 Rwy'n tryd i gael i nifit i gael i ddyn nhw. The 30th meeting in 2015 of the Economy, Energy and Tourism Committee can now welcome all the members. Welcome our witnesses who welcome to the gallery and can remind everyone please to turn off or at least turn to silent all mobile phones and other electronic devices so that they do not interfere with the sound equipment. Item 1 on the agenda. Can I ask if members are content that we take item 4, our review of evidence in private. The meeting is great. Thank you. Idem 2, on the agenda, we have before us a piece of subordinate legislation, the diligence against earnings variations Scotland regulations 2015, that is SSI 2015 slash 370, that copy of that has been circulated to members. Members have any issues to raise in relation to this instrument? No? In that case, are members content that the instrument comes into force? OK, that is agreed. Thank you. Item 3 on the agenda, we are starting a short inquiry into the future prospects for oil and gas in Scotland. I would like to welcome this morning our first panel of witnesses. We are joined today by Tommy Campbell, who is an industrial organiser for Unite the Union, Stephen Boyd, assistant secretary at the Scottish trade union's congress and Jake Malloy, who is regional organiser of the RMT. Welcome to you all and thank you for coming along. I think what we'd like to do in the time available is to explore some of the issues that are covered in your written submissions, that we've received around the prospects for the oil and gas sector, its wider impact also on the Scottish economy and particularly the impact on the workforce. We're going to run this till about quarter past 11. What I would ask members to do is keep their questions as short and to the point as possible and answers as short and to the point as possible would be helpful to get through the topics that we want to cover in the time available. Because we don't necessarily want all three of you answering every single question, I would ask if members could perhaps direct their questions initially at one member of the panel and then, if other members of the panel want to come in and respond, just catch my eye and I'll bring you in as best I can as time allows. I wonder if I could just start off and ask all of you, just in a couple of minutes, if you could just summarise for us what, in your view, are the key issues currently facing the sector and perhaps more particularly looking at the role of government, looking at the royal role of industry, looking at the role of oil and gas authority. What would be your key asks, maybe no more than one or two, that needs to be done in a policy sense to try and make the situation better? I'll maybe just start with Mr Campbell and work my way across the panel. Well, we certainly want to make sure that any approach to any of the problems is done in a tripartite way. It's done by all the employers along with all the trade unions but also involved in the politicians and the government. But mixed into those ingredients has to be the workforce. They're the ones that are critical to this. We should never forget the fact that when we talk about the oil and gas industry, we're talking about workers and their families and of course it's them that's suffering the most now as a consequence of this crisis. It has to be said that the employers that are crying out because of the crisis aren't suffering financially, they're just not making as much profit as they used to but the workers are the ones that have got less income. We're seeing the detrimental effect. We've got figures that have been mentioned, which is a guesstimate of about 65,000 jobs. If we look at it, that's the equivalent of about 20 car factories, 20 shipyards, it would be being treated as a national crisis if that was the case. Approximately about 6,000 jobs on the platforms and rigs themselves, we reckon, have gone. About 30,000 in the support companies that are backing up the industry and then rippling out from that, of course, approximately another 30,000 jobs in the hotel catering. On a dole, I met with taxi drivers in Aberdeen last week and they were indicating to me that their takings are down this year, approximately an average of over 20%. They're seeing it themselves with the squeeze from the type of trade that they would get from the oil companies. It's not just the oil and gas, it's not just offshore, it's now coming onshore as well. There are initiatives. I know that, given that I'm based in Aberdeen, we have to thank the local authority there, all the parties there and the independent politicians there working together in terms of the city deal that they're looking at both the crisis as it's happening and actually trying to project in the long term. That's, of course, something that we would welcome. There has to be a planned approach, a plan to this economic crisis. There are probably people losing their jobs and that's skills that are coming out of the industry as well, but the direction of traffic coming this way, we have to forget, we've got young people, young men and women who should be saying that there's a future in that industry, who are developing their skills, going to university, developing their skills and apprenticeships. What would they be thinking now? I'll give you another anecdotal example. The change to the rotas, this tree and tree, which we'll deal with later as well. A figure that's bandit about is that the savings in the helicopter costs alone is approximately £150 million. That comes out of the system. The ripple and the fact of that is that there's over 20 young apprentices in one company, helicopter company alone. Helicopter engineer apprentices are now going to lose their jobs, along with other people losing their jobs. There is a crisis. We do want to work together. I'm sure