North Sea Energy

Nusrat Ghani Excerpts

Thursday 6th March 2025 Commons Chamber

[The Minister for Industry (Sarah Jones)]

With permission, I would like to make a statement about this Government�s plans to unleash the North sea�s clean energy future.

For almost half a century, the workers, businesses and communities of the North sea have powered our country and the world. We believe that they can and will continue to do so for the next half a century and beyond, which is why yesterday, we launched a consultation on the steps we are taking to seize the opportunities of the clean energy transition in the North sea. This is about working with businesses, workers and communities to strengthen north-east Scotland�s status as the energy capital of the UK, and it is about showing global leadership as we deliver a well-managed, orderly and prosperous transition.

We know that the North sea is a maturing basin. Oil and gas production has seen a natural decline of 72% between 1999 and 2023, and as a result, the industry has lost around a third of its direct workforce over the past decade. The truth is that sprinting to clean energy is the only way to deliver energy security and good, long-term jobs for the workforce and for communities. At the same time, we know that we need to listen to the science on what is required to keep global warming to 1.5�C. A science-aligned approach to future oil and gas production is the only way to deliver climate security for future generations, so we owe it to the North sea�s workers and communities�who have done so much for our country�to come up with a proper plan for the future. That is what this Government are doing.

First, we are consulting on our manifesto commitment not to issue new licences to explore new fields. While we have always been clear that oil and gas will continue to play an important role for decades to come, the reality is that new licences for oil and gas awarded in the past decade have made only a marginal difference to overall production. To continue granting them would not help our energy security, would not be compatible with our climate commitments, and would not take one penny off bills. As such, we will not award new licences, but we will continue working with the sector to manage existing fields for the entirety of their lifespan. We will also provide the long-term certainty on its fiscal landscape that the sector needs. Yesterday, the Treasury set out plans for a new regime to respond to future spikes in oil and gas prices once the energy profits levy ends in 2030.

The second part of the consultation is about harnessing the North sea�s unique strengths, including its offshore infrastructure, highly skilled engineers and deep supply chains, to make it a global clean energy powerhouse. In just eight months, we have already made significant progress. We have established Great British Energy in Aberdeen, so that it is in the perfect position to drive the roll-out of clean energy projects. We have improved the offshore wind auction, so that later this year there will for the first time be a new clean industry bonus to reward investment in good manufacturing jobs and clean supply chains. We have overseen a record-breaking renewables auction. We have kick-started the UK�s carbon capture and hydrogen industries�the energy sectors of the future�with strong, early investments. Just yesterday, we awarded more than �55 million to the port of Cromarty Firth for upgrades that will support the development of floating offshore wind, creating hundreds of jobs as we ensure Scotland and the UK remain world leaders in this next-generation technology. But that is just the start.

Our clean power action plan will drive �40 billion a year of investment to meet our goal of clean power by 2030. Research shows that jobs in offshore renewable sectors could increase by tens of thousands in that time. We will also make sure workers have the tools they need to take up these new opportunities. Already, we have worked with the Scottish Government and trade bodies to launch a skills passport, making it easier and quicker for oil and gas workers to bring their skills and experience into clean energy jobs. That idea has been stuck in the mud for years. Thankfully, we have made more progress in the past eight months than was made in the previous 14 years combined. At the same time, we are putting clean energy at the heart of our upcoming modern industrial strategy.

We are incredibly fortunate to have the North sea on our doorstep. For decades, the oil and gas buried there have fuelled development and charged our economy, but the North sea�s long-term future lies in its incredible clean energy potential. We know that its stable winds and shallow shelves make it one of the best locations in the world for offshore wind farms. We know that the UK continental shelf alone has enough capacity to store up to 78 billion tonnes of carbon, which is roughly the amount this country has produced since the industrial revolution. With our skilled offshore industry and workforce, we are perfectly placed to seize this natural advantage and get ahead in the global race for new jobs in new industries.

