Food banks in Aberdeen? Why this once wealthy city fears economic disaster

After returning to Scotland following 40 years away, Martin Roche visits Aberdeen on the second leg of his journey of discovery around the country and finds a city with huge concerns about the decline of the oil industry

I left my native Inverclyde in 1978 to be a mature student at Aberdeen University. Four years later, it churned me out as a graduate and I took my degree out into a Britain about to experience an economic revolution.

My time in Aberdeen witnessed the peak oil boom years. It came to the rescue of an ailing nation. The 1979 general election had brought Margaret Thatcher to power and oil gave her the financial cushion to remodel the economy, mainly moving Britain from manufacturing to services.

In tandem with the huge loss of manufacturing enterprises, and the jobs they provided, dozens of industrial towns lost the complex weave of skills fundamental to their economic viability. That’s the fate that Aberdeen now fears may befall its oil and gas workforce and the supply chain of supportive specialist companies the industry depends on.

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An oil industry supply vessel docked at Aberdeen Harbour (Picture: Andy Buchanan) | AFP via Getty Images

‘Equivalent of 25 Grangemouths’

I went to Aberdeen to talk to Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce. He told me the region has a clear plan, one that can deliver great benefits to the UK.

Borthwick’s strategic aim is to see his region emerge as the European capital for renewable energy skills and technologies. All that’s needed for Aberdeen to do that currently exists in the area.

The threat to the city’s future is, argued Borthwick, to be found in the UK Government’s windfall tax on the North Sea operators. The tax has seen new investment in the sector come to a halt, creating a domino effect of people and enterprises following the industry out of Aberdeen to where it is investing overseas.

“We have already suffered the equivalent of 25 Grangemouths in terms of job losses,” said Borthwick. (Four hundred jobs are going at Grangemouth with the closure of the refinery.)

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Oil and gas are not about to vanish as elements in the UK’s energy mix. Current forecasts say both fuels will be needed for at least 25 years, a lot of it imported. By increasing North Sea production and exploration now, and ending the windfall tax, argues Aberdeen’s Chamber of Commerce, the UK can be more energy secure, reduce reliance on imports, cut the harmful emissions from importing fuel halfway across the world and lay solid foundations for leadership in net zero.

“In ten years’ time, I want the country to see Aberdeen as the place that enabled the UK to achieve its climate and net-zero ambitions in a way that kept the lights on, kept people in work and powered an economic recovery for the UK, and at no cost to the public purse,” Borthwick said.

Scotland’s economic disasters

In their haunting song Letter From America, The Proclaimers chronicle a list of great Scottish economic disasters. There seems an opportunity now to avoid the mistakes of the past, to do something different, something better.

John Swinney’s Scottish Government has a role to play in championing the North East as the home of energy. But only Keir Starmer has the power to swap short-term fiscal expediency for long-term economic success for Aberdeen and the North East, for Scotland and the UK.

Aberdeen University’s principal, Professor George Boyne, shared Borthwick’s commitment to net zero. We talked in his office at King’s College. “Let’s get the pace right to protect the employment, the wellbeing and the welfare of the people of the North East,” he said.

Since 1495, the university has been producing a commodity even more valuable than oil – it’s been building brains in Scotland. Boyne retires later this year, leaving behind a university with very high levels of student satisfaction and research and development income up 80 per cent in the past five years. The EU students lost to Brexit have also been entirely replaced with scholars from other lands.

But the UK’s divorce from the EU can’t separate an institution like Aberdeen University from its geographic and intellectual roots, or its Enlightenment values. “Brexit was damaging to our sense of who we are, to our identity as a university,” Boyne said.

“It was inconsistent with our history. We were founded on the European model of a university and have always felt like a northern European university. Brexit feels like a fracture. We still mourn the loss of all those wonderful EU undergraduates. They brought so much culturally and intellectually to the university.”

‘Self-defeating’

Stephen Flynn is the SNP MP for Aberdeen South and his party’s leader at Westminster. I called him to ask how fast we should move to net zero right now. Flynn urged the UK Government to greatly accelerate decisions over new North Sea oil and gas licences and the fiscal regime affecting the industry.

“We need certainty now over the future for oil and gas and of the new net-zero technologies. The North East desperately needs projects like the Acorn carbon capture facility to speed up net-zero and help retain the skills and supply base we have. There’s a real air of trepidation in Aberdeen,” he said.

Flynn argued it was unrealistic not to have new licences. “Without the revenue from the North Sea and the skills the industry brings, we all lose. A hard stop in oil is self-defeating.”

The immediate future for Scotland’s energy industries hangs in the balance. Get it right and Labour might once again claim to be the natural party of Scotland. Get it wrong, and that will bring hardship to many. Lochaber No More.

Near the Pittodrie Bar, where once I was a regular, I came across a food bank. In Aberdeen? Perhaps Lochaber is already here.

Martin Roche worked in foreign direct investment, followed by a 35-year career in international public relations.