Rishi Sunak is expected to give north-east energy firms a multimillion-pound boost at Wednesday’s Budget.
The Chancellor is to make £27 million available for an Aberdeen energy transition zone (ETZ), the first step in delivering a wider sector deal for the oil and gas industry, and £5 million for a global underwater engineering hub in the city.
UK oil industry chiefs first submitted proposals for a sector deal in March 2018, estimating it could deliver £110 billion for the UK economy by 2035.
It’s hoped the ETZ fund will help transform the north-east into a globally competitive hub for cleaner energies as the oil industry decarbonises and diversifies, supporting green jobs and helping the industry transition to net zero.
‘Boost Scotland’s transformation’
Mr Sunak said: “It’s vital that, as we deliver our plan for jobs and level-up across the whole UK, we build back better in a sustainable way.
“The measures set out in tomorrow’s Budget will boost Scotland’s transformation into a green energy hub, deliver on our commitment to net zero, and deliver a boost that cities and industry need.”
Scottish Tory leader Douglas Ross welcomed the move, saying: “The North Sea oil and gas industry is a totemic part of Scotland’s economy, it’s worth 9% of our GDP, bigger than our tourism and finical service sectors and supports over 100,000 Scottish jobs.”
Mr Ross said the funding will enable the industry to play a “vital role” in the north-east’s economic recovery.
The Chancellor is also expected to fast-track a number of city and growth deals across Scotland in a bid to aid the Covid-19 recovery.
We understand more than £25 million of funding will be accelerated for the Ayrshire, Argyll and Bute and Falkirk growth deals.
The cash will be paid over 10 rather than 15 years, meaning hundreds of thousands of pounds extra per year to invest in local communities.
PM ‘absolutely confident’
Boris Johnson has said such measures will pave the way for a “strong, jobs-led recovery” as Britain comes out of lockdown.
Mr Johnson told reporters: “I’m not going to anticipate what the Chancellor is going to say on Wednesday.
“But I am absolutely confident that it will be a Budget that builds on everything we have done to look after the businesses and the people of this country throughout the pandemic.
“But that also paves the way for a strong, jobs-led recovery. That’s what our focus is going to be on.”
