’, I told him that I could not answer for the Treasury, but he might want to put that question to the Tory candidate if they knock on his door.
It is, however, a question that merits some consideration. After all, we were told in the weeks leading up to September 18th 2014 that it was only the broad shoulders of the UK that could support the oil and gas industry to flourish in the future.
And when the industry needed the support of those broad shoulders, what did they do? They shrugged.
The Chancellor’s recent budget, which has been imploding from the moment he sat back down after delivering it, yet again passed up an opportunity to deliver real support to a sector of our economy which has pumped billions into the Treasury’s coffers over the decades.
I met recently with a company which supplies services to exploration rigs. Every rig active in the North Sea is worth around a quarter of a million pounds to that company. If the rigs sit stacked and idle, it is worth nothing.
Osborne could have introduced incentives for exploration, this would have had the benefit of getting the rigs out, boosting the supply chain and meaning, when the price picks up, companies would be in a strong position to take advantage.
Instead the Chancellor focused more on production than on securing a vibrant future for the industry. This was a missed opportunity, and there is a risk that the actions of the Chancellor, and the rhetoric of some politicians, could lead to early decommissioning which would be a disaster for the sector.
And what of the City Region Deal? The Scottish Government is investing a total of £379 million to support a range of infrastructure developments in the North East, that is on top of the billion pound package being delivered at present which includes the AWPR, the Inveramsay Bridge and the Balmedie/Tipperty improvements. All projects designed to boost connectivity and enhance our economy.
Meanwhile, the contribution of the London Government, with their broad shoulders, was £125 million, less than a third of the Scottish Government’s contribution.
The North East has contributed around £300 billion to the Treasury over the last four decades, and we are receiving £125 million at a time when we would have expected some form of payback.
It is hard not to conclude that the North East of Scotland has been effectively participating in a London Treasury pyramid scheme. We are certainly not being given anything like the return on our money that we ought to be.
It is high time David Cameron, George Osborne and Amber Rudd, the Energy Secretary, took seriously the difficulties that face the sector, and in particular the companies in the supply chain, and offered meaningful support.
I fear that this is unlikely, however, but at least we know that the SNP recognises the importance of the North East and put the support in when it was needed.
Mark McDonald is the SNP Candidate for Aberdeen Donside
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