Oil and Gas Industry

– in the Scottish Parliament on 6th September 2017.

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Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

3. To ask the Scottish Government what support it can offer to companies affected by the downturn in the North Sea oil and gas industry that are not based in the north-east. (S5O-01207)

Photo of Paul Wheelhouse Paul Wheelhouse Scottish National Party

I attended Offshore Europe 2017 on Tuesday with the Cabinet Secretary for Economy, Jobs and Fair Work, Keith Brown. At that event we met individuals and companies operating across the whole of Scotland that were showcasing a range of technologies, products and services that are used in the oil and gas industry both in the North Sea and globally. Many of those companies are benefiting from support and account management services that are provided by Scottish Enterprise and Highlands and Islands Enterprise. That supplements relevant support that they receive through the business gateway services that are delivered through local authorities.

In addition, our £12 million transition training fund has funded training opportunities for more than 2,400 individuals in the sector who have been faced with redundancy. Additional training programmes have been procured by the fund to create more than 700 employment opportunities across Scotland.

We have also provided a further £12.5 million to support innovation and business resilience; that support is available to businesses across Scotland. It includes £10 million of SE funding to help firms take forward vital research and development that supports innovation and improved productivity. To date, around 111 innovation projects, with a total project value of £43 million, have benefited from increased funding of around £16 million by the Scottish Government so far. We have also provided targeted support for business resilience reviews from industry experts, with over £2.5 million invested in that commitment to date.

Our competitive non-domestic rates package also targets support where it is most needed, including around £660 million of rates relief this year. In accordance with the Community Empowerment (Scotland) Act 2015, councils are now able to apply further targeted reductions in business rates, in response to their local economies’ needs.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

I thank the cabinet secretary for his answer, and I am grateful for the time that his colleague Keith Brown gave me when we met in June to discuss the difficulties that were faced by Edgen Murray Europe, which is a significant employer in my constituency that manufactures steel components exclusively for the oil industry.

It has just seen a prohibitive rise in business rates during one of the worst periods in its history. Not being based in the north-east, it does not qualify for the kind of support that firms that are based there currently do. It is not alone. What additional help can the Government offer to those companies that are based outside of the north-east but depend on the oil and gas sector and are struggling in the current environment?

Photo of Paul Wheelhouse Paul Wheelhouse Scottish National Party

Certainly I would be happy to discuss the needs of the business in Alex Cole-Hamilton’s constituency that he mentions. Keith Brown and I are involved closely in the work of the Scottish steel task force, and we are looking to support businesses not only in the oil and gas industry but in the steel industry and more widely in the economy. There might be measures that we can take to give support through that route.

With regard to business rates, the member will have heard the finance secretary refer to his statement, which is coming up shortly in Parliament. We will also see more in response to the Barclay review. I hope that, between the work that the finance secretary can do on business rates and the work that the economy team can do to support individual businesses using the enterprise agencies, we can support the important employer in the Edinburgh Western that Alex Cole-Hamilton mentions.

Photo of Clare Adamson Clare Adamson Scottish National Party

Does the cabinet secretary agree that the United Kingdom Government’s lack of support for the oil and gas industry, which was most recently evidenced by its failure to appointment an oil and gas ambassador, is shameful and harmful to the workforce in that industry?

Photo of Paul Wheelhouse Paul Wheelhouse Scottish National Party

In January 2016—in a pre-election mode, perhaps—Prime Minister David Cameron gave a UK Government commitment to appoint an oil and gas ambassador to help ensure the best possible access for Scottish and UK companies to markets overseas. That has clearly not been fulfilled, which was a source of embarrassment to Richard Harrington when he appeared in Aberdeen last week.

Scottish Development International, importantly, continues to work with Scottish companies to offer significant financial incentives and other assistance to help businesses access international markets. However, the lack of UK Government support is concerning, particularly when the industry has set itself an ambitious target to generate additional revenue of over £290 billion by extending the life of the North Sea and maximising supply chain sales to international export markets. It is important that the UK and Scottish Governments get our act together collectively. I am confident that we are doing everything that we can; we need to see the UK Government follow through as well.