The political and policy landscape — locally, at Holyrood and at Westminster — never seems to quieten down.
It was as recently as January that then First Minister Nicola Sturgeon said she was “nowhere near” vacating Bute House and had “plenty left in the tank”. What is it they say about political promises?
But sometimes turbulent times can create an abundance of opportunity and Aberdeen & Grampian Chamber of Commerce was quick to engage with the runners and riders to become Scotland’s next First Minister as all committed to that much-needed reset between business and government.
To recap on a busy first quarter of 2023, we started with one of our busiest ever months on the policy front with several announcements from government giving cause for concern for North-east businesses.
The first of these was found within the Scottish Government’s draft Energy Strategy and Just Transition Plan — a presumption against further exploration for oil and gas in the North Sea.
In our view, adopting such a policy would be economic self-sabotage and we made our case forcefully to ministers and advisers both in public and behind the scenes.
We know this message has been heard loud and clear and we certainly hope, for the sake of our region’s economy, that significant changes will feature in the redraft which is brought forward.
But if Holyrood set the tone for bad news, the UK Government was hardly blameless either. Just two days later it was announced that both governments had rejected the North East Green Freeport bid in favour of Forth Ports and Cromarty.
In the first instance, we knew it was important to call out the wrong-headedness of this decision and to do so in the most robust of terms. Sometimes it’s the only way to ensure that politicians notice.
But among other stakeholders who seek the best for the future of our region as a global energy hub and thriving diversified economy, it was important too to dust ourselves down, regroup, focus on the opportunities ahead and learn from mistakes. Within days we were in the room with UK and Scottish Government ministers to start the conversations around ‘what next?’.
While energy, as we all know, is intertwined with the success or otherwise of our region’s economy, it’s not the be all and end all. Other policy matters have been exercising a huge number of businesses and the Chamber has helped to turn up the volume on those concerns, including Scotland’s doomed deposit return scheme and proposals around disproportionate restrictions on the advertising of alcohol.
We spoke up for businesses on the former and responded to government consultation on the latter. Ultimately, the new First Minister has given ground on both policy fronts — and that’s all because industry spoke up for common sense.
There’s been much work underway in the background to build up the empirical evidence base to support our policy efforts. Our annual Investment Tracker charts the major projects which have been completed right across the region and highlights the huge pipeline of exciting projects yet to come. The latest edition will be unveiled at our special event this coming Thursday and is not to be missed.
Likewise, our biannual Energy Transition Survey (ET37) opened to consultation. This substantial piece of work has been tracking trends in the energy sector since 2004 and is now a vital source of industry intelligence for both business, policymakers and in the media.
It lets us know what policy interventions we should be calling for to help the sector thrive and the last edition revealed that political decision making over recent months has proved more of a hindrance than a help in delivering energy security and delivering the transition that governments at all levels tell us that they are so keen to deliver. The results will be shared publicly this coming Tuesday — and there’s plenty in there to inform some difficult but necessary conversations we will have to undertake with policymakers over the months ahead.
Some responses to ET37 have doubtless been informed by the unwanted pressure that the Energy Profits Levy continues to place upon an industry in transition. We have spent significant amounts of time this year, directly and in conjunction with partners, to persuade the Treasury to apply a price floor on the windfall tax.
The Chancellor missed an opportunity in his Spring Budget. And consequently, some 90% of producers have cut spending in the North Sea, investor confidence has been shaken and some firms have even had to reduce their headcount, with profits wiped out entirely. In a global race for energy investment and the UK Government is determined to make the UKCS less attractive. It’s nonsense on stilts.
While progress on delivery of the Acorn Carbon Capture project at St Fergus has been slower than desired, we’ve kept this issue at the top of the agenda — and will keep on pushing until government support is at last secured. The UK Government has made further commitments on CCUS in its proposals outlined in May, alongside prioritising huge and exciting plans for the transformational Kintore Hydrogen project. With the announcement of a new UK Government department, dedicated entirely to Energy Security and Net Zero, the Chamber has made the case for this to be headquartered in Aberdeen.
A huge leap forward has also been taken to address the stubborn problem of what should be the jewel in the crown of our Granite City: Union Street. Following the emergency summit co-convened by the Chamber last year, a new community-led organisation has now been launched with AGCC’s backing to bring businesses and people back to the Granite Mile.
‘Our Union Street’ now has a website, a brilliant experienced chair in the shape of Bob Keiller, funding behind it from a range of private and public partners who care about the future and, above all, an overwhelming 10,000+ ideas from the good people of Aberdeen about what could be done to transform our city centre. There are also thousands of people willing to roll up their sleeves and offer their time and talents to make a difference. People power, in conjunction with business, can make change happen.
While the Green Freeport announcement may have come as a disappointment, talk of Investment Zones — of which two are promised in Scotland — could offer massive opportunity for our region.
With partners in industry, academia and government, we’ve already held talks to get things rolling. We stand ready and willing to work with anyone who can secure this special economic status for the North-east. This region has the proven track record that the UK economy needs to deliver energy security in the here and now and turbocharge our transition to a green future.
Elsewhere, while daily disruption on our railways is no longer the headache of six months ago, the Chamber is still beavering away on the longer term investment needed to connect Aberdeen to the rest of the country. Journey times to the central belt leave considerable room for improvement and we are ensuring those calls don’t slip down the list of government priorities.
Furthermore, the Campaign for North East Rail, which was awarded £250,000 from the Scottish Government’s Just Transition Fund, is taking forward plans for a feasibility study into reinstating rail to Peterhead and Fraserburgh. AGCC has supported this project over the past year and will continue to do so in terms of business and government engagement, as well as practical support on delivery capacity, in the coming months. More exciting news to follow as this takes the next exciting steps forward.
Finally, if the past few months have taught us anything it’s to prepare for almost any eventuality. In that vein, we’ve been ramping up the engagement with the Labour Party — who fancy themselves both as the next UK Government and perhaps thereafter a serious contender at the 2026 Holyrood elections.
We had the chance to meet with Keir Starmer and Shadow Chancellor Rachel Reeves in Glasgow for a brief conversation about the energy sector and our region’s future. They undertook to pay us a visit — rest assured, we’ll be holding them to that commitment.