Instead of sticking our head in the sand and avoiding the big decisions, we have set out a plan to deliver the future that the North sea�s workers and communities deserve. It is a plan to co-ordinate the scale-up of clean energy industries, from offshore wind and hydrogen to carbon capture and storage; a plan to give the oil and gas sector the support and clarity it needs to continue operating for decades to come; a plan for energy security and sustainable economic growth; and a plan to keep working with the people who matter most�the North sea�s businesses, workers, communities and trade unions� to take advantage of the tremendous opportunities of the years ahead together. I commend this statement to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

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[Sarah Jones]

The shadow Minister quoted trade union representatives, having not met them or supported them in government. That is always rich. [Interruption.] He says that he did; I stand corrected, although I suspect that he did not do it often. He quoted the general secretary of the GMB, so let me quote him back. The general secretary said:

�Tory ideology has left the UK vulnerable and exposed. Our Government stood by and exported the bulk of the jobs, closed gas storage and failed to invest in new nuclear and skills.�

I thank the shadow Minister for his questions, and I will come to them shortly, but I have to say that this is a fairly familiar story from the Conservative party: no acknowledgment of their failed record on the North sea, no acknowledgment of their having presided over the worst cost of living crisis in a generation, and no answers to the future challenges that our country faces. I remind the hon. Gentleman that it was his party that lost 70,000 North sea jobs in less than a decade. His Government were content for those workers to have to go around the world to find jobs, but this Government want to keep those talents here in the UK, which is why, unlike the last Government, we have a plan.

In my statement, I said that everyone accepts that the North sea is a declining basin. I do not know whether the shadow Minister understands the basic geology, but this is a super-mature basin, and the harder it becomes to drill for oil and gas, the less likely it is that people will be successful. Only one in 10 of the licences that have been offered and granted in recent years have ultimately led to any work.

The hon. Gentleman needs to establish what his party�s view of this agenda is. The hon. Member for West Suffolk (Nick Timothy), who is sitting next to him, had some very peculiar things to say in Westminster Hall yesterday, and it is unclear exactly what their position is. The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) was a Minister for the grid who opposed grid infrastructure, he was a Minister for solar who opposed solar power, and here he is now, the Minister for Aberdeen, campaigning against jobs and investment in his own community.

We are getting on with a plan for the future. First, we will invest in clean power. It is ludicrous that at this time when our bills depend on what Putin chooses to do and we have to respond, the shadow Minister is suggesting that we should do more of that. Even if there were no climate change, even if there were no push to clean power, if we drilled as much oil and gas from the North sea as we possibly could, it would amount to less than 1% of the global market and would have no impact on bills whatsoever.

We will give immediate support to workers�we have explained how we will do that�and we will support Scotland more widely. We will support Great British Energy in Aberdeen. We will support Grangemouth with �200 million from the national wealth fund. Harland and Wolff in Arnish and Methil has been saved from closure. Yesterday, the Port of Cromarty Firth received �55 million through the floating offshore wind manufacturing investment scheme. Twenty per cent. of the contracts in allocation round 6 of the contracts for difference auction are going to Scotland. We have hydrogen investment in Cromarty and Ayrshire. We have the biggest budget for the Scottish Government that we have seen. This is a party that is committed to supporting the people of Scotland, not overseeing managed decline.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Select Committee.

[Bill Esterson (Sefton Central) (Lab)]

The Minister was right to remind us that the North sea is a mature basin, she was right to remind us that 70,000 jobs have been lost there in the last 10 years, and she was right to praise the highly skilled engineers who have made such a contribution in the North sea and to the country. She mentioned the skills passport, and said that the Government were making progress with the industry in finding alternatives in the jobs transition. The Select Committee has heard, a number of times, evidence that one of the challenges is the fact that pay in the North sea is significantly higher than pay in equivalent jobs in the renewable sector, and offshore wind in particular. What, at this stage, are the Minister�s thoughts on how we can make pay more attractive for workers moving from oil and gas into renewables?

