We here in Aberdeen and the north-east are undoubtedly living through very difficult economic times.
The fall in the oil price has had a major impact not just on the oil and gas industry, which has seen thousands of jobs lost, wages reduced and terms and conditions altered, but has taken its toll on the wider economy as levels of disposable income fall.
There is then the additional uncertainty following the UK decision to leave the EU and the complete lack of anything resembling a plan from anyone in a position of power in the UK Government.
Like Scotland as a whole, the north-east voted to remain in the EU, a position that I share.
The impacts on our economy of EU withdrawal will likely be significant as we will lose access to the single market, which includes non-EU Norway, which is significant and important to the UK oil and gas industry.
The challenge is substantial, but it is one that I am sure Aberdeen is up to – there will continue to be a strong oil and gas presence in the North Sea for decades to come.
Only two years ago £14.8bn was invested in new and existing developments. That investment will be paid back over a long period and Oil and Gas UK estimates 20billion barrels remain to be produced – at $50 a barrel that is a $1trillion asset base that can be developed with the right use of technology and skills base we are lucky to have.
To ensure that opportunities do not go to waste the UK Government must implement fiscal incentives for exploration without delay.
We must also continue to diversify and internationalise our economy.
Tourism, life sciences and food and drink will play a major part in that process, as will our renowned strength as a centre for excellence as an oil and gas hub.
The oil and gas supply chain based in Aberdeen is the jewel in the crown of our economy.
Exports to other oil regions have grown dramatically in recent years and with the right support this can continue to happen. If Aberdeen didn’t exist, the international oil and gas industry would have to create it. That is a major competitive advantage we must continue to nurture and support.
There is also the potential to use the skills and expertise based here to diversify into renewables, particularly marine renewables, given our world leading role in subsea technologies.
Another area where Aberdeen has taken a lead is in the use of hydrogen as a clean fuel for the future.
Conceived by Aberdeen City Council and with funding from the EU plus Scottish and UK governments, we are home to the largest fleet of hydrogen-powered buses in Europe.
The potential for further development in this area is both large and potentially lucrative. The buses are great, but more effort must be made to commercialise the technology and attract jobs to the area.
All of this is possible, but it will not happen by itself. We need continued investment in the region’s infrastructure, building on the massive investment by the Scottish Government and both councils in the AWPR.
Aberdeen City and Aberdeenshire councils should be commended for their efforts in securing the city deal, even if there was disappointment that the UK Government’s £125million commitment fell way short of the SNP led Scottish Government’s £379million.
The biggest infrastructure challenge facing the region is the chronic lack of affordable housing, which has acted as a brake on the economy for years now.
When I was on the council I was hugely proud that we delivered the first new council housing in the city in a generation, but that progress has stagnated under the current Labour administration and that must be addressed.
The Scottish Government has committed to build 50,000 affordable houses by 2021 – Aberdeen City Council must work in partnership with Holyrood to see that our city plays its part in meeting that target.
At Westminster I will continue to use my role to champion the needs of Aberdeen.
