Reeves dismisses claim 1,000 jobs lost a month in North Sea due to windfall tax

Rachel Reeves was accused by opponents of reaching a “new low” after she dismissed claims 1,000 North Sea jobs are being lost each month because of UK government policy.

On a visit to Grangemouth, the Chancellor said there had been job losses in the oil and gas sector for “a number of years”, going back to before the introduction of the windfall tax.

Offshore Energies UK (OEUK), which represents the industry, has repeatedly warned the current fiscal regime is costing 1,000 jobs a month.

Rachel Reeves during a visit to Ineos FPS headquarters in Grangemouth | PA

Asked whether she accepted this, Ms Reeves said: "No, no I don't."

READ MORE: North Sea jobs lost 'within days' as UK Budget ignores economically ruinous oil and gas policy

Speaking to journalists after announcing a support package for the Ineos chemical plant at Grangemouth, she said: "There have been job losses for a number of years including before the previous Conservative government introduced the energy profits levy.

"What we're trying to do as a government is to bring new jobs into Scotland and also to support industries like we see here in Grangemouth by stepping in, not just carping from the sidelines.”

SNP Westminster leader Stephen Flynn MP said: “The sight of a Labour Chancellor denying expert evidence to justify Labour’s destruction of Scottish jobs is a new low.

“The so-called party of working people has unions, experts and workers pleading with them to end Labour’s tax on Scotland’s energy, but instead they’re ploughing ahead with job losses on an industrial scale.

“1000 jobs are being lost every month and if the Chancellor had any substance she would look the families of workers made redundant in Aberdeen in the eye and explain the actions of her Labour Government.”

Conservative MSP Douglas Lumsden, his party’s energy spokesman, accused the Chancellor of being “in total denial about how she is destroying Scotland’s oil and gas sector”.

He said: “Workers will be furious that she is so detached from reality that she cannot accept the damage that is being done by her reckless decision to keep the windfall tax in place.

“Alongside the SNP, both of Scotland’s governments are killing 1,000 oil and gas jobs every month with their hostile policies and failure to support new projects in the North Sea.

“She should have used this visit to apologise for her recent Budget instead of rejecting figures out of hand.”

David Whitehouse, chief executive of OEUK, said: "The job losses are real – just ask my neighbours, friends, and colleagues – but they are not inevitable.

“Let's be clear, the North Sea's decline is policy-driven and reversing this trend is within the government's control. Yet they rejected our comprehensive proposals to unlock £50 billion of investment, back energy jobs, strengthen energy security, and deliver a homegrown energy transition. I urge the Chancellor to meet with me on behalf of industry – back UK jobs and please don’t dismiss real concerns."

Ms Reeves was repeatedly asked about the issue as she visited Grangemouth to announce a support package for Britain’s biggest chemical plant.

The deal will see the UK Government provide more than £120 million to help keep Ineos’ Olefins & Polymers (O&P) plant operating, after the future of the site became uncertain earlier this year

Ineos boss and founder Sir Jim Ratcliffe said the funding was “welcome” and would help to support UK manufacturing. The billionaire has previously been critical of the Labour Government’s energy policies and investment environment in the UK.

The Government and Ineos will together invest around £150 million into the petrochemicals site, which the UK has deemed “strategically important” for its national infrastructure.

Ineos has agreed assurances that funding will only be used to improve the site and allowed the Government a share in future profits. The chemicals giant said it has spent more than £100 million maintaining operations at the site over the past year.

Last month, ExxonMobil announced plans to shut its ethylene plant at Mossmorran in Fife in February, putting more than 400 jobs at risk.

The UK Government did not intervene to save that facility and the ExxonMobil management has pinned some of the blame for the closure on Government policies, such as taxes on emissions and restrictions on new North Sea oil and gas exploration.

Scottish Secretary Douglas Alexander said there were “a number of differences” between the sites.

“I fully appreciate this is a very difficult time for the Mossmorran workforce, given the approach that’s been taken by ExxonMobil,” he said.

“I would draw a pretty stark contrast in the dialogue and the discussions that we were able to have with Ineos at Grangemouth and that, frankly, we weren’t able to have with the Mossmorran leadership of ExxonMobil.”

He added: “The reality is Ineos see a very strong future for ethylene production in Scotland. They’re confident, they’re confident in their workforce and in their facility, and that was not a position that we were able to reach with the Mossmorran leadership.

“That’s a great regret to me, because I sat with the Mossmorran leadership with an open heart and an open mind to see if there was a way forward.”

Elsewhere, he said the figure of 1,000 North Sea job losses was from Robert Gordon University (RGU) – based on analysis by offshore expert Professor Paul de Leeuw – and not one produced by the Government.

The RGU report, published in the summer, warned the North Sea workforce could shrink by approximately 400 jobs every two weeks for the next five years.

“Of course we recognise that we’ve got a responsibility to manage what is a declining basin effectively,” Mr Alexander said.

“The reality is I was in Aberdeen announcing new money for the energy transition zone a couple of months back – we’re backing Scottish industry, as we’re doing with Grangemouth today.

“Rachel is absolutely right, 70,000 jobs – about a third of the jobs in the North Sea – were lost in the 10 years preceding the election of the Labour Government.

“We do face challenges with what is a mature basin, and we’re determined to put in place a plan that simply wasn’t there under our predecessors.”

Meanwhile at Westminster, the Conservatives said they welcomed the £120m package for the Grangemouth ethylene plant, but feared others would find themselves in financial difficulty if the government did not change tack on green levies and energy costs.

Shadow Scotland secretary Andrew Bowie, who also serves as a shadow energy minister, said: “It cannot be ignored that this move, welcome as it is, demonstrates just how exposed sites like Grangemouth have become under this government.

“This government’s policies are leading to the deindustrialisation of this country with unemployment rates soaring and the economy shrinking as a result from potteries in Stoke to the Prax Lindsey oil refinery in Lincolnshire, and most obviously, and glaring, our oil and gas industry operating in the North Sea.

“This government is not just overseeing but engineering the decline of energy-intensive industries in this country.”

He said the government’s “exorbitant taxation regime” was “driving away” investment.

Industry minister Chris McDonald said the Tories should “stop talking Britain down”.