Fiddich Review Centre

Scottish Government needs to support our oil and whisky industries

HUNDREDS of thousands of jobs. Billions of pounds in exports. Businesses that provide employment and investment to communities across the country. It would be heard to exaggerate the importance of our two biggest industries, oil and whisky, to Scotland’s economic strength and resilience.

And yet in the last few days a worrying question has become unavoidable for the men and women who work in these industries: is the Scottish Government really on their side? The government’s new energy strategy, published last week, suggests there should be an acceleration in the winding down of the North Sea basin and a presumption against new exploration. The best way forward, says the strategy, is the fastest possible transition to greener energy, and according to the energy minister Michael Matheson, what that means is North Sea oil and gas production would effectively end in the next 20 years.

The recent messaging on one of Scotland’s other great industries, whisky, has been just as troubling. An official Scottish Government document, published to accompany a consultation on curbing alcohol advertising, suggested the only difference between a single malt and any other drink was good PR. “Alcohol products in each beverage sub-sector,” it says, “are essentially variations of the same thing.”

For anyone who enjoys a single malt in Scotland – or anywhere in the world where Scotch whisky is exported – the remark will appear remarkably tone-deaf. Blair Bowman, the whisky expert and consultant, told The Herald that, in suggesting a Macallan 50-year-old was the same as a cheap blended whisky from a supermarket, the Government had dismissed centuries of heritage and culture. “Scotch whisky is our biggest food and drink export,” he said. “It’s madness.”

The figures back him up. According to the most recent statistics from the Scotch Whisky Association, in 2021 exports grew to £4.51bn, a rise of 19 per cent on the previous year. Of course, like almost every other sector in Scotland, there have been challenges in recent months: the surge in energy costs after the war in Ukraine has been acutely felt by distillers, and they have also seen big rises in the cost of raw materials. But Scotland’s distilleries are still an undoubted success, exporting around 22 bottles every second.

The oil and gas sector is just as important and is one of the vital planks of Scotland’s economy. Some 100,000 people work in the industry – about a third of all oil and gas jobs in the UK. Most of them, naturally, are in the Aberdeen and Aberdeenshire area, and the end of the industry would have a disproportionate effect in the region. But the industry is not limited to the north-east, far from it: thousands of people around Scotland rely on oil and gas, either directly or in the supply chain, and its end could have a devastating impact across the country.

So why is the Scottish Government saying what it’s saying? Why is it apparently keen to accelerate the end of an industry that supports so many jobs? In supporting the new strategy, the First Minister Nicola Sturgeon said her government was recognising that the unlimited extraction of fossil fuels cannot continue and she’s right: Scotland, the UK, the world, needs to move away from fossil fuels.

But there are real problems in the Government’s approach. For a start, the power to grant new North Sea oil and gas licences is reserved to Westminster, which could leave the Scottish Government open to the accusation of a kind of virtue signalling: theoretical policy making without practical effects. This certainly seems to be what the SNP’s new Westminster leader appears to think: Stephen Flynn says the Scottish Government’s new stance against fossil fuels will not have a direct impact on potential future investments.

But the other problem with the Government’s strategy is that it fails to properly account for Scotland’s place in an uncertain world. Quite apart from the uncertainty and worry the Government’s strategy creates for everyone who works in the sector, prematurely reducing the oil and gas that is produced in Scotland would inevitably mean increasing carbon-heavy imports of energy from overseas – in some cases from insecure, totalitarian regimes, with weaker environmental safeguards. It would be counterproductive economically, environmentally and politically.

The Scottish Government’s response to the criticism is that its plans are driven by the imperative of climate change and the transition will be “just” because the jobs lost in oil and gas will be replaced by new jobs in green industries – 58,000, says the government. |In fact, Ms Sturgeon insists that, pursued properly, the strategy would create a net jobs gain with the potential to eclipse the number of jobs that already exist in oil and gas. The transition, she says, isn’t a problem, it’s an opportunity.

However, the Government’s critics are rightly sceptical about the numbers. Where is the evidence for the new jobs, and how does it stand up to the actual, real jobs that exist now? The Government says the jobs will be created if there is a renewables revolution. It also suggests that even more jobs will be created if Scotland realises the enormous export potential of renewable and low-carbon energy. You may have noticed that there are quite a few ifs in there – the thousands who work in oil and gas would probably prefer the certainty of government support, investment and promotion until, not before, renewables are a viable replacement for the sector that gives them a livelihood.

The issue of support also applies to the whisky industry. The Scottish Government says the document which suggested single malts were effectively the same as any other drink is part of its ongoing campaign to tackle alcohol-related harm in Scotland. As part of this, it wants to look at advertising and whether it should be further restricted or controlled. They say 24 people die every week from illnesses caused by drinking alcohol and they have a responsibility to do something.

The Government is right to focus on this problem – the abuse of alcohol is a serious issue in Scotland – but it is possible to look at the subject while also recognising, and supporting the unique product produced by our 140 or so distilleries. Instead, the government’s suggestion that single malts are essentially the same as a cheap supermarket booze appears to betray a worrying ignorance and a lack of recognition of the sector’s importance. Across the country, distilleries are embedded in communities, large and small, providing much-needed jobs and investment. And other countries such as France and Italy go to the barricades to protect their national products. It is too much to expect the Scottish Government to do the same for our most famous export?

The other concern raised by the Government’s irresponsible pronouncements on whisky, as well as its strategy on oil, is how it approaches policy in general. Reducing fossil fuels and tackling alcohol abuse are legitimate, and necessary, objectives, but too often the policies suggested by the Scottish Government have the swift and shallow feel of student politics rather than the politics of mature government. It is fairly easy to announce what you will do, and why you are doing it, but it is harder to make the hard-headed decisions that are dictated by the facts. Scotland’s oil and whisky industries are vital parts of our economy supporting thousands of jobs, and as such they should be treated with respect. They should also be given the support they need for however long they need it.

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