that my colleagues will come in. We're starting to see an inward trend of cowboy operators. We've got concerns about that. Of course, our primary concern about that is that their attitude towards safety would be leaving a lot to be desired. I'll leave it for my colleagues to add a few comments. If I could maybe just turn to the kind of economy-wide issues from the SDUC's perspective, I think it's extremely important. I think the reason we welcome the committee taking an interest in the sector is what has happened over the last year. I think it's been a massive scale and is perhaps still underappreciated out there. I don't think people really get the impact that the fallen oil price has had in the sector. You ask about the issues facing the sector. It's a statement of the obvious, but when that price collapses, it's a massive issue. Underneath that, it looks as if the economics of the industry fundamentally changed. With that, the offshore sector in Scotland, which is relatively expensive way of extracting oil, is facing pressures of an order of magnitude more than other oil producing nations around the world, to enable to improve productivity at a much faster rate. I think that we've already seen the impact of that in Scotland in terms of economic and labour market performance through the middle part and latter part of this year, Scotland relative to the rest of the UK. What's happening in the industry is undoubtedly having a wider impact. In terms of what's got to change, I think that it's very difficult to do that within two minutes. I think that you're looking across a huge range of issues for all the different industry actors. Again, you have to realise that it's a high-cost jurisdiction, and I think that the industry as a whole has been natalised. It hasn't, as the board review recognised, it hasn't collaborated well. When you compare to the way the industry has run in the UK continental shelf in the way it's run in other North Sea jurisdictions, it's very different. The cost bases are very different than something has to be done about that. The industry hasn't innovated in the way it should. It hasn't collaborated, but I think that there are opportunities there as well. Moving forward, the commission would be the obvious one. It provides a route to diversification. It provides a route to saving jobs. It provides an opportunity for Scotland to develop expertise that can then be exported around the world. In terms of the way that Tommy has described, the response has to be I don't really like using the word partnership because it can be loaded, but it has to involve all the industry partners working very closely together. We have seen, as Tommy again says, through some of the industry groups that are listed in our submission. We have seen some quite good activity. I think that the energy jobs task force has started to drive some of that collaborative activity that, however, wasn't apparent. We are making progress, but there's an awful lot to be done. Tommy and Jake are far better placed to describe some of the really worrying stuff that's happening at workplace level, which I think will have to be cognisant of. There are so many issues, as Stephen said, that it would be difficult to cover them all in two minutes, but it's the consequence of the industry approach, the slash and burn approach. There seems to be little take-up or engagement on how we can be more efficient, more productive without the blunt instrument of redundancy and cutting terms of conditions. That, I believe, is having, and we're just in its infancy now, the effect of developing this culture of fear. Someone I've been personally involved with after the big slump in 1986, and we all know what happened in 1988. It's a different environment now. We've got a different regulator, different machinery, different mechanisms, but there's clearly a culture of fear developing on the ground where workers are reluctant to challenge, reluctant to question, reluctant to report for fear of losing their jobs. That doesn't necessarily make it unsafe, but it does absolutely make it less safe, and that's a serious worry, but only that culture has other knock-on effects in terms of the lack of maintenance being done, the backlog of maintenance, how we maintain the infrastructure to develop and exploit what's left. If we're not careful, because of a lack of investment, a lack of maintenance, we could very rapidly lose a lot of the infrastructure and it becomes uneconomical, and so we start leaving the oil on the ground. The other big fear from the maritime side of things is the drive to reduce cost, which is seeing many of our traditional UK supply companies virtually want a brink of closure. I've said it once already, and I'll say it again, a fear for the British seafarer in the oil and gas sector. I think we're looking probably Christmas time new year. There'll be little or no British seafarers left in the oil and gas sector. It's undoubtedly a race to the bottom. Day rates have been cut by such an extent that we're seeing the use of second registration vessels, flag of convenience vessels, exploitation of foreign national social dumping, which I don't know fits with the Scottish Government's drive for fair work conventions and a living wage. This is not a living wage, it's not a minimum wage, it's way way below that. The knock-on of all that, future skills gaps, the social dumping continues, and as Stevens alluded to, the potential then is because they've created this low-cost environment, they will not, absolutely not, and I say that the oil companies will not consider any opportunities that we as a society would look to in terms of decommissioning. I mean, we've got steel plants closing down when we've got huge steel platforms that need recycling. We've got debate about diversity in the Clyde. We've