UK Labour commits $3.1 billion for North Sea clean technology jobs fund

Kitty Donaldson, Bloomberg November 19, 2023

(Bloomberg) — Labour has pledged to create a £2.5 billion ($3.1 billion) fund for companies creating clean tech jobs in hydrogen, offshore wind and carbon capture and storage around the North Sea as leader Keir Starmer tries to win votes in Scotland.

Starmer, who has put regaining Labour seats in Scotland at the center of his strategy ahead of the election expected next year, wants to create 30,000 jobs in the nation by 2030 by using the fund to encourage private investment. In a visit to Aberdeen, northeastern Scotland on Thursday, Starmer met executives from BP Plc and Shell Plc alongside unions and workers to set out how North Sea industries will be eligible for what Labour is calling the British Jobs Bonus. 

“Only Labour can deliver lower bills, good jobs, and energy security for our country,” Starmer told Bloomberg News. “The road to making Britain a clean energy superpower, slashing energy bills and creating tens of thousands of quality jobs runs through Scotland and the North Sea.”

Starmer is trying to burnish his party’s green credentials while at the same time taking advantage of a drop-in support for the Scottish National Party following the departure of popular former leader Nicola Sturgeon. Labour leads Prime Minister Rishi Sunak’s Conservatives by double-digits in the polls, and the SNP’s woes gives Starmer the opportunity to win more than 20 seats north of the border that could be crucial in his bid to become prime minister.

Starmer has also said oil and gas would remain part of the country’s energy mix “for many, many years,” as he has sought to reassure unions that criticize his plans to phase out the extraction of fossil fuels from the North Sea. His strategy is also aimed at England’s northern industrial areas and coastal communities, with the jobs fund providing a capital grant to companies bidding for new energy generation capacity who show they will invest in new jobs and supply chains. 

Both the UK’s legally binding net zero target and the Tories’ environmental credentials have taken a bashing in the last two months as Sunak controversially pushed back some policies and the offshore wind energy sector suffered an embarrassing setback when an auction for contracts to build new wind farms received zero bids from developers. In response the government is preparing to offer significantly higher subsidies to get the country’s clean-power strategy back on track. 

Starmer is seeking to boost confidence in Labour’s commitment to green energy after the party was forced to scale back a plan to invest £140 billion over five years because of cost concerns. It now seeks to “ramp up” to £28 billion a year, rather than deliver that figure from the beginning of the next parliamentary term. The original plan fell victim to Shadow Chancellor Rachel Reeves’ efforts to show a more fiscally conservative face to voters. 

Labour has already announced that GB Energy, a new publicly owned company to invest in clean homegrown power, will be headquartered in Scotland. Labour hopes its green investment plans will create an extra 50,000 jobs in the U.K. overall.

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