One of Labour's biggest financial backers has hit out at the party's North Sea plans amid concerns that Chancellor Rachel Reeves is driving the sector towards a "cliff-edge".
The GMB union and members of the Association of British Independent Exploration companies (BRINDEX) have warned the UK Government "not to ignore the voices of the UK’s oil and gas workers" – and urged ministers to engage the sector in meaningful discussions.
The union was one of Labour's biggest financial backers in the run-up to the General Election and is a long-term donor to the party, coughing-up millions of pounds over the past decade.
Today’s warning follows government proposals for the sector’s fiscal regime in the Autumn Budget and uncertainty about future licencing, provoking widespread concern across North Sea operations about a cliff-edge threat for investment, jobs and skills, and vital carbon capture development.
Gary Smith, GMB General Secretary, said: “GMB is a proud and unambiguous energy union, and we want the voices of our offshore workers to be heard loud and clear in the corridors of power over the decisions affecting their livelihoods.
“The government is rightly focused on a growth agenda after years of instability and industrial decline, and the transition presents a huge opportunity to unleash investment for jobs, infrastructure, and security.
"But that means creating the right conditions to turn that ambition into reality, and better cooperation between unions, industry, and government is fundamental to this because ‘business as usual’ won't work.”
Partnership
GMB and BRINDEX agreed a Memorandum of Understanding (MOU) last November, committing to “represent workers’ voice and employer concerns to better engage policy makers” and to “make the case for pro-jobs policies and strengthening energy security.”
GMB visited the Armada Kraken offshore production facility in May, representing a step forward for better cooperation between the sector’s oil and gas independents and the UK’s energy union. Further visits are planned this summer to infrastructure owned by some of the UK’s leading North Sea producers, including Serica Energy, EnQuest, and others.
Robin Allan, Chairman of BRINDEX, said: “Hard working families sustained by the oil and gas sector across the UK’s nations and regions deserve to be treated with respect from government – and so do our independent operators who support these livelihoods.
“Our ongoing engagement with GMB through these latest offshore visits recognises that if the transition is going to be a success, then change must be done with the people doing so much to keep the lights on, homes warm, and industry running - not to them.
"That’s why we are urging the government to work with us and engage in meaningful discussions with the very people on whom they depend to help accelerate the UK’s industrial transition, growth, and energy security agendas.”
Consensus
Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce, said: “The Chamber, industry, investors, academics and unions are all aligned in their concerns about the impact that Labour’s policies will have on the North Sea oil and gas sector. Indeed, there is so much alignment on this issue, that even Aberdeen Labour described the plans as ‘economically illiterate’ prior to the election campaign.
“The simple fact is this; we need investment in new North Sea oil and gas fields to maintain jobs and offset declining production. Without that investment, production could halve by 2030, which places thousands – perhaps tens of thousands – of jobs at risk.
“We are already seeing investors walking away from deals – and if that gathers pace, then the jobs we have already lost to the windfall tax could be a drop in the ocean compared to what is to come.
“The energy transition requires a very tricky balance to be struck. We need to manage what will be the final phase of exploration and production in the North Sea and at the same time also need to unlock over one trillion pounds in investment to develop and build out the low carbon technologies of the future.
“The same workforce and supply chain are required to deliver both – but if we wind down oil and gas production before jobs are available at scale in renewables, then we lose the world class expertise built up over 50 years and Aberdeen will pay the price."