got huge platforms that can be taken in there in the deep water and decommissioned and used. We can maintain some form of manufacturing in this country by using the means that we have through licensing, through the OGA, to ensure that if they're going to exploit our natural resources, there should be some return for us as a society. I see that as being diminished to the point that it's going to be a seriously lost opportunity. I don't see it turning round until somebody's hurt. That's a real, real worry. How you, as a Government, can change that, I think, we really need all of the regulators, oil and gas authority, health and safety executive, even the CAA, to be in the room and setting down parameters that are considered to be operating standards for the UK sector. We have Norsox standards in Norway that dictate how the oil companies operate there. We must, must take the oil companies into some kind of forum that sets standards rather than see them raised to the bottom. Thank you for that summary. You've all raised a huge range of issues, which I think we want to explore in more detail in the time available. Just before I move on, there's a couple of follow-ups that I want to ask myself. We did, as a committee in Jeremy Corbyn's style, ask the public if they had any questions that they wanted to put. We do have a question from Yvonne in Aberdeen, which I will just read to you. She asks this, are the trade unions fighting the change or are they working with businesses to ensure a sustainable future for oil and gas in Scotland? Who wants to respond to that? Tommy Campbell? I'll answer that. It's a very good question from Yvonne. Stephen mentioned the word partnership, and sometimes it can create different thought processes in people's minds. I believe that we can work in co-operation for the greater good of the people that we represent. That means that we have to sit in the same room as the bosses. That means, for example, that some people on the outside might think that they're in bed with the employers, but the only time that I get into bed with any bosses is to have a pillow fight. The point has to be made that we are currently in dispute on a number of fronts with businesses in the oil and gas industry. There's a current ballot taking place on the co-taside, which involves ourselves and the RMT. We're also currently trying to resolve a dispute on the OCA side as well. We're working hard because we also recognise that the industry is in crisis, but, as I said in my opening comments, we don't see the reason why the workforce should be the ones that should carry the greatest burden of that and those who are affected in the onshore environment as well. It's not just in Aberdeen. The reason why I made that point about the analogy about car factories and shipyards is that the workforce who work particularly in the north is the whole UK continental shelf. It's right around the UK, so it's people working from England, Wales, Scotland, Ireland and from other countries. We don't want to see a race to the bottom, as Jake has quite rightly mentioned. We want to see common standards of good employment practices, good employment rights, good health and safety. We want to bring all the players into the same room. What we'll have is a situation where those at the top, the major oil companies who are still making significant profits, are keeping their distance and then sending them to the contractors. Basically, it's your shout how you handle this, but they're being really told that you will cut and the only people they can cut from, of course, is the workforce, because they're going to protect their profits as well. As Jake and Stephen say, we will need and we do need state intervention, both at Scottish and UK level, to bring this to a halt and say, look, this is becoming irresponsible now. We've got an industry here that's exploiting the natural resources of the United Kingdom, exploiting resources off the coast of Scotland and the payback should be that they should have social responsibility and be using the profits that are generated by the people that we represent to put back and invest in our communities, both for now and in the future as well. Just one point. It's difficult to be in partnership with employers who can't negotiate with you, and that's the situation that we find ourselves. We're talking to employers for whom our members work with, but they're being dictated to by a third party, the oil companies. When they're being dictated to, they will do what their clients dictate as opposed to what their workforce are looking for. A lot more questions on a slightly different topic. Stephen Boyle talked about diversification and looked at how do you use the skills that are acquired in the industry elsewhere in the economy? Is it an opportunity to reuse skills that oil and gas acquired offshore on onshore technologies such as unconventional gas? What is your view, therefore, of the moratorium on fracking that the Scottish Government currently has? I think that we always have to tread very carefully when we talk about diversification. I think that it is a word people fling around without really thinking through the process from where we are now to where we want to get to. I think that there are opportunities. We've spoken for a long time about the possible synergies between the skills in oil and gas and offshore renewables. Unfortunately, we haven't seen the progress in offshore renewables that would allow that flow of employees from one sector to the other, so I think that that remains a major challenge. In terms of the specifics around fracking, I don't know the answer to that question. I'm not entirely sure about how closely aligned the skills in the offshore sector are with fracking. In terms of the moratorium, we took a position at Congress last year that