The future of the North Sea: is the UK government supporting offshore workers?
Unite, the largest trade union in the UK and Ireland, has criticised the UK Government’s new Oil and Gas Workforce Plan, which was published in July and focuses on how the government will help British offshore workers find new employment. Is the plan really “woefully inadequate”, as Unite has described it, or is it a necessary step in an industry that is facing huge cuts and low oil prices?
Since 2014, 120,000 jobs have been lost in the UK oil and gas sector, and the price of a barrel of oil has dropped to $27 before starting to rise again. In an environment which is so volatile, the government has put forward an Oil and Gas Workforce Plan, which it claims will help support the industry.
The plan proposes how offshore workers can find new employment in the wider engineering sector, in jobs where they can use their existing skills and experience. It also claims to provide further financial support to oil and gas workers from the government for training, and develop a longer-term plan for the oil and gas workforce, including “better information to understand what the future workforce needs under different market scenarios”.
In a foreword to the report, UK Business Minister Anna Soubry and Energy Minister Andrea Leadsom state: "The future success of the industry will depend on retaining access to a skilled workforce. That is why we have worked with the oil and gas sector to develop this workforce plan. Understanding the long-term outlook for the industry and planning for the future is inherently difficult. The aim of this document is not to predict the future. The purpose of this plan is to put in place measures which will help industry deal with the cyclical nature of its workforce needs over the longer term."
Unite and the workers’ perspective
However, the plan has not been well received by the trade union Unite, which has dismissed the report as “woefully inadequate”. Unite national officer for oil Tony Devlin says that despite the best intentions of the plan, it has been created by people who aren’t equipped to make the right decisions to combat the industry’s decline.
“Regardless of the best intentions of all of these people or good that may be being done, the reality is that that's all about managing decline as opposed to arresting decline,” he says. “None of these people have the authority to make any decisions about what happens in the sector. None.”
Devlin says that of the 120,000 job cuts, around 100,000 have probably been lost from the oil industry alone, and more and more are lost on a daily basis.
Instead of having a discussion with all the key players in the industry, Devlin feels the government has made up its mind and hasn’t considered all the voices that should have been heard.
“The key players in the industry should have a proper discussion about what's happening in the industry, and how to arrest that decline, because there are a lot of serious topics to be discussed,” he says. “The oil industry has the ability to do some amazing things engineering-wise… But for some reason it can't engineer the right people into a room to have a conversation about how to arrest decline as opposed to managing it.”
Devlin believes the strategy to re-train workers for other industries is inefficient, and not what the trade union’s members or oil and gas workers want.
“My view from a Unite perspective and a member’s perspective, and from any worker’s perspective in the oil and gas industry, is they want the decision-makers in a room having a proper frank conversation about how we try and arrest this decline,” Devlin says. “And try to take it forward as an industry, rather than just some ready acceptance from the government, that the industry is where it is and that's what it's going to be.”
The status of the North Sea
Devlin says Unite does not accept that view because there is still a lot of good work to be done in the North Sea.
“It’s about time people woke up in the government, recognise that and try to develop a proper strategy,” he adds.
Currently, there is unrest in the North Sea, and Devlin says he has attended strikes over the past few weeks. In July, around 400 workers on Shell oil rigs put down their tools because they believed they were bearing the brunt of cost-cutting in the North Sea.
The strike lasted 24 hours and was the first industrial action workers have taken in 28 years. Shell said that the decision was “regrettable” and the strikes were “counter-productive”.
“For decades, oil and gas companies across the North Sea have made hay while the sun shone and become very profitable on the back of the hard work and dedication of our members,” said Unite regional officer John Boland at the time. “Now the weather has turned for the industry, they are using the downturn to attack the pay, terms and conditions of our members.”
The North Sea was hit particularly hard by the drop in oil prices, but Devlin argues that there is still a lot of oil to be found in the area. The conditions will probably be more challenging, but it’s still profitable, he says, and attacking workers’ rights and pay is taking the easy way out.
“There’s got to be more ability in the senior management team, I would hope, to come up with solutions rather than just attack people's pay and conditions,” he says. “There’s still business to be done in the North Sea and people need to stop attacking their members and workers’ terms and conditions in pay as an easy option. I'm not confident that it's in good hands.”
The answer: two different sides
A spokesperson from the Department for Business, Energy & Industrial Strategy – the government department now responsible for the plan – disagrees. The department states that it has established the Oil and Gas Authority to drive greater collaboration and productivity within the industry. It claims that in the last two budgets, tax measures worth £2.3bn were announced to ensure the UK Continental Shelf (UKCS) remains an attractive destination for investment.
“The government is clear that the broad shoulders of the UK are 100% behind our oil and gas industry and the thousands of workers and families it supports,” the spokesperson says. “The valuable skills of our UK work force are transferable right across the engineering sector. The Oil and Gas Workforce Plan will ensure that this talent is maintained and create more opportunities for those who have been directly affected by the low oil price.”
In January, the department announced a further £20m of funding towards conducting seismic surveys in a bid to maximise the economic success of the UKCS.
Devlin remains unconvinced; ultimately the trade unions feel that they have been left out of the conversation. Unless all the voices are in the same room to try and come up with a plan, he believes it will be ineffectual and negatively focussed.
“As a union we're not asking for much,” Devlin says. “I'm asking to get the right people in the room and let's have a conversation.”
He wants the government to call a summit urgently, so that senior people from oil companies, contractors, service providers, government officials and union leaders can address the issues in a way that means the workers don’t lose out. At the moment Devlin feels the government may as well not have written a plan at all.
“At the moment, it all looks pretty desperate from the employer side, and definitely from the government's side,” he says. “If they can't communicate, it's a pretty sad day, to be honest with you.”