[Sarah Jones]

I thank my hon. Friend for his work on the Select Committee, which is very important. As he knows, for a long time we have been a bit stuck in trying to set up a passport system because of the slightly different skills and qualifications in each industry and the need to bring them together. The Government became involved to try to ensure that we could bridge that gap and enable people to make the transition. Oil and gas workers are highly skilled and greatly in demand, and, as my hon. Friend says, they are paid a good wage. We need to work with the new offshore wind companies; we like to see union recognition, and we like to see good salaries for people doing those jobs as well. There will be other jobs that people can go into. The plan is to help people make the transition rather than leaving them adrift as the last Government did.

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[Claire Young (Thornbury and Yate) (LD)]

I thank the Minister for advance sight of her statement, much of which we can agree with.

The North sea gives the UK the opportunity to become a powerhouse in renewable energy generation, and it is time that we seized it. We urge the Government to make good their commitment to consult on a new regime to boost investment in jobs. We want to ensure that the oil and gas industry is wound down in a way that supports the redeployment of skills and jobs, and provides the right incentives to encourage fossil fuel industries to invest in green technologies. What details can the Minister give us of the support that the Government will provide to upskill and redeploy those who were formerly working in the fossil fuel industry?

We believe that much bolder action is urgently needed to ensure energy security, to cut bills and, with Donald Trump threatening to pull the United States out of the Paris agreement once again, to resume the UK�s global leadership role on climate action, which was abandoned by the previous Conservative Government. We urge this Government to introduce an emergency 10-year plan to insulate homes, starting with free insulation for the most vulnerable residents, and to introduce an energy social tariff to tackle fuel poverty and health inequalities caused by cold, damp homes.

We are deeply concerned about the cost of heating bills following Ofgem�s decision to increase the energy price cap by 6.4% this April�the third increase since October 2024. The Government must decouple electricity prices from the wholesale gas price and toughen up their windfall tax on the profits of oil and gas giants, including by increasing the tax by another two percentage points to a headline rate of 80%. Time and again, we have been disappointed by the decisions that the Government have taken this winter to delay energy bills support for households. For example, the Government�s warm homes scheme, designed to insulate homes, will not benefit households until�

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. There is always a maximum of two minutes, and you have exceeded it. Please be seated.

[Sarah Jones]

I thank the hon. Lady for her remarks. On upskilling and redeploying workers, as I said previously, we are introducing the passporting scheme and making sure that we can break down the barriers that exist in different industries, because the skills and talents of people working in oil and gas can be transferred to renewable energy. We want to make sure that we do that.

The hon. Lady talks about vulnerable residents and the cost of heating, and she is absolutely right to do so. We have all suffered from the huge cost of living crisis caused by Putin�s invasion of Ukraine. We are doing what we can, and 6 million people will now get the �150 warm homes discount this winter, which will help with their energy bills.

The hon. Lady asks about the windfall tax. The clue is in the name: it is a tax on windfall profits. While the oil and gas industry is making windfall profits, there will be a windfall tax; when it is not, there will not be. That is the way the scheme works, but her points on the need to insulate homes�we are working at pace on that�and to support vulnerable people are absolutely right. The basic principle is that we have an energy bill rise driven by fossil fuels, so we must move to home-grown power for our energy security and for long-term bill reductions.

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[Madam Deputy Speaker]

Order. If questions are not kept short, Members will prevent their colleagues from getting in.

[Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

I congratulate the Minister on setting out a plan that supports jobs, skills and communities in the face of technological change�unlike the Conservative party, which abandoned wholesale our industrial base in the 1980s. Like the north-east of Scotland, the north-east of England has jobs, skills and opportunities that depend on the energy of the North sea. Kinewell Energy, in my constituency, leads in wind farm design optimisation. Can the Minister confirm that she will work with the Mayor of the North East, Kim McGuiness, to ensure that the north-east of England benefits from the jobs and opportunities of the North sea?

