Any moves to scale back the UK Government furlough scheme would be “absolutely disastrous” for the North Sea oil and gas sector, an Aberdeen union boss has warned.
Jake Molloy, regional organiser for offshore union RMT, said any Westminster decision to roll back its Covid-19 Job Retention Scheme would push the industry to “absolute breaking point” and force workers out of the sector.
Reports have suggested the UK Government may be about to announce plans to cut payments by as early as July.
But Mr Molly claimed any removal of retention funds would only “fuel the severity of the situation” and “devastate” an already struggling industry.
He fears hundreds of north-east oil and gas workers currently using the scheme could face redundancy if firms feel there is no state support.
Mr Molloy said: “We’ve got hundreds of workers on furlough here and all this move will do is hasten companies to push for redundancies and make the situation worse – it is madness.
“’The North Sea has just come out of four years of cuts and redundancies and was just starting to see a return and now, wham!
“This could really devastate the industry and see it lose its ability to recruit and retain skilled staff.
“It’s a potential tragedy.”
Aberdeen MSP Lewis Macdonald, who has led the call for greater clarity on the furlough scheme in the Scottish Parliament, agreed that the removal of state aid would increase the likelihood of North Sea redundancies.
He said: “It’s absolutely critical that the furlough scheme remains in place and if anything it should be strengthened for the next period because this is the time when companies are trying to get back into business and they’ll really struggle to do it if they suddenly have a reduction in the level of support for staff wages.
“The removal of the scheme will simply give companies inclined to make redundancies more of an excuse to do that.”
Alix Thom, Oil and Gas UK’s workforce engagement and skills manager, described the furlough scheme as a “vital lifeline” for thousands of workers.
She added: “The UK oil and gas industry has been deeply impacted by the collapse in commodity prices as well as Covid-19 and we are now seeing the compounding effects on people’s jobs and livelihoods.
“The additional problems of a collapse in commodity prices means the recovery will inevitably be longer, and for some companies they are left with little choice but to begin the redundancy process which is what we are now beginning to see.”
The UK Treasury was approached for comment.