End of story? Well, it certainly should not be. What happened with BiFab is only the symptom of a far more serious problem which remains entirely unresolved. It might be called “Whatever happened to Scotland’s Second Industrial Revolution?”. In other words, how on earth have we ended up getting so little economic benefit out of renewable energy?
The sad sub-text to the BiFab story is as follows. Scotland, at present, has only one large offshore wind project under construction, though the Beatrice windfarm has a value of £2.6 billion. It has been in gestation for almost 20 years. Yet the only substantial part of that work being carried out in Scotland is a £100 million sub-contract, and we can’t even that get that right.
That is no reflection on the workforce who, quite rightly, fought tenaciously to carry on working. Unfortunately, the great majority of them are working in conditions that are far from custom-built. BiFab in Fife has been primarily an oil and gas business since 1990.
The 2015 downturn created additional pressure to put part of the Beatrice work into Fife. But investment was required to make them competitive. Eighty-six steel “jackets” were ordered for Beatrice – 30 from Bladt of Denmark, 30 from Smulders of Belgium (with completion at Wallsend) and 26 from BiFab.
It would be fair to say their European counterparts are working in somewhat more advantageous conditions than the workforce at BiFab while their employers were running into none of the same cash flow problems.
There seemed to be some media awakening last week to the fact it was not meant to be like this. The bold promises of that “second industrial revolution” were dusted down. I heard the BBC’s Gordon Brewer on television asking Keith Brown, the industry minister, why Scotland has been so unsuccessful in attracting investment in renewables infrastructure with the vast majority of hardware imported.
I did not get the impression that Mr Brown understood the basis of the question, far less knew the answer. When in doubt, however, there is no doubt about the first place of refuge – blame Westminster, which Mr Brown duly did for failing to give certainty to the renewables industry. The problem with this is that it is completely untrue.
No project has had greater support from the UK Government right back to the time I was Energy Minister than Beatrice. There has been planning consent since 2009 and the guarantee of subsidy since 2014. What’s more, the lead player in its ownership is SSE. So why has there never been a plan to ensure a high proportion of the work stayed in Scotland, supported by state-of-the-art facilities?
The same question should have been asked long ago about onshore wind. While we were listening to endless political rhetoric about the “Saudi Arabia renewables” and world-beating targets, nobody seemed to care about the fact that thousands of turbines which appeared on our hillsides were being built in Spain, Denmark and Germany while every promise of investment in Scotland came to nothing. (Dundee no more, Leith no more, etc).
As I have written here before, the two main beneficiaries of privatization in Scotland, Spanish-owned Scottish Power and SSE, have a lot to answer for. Between them, they had more than enough fire-power to create and sustain a manufacturing centre of excellence in Scotland based on planning consents from the Scottish Government and the vast subsidies from UK consumers (with profits to match) which these generated.
I believe that political leverage could have been used to positive effect. Instead, we seemed to have a sweetheart deal between Scottish Power in particular and the Scottish Government, which involved lots of mutual congratulation but few tangible benefits – and certainly not a trace of that “second industrial revolution”.
As far as onshore wind is concerned, the stable door has slammed shut. Offshore wind, however, still has a future ahead and I hope the problems at BiFab have finally alerted Holyrood to the fact that this should be an ongoing political issue of the highest order. If there is anyone who still cares about Scottish manufacturing industry and the thousands of well-paid jobs it could support, this is the time to make that case.
There are another couple of large offshore windfarms in the offing, in the Moray Firth and off the Fife coast. It has taken the latter more than six years to finally obtain the go-ahead due to the planning processes for major projects still used by the Scottish Government. In the same time, Whitehall – which streamlined the process a decade ago – has approved 45 offshore windfarms.
This is not about whether one approves or disapproves of windfarms. That is for the planning process to determine in each case. But where they are going to happen, and particularly if it is in Scottish waters, then surely it makes sense for Scottish workers and the Scottish economy to get far more benefit. That will not happen until empty rhetoric gives way to sustained policy and actions.
There needs to be an urgent census of relevant capacity and what is needed to make it competitive with yards on the continent and also south of the border. By quietly going about its business, the east coast of England has been far more successful in creating the kind of facilities that have repeatedly eluded Scotland’s own efforts, whatever these may have been. Is it too late for this to change? If so, is there a case for public investment to fill the gap?
I’m sure efforts are now going on to ensure that BiFab, by one means or another, is not back in crisis next April when the current contract is due to be completed. However, this is not just about BiFab. It is about the whole Scottish manufacturing base and another huge opportunity which is in imminent danger of floating off into history.