STV survey: Six out of ten people in the Northeast believe the special tax will damage the economy

About six in ten people in north-east Scotland believe that the special tax will harm the region’s economy.

According to a ScotPulse poll conducted on behalf of STV News, 57% of residents in the area believe it will have a negative impact, while only 9% of residents say it will have a positive impact on local businesses.

This came amid warnings that new jobs must be found for those working in the oil and gas sector as the country transitions to a renewable energy future. Around one in five jobs in the North East are created directly or indirectly by energy companies.

At the beginning of the year, the Conservative government in Westminster announced that the special tax on oil and gas companies would be extended for another year.

The current energy profit levy of 35 percent, which will apply until 2029, increases the total tax burden on producers to 75 percent, making it one of the highest in the world.

But the new Labour government plans to increase the special tax on oil and gas profits from 75 to 78 percent, extend the tax until 2030 and eliminate tax incentives for further investment.

Figures released by industry body Offshore Energies UK (OEUK) show that the proposed increase would result in a decline in investment by oil and gas producers in UK projects from an expected £14.1 billion to just £2.3 billion between 2025 and 2029.

What does the future hold?

The future of energy is surrounded by controversy and debate.

In Aberdeen, oil was once the only topic in the city.

The change of government in Westminster following this summer’s general election signalled a change of direction regarding the future of the North Sea.

But for many, the question is what exactly will happen next and what consequences this could have for jobs and investment.

Scotland is already a leader in renewable energy such as offshore wind and tidal power.

But in places like the Northeast, it’s about how we shift jobs from fossil fuels to green technology.

Across Scotland, around 60 percent of the population supports the country’s net zero ambitions. In the North East, this figure is even lower than 50 percent.

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Myrtle Dawes of the Net Zero Technology Centre said: “Many of the jobs in the energy transition, people already know how to do them. I think the gap is whether we create new vacancies and jobs that people can just take on, or whether people have the skills to do them.”

“I think it’s because of that pace and keeping up with people moving from traditional jobs to newer jobs.”

The so-called just transition has been talked about many times, but for workers’ representatives it is more than just a phrase.

One issue that concerns the oil and gas sector is the so-called windfall tax.

OEUK has warned that the proposed changes could reduce the value of the sector by £13 billion.

But climate activists who demand a fair transition process say the special tax is necessary.

Tessa Khan, chief executive and founder of campaign group Uplift, said: “So far, the signals the UK government has sent about moving away from oil and gas are promising.

“There are many more details to come and in particular we are interested in details of how they will transition the workforce in the North Sea oil and gas industry and the communities in north-east Scotland – associated with that industry – into these long-term, sustainable industries of the future.”

Investment continues in Aberdeen, with the city’s new £420 million South Port being a case in point. It was built to accommodate larger vessels needed as part of the decommissioning and renewable energy work.

However, with oil prices rising this year, a smooth transition is crucial.

Roddy James, commercial director of the Port of Aberdeen, said: “Our view is that it has to be a just transition – we have to move from the energy we currently produce, fossil fuels, to clean, renewable energy.

“If there is a gap of three or four years, the entire supply chain and everyone involved in it needs time to adapt and change, but they also need revenue for the here and now.

“If it is an abrupt transition, many companies will struggle to bridge the gap between the start of the new industry and the end of the old one.”

In the Northeast, a new remotely operated vehicle (ROV) technology was developed and built.

It is fully electric and operated from land – and serves to support both the oil and gas and renewable energy sectors.

But it is also part of the region’s broader underwater industry – an area that technology company HonuWorx believes needs to continue to grow.

Lee Wilson, CEO and co-founder of the company, told STV News: “This region has been at the forefront of subsea technology for over 40 years.

“We have an underwater infrastructure that is recognized and envied worldwide. We have exported it worldwide, people have come from all over the world to work in this sector. The energy transition will depend on the technology, skills and capital that we have in our underwater sector.”

At the heart of this debate are jobs.

How many could be created, how many could be lost and how many will want them. The next few years will be crucial for this region as well as the rest of the country.

There is perhaps no better example of a ‘just transition’ than the news that 400 jobs are likely to be lost with the closure of the Grangemouth refinery next year.

The exact definition of the term is the shift of jobs from fossil fuel production to more environmentally friendly jobs in the local community.

However, the speed at which this must now happen makes the situation even more serious for everyone involved.

But it is a broader problem that will affect many areas of the country.

Aberdeen, the ‘Oil Capital of Europe’, is undergoing a transformation, but if this transition is not done properly, thousands of jobs could be lost.

A report by Robert Gordon University found that more than 30,000 jobs could be lost in Scotland if the balance between falling oil production and the expansion of renewable energy is not maintained.

But companies that depend on the energy sector fear a time when the oil industry dries up and renewable energy can no longer meet demand. For many, that would be the worst of all.

The new British government has signalled a change of course for the North Sea: a higher and longer-term special tax and the termination of future drilling licenses.

Whatever the arguments on both sides, ultimately it is about jobs.

Those directly employed in the energy sector, and the businesses and communities across much of North East Scotland that depend on it.

It is about ensuring that they are not left behind in future changes.

At least there is agreement between both sides on this.

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