Automatic Enrolment (Offshore Employment) (Amendment) Order 2020

Lord Purvis of Tweed Excerpts

Tuesday 19th May 2020 Lords Chamber

[Lord Purvis of Tweed (LD)]

At the moment, there is unprecedented pressure on North Sea workers off the coast of Scotland, north of the border, where I am speaking from at the moment. The workers there are involved mainly in supply chains, both offshore in maritime transport and both onshore and offshore in maritime engineering. The profile of employment there is far from the stereotype of the wealthy oil baron.

In a little more than two months, global oil demand has fallen by 30% and the Brent price has collapsed by almost 70% since the start of the year. Alongside this, UK gas prices have fallen to their lowest level for 14 years and are now among their record lows. For many who thought that they would never see petrol selling for less than £1 a litre again, this is a respite, but, as a result of the economic crash, new activity in the North Sea basin has stalled, investment plans have been postponed and major planned shutdowns delayed. Even after the lockdown eases, low commodity prices are likely to endure, slowing any recovery into 2021 and beyond. As the recent Oil & Gas UK market report shows, there is particular concern about the ability of the supply chain being able to absorb more pain. Contracts are already being deferred or cancelled, while the longer-term pipeline of work is becoming increasingly uncertain.

The collapse in investment will inevitably impact on employment and therefore have long-term consequences for the workers. There will be a knock-on effect on the long-term future of those who were not part of the automatic pension arrangements but now are. Ending that would be very consequential, so I welcome the measures introduced by the Minister.

Job cuts in the sector have already been announced and the industry will see many more in the coming months. Oil & Gas UK’s current estimate is that up to 30,000 jobs could be lost over the next 12 to 18 months if action to help the sector weather this storm is not successful. For example, 60% of supply chain businesses have used the temporary furlough scheme. Only by concerted action across industry and Governments, both UK and Scottish, can we begin to mitigate such damage.

To ensure supply to the UK and a return to activity for many, a proactive testing regime for offshore workers in the sector is important. I know that the priority is the NHS, care homes and young people in schools, but north and south of the border, it is important that we get the offshore industry back to a degree of normality. Giving the lower-paid workers there security and support in the long term is important. I welcome the move introduced by the Government and hope that it will be part of a long-term consideration for a strategy to support offshore and onshore workers, in the north-east of Scotland in particular, to get the economy there back up and running.