Conference jolt

Business leaders attack Labour over energy plans

Sir Ian Wood on Question Time
Signatory: Sir Ian Wood

Scottish Labour opens its conference today against a growing backlash from business leaders angry at the change of energy policy which they say will threaten livelihoods across the country.

In a joint letter, about 800 individuals, firms and trade groups have warned Labour leader Sir Keir Starmer his plans to raise North Sea windfall tax and ban new drilling licences will decimate the north east economy.

Comparing the impact of Labour plans to former Tory Prime Minister Margaret Thatcher’s coalmine closures, the letter accuses Sir Keir’s party of betraying promises made to the region during recent visits of its front bench.

The business leaders say Labour has undermined the party’s recent attempts to improve relationships with business and “will bring about the cliff-edge end to North Sea production you promised to avoid”.

It says: “If you proceed with these plans, up to 100,000 people could lose their jobs; redundancies on a scale not seen in this country since the pit closures of the 1980s.”

Labour is looking to increase the existing energy profits levy by three percentage points to 78% as part of a “proper” windfall tax on oil and gas companies.

Oil and gas companies say the existing levy is already forcing them to drop or reconsider investing in the region and point out that without the revenue from fossil fuels they will be unable to invest in cleaner alternatives.

The levy plan is alongside Labour’s controversial decision to drop its commitment to spending £28bn a year on green investment.

Anas-Sarwar-and-Keir Starmer
Sir Keir Starmer with Anas Sarwar delivering the energy strategy last summer (pic: Terry Murden)

In a colourful display of anger, the local daily paper the P&J has portrayed Sir Keir, Shadow Chancellor Rachel Reeves, Shadow Energy Secretary Ed Miliband and Scottish Labour leader Anas Sarwar as televisions’s The Traitors.

Editor Craig Walker said: “They said they’d listened to what they had to say but one thing they definitely didn’t hear was a request for an increase in the windfall tax. That’s exactly what Labour is proposing as part of its energy plans, a plan which industry experts predict could lead to a best-case scenario of 20,000 job losses and potentially up to 100,000 job losses.

“This move has sparked outrage and led to Labour being accused of turning their back on the North Sea and branded traitors.”

P&J front page on Traitors
Aberdeen newspaper the P&J makes its views known

Among the signatories to the letter are the oil tycoon Sir Ian Wood and Martin Gilbert, who founded Aberdeen Asset Management and is now chairman of investment vehicle AssetCo.

Aberdeen & Grampian Chambers of Commerce and Aberdeen Airport are others, alongside finance and agriculture groups.

The letter refers to analysis by the investment bank Stifel, which suggested that the plan would cost the Treasury £20 billion and “maybe 100,000 jobs”.

At the weekend, Offshore Energies UK, the trade body, said 42,000 jobs and £26 billion of economic value would be wiped out under new Labour proposals to extend the windfall tax on UK oil and gas producers.  It has demanded an urgent meeting with the Labour leadership.

Labour argues that it needs to take firm action on energy transition and will point out that it will spend £8.3 billion basing its state-owned GB Energy company in Scotland. It says its Green Prosperity Plan will help support the creation of more than 50,000 jobs in Scotland’s clean energy economy. 

Ed Miliband, Labour’s Shadow Energy Security and Net Zero Secretary, says: “GB Energy will make Scotland the energy capital of the UK and the UK the energy capital of Europe.

Ed Miliband: we will deliver (pic: Terry Murden)

“Seven years ago the SNP promised a publicly owned energy company for Scotland. They have failed to deliver. If the people of Scotland help elect a Labour government, we will deliver GB Energy here in Scotland. 

“A Labour government will invest across Scotland from floating offshore wind to tidal energy to carbon capture and we will support community energy across every local area in Scotland. ” 

The SNP has been critical of Labour’s changing position. Mairi McAllan, the newly-appointed Wellbeing Economy, Net zero and Energy Secretary, will next week address a forum of business leaders organised by the Prosper group when she will be challenged on the SNP’s economic record.

In his address to the Labour conference today Anas Sarwar will confirm the party’s plans to scrap all zero hours contracts and give workers new rights.

This has also prompted concern among businesses leaders who believe a shake-up of the country’s employment laws could significantly increase costs and damage the UK’s economic recovery.

Angela Rayner, the deputy leader, is coodinating proposals for the biggest overhaul of workers’ rights in a generation.

Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said: “We have made clear that a balance must be struck to give employers the flexibility to respond to challenges and opportunities. To protect jobs and the economy, any changes to legislation must be proportionate and affordable.”

The CBI added: “Our members do have areas of concern.”

Comment: Starmer needs to re-energise Labour

By-election victories

The reaction from business leaders will take the shine off Labour’s two by-election victories overnight.

In Wellingborough the party overcame a Conservative majority of more than 18,500 to take the Northamptonshire seat. The swing of 28.5% was the second biggest from the Tories to Labour in any post-war by-election.

In Kingswood, where the Tories previously had a majority of more than 11,000, there was a swing of 16.4%

Sir Keir said the results showed “people want change and are ready to put their faith in a changed Labour Party to deliver it”.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.