Monday, 24 February 2014

2 Cabinets meet in Aberdeen, but 1 question is raised: how best to extract the declining oil?

How times change. The UK cabinet did meet in Scotland, in 1921 - when Winston Churchill was the Colonial Secretary, and a Liberal MP for Dundee; Churchill had won Dundee in a by election in 1908, and held the seat, as a liberal, until 1922. Nowadays people regard Churchill as a typical Conservative. Yet he was a liberal conservative to his core. In my view a traditional liberal and a one nation conservative are very close beasts in the political jungle.

The irony is that dundee is now a SNP town and Aberdeen - where the can just are going is the heart of oil and gas territory. There are still undeveloped oil and gas fields in the North Sea, but extraction from them is mostly technically difficult and expensive. Oil companies may well require generous tax breaks to make production worthwhile. Meanwhile there is the high cost of decommissioning exhausted fields to be taken into consideration. Last month I met with many of the key Scottish oil and gas players at a private meeting and listened to them making the case passionately for the union. They wanted a long term future, but made the case that there are other places to invest for their global companies.

And this matters here in Northumberland as we see:
- the success of the subsea sector, which is so strong in Tynedale with local companies like PDL, Red Marine, and IHC Engineering Business in stocksfield.
- and the rebirth of the Tyne shipyards being linked to work in the North Sea
All of this is giving work and business to our people in Tynedale and Ponteland. This matters.

These companies depend on a thriving oil and gas sector. The question is what is the best framework for these companies to work under. The PM will be arguing today for the need “to use the UK’s broad shoulders to invest” in the future of “this vital industry”. Only the greater resources of Britain can, he says, “maximise the benefits” of the North Sea for all of us, and especially for “communities and families across Scotland”.

His assertion is given substance by a report from Sir Ian Wood, former head of the Wood Group, the oil and gas engineering company, for the Department of Energy and Climate Change. This argues that government and industry must work more closely together if the huge potential that the North Sea continues to offer is to be realised. The implication, whether openly stated or not, is that the greater resources of the British state are needed for success, while those of an independent Scotland would be inadequate.
Sir Ian Wood is one of Scotland’s most remarkable and successful industrialists and a man who should be listened to. A psychology graduate of Aberdeen University, bent on an academic career, he agreed, with some initial reluctance, to take over the leadership of his family firm when his father
unexpectedly died. That firm was then engaged in fishing and ship repairs. It was the early days of North Sea Oil, and within a few years he had converted the family business to one servicing the oil
industry. He is a great man, and his vision is both bold and wise. Most importantly, he is a true Scot.

Today will be am interesting day. I am sure 90 years on Churchill will be looking down and shaking his head in wonder that the country he represented, and helped guide through two world wars, is thinking of throwing it it all away.