Andy Burnham should be ready to exploit the UK’s remaining North Sea oil and gas resources to avoid mass job losses in Scotland and the north-east, the director of the British Chambers of Commerce (BCC), Shevaun Haviland, has said.
The decision about whether to allow extraction at the Jackdaw and Rosebank fields now appears likely to fall to a Burnham administration.
Asked about it, Haviland said: “At the moment, instead of using those fields we are importing liquid gas, which is more expensive and less environmentally friendly. So yes, we believe we should use our own assets.”
She was speaking as the business group, which represents 19,000 firms employing 8 million people, prepares for a high-profile conference in London on Thursday. Politicians from five political parties, including the Labour chancellor Rachel Reeves and Green leader Zack Polanski, will address the gathering.
Haviland, a former senior civil servant, said British businesses backed the transition to clean energy and were keen to exploit the opportunities it presented. But she said the switch to offshore wind was not creating enough jobs to soak up workers displaced as the North Sea wound down; and local suppliers were being closed instead of supplying the new industries.
“It’s just not being managed in the right way. We are absolutely behind the incredible leadership we’ve seen in offshore wind, where we’re a world leader. We are not investing enough in building a local supply chain to support that. A lot of it’s still coming from overseas. And because it hasn’t happened as fast as oil and gas are declining, we have a really worrying gap, and we are seeing the supply chain leave.”
She added, “There’s some very big concerns from our chambers up in Aberdeen and the north-east that it will go the way of the coalmines, and you’ll have millions of people out of work.”
The future of Jackdaw and Rosebank will be watched closely by business and environmentalists as a signal of intent from Burnham’s new team. The energy secretary, Ed Miliband, who is being touted as a possible chancellor, is seen as sceptical about giving the go-ahead.
With Burnham likely to become prime minister within weeks, Haviland also called on the outgoing Manchester mayor to take action on the “cost of doing business crisis”.
The BCC has published research suggesting the cost of doing business has risen by 70% in a decade. That includes tax, regulation, the minimum wage, and the trade frictions caused by Brexit.
“Businesses don’t feel confident to invest, because business costs are so high, so they pull back from investment, and it’s a vicious cycle,” Haviland said. “Then you don’t get the growth. And you don’t get the tax income. So we want him to look at ways that he can begin to alleviate some of those cost pressures.”
In particular, she cited business rates, which Labour promised to overhaul in its general election manifesto; and the cost of energy.
Reeves promised recently to backdate the government’s planned Business Industrial Competitiveness scheme, which will cut bills for companies in some energy-intensive sectors. However, Haviland said its scope remained too narrow.
“Already before the Iran crisis, 25% of our members were saying they were struggling to pay their energy bills,” she said.
Asked about the possibility of additional taxes on business, as Burnham casts around for ways to find extra funding – for the controversial Defence Investment Plan, for example – Haviland said that would be a mistake.
“We would always come back to him to say, the way out of the fiscal issue that we’re in is economic growth. Taxing business further is a road to ruin. It’s a downward spiral.”
Ten years on from the EU referendum, she echoed recent comments from CBI director general, Rain Newton-Smith, that despite the costs of Brexit, businesses did not want to open a discussion about reversing the decision – or even rejoining a customs union.
“I think that sort of old language of customs union, single market, all of that, it’s just unhelpful. I think we just all moved on from there. What our members want is pragmatic, specific solutions to the issues,” she said.
A planned EU-UK summit has been postponed pending Burnham’s arrival in No 10; but Haviland said businesses would like to see negotiations completed on the issues Labour have already been prioritising.
These include an agrifood deal, a youth exchange programme, and alignment with the EU’s carbon border adjustment mechanism that could otherwise place additional burdens on UK firms.
Asked about Burnham’s record, she emphasised the significant role played by private sector investment in Manchester’s transformation. “That has really been a great example of public and private investment – of the public sector laying the right environment for business to come in.”
She added that while she did not now the PM-in-waiting well, when they last met, at the north investment summit last month, “he very specifically said to me: ‘You know, I’m pro-business’.”
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