The granite city is poised to be the HQ of Labour’s new investment vehicle, but questions remain unanswered, says TERRY MURDEN
Optimism has been in short supply in Scotland’s oil capital where uncertainty over the future of its biggest industry together with the decline of its most famous shopping and leisure thoroughfare has provided it with enough to worry about as it copes with the whirlwind of the changing economy.
It has prompted local campaigns to inject new finance and restore a sense of civic pride, and there is evidence of these efforts being rewarded with an upturn in its fortunes.
Okay, the council is declaring a housing emergency, but that’s a national trend. Commercial property investment into Aberdeen in the first half of the year was its highest since 2018 and the number of people in employment in the city has risen.
Two tech entrepreneurs have just launched a pioneering ‘unicorn factory’, and one of the country’s least well-known large engineering companies, D2Zero, has announced an acquisition, and a new HQ. A mood of optimism has even descended on Pittodrie with Aberdeen FC jostling for top spot in the Premier League.
There has certainly been no let up in the battle to restore a tired looking Union Street and that same vigour was applied to securing the head office of Labour’s new renewables transition company GB Energy, including a campaign battle bus journey to London.
But before the city burghers rev up the vehicle for a victory tour, some commentators argue that awarding GB Energy to Aberdeen – assuming it is confirmed later this month – is a cynical ploy to quell local criticism of Labour’s plans for higher windfall taxes on oil and gas company profits in order to pay for it.
While Aberdeen is expected to be the HQ, there is likely to be a satellite office in Edinburgh, and possibly a third in Glasgow, to help join up the politicians, financiers and manufacturers (and save London-based politicians and officials too many long journeys north). The Highlands lost out despite making the legitimate case that it is where many of the turbines will be built and shipped to and from shore.
Aberdeen’s role, presumably, will be to provide a direct link to the stock of decision makers, skilled workers and training establishments that have fed the fossil fuel sector for half a century and which are being prepared for a new life in the wind, solar and tidal industries.
This should ensure it is more than a mere “brass plate” head office, though the ultimate decisions will be made in London because Ed Miliband has made GB Energy a centrepiece of his tenure as Energy Secretary and he will want to make sure his legacy is not one of wasting public money on a failed venture.
It has had a tricky birth, being described by Labour’s Scottish leader Anas Sarwar twice in one week before the election as a “generating company”. We now know it has a mandate to “develop, own and operate clean energy assets”, but it is not a generator nor a retailer. It is an investment vehicle to support higher risk ventures that will do much the same thing as the Green Investment Bank before it was sold to the Australian group Macquarie.
Opposition parties are bound to pick holes, but the SNP’s claims that all the wealth raised from GB Energy’s investments should be retained in Scotland should embarrass party leader John Swinney who is demanding a more consensual style of politics. His ministers will be consulted on GB Energy’s priorities and this sort of silliness won’t help.
Tory scepticism focused around the lack of detail in Mr Miliband’s four-page bill that was hurriedly presented to parliament and comfortably received MPs’ backing after its second reading in the Commons.
His Conservative shadow Claire Coutinho and junior minister Andrew Bowie have put pressure on Mr Miliband to come up with a reason for setting up GB Energy and to deliver an investment plan backed up by figures for how much energy will be produced, when its promised savings will come through, and what carbon emission reductions will be achieved.
Mr Miliband says simply that the country must go faster in pursuit of net zero and that GB Energy will help ensure the UK becomes less dependent on international supplies. But having rushed his bill through parliament, don’t expect him to be in the same hurry to provide the requested figures.
No one knows how many staff will be required by GB Energy but Mr Miliband has hired Juergen Maier, former head of Seimens UK, as chair and we should expect another heavy hitter from industry to be its first chief executive. As is the way these days, he or she may end up commuting from the leafy London suburbs, but let’s hope that doesn’t do too much damage to Aberdeen’s new-found pride.
Terry Murden was Editor and Business Editor at The Sunday Times Scotland, Business Editor at The Scotsman, and Business and City Editor at Scotland on Sunday. He is now Editor of Daily Business.
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