How Labour's energy policies are making the cost of living crisis even worse
As the Tartan Army considers the price of a trip to next year’s World Cup finals, the cost-of-living crisis is being exacerbated by high energy prices
After the thrills of World Cup qualification came the hangover on Wednesday morning. And after Tartan Army USA ’26 tour planning sessions in pubs across the country and another hangover on Thursday morning came the real headache. How are they going to pay for it?
From the tales of hiring old submarines to reach Argentina in 1978, needs must for the committed Tartan foot soldier and although next week’s UK Government Budget will hardly have been at the forefront of their minds on Tuesday night, Labour's political perma-crisis has left Chancellor Rachel Reeves with no positive ways forward and the decisions she announces this Wednesday will hit the vast majority of households.
That the dramatic Scotland victory over Denmark came on the same day as ExxonMobil announced the closure of the Mossmorran ethylene plant in Fife and the loss of 400 jobs is an illustration of these times; the adrenaline rush from the sports field briefly brightening the unremitting gloom of an economy which refuses to grow, hampered by decisions from governments in hock to vested political interests and incapable of delivering a promise of economic recovery.
‘Striking the Balance’
Mossmorran is only the latest in a string of adverse job announcements stemming from the hostile conditions created by the climate alarmism which still grips both the Scottish and UK administrations, further evidence to support the findings of a report from Robert Gordon University’s Energy Transition Institute in June, which predicted the loss of 400 UK oil and gas jobs every fortnight for the next five years.
“What is required now is honest and candid dialogue, involving all stakeholders, to settle on a common UK policy framework that achieves a genuinely just transition while preserving our energy resilience,” said the “Striking the Balance” report, more in hope than expectation.
READ MORE: Ministers must consider boldest of steps to save Fife Ethylene Plant at Mossmorran from closure
Strathclyde University’s Fraser of Allander Institute picked up the research and this week published new analysis which claimed an accelerated decline in North Sea oil and gas, as envisaged by already unrealistic net zero goals, could cost the UK economy £13 billion, £4 billion of it from Scotland, the equivalent of shutting down the entire spirits and wines industry.
“The energy transition is often framed as a story of new opportunities – and those opportunities are real. But right now, the UK is not doing enough to keep investment, supply chains and high-value jobs here at home,” said the institute’s director, Professor Mairi Spowage.
North Sea job losses mounting
To continue the football theme, it's an open goal for Scottish Conservative leader Russell Findlay who this week urged First Minister John Swinney to sign a joint letter to Ms Reeves, calling for the end of the Energy Profits Levy, knowing Mr Swinney would have no intention of doing so.
But the levy has been cited by significant employers as a particular reason for recent cutbacks, including the US-based APA Corporation, formerly Apache and the operator of the famous Forties oil field, which will pull out of Scotland by 2029 with the loss of around 500 jobs.
With RGU estimating 5,000 North Sea jobs were lost in 2023-24, the tally of this year’s reductions gives little cause for optimism that the tide will turn, when the Chancellor needs every penny she can find to keep a lid on borrowing which funds the Labour government’s inflation-busting public sector pay deals.
The closure of the Petroineos oil refinery at Grangemouth came with 430 redundancies. Harbour Energy expects to axe 250 workers in Aberdeen, blaming "punitive" government policies. Precision engineering group Hunting, with 140 employees in Aberdeenshire, is transferring manufacturing activities to its Dubai base.
Energy services giant Petrofac, which employs 2,000 people in Scotland and fell into administration last month, was this week reported to have started issuing immediate termination notices and freeing staff from notice periods.
Gloomy outlook for business
Meanwhile, new number-crunching by an independent energy analyst estimates that the cost of the UK Government’s renewable energy policies will add over £150 to average annual electricity bills by 2030, despite wholesale energy prices falling. It’s all an essential investment in the future which will eventually bear fruit, energy secretary Ed Miliband might claim, but that will butter no parsnips for the average householder faced with paying £1,124 a year for electricity compared with £968 today, and a 40 per cent leap in a decade.
That’s just the start of it, because the same increase in business energy costs mean householders are hit twice through higher prices for the goods they buy as firms on already tight margins can’t absorb the costs.
It contributes to a gloomy outlook in the tourism and hospitality sector, with the Scottish Tourism Alliance this week reporting that 59 per cent of their members cited rising operating costs as the biggest threat to profitability. With higher taxation and weakening consumer confidence, 46 per cent of the businesses surveyed now expect to delay or cancel investment, which not only hits their own growth but that of the supply chain, and 72 per cent expect to put up prices. One in six expect to lay off staff.
Retailers are looking to Black Friday to boost a tough year, and the British Retail Consortium reported “tumbling” consumer confidence this week, while advertising markets are predicting a sluggish start to 2026. What then will Ms Reeves have to offer on Wednesday?
With all the will-she-won’t-she over income tax, Treasury kite-flying is only about what other ways she can find to fleece ordinary people. Freezing tax thresholds, raiding pension pots, attacking small self-employed traders’ dividends, and sticking VAT on your Uber home after a night out. And, counter to the war on fossil fuels, she’s even considering an electric car road tax.
The Tartan Army better start getting their hands down the back of the sofa.
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