The UK Government must deliver investment in the energy sector of a level that allows Aberdeen and the north-east to “ride the storm currently enveloping it”, says the SNP’s new shadow business secretary.
Stephen Flynn, who was recently promoted to the party’s front bench, claims the pandemic has made the “urgency” for the promised North Sea Transition Deal “clear to all”, with an estimated 12,000 jobs already lost in the sector over the last year.
Westminster pledged to deliver a sector deal during the first half of 2021 in its long-awaited energy white paper but Mr Flynn says the UK Government’s response to the “unique situation” in Aberdeen and the north-east “hasn’t been up to scratch”.
In our interview, Mr Flynn, the SNP’s shadow secretary of business, energy and industrial strategy, also revealed his personal set of priorities as he takes on his new role in the midst of the Covid-19 pandemic.
Chief among them is calling on the UK Government to deliver more certainty for businesses struggling as a result of the pandemic by offering commitments on business rates, loans and furlough.
‘I would like it tomorrow’
Mr Flynn, who was elected to represent Aberdeen South in 2019, says there has been a lack of sector-specific support for the oil and gas industry, adding there has not been a “single penny” from Westminster.
He adds: “I think, in terms of delivery of the oil and gas sector deal, this is something that has been talked about for longer than I have been an MP.
“Since the pandemic hit, the urgency of that has been clear to all.
“We have been repeatedly asking the UK Government to deliver on what is their promise.
“There was a commitment given quite recently from the former Secretary of State (Alok Sharma) that the deal would be delivered by end of the first quarter.
“Is that soon enough? No, I would like it tomorrow. I think everyone would because the urgency of investment is real.
“No matter where you look in the city there are people losing jobs and there are companies that are struggling so we need to have reinvigoration of Aberdeen and the wider north-east economy.”
However, David Duguid, Conservative MP for Banff and Buchan said that while SNP MPs have been “busy sending letters and making demands”, Scottish Conservative MPs have been “actively engaging with the industry and government in the preparation of the heads of terms”.
‘Thousands of jobs lost’
A “transformational” sector deal, which would support the North Sea industry as the UK moves towards a net zero economy, formed part of the Conservatives’ general election manifesto pledge in 2019.
The need for government support has been thrown into sharp focus in recent months as a result of Covid-19 and the oil price crash, with thousands of jobs lost.
UK oil industry chiefs submitted proposals for a “sector deal” to Westminster in March 2018, estimating total investment of £176 million could deliver £110 billion for the UK economy by 2035.
In December Mr Sharma, said he was “fully aware” of the importance of oil and gas as an employer in Scotland and across the whole of the UK.
In response to a question from Gordon MP Richard Thomson, he added that the government had received a formal proposal from the industry for a deal and would move into negotiations, which they hope to complete and publish in the first quarter of the year.
Mr Flynn says he hoped the UK Government would have “gone quicker” but “they haven’t so we are where we are at this moment in time”.
He adds: “I hope, over the course of the coming weeks, they will finally deliver and hopefully the level of investment that they deliver allows the city and the wider region to ride the storm that is currently enveloping it.”
‘Complete and utter silence’
SNP MPs in the north-east penned a letter to Mr Sharma in December, calling for a meeting on the planned support for the sector.
However, so far, their request has gone unanswered, which Mr Flynn claims shows a “complete and utter disrespect” to MPs and to the people of Aberdeen.
Mr Sharma has been appointed full-time COP26 President and was replaced as business secretary by Conservative MP Kwasi Kwarteng on January 8.
Mr Flynn says: “We’ve been elected by the people of Aberdeen to express their views and this goes much deeper than party politics.
“This is literally about people’s jobs and the potential future economy of Aberdeen and the north-east and we’ve had complete and utter silence from the UK Government in respect of something that is so simple as a meeting to put forward our city and region’s case.
“It’s not good enough. It doesn’t just show a complete and utter disrespect to us as MPs but it shows complete and utter disrespect to the people who elect us and the wider public in Aberdeen who expect us to be championing our city and region to government at the highest level.”
Call for more certainty
The energy transition deal is just one of the main asks of the SNP’s new shadow business secretary; beyond that he wants Westminster to provide certainty around long-term business-rates relief for the hospitality, retail and leisure sectors.
He would also like clarity on what will come after the furlough scheme, once it stops at the end of April, to support struggling businesses.
He says: “There is that 100% relief that’s been extended by the Scottish Government but to date UK Government have been silent as to whether they’re going to extend.
“We need to see an end to the uncertainty which surrounds all these schemes from the UK Government.
“They appear to be waiting for the Chancellor’s budget statement in March but businesses need to be able to plan ahead a lot more than they have been able to of late.”
Energy transition of ‘critical importance’
David Duguid, Banff and Buchan MP, said: “The SNP MPs have been busy sending letters and making demands, while Scottish Conservative MPs have been actively engaging with the industry and government in the preparation of the heads of terms.
“A sector deal was part of the Conservative manifesto in 2019 and all those involved have had input into it.
“It was Scottish Conservative MPs who secured Transferable Tax History for example which did massive amounts to help the north-east oil and gas industry weather the storms of low prices.
“The vision for the North Sea Energy Transition is of critical importance to the region and to the UK as a whole. Those who have actually engaged recognise that.”
The Department for Business, Energy and Industrial Strategy were contacted for comment.