North Sea Oil and Gas (Employment)
Debate between Lord Bruce of Bennachie and Russell Brown(9 years, 10 months ago)
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Mr Russell Brown (Dumfries and Galloway) (Lab)
Like the right hon. Gentleman and, I think, everyone else present for the debate, I received an Oil & Gas UK briefing. It deals with the immediate problem in the sector, but there is no mention of how it arose, with the downturn in China and India, and oil and gas fracking in the United States. That is a longer-term issue. Something of a quick fix may be required, but in the longer term we must take cognisance of what is happening globally.
Sir Malcolm Bruce
That is a fair point; I would say only that I have never yet met an oil economist who was any good at anything other than explaining why prices did what they did, rather than what they would do next. Yes, the hon. Gentleman may be right, but people have told me many times that the oil price would stay low, and then it has gone up. When they have told me it would stay high, it has gone down. We have to live with that.
Those of us close to the industry, and the taskforce, of which many of us are members, are aware that in recent years prices have escalated unrealistically and unreasonably on the back of the high oil price. I want to make it clear to the hon. Member for Aberdeen North that that is no excuse for a slash and burn response on employment; it is, however, a recognition that a lot of fat has built up in some of the contractual arrangements.
With the right approach, it would be possible to slim down and maintain skills and capacity for the future. The wrong approach means, of course, making people redundant and losing their skills, so that if and when there is an upturn we will have lost capacity as well. I argue that we need to manage things proportionately. The industry has been rather late in tackling that problem. Quite a few of the redundancies that have been announced since the oil price fell were part of reviews that took place because of the escalating costs before we knew that the price was going to fall.