Michael Shanks: Labour government should have done more for North Sea transition 20 years ago

Labour should have done more to prepare north east Scotland for the just transition 20 years ago, energy minister Michael Shanks has told MPs.

Shanks said he wished more support had been put in place under former Labour prime ministers when signs of mass oil and gas job losses appeared.

The Rutherglen MP said the current government’s North Sea Future Plan and specialist job service would help to support workers into new roles.

He said: “I wish we had been doing that 20 years ago when we first knew that we were losing thousands of jobs in oil and gas, but we didn't.

“I take responsibility for the Labour Party's role in that when we were in government 20 years ago, but we also had 14 years of the Conservatives not taking it seriously, so there's plenty of blame to go around.

“It doesn't solve the issue [and] we are determined to tackle it.”

Shanks was giving evidence to the Scottish Affairs Committee in the final session of its inquiry into state-owned GB Energy and the net zero transition.

The matter is a key economic issue, with the Iran conflict adding to debate over the best direction for the North Sea as oil prices rise and supply becomes more uncertain.

The government has banned new licences for oil and gas drilling as it pursues a transition to greener energy. However, energy secretary Ed Miliband is yet to make a decision on activity in the Jackdaw or Rosebank fields.

Shanks said he would not comment on those projects as deliberations continue.

However, he told the cross-party committee that GB Energy, which is headquartered in Aberdeen, now has more than 120 staff.

They include civil servants helping with the startup, who will return to their regular roles afterwards.

Senior roles in Aberdeen are currently being advertised, with the rest of the workforce set to “build on that”.

The figures compare with those from November, when the committee heard of nine permanent GB Energy posts and 15 jobs “on loan”.

Shanks said there will be “hundreds” working in the office in Aberdeen, with “thousands” more jobs delivered through investment by the publicly owned company, predominantly in projects taken forward by developers.

Tory MP Harriet Cross said she had learned of further North Sea job losses just one day earlier.

She asked Shanks about the potential for further North Sea exploration to support the local economy.

Shanks said: “All the evidence points to the fact that although the North Sea has been a hugely important contributor to our energy security and economy for the past 60 years, it has been in decline for 20 of those years, and that isn't going to reverse. And so what we've said is we will not issue new licences to explore new fields, but we will take the pragmatic step of saying if there is a tie-back to an adjacent field that would improve the economic viability of an existing field, which is the most economically likely production in any event, we will look at those applications and take those forward in a pragmatic way.

“But alongside, it is recognising the future of the North Sea workforce and supply chain and energy production comes from the next technologies that we need to invest in at speed right now. That is offshore wind, floating, offshore wind, hydrogen, CCUS [Carbon Capture, Utilisation, and Storage] and all the decommissioning work that needs to be done on what has been in the North Sea for 60 years. That's where we get the real economic advantage from the North Sea. And I'm afraid pretending that the facts on what has been declined for 20 years are different doesn't change the fact.”

The session took place as it was revealed that 100 jobs at the Spirit Energy office in Aberdeen were are risk.

Cross responded that she was “not pretending about any of this”.

The Gordon and Buchan MP said: “I live in the north east of Scotland, as you know I speak to the industry very regularly and I live next to people in my community, in my constituency, who have their jobs being lost every single day – there are more jobs losses announced yesterday which are not public yet, so I will not say what they are, but I'm sure he knows what I'm talking about.

Cross said ongoing job losses in the North Sea were “largely because of government policies” with the industry being “driven down faster than it needs to be”.

Shanks said the labour force in Aberdeen and the region was “incredibly skilled” and “every single job loss is a very serious problem for that individual and for the family and for the community”.

He said it was “disingenuous” to suggest that a job lost in oil and gas didn’t result in a job being created “somewhere else in renewables”.

He added: “Robert Gordon University found that by 2030 the mission could support more jobs in renewables than were lost in oil and gas – the equivalent of 1,400 jobs a month between 2024 and 2030 – so we are going to see a change in the workforce.”