Swinney warns Starmer of threat to Scots economy – Daily Business

First Minister John Swinney has warned Sir Keir Starmer that key parts of Scotland’s economy are facing an “existential threat” unless the UK Government takes immediate action.

In talks before the British-Irish Council meeting in Wales, Mr Swinney told the Prime Minister that his ministers risked delivering “irreversible deindustrialisation and decline in the North East economy” if the government failed to scrap the energy profits levy on the oil and gas industry. 

The levy has been blamed for deterring investment in the North Sea by energy companies and causing thousands of job losses in the sector.

Attempts by key players and supporters to have the levy abolished or reformed have met with resistance from the Labour government which has only promised a replacement scheme in 2030. Critics say this will be too late. Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, warned that the industry is facing death by taxation.

Mr Swinney’s approach to Sir Keir followed a media interview the Prime Minister gave in Scotland yesterday after which he was accused by industry specialists and the SNP of not understanding how the energy profits levy, or windfall tax, works.

The First Minister also raised the future of Grangemouth and Mossmorran whose closure is adding to the loss of industrial activity, and the Acorn carbon capture and storage project which has lost a key partner. He pressed for an update on UK-US Trade negotiations, particularly around whisky tariffs.

Following the meeting, Mr Swinney said: “I was clear with the Prime Minister – act now or run the risk of delivering irreversible deindustrialisation and decline in Scotland’s economy.

“The energy industry is facing an existential threat unless it gets the support it needs from the UK Government – including removing the energy profits levy – to help ensure there is a just transition from oil and gas to renewables that protects skills and delivers a pipeline of future investment.

“We have a moral obligation to deliver on our climate commitments but must ensure we do not leave communities behind. Scotland still suffers the scars of deindustrialisation from previous UK Governments and unless there is action now from UK Ministers, we run the risk of repeating the mistakes of the past.

“I also pressed the Prime Minister for an update on the UK-US trade negotiations – specifically whisky – and reinforced my determination to ensure there is a mutually beneficial deal for Scotland.

“This follows my earlier discussions with President Trump about the tariffs impacting Scotch whisky and the symbiotic partnership which exists between the Scotch and US whisky industries.

“Scotland’s whisky industry is a cornerstone of our economy and without those trade exemptions – which are for the UK Government to secure – the industry will not have the protection and support it needs. It is in the economic interest of both Scotland and the US to reduce tariffs for Scotch whisky.

“Scotland’s economy is at its best when we focus on securing investment in the jobs and industries of tomorrow. That ambition is matched by our commitment to ensuring we do not repeat the mistakes of the past – a commitment I pressed the Prime Minister to follow.”

The Scottish Affairs Committee will hold a one-off evidence session exploring the closure of Mossmorran chemical plant in Fife on 17 December.

The cross-party committee will question ExxonMobil UK Chair, Paul Greenwood, and a representative from Unite the Union.