MPs Warn UK Clean Energy Job Creation Lags Behind North Sea Oil and Gas Losses

Westminster Committee Highlights Employment Gap

A Westminster committee has issued a stark warning that the creation of clean energy jobs in the United Kingdom is not keeping pace with the significant job losses occurring in the North Sea oil and gas industry. The report, released this week by the Scottish Affairs Committee, urges the government to take immediate action to address this growing employment gap.

Patricia Ferguson MP, Chair of the Scottish Affairs Committee, emphasized the urgency of the situation, stating that jobs in the clean energy sector are 'simply not being created fast enough, or on the scale needed, to match the mounting job losses from the oil and gas sector.'

Key Recommendations for a Managed Transition

The committee's report, which forms the first part of its inquiry into GB Energy and the net-zero transition, outlined several critical recommendations for the UK Government:

• Urgent Action on Employment: The government must urgently address the employment gap and detail how it plans to do so.
• Avoid Accelerating Decline: Until clean energy jobs can be created at a sufficient scale, the UK Government should avoid policies that would further accelerate the decline of North Sea oil and gas production.
• Reform Energy Profits Levy: The report calls for immediate reforms to the Energy Profits Levy, also known as the Windfall Tax, which was introduced in 2022. The committee argues that without reform, the current tax regime will accelerate the decline of the North Sea industry and its supply chain, creating uncertainty and risking investment.
• Pragmatic Licensing Approach: MPs urged a pragmatic approach to North Sea licensing policy, seeking clarification on how developers can undertake additional drilling activity under existing exploration licences.
• Learn from Grangemouth: The closure of the Grangemouth oil refinery was cited as a failure of transition planning, with the committee concluding that both the UK and Scottish Governments 'should have acted sooner to prepare for resulting job losses.'

North Sea Job Losses and the Energy Transition

The North Sea oil and gas industry is described as being at a 'critical juncture' as the UK moves towards renewable energy. The report highlights that job losses are occurring at an 'unacceptable scale,' with some estimates indicating approximately 5,000 jobs a year being lost across the UK North Sea workforce. The UK's oil and gas workforce has more than halved over the past decade, with forecasts suggesting a fall from 115,000 in 2024 to between 57,000 and 71,000 by the early 2030s.

Concerns were also raised about the potential loss of highly skilled workers to overseas markets if the transition is not managed effectively. Industry leaders have warned that fiscal uncertainty, such as that caused by the windfall tax, threatens UK energy security and leads to redundancies.

Government Response and Future Outlook

In response to the Westminster report, a spokesperson for the Department for Energy Security and Net Zero (DESNZ) stated that the government is 'not willing to accept the status quo we inherited of the North Sea being in decline.' DESNZ highlighted its efforts to deliver 'the next generation of good jobs for North Sea workers in a fair and orderly transition,' including significant investment in offshore wind and carbon capture. The department also claimed its 'landmark clean energy jobs plan will deliver the next generation of skilled jobs across the country, where Scotland could see over 40,000 new jobs by 2030.'

DESNZ has established an Office for Clean Energy Jobs and is running regional skills pilots to help workers transition from carbon-intensive sectors. However, the committee's findings underscore the urgent need for these initiatives to translate into tangible job creation at a pace that can genuinely offset the ongoing decline in the traditional oil and gas sector.