TRADE unions have criticised the £250 million City Deal for Aberdeen as “next to nothing” given the crisis gripping the oil and gas industry as Nicola Sturgeon made clear the Scottish Government would continue to press David Cameron to increase the UK Government’s support for the north east of Scotland.
As the Prime Minister flew into Aberdeen to highlight the help Whitehall was providing for the local community, insisting the UK Government was “100 per cent” behind the beleaguered petrochemical industry, union leaders and his political opponents were expressing their disappointment at the financial numbers.
Local councils were said to have originally been hoping for a City Deal worth almost £3 billion.
David Mundell, who announced the support package, described it as “historic” and said it demonstrated the commitment of both the UK and Scottish governments to the region.
The Scottish Secretary pointed out how the agreement would also help kick-start "hundreds of millions" of additional private sector funds.
In Aberdeen, the PM met local workers and industry executives and announced an extra £20m package to help fund further oil and gas exploration.
Hailing the City Deal, he said: "Obviously, it's a difficult time for the oil industry because of the oil price decline but what this shows is that the British Government is 100 per cent behind this industry, behind Aberdeen, behind Scotland in making the best of the opportunities we have.”
Pressure is now mounting on Chancellor George Osborne to set out tax breaks in his March Budget to help the industry further.
The government announcements came as Total said it planned to start drilling an exploration well east of Shetland later this year.
Jenny Laing, leader of Aberdeen City Council, stressed how the City Deal package was "only the first stage in transforming the north east of Scotland" while Martin Kitts-Hayes, co-leader of Aberdeenshire Council, said it would open the doors to further investment in key areas such as infrastructure and housing.
The initial package amounted to £250m with London and Edinburgh each contributing £125m.
The First Minister made clear the SNP administration would also pledge an extra £254m from its future budgets and encouraged Mr Cameron to match its commitment, which amounts to £379m.
It is thought in the coming days the local councils will promise more funds, possibly as much as £200m.
With additional private business investment also expected, the combined £504m pledged by the two governments could be boosted further to nearer £800m over the next decade.
But the RMT union, which represents offshore workers, was not impressed with the £250m City Deal, saying it was “next to nothing” given there had been more than 65,000 job losses, a fall-off of investment of £2bn and with up to £12bn likely to be lost by 2018 if the oil price slump continued.
Mick Cash, the union’s general secretary, said: “Today’s announcement will mean nothing to oil and gas workers now expected to work an average of 300 hours extra a year for lower pay, inferior terms and conditions, on installations with an average of 20 per cent fewer staff and growing backlogs of safety critical maintenance work. We repeat our demand for greater investment in offshore workers and skills in the North Sea.”
At Holyrood, the First Minister welcomed the City Deal but made clear she and her colleagues would continue to press the UK Government to match her government’s increased contribution.
Ms Sturgeon said she would make “further commitments to support the industry” during a visit to Aberdeen on Monday.
SNP colleagues were more openly critical of the UK Government’s contribution.
Kirsty Blackman, the MP for Aberdeen North, noting how the oil and gas industry had contributed £300bn to Treasury coffers in recent years, described Whitehall’s £125m support package as “a slap in the face”.
Meantime, Scottish Labour’s Lewis MacDonald said, while the City Deal was welcome, it was “an extraordinarily small figure compared to other City Deals that have been agreed”.
He also decried how the SNP Government had not made a thorough assessment of the industry crisis, which, he claimed, brought “into doubt their whole approach to tackling the crisis facing the North East”.
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