essentially supports the Scottish Government's moratorium for the time being. I think that, like the Scottish Government, we will constantly revisit that over the next few years as the energy policy debate progresses and as the situation in the offshore oil and gas sector progresses as well. We have to look closely at other opportunities for diversification. I think that the Scottish Enterprise has been playing a very important role in the north-east at the moment, particularly through Lena's chairing of the Energy Jobs Task Force. However, in terms of trying to drive that collaboration, which I discussed in the past, I think that the Scottish Government needs to resource the activity if necessary. It has to be looking very closely at what are the real diversification opportunities here and what Government investment is required to materialise those opportunities. First of all, if you declare an interest in one of the co-conveners of the oil and gas UK cross-party group here in Holyrood, I might be able to direct my question to Jake Malloy first. Jake, you have painted a fairly bleak picture and you have used terms like fear within the workforce, fear of losing their jobs if they were to report health and safety measures. I think that we are all too aware of 1988 and the impact that it had and, obviously, thereafter the health and safety initiatives. Are you suggesting that health and safety is being compromised offshore at the moment? Right at this moment in time, it is difficult to quantify it because, in actual fact, the statistics suggest that safety performance is slightly improved, but it was the same in 1986, albeit the statistics were not as robust as they are today. I am trying to pre-empt the inevitable. I think that we have anecdotal evidence that we are talking downstairs. If you cannot make a complaint about a lack of rest because the room that you are sharing is occupied by a rather loud snorer without fear of being sacked and that is what has happened, then are you likely to challenge on maintenance procedures or unsafe acts? It is the culture, call it fear, call it reluctance to talk, call it a perception of fear, call it what you will, but it is that reluctance to challenge, which I have rounded up as this underlying entity of fear, which detracts from the ability to stop the job and challenge. That is what I am trying to explain. You will be aware that the industry and the companies say that safety is paramount. It is above anything else and everything else. Are you questioning their suggestion that safety is paramount? That fear culture is there because of redundancies? Some measures or some incidents may not be getting reported, so the industry is not aware? I am not questioning people at the senior level. I am not doubting their commitment to making things safe, but take that to the very bottom level just in the last week. A group of workers working for a major contractor are told that they are redundant as of 18 November and the company that is taking you over is this company, Company X, and you need to contact them. No transfer of undertakings, no redundancy, no consultation, we have gone, they are running the job. The guys have to apply for their own jobs but have to apply with a £5 million employer liability insurance certificate and work as self-employed workers. I cannot for a life when we see a self-employed worker who is working on a day-rate basis, reliant on producing the goods, standing up and challenging his main client. I just do not see it happening. I do not speak from experience, I have never been self-employed, but is that the culture that we really want? A culture of self-employed, sham, zero-hour type contracts in place in a safety critical major accident hazard environment? I am not convinced that that is conducive to good safety practice. Before any of the other witnesses want to come in, he also suggested that the seafaring in terms of British employees within the seafaring is being compromised—flags of convenience, that sort of thing. Do you believe that, obviously, the health and safety then of the seafarers and the work that they associate with the offshore is being compromised because there is a different health and safety initiative or level within people coming in that you are suggesting? There is no doubt about it. I have done international transport federation inspections on some vessels of flag of convenience. The Filipino workers, the Indonesian workers, look upon you as the police arriving to save them from purgatory. Some of the conditions are appalling on some of those ships. What worries me most about that is that industry has invested millions in developing competence to a standard that delivers safe operations. We are seeing that dumped and replaced by less competent, less able, less willing workers who are being exploited to exploit our natural resources. Again, I am looking at it. The safety must be compromised. Absolutely, there is no question about it. I wonder if any of the other witnesses want to come in. As always is the case, a very difficult area to produce proof. Let's look at another industry, the construction industry, where lucky—the union has got lucky and the workers got lucky—we are able to uncover the scandal of the consultant association and collaboration with major construction players. You are well aware of the history of this now and it is still on-going in the courts. I think that it is a safe bet to say that that level of behaviour, which was widespread within that industry, is safe to say that it is very typical in other industries as well, but we will not able to get the proof of it. What we do have is that when we have a situation and my colleague Jake and other trade union officials deal with them at the offshore, when we are talking with workers, both up at the heliports and