Industrial and economic vulnerability in the North East of Scotland

The dread of anything else but a broad, diverse and humane transition

Illustration by Carys Boughton: family struggle in the North East of Scotland

The North East of Scotland has frequently featured in the news since the beginning of Brexit, right through to the outbreak of the COVID-19 pandemic. In 2017, a report published by the Centre for Cities and the Centre for Economic Performance at the London School of Economics concluded that Aberdeen's local economy would be struck by Brexit due to the dominance of oil that would see a reduction in economic output, as well as a knock-on effect on the businesses reliant on the sector. Towards the end of last year, the North-East received a fresh warning from First Minister Nicola Sturgeon after an analysis report produced by the National Institute of Economic and Social Research predicted a potential hit of 6.3% to GDP – the highest drop compared to anywhere else in the UK. Think tanks, independent research, business sector representatives and politicians have mostly projected that across our industries, the oil and fishing sector should expect severe challenges following the implementation of new trade deals with the European Union, irrespective of whether Brexit will be ‘hard’ or ‘soft’; and there is substantial fear of a ‘No Deal Brexit’ being put on the table. Nothing convincing has been presented so far that a Conservative Brexit will offer a ‘Good Deal’ for the region and this is rubbing salt into very sore wounds for people who overwhelmingly did not support the result. As I write this piece, we have just received another bleak update that according to a study by Warwick University, Aberdeen City has seen the highest Brexit cost per head in Scotland – at £9,000.

Front page of The Press and Journal newspaper

The combined COVID-19 pandemic and oil crash saw the oil price dive into negative numbers for the first time in history. Places like Aberdeen did not fully recover from the last crash over 2014-2016 and it became a brutal reality of the inherent vulnerabilities that are attached to areas which have a large dependency on an industrial giant, particularly because of the fluctuating nature of oil – the peaks and troughs are in the sector’s history and it has been far from the perceived image of all wealth and enjoyment. Our stark inequalities between those who have a lot and those who have little, or nothing, are as shameful to us as they are to our visitors who can see our poverty and decline when they arrive here. The “hidden deprivation” received more exposure in 2018 when Aberdeen City and Shire outnumbered other Scottish cities on foodbank use due to the roll out of Universal Credit and the oil downturn of 2014. Today, more than 70 organisations are working to address the scale of our food poverty. Let that sink in.

There are endless reasons why the world needs to reduce oil use and champion a green agenda. This change is needed because of the terrible cost oil production has on the global environment. Nevertheless, the price dive was not a cause for a ‘social media celebration’, where people from across the globe expressed tweets of thrill at the prospect of buying cheap oil or thinking the price crash was a positive outcome of the global COVID-19 pandemic. What about the concern for families and their livelihoods since it would have been painful to witness the price plummet, with a feeling of déjà vu because of the mass redundancies resulting from the last oil crash in 2014? With continued uncertainty on employment and the survival between now and the proposed faster transition away from oil and gas into renewable energy, like many people living in Aberdeen, I have been overwhelmed with worry from hearing and reading all the different predictions about the region’s future prosperity and not knowing what to expect or believe. What will become of Europe’s (not all rich) oil capital? I hope for change, but it must be broad, diverse and humane; we cannot afford to accept a transition that provides anything less, and this is also a cause of my concern for the future of the North-East.

These unfolding events should not be addressed based only on economic stability, for example, whether there will be an energy sector “pot of gold” at the end of the transition rainbow or if, by doubling the size of the life sciences industry, we can make Aberdeen more attractive to outside talent and businesses. They should also be addressed by reflecting more broadly on deindustrialisation and opening up the opportunity for discussions on how to revitalise the communities affected humanely. In other words, we need to consider what people want or imagine for their future living here. How can we improve their representation on what matters to them and what lessons are to be learned to prevent uneven developments in moving forward? If we do not invest the time to reflect on any of this, then we have missed the point entirely.

When oil was first discovered back in the 70’s, the gains for the North-East to transform a deprived local economy were laid out in terms of well-paid available work and international investment. However, it also came with a caution attached; if not everyone is included in the transformation the impact on their lives will be negatively profound due to their exclusion. Now is precisely the right moment to capture the voices from Aberdonians, which shifts the focus away from elite figure heads of Oil and Gas UK (OGUK), many of whom will never have to worry about their futures in the same way our young and future generations will, particularly those from areas of unjust deprivation. While I respect the fact OGUK are trying to give some public reassurance over the fact they have agreed to form a closer relationship with Aberdeen Renewables Energy Group (AREG) regarding the North Sea energy transition, they have also been dominant in controlling much of the conversation for many years through well-funded PR and corporate events. Perhaps now is the time to ensure our prosperity does not become an agenda to make the rich, even richer. There is a genuine concern that, when and if the economy of the north-east improves, not everyone will reap the benefits, and many are at serious risk of being left behind. People do not want to be propping up pollutants, but they also do not want to be going back to our social divisions and inequalities. The transition will be far from smooth, but I am confident it will be monitored and scrutinised. Let us hope I am proven wrong regarding my concerns. Imagine if we could provide world-leading expertise on improving the life chances and living standards of thousands based on our past mistakes? One can only hope for the best.

A community mural in Torry, a fishing village situated in Aberdeen where the sector was largely pushed out of the area to accommodate for the oil industry