Scotland’s ‘oil economy’ not sustainable - Labour

An oil platform in the North Sea. Picture: Hemedia
An oil platform in the North Sea. Picture: Hemedia
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The current North Sea oil crisis has cast doubt over the future of Scotland’s “oil economy”, MSPs have been told.

Labour warned the country must now start planning for a post-North Sea future and focus on the opportunities from de-commissioning ageing rigs.

It came as the oil industry’s annual report found 75,000 jobs have been lost since last year, while new oil finds have sunk to their lowest level in the North Sea’s history.

Holyrood finance secretary John Swinney said GDP is enjoying its longest period of sustained growth since 2001 as Scotland’s economy came under the spotlight of MSPs at Holyrood yesterday.

But opposition parties warned the country is lagging behind the rest of the UK and business confidence is flatlining.

Labour public services spokeswoman Jackie Baillie said the ongoing slump in global oil value saw prices reach $42 a barrel last week – from $110 last summer.

“I worry about the sustainability of our oil economy,” Ms Baillie said. “This has real consequences. There have been more than 5,000 job losses – 35,000 job losses are predicted over the next three years.

“It touches every constituency in Scotland, but in Aberdeen and Aberdeenshire the impact has been severe.”

She added: “Oil is in decline and the cost of extraction is increasing. However much we might not want to talk about this, we need to start thinking now about a post-oil economy.

“What do we do about de-commissioning? Let’s have a clear strategy from the SNP government to bring investment to do that here, helping make sure that the skills, the talents and the jobs in the oil industry transfer into the new industries of the future.”

Mr Swinney there has been a “strong economic performance” in recent years. GDP has now experienced 11 consecutive quarters of growth, its longest period of uninterrupted growth since 2001, he said, with the Scottish economy proving resilient in the face challenges.

Construction has been particularly strong after “continued infrastructure” investment by the Scottish Government, Mr Swinney added.

“On employment the picture is also encouraging,” Mr Swinney said. “Our employment rate is above that of the UK while youth unemployment is at its lowest level in six years.”

He added: “Our strong economic performance is expected to continue with the consensus forecast growth in Scotland this year of around 2.4 per cent.”

Global exports has also improved by 40 per cent since 2007, he added, while Scotland is now the second most attractive area of the UK outside London for inward investment.