Exclusive:Rachel Reeves issued Budget warning not to 'hollow out' energy jobs in Scotland
Union bosses are demanding Chancellor Rachel Reeves uses her Budget to draw up a “fair tax regime” for the North Sea oil and gas sector and ensure her government does not “hollow out” energy jobs in Scotland.
Ms Reeves is widely expected to signal tax rises in her Budget later this month as she grapples with severe spending cuts needed to balance the books.
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But union leaders have issued a warning that Scottish energy jobs are at risk - particularly over nuclear decommissioning and in North Sea fossil fuels.
The GMB union is also urging the Chancellor to use her first Budget on October 30 to “significantly increase” the money Westminster issues to the Scottish Government, warning Ms Reeves’ tight fiscal rules she has chosen to continue from the Conservatives will “drastically impair the ability of Scotland’s communities and industries to heal the scars left by years of Tory mismanagement”.
The warning over energy workers comes after Petroineos announced Scotland’s only oil refinery at Grangemouth will close next year - axing 400 direct jobs, with thousands of more at risk through supply chains.
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Hide AdConcerns have also been raised about two Harland and Wolff yards in Scotland that had been earmarked to produce wind turbines after the company entered administration.
GMB Scotland secretary, Louise Gilmour, has written a letter to Ms Reeves and Scotland Secretary Ian Murray, calling on the Budget to be “bold and visionary”.
In her letter to the Chancellor, seen by Scotland on Sunday, Ms Gilmour, has claimed that Labour’s mandate in Scotland and across the UK is “precarious”, adding that “many voters lent their vote to you and many supporters of opposition parties chose not to turn out”.
Ms Gilmour added: “It is incumbent on a Labour UK government to prove it can deliver for Scotland’s economy, industry and workers.”
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Hide AdThe GMB has previously criticised the Scottish Government’s long-standing opposition to new nuclear power, which ministers can veto through devolved planning rules.


Ms Gilmour has warned that “Scotland’s nuclear energy sector is being hollowed out while work in one of energy’s most highly skilled and highly paid sectors goes south”.
In her letter, she added: “Both our nuclear sector and offshore wind supply chains need urgent investment – including in nuclear decommissioning. A cut to the decommissioning budget will only further hollow out jobs at Dounreay, Hunterston and soon Torness.
“The Budget should commit to protecting nuclear decommissioning, expanding the UK’s nuclear fleet which includes a funding model which isn’t overly reliant on costly private finance and ringfences funding for new nuclear in Scotland.”
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Hide AdMs Gilmour added that the closure of the Grangemouth oil refinery “should act as a warning to both governments that loose talk on energy policy and poor industrial planning will cause redundancies, the hollowing out of our tax base, and undermine our energy security”.
The union chief has also warned against Labour’s plans to extend a windfall tax on the oil and gas sector.
She added: “The oil and gas sector is more delicate than most realise. Increasing the tax on the sector is a regressive step which will cost well paid, skilled and unionised jobs and will divert investment abroad making us more reliant on imports as domestic production slows.”
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Hide AdMs Gilmour said that “the transition to more renewable energy is inevitable”, but insisted that “job losses and poorer pay, terms and conditions are not”.
She claimed that “raising taxes on a key foundation of Scotland’s economy would be devastating and place thousands of jobs on the scrapheap with nowhere for workers to go”.
Ms Gilmour added: “The UK government should scrap these plans and instead develop a fair tax regime for the oil and gas sector that will protect jobs and secure investment for the energy transition”.
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Hide AdHighlighting Ms Reeves’ vow to stick to the Conservatives’ fiscal spending rules, Ms Gilmour, has issued a stark warning the mantra will “drastically impair the ability of Scotland’s communities and industries to heal the scars left by years of Tory mismanagement”.
She added: “Scotland’s public sector workforce has year after year been expected to do more for less.
“Key frontline services are on their knees and our members face the annual reality of potential strike action to secure a pay offer that values their contributions. No amount of ‘reforms’ and privatisation can alleviate the crisis in our services.”
In her letter, Ms Gilmour has stressed that “austerity must be ended” and the Scottish block grant “significantly increased to build the economy and public services Scotland deserves and expects”.
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Hide AdMs Gilmour said: “The Chancellor has an opportunity to deliver a genuinely transformative budget but must be brave enough to take it.
“Our country has been brought to its knees by austerity when any long-term vision for our country was sacrificed for short-term Tory tax cuts.
“We cannot keep staggering on from one year to the next without any kind of plan for where our country should be in ten years’ time.
“We need to restore our public services, we need to start building again, from homes to supply chains, and we need to do it at pace.
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Hide Ad“Labour was elected on a promise of change. Only with real courage and genuine vision, can this Budget start delivering on that promise.”
A UK government spokesperson said: “Our transition to clean, homegrown power will create a new generation of good jobs across the country.
“The Office for Clean Energy Jobs is at the heart of the government’s plans to reach clean energy by 2030 and highlight the substantial job opportunities from this transition.
"We’ve also set out our support for a ‘skills passport’, alongside the Scottish Government – that will help the highly skilled workers of our North Sea oil and gas industries move into new careers in renewable energy."
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