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David Cameron unveils £250million deal to help save oil and gas industry

Prime Minister David Cameron talks to the crew of the Clair platform via video link during his visit to BP
Prime Minister David Cameron talks to the crew of the Clair platform via video link during his visit to BP

David Cameron will sweep into the north-east today to announce further measures to support the beleaguered oil and gas industry and encourage exploration.

The prime minister will be in Aberdeen as the UK Government announces the long-awaited Aberdeen City Region Deal will pump £250million into the region’s economy.

Last night, the Scottish Government – which has agreed to fund the investment on a 50-50 basis – also pledged an additional £254million for infrastructure in the area.

Aberdeen City Council leader Jenny Laing welcomed the City Region Deal and additional support for oil and gas – but said the package was “only the first stage in transforming the north-east”.

Unveiling the details, Scottish Secretary David Mundell acknowledged the “very tough time” people in the industry and their families were going through, adding: “I am determined that the UK Government will do what it can to support them.”

He said the city deal would help the sector export its world-class expertise around the globe and encourage diversification of the economy.

“We have seen in Glasgow the extra jobs and growth that this kind of deal can bring, and I want to see the same achieved in and around Aberdeen,” he added.

Energy Secretary Amber Rudd, who this week chaired a meeting of the new ministerial group on oil and gas, said the UK Government stood “100% behind the industry”.

And Communities Secretary Greg Clark said the city deal would help ensure Aberdeen’s “long and proud heritage” continued.

He added: “This package of support will help prepare the oil and gas industries for the future, given their crucial importance both to north-east Scotland and the country as a whole.”

The agreement, due to be signed at a special ceremony in the Town House, will be Scotland’s second city deal following the £1billion awarded to Glasgow in 2104.

It will address a number of proposals from the region, including a new energy innovation centre, supporting the industry to exploit the remaining reserves in the North Sea, and the expansion of Aberdeen harbour, enabling the city to compete for decommissioning work.

It also sets out how the region will diversify the biopharmaceutical and agri-food industries and commitments to improving digital connectivity.

While in Aberdeen, Mr Cameron is due to announce further measures to safeguard oil and gas sector jobs.

Yesterday at Prime Minister’s Questions, he vowed to build a “bridge to the future” for the North Sea and is expected to unveil possible tax concessions to help the “vital industry at this vital time”.

The Tory leader acknowledged the oil price decline was the longest and “nearly the steepest” in 20 years.

He added: “We can see the effects in the east of England, across Scotland – particularly in Aberdeen – and in other parts of our country too.

“We discussed this at Cabinet on Tuesday. I’m determined we build a bridge to the future for all those involved in the North Sea.”

He also pointed to the £1.3billion of support for the UK Continental Shelf announced last year and the implementation of the Wood Review.

Mr Cameron later highlighted the “very dark” place Scotland would have found itself in had it voted for independence, rather than being protected by the “broad shoulders of the UK”.

There is no definitive timescale for the deal, but it is expected to be less than the 20 years envisaged in the initial proposal.

The extra money from the Scottish Government will be invested over a five to 10-year period and be targeted towards the delivery of improved transport, digital connectivity and housing programmes.

Infrastructure, Investment and Cities Minister Keith Brown said it sent an “unequivocal message” that Aberdeen and the north-east remained central to driving future growth and prosperity in Scotland.

He added: “The Scottish Government recognises that there is more support that can be made available to the region and that will deliver real economic benefits.

“It is clear that the appetite of the councils and the needs of the area require more.”

Mr Mundell will also be in Aberdeen today to launch a drive to forge a new trading partnership between the Granite City and Pemba in Mozambique.

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