SNP backs calls for oil jobs to move to Scotland

George Osborne on a North Sea platform yesterday. Picture: Getty

The move comes amid fresh fears for thousands of jobs as a report warns Scotland’s employment outlook has plunged to a two-year low over the plummeting global oil price.

There are new warnings that the once-buoyant North-east economy now faces a “tipping point” as the jobs losses threaten economic stability.

The global oil price now stands at about $60 a barrel – about half the level of last summer – and many experts warn it could stay this way for some time.

Deputy First Minister John Swinney will today set out what he says is the action needed to address the issues in the North Sea and demand “urgent” action from the UK government at Westminster. Ministers in Scotland have backed a letter to George Osborne from the N-56 business think-tank, ahead of next week’s Budget, setting out a “five-point plan” for the industry.

It includes the call for the UK’s Treasury and Department of Energy and Climate Change to establish bases in the Granite City for their oil industry policy-makers.

The proposal would bring them “closer to the industry” and echo the situation in Norway.

Scottish energy minister Fergus Ewing welcomed the proposal and warned last night that Scotland “competes for investment” from multinational energy firms with other oil-producing nations around the world.

“Right now we are not competitive because both costs and tax are too high,” he said.

Mr Ewing said there was a “long-term sustainable future” for the North Sea and pledged Scottish ministers would use “every lever at our disposal” to secure this.

He added: “We have called on the UK government repeatedly to commit to urgent fiscal changes to support investment, encourage exploration and ensure that the North Sea is a competitive investment location.

“After years of using the North Sea as a cash cow, the UK government must finally and urgently take substantive action.

“To win back confidence on taxation, two things are needed. First a substantial package of tax reductions. Second, a commitment to stability and a predicable tax regime, with future changes made in full consultation with the industry.

“Next week, with the UK government’s Budget, the Chancellor has an opportunity to undo much of the damage that has been caused and to bring back confidence to the North Sea oil and gas regime.”

The letter from N-56, founded by pro-independence businessman Dan Macdonald, came after it published a report today. The group’s five-point plan includes short-term tax breaks, a hydrocarbon investment bank, a Norwegian-style long-term approach and more support for offshore fracking – as well as the Granite City base for the key players.

Mr Macdonald said: “It is vital that those policy and decision-makers responsible for taxation and regulation of the sector are located in Aberdeen where development of the industry is properly understood. We can then ensure the delivery of a sector that is responsive to those most impacted by it.”

The economic impact was brought into focus yesterday by a report from workforce experts Manpower which found Scotland’s jobs outlook has fallen to its lowest level in two years after being hit by the falling oil price.

At -1 per cent, Scotland is the only region in the UK with an outlook in negative territory going into the second quarter.

The Employment Outlook Survey is based on responses from 2,100 UK employers and asks whether employers intend to lay off staff or take on new workers in the coming quarter.

“Scotland’s jobs outlook is at its most pessimistic level in two years and is eight points lower than it was heading into last year’s independence referendum,” said Amanda White, operations manager at Manpower UK. “The energy industry provides employment for around 200,000 people across Scotland and the recent fall in oil price has hit Scottish jobs hard, with Aberdeen reliant on the sector.

“As well as an overall fall in the number of jobs available, we have also seen salaries impacted.

“For example, pay in Aberdeen has dropped, after a period of higher salaries driven by a booming resources sector.”

She added: “The jobs market in Grangemouth also looks less rosy this quarter, as, coupled with the fall in oil price, the industrial roles that provide much of the employment for the area have also decreased.”

Labour’s energy spokesman Lewis Macdonald said the Scottish Government must undertake a “full assessment” of the impact of the current low oil price on the North-east, including employment and economic activity. He added: “They have simply disregarded our calls for a resilience fund to support the economy through sudden economic shocks.

“They need to understand the impact the low oil price is having on the Scottish economy – they can’t influence the oil price but their enterprise networks should be geared towards supporting the economies in these situations, so they have a clear and definite role to play.”

He added that the UK government must be more proactive in working with operators to ensure “production is not lost”.

Mr Macdonald said “several thousand” jobs had already been lost as firms cut back.

“Aberdeen is a full employment economy and can absorb an amount of job losses that might be disastrous elsewhere.

“But there is a tipping point where it goes from simply cooling an overheated economy to actually damaging the economy and we could be approaching that tipping point.”