[Sarah Jones]

I meet industry representatives all the time, and their response to Kim McGuiness is great. She is such a force of enthusiasm, knowledge and power for her communities, and people engage with her. They like what she says about investing in the north-east, and they are responding to her. She is making a real difference in her community. We are doing all we can, through all kinds of levers that the Government can use, to make sure that the investment in clean energy supports all our communities. My hon. Friend is right to highlight the fact that we need to take advantage of the particular skills of people in the north-east.

[Madam Deputy Speaker]

I call the Father of the House.

[Sir Edward Leigh (Gainsborough) (Con)]

When I climb the hill behind my home in the Lincolnshire wolds, I can see, 20 miles away, a wonderful array of wind turbines in the North sea. We love it locally�we love it for our economy�but nothing in that precludes oil and gas exploration. If we in Lincolnshire are doing so much for green energy, why are we allowing the bread basket of England to be covered with solar farms? We have 10,000 acres of them around Gainsborough, and there is another application for 3,900 acres at North Clifton. Will the Minister and her boss please look at such mass applications in the round so that there is not overdevelopment in the break basket of England?

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[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Through support for jobs, support for skills, the prominence of the industrial strategy and support for a clean transition, the Minister has demonstrated what is possible when there is political will. To quote her words back to her, when will we be able to give the sector the support and clarity it needs to continue operating for some decades? The ceramics sector would love a package like this�or is the ceramics sector not sufficiently important enough?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I ask the Minister to keep her responses short.

[Sarah Jones]

Forgive me, Madam Deputy Speaker. I am over-enthusiastic and have so many things to say.

I always worry when my hon. Friends quote my words back to me. My hon. Friend and I have talked often about ceramics, and I am well aware of the issues. We had a great debate in Westminster Hall this week on the ceramics industry�s challenges with the transition and with energy prices. We are well aware of all of them, and we are working to fix them. I give as much time to ceramics as I do to any other industry, and I will continue to do so.

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[Several hon. Members rose�]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I keep repeating myself: short questions please.

[Christine Jardine (Edinburgh West) (LD)]

As someone with two generations of their family who have depended on the North sea oil and gas industry, I know that we have to move away from fossil fuels and that we have to drive forward to the just transition, but we must also recognise that we are not there yet and that this is not the moment to push the industry off a cliff. It is declining naturally. We are leaving ourselves in a position where we will still need oil, so will we import it? We will need gas for hydrogen production, plastics, chemicals and pharmaceuticals. All of that is necessary. We also face a threat from the Chinese trying to infiltrate our renewables, so what are the Government going to do about that?

--- Later in debate ---

[Sarah Jones]

My hon. Friend will know about the announcements that were made recently about support for Grangemouth. In the last couple of weeks, I met INEOS to talk about its chemical factory and the huge contribution it brings in terms of jobs and the provision of chemicals. The �200 million investment from the National Wealth Fund is really important in this space. The work that the Government have done to look at possible businesses and industries for Grangemouth in the future is really important and I am very happy to have a conversation with him.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Final question.

[Jim Shannon (Strangford) (DUP)]

While I very much welcome the move towards clean energy, my concern is that we cannot allow energy prices to rise any further, especially when we take into account the loss of the winter fuel payment for many pensioners on the poverty line. How will the Minister ensure that clean energy and heat will not be out of reach for those who are already struggling: the elderly, the vulnerable, those in poor health and those in poverty?

[Sarah Jones]

The hon. Gentleman raises a really important point. We know that energy bills have been rising because of the oil and gas we rely on and the impact of the war in Ukraine. We have massively increased the warm home discount so that 6 million households will get �150 to help towards their energy bills, but he is right to champion people who are going through a cost of living crisis. We will do what we can to support them.

[Madam Deputy Speaker]

That marks the end of the statement. I could not get all colleagues in because questions were so long, and answers were occasionally just as lengthy.