Scotland risks losing thousands more North Sea workers, report warns

The North Sea Transition Taskforce said oil and gas activity is declining faster than offshore wind, carbon capture, hydrogen and other emerging industries are growing, threatening the jobs, investment and supply chain needed to deliver the energy transition.

It said 25,000 oil and gas jobs have been lost since the general election in 2024.

Its report, North Sea Transition Taskforce: One Year On, acknowledges progress over the past year, but warns the pace and scale of action is not yet sufficient to deliver a successful transition.

It calls for the UK government to end the energy profits levy - also known as the windfall tax - in 2027 rather than 2030, bringing forward plans for a narrower levy that only applies during periods of high prices.

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Industry analysis cited in the report suggests this could unlock up to £50 billion of additional private investment and more than £13 billion in tax revenues over the following decade.

The taskforce, which is backed by the British Chambers of Commerce and Aberdeen and Grampian Chamber of Commerce, also calls on the Scottish government to finalise its energy strategy and just transition plan.

Its report says the “strongest economic advantage of domestic production over increased imports is the value retained within the UK economy, the most politically salient element of which is employment”.

It adds: “The oil and gas sector supports 115,000 jobs directly and in the supply chain, having lost 25,000 jobs since the last election. Those jobs are spread across the country, but as activity declines particular areas will be disproportionately affected: chiefly Aberdeen and the north-east of Scotland, the north-east of England and East Anglia, each with a high concentration of supply chain activity.”

Philip Rycroft, chair of the taskforce, said: “Last year, we warned that the window for delivering a successful transition in the North Sea was closing. That window remains open, but it has narrowed considerably.

“The fundamental problem is that the traditional energy economy is declining faster than the new one is being built. If we allow that gap to widen further, we will lose skilled people, businesses and infrastructure which cannot simply be recreated when new industries are ready to expand at scale.”

The report says domestic production can strengthen energy security by reducing exposure to imports and global supply disruption.

It concludes: “The North Sea debate cannot be resolved through false binaries: continued production of oil and gas or a clean energy future. These choices are more entangled than political debate currently allows.

“The only real choice is between a managed transition that retains value, capability and consent, and a disorderly decline that loses them before the alternatives are ready.”

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Shevaun Haviland, director general of the British Chambers of Commerce, said: “The North Sea is a national economic asset and what happens there matters to businesses and communities right across the United Kingdom.

“The government has made some welcome moves, but businesses invest on the basis of what happens, not what is promised. We now need pace, certainty and delivery.

“That starts with the fiscal regime. Moving to a stable and competitive regime from 2027 would give businesses confidence to invest, protect highly skilled jobs and help retain billions of pounds of economic activity here in the UK.”

Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, said: “For the north-east of Scotland, this isn't an abstract debate about what our energy system might look like in 20 years. Jobs and investment are being lost right now.

“One in four working people in our region depends on the offshore energy industry and around 80 per cent of that activity is still rooted in oil and gas. The renewable jobs we all want to see simply aren't arriving quickly enough or at sufficient scale to replace what is being lost.

“We have always championed the transition, but it has to be a transition in reality rather than just in name. That means protecting the skills, businesses and supply chains we already have while creating the conditions for new industries to grow.”

Conservative shadow energy minister and North East MP Harriet Cross urged Prime Minister Andy Burnham to “finally take notice of these repeated warnings, end Labour’s ban on new licences and scrap the energy profits levy”.

She said: “The warning from the North Sea Transition Taskforce could not be clearer to Andy Burnham — support the UK’s crucial oil and gas sector before it’s too late.

“How many more warnings and how much more evidence does the government need to finally understand the extent of the irreparable damage it is inflicting on the oil and gas industry and its workforce?

“Both Labour and the SNP’s hostility towards the sector is resulting in oil and gas activity declining at a faster rate than any other energy industry.”

SNP energy minister Stephen Gethins said: “The Scottish government’s position on North Sea oil and gas projects is well known – we need to see a parallel track approach to the energy transition, in which oil and gas production is managed alongside the increasing deployment of renewables.

“We continue to call on the UK government to replace the energy profits levy with a fair system that protects jobs, and for decisions on future projects to be approached on a rigorously evidence-led, case by case, basis with climate compatibility and energy security as key considerations.

“We will also continue to support the energy workforce with the limited powers currently available to us, including through investment in the oil and gas transition training fund and the just transition fund.”

A UK government spokesperson said: “Our North Sea future plan will build a prosperous and sustainable future for the North Sea.

“We are focused on driving growth in every postcode and delivering jobs for communities – with clean power expected to create 400,000 roles by 2030.