when we are in communication with them over the phone and that, and they tell us things. They say that they did not hear this from me, and they are telling us things. Then we look at some of the evidence. There have been inspections by the authorities. It shows that a number of installations last year that the safety critical element was quite high. They were scoring the highest points when there was a question mark over the integrity of the installation. That should give you some indication that something is not right. It is sad that what happens is that it is when there is a major incident that, in hindsight, when there is the enquiries and everything else, people then start to say, well, I could have said so with them, but I was afraid to speak out. It is what there is in terms of an absence. We raised this very factor at a meeting yesterday with the OCA employers that we were wanting them to promote more strongly the idea that workplace representatives, union representatives should be elected, and that idea should be promoted and encouraged within the companies. The real heroes, as far as I am concerned, are the workers, the men and women who have the courage to speak up and speak out, but the history shows us that those people somewhere along the line get their cars marked. When it comes to redundancies, they find themselves in that queue to go, and they are suspicious. Again, we have not got the hard evidence that somewhere along the line they are getting NRBs, because they were seen to be speaking out about something that was detrimental to the company's interests, but that will never be written down. That is why we got lucky with the construction industry, with the consultant association, with those files being found. Maybe one day, maybe one day we will have a WikiLeaks-type situation in the oil and gas industry, and the lid could get opened up and we would then find out that the truth that we generally knew is definitely a truth. We need to see the companies and the industry clearly coming up, maybe with a charter, to encourage people to definitely speak up and speak out, and that that should be protected. Let us look at another example. Why is the industry so dead against a public inquiry into the helicopter disasters? When the committee of the UK Government and Parliament decided that there was a need for such an inquiry, an independent one in the summer of last year, it was a no-no on the basis of, it is not that bad, we are just as good as the Norwegian sector. In the 21st century, 38 people have lost their lives in their territorial waters as a result of helicopter tragedies. That has not been any deaths in Norway. So where is the comparison? The only comparison is that it is really quite bad here, so there is a need for that. So who blocked that? Who was behind that? Ask yourself that question and when you look at the answer then you have to say, is there a nervousness there? So on the one hand the textbooks say that they will have everything written down about their policies which are health and safety and we welcome these policies, but it is then the practical application all the way down the chain of command as to what happens when somebody really does put their hand up and points the finger and speaks up and speaks out and they come through their unions then sometimes to do that because they want that anonymity. So like Jake, I do have serious concerns that something seriously could happen and we do not want it to happen of course, I have to emphasise that. Is there a different application of health and safety or is it one single standard that is being operated within the different offshore platforms etc? Is each company liable for their own safety or is there a collaborative working together in order that there is a single standard and if that is not the case do you believe that it should be? I sat on a panel yesterday morning with Trevor Gallach, chief executive of BP and this was the subject simplification standardisation. We need some proactive positive input and the workforce has been screaming out for years because it is very difficult as an itinerant worker moving around the North Sea to go from Shell who have a golden rules reporting system and a risk assessment process to BP who have a completely different golden rules observation system and a risk assessment process to Apache and so on. That does not make for economic or efficiency or productivity improvements, there is an easy win there for the industry to change that and send a clear message to workers that this is not just about cutting jobs and cutting your terms and conditions, we are introducing efficiencies across the board but there is a reluctance to do it. They are talking about a six-month lead-in time with a pilot exercise. Can you explain to us what this easy win is? The easy win is that you have a common induction, a common payment of work, a common risk assessment instead of investing each operator, investing millions, training people to their specific standards. We have a common standard, so you can move around operator to operator, contractor to contractor and know what the rules are and how you are expected to behave and how you intervene in an unsafe act. I think that the figures that were produced in this very room last week were in the region of 200 Mawin Cwyd. I mean that I lack Jake and Tommy's decades of experience in the sector of only very recently became involved but over the last few weeks for the opportunity of Jake and us to be at a number of very senior players in the sector. I do not doubt any of their good faith when it comes to supporting a decent health and safety regime, an excellent health and safety regime in the North Sea, but the problem is that when you enter a phase of rapid cost cutting, it can introduce bad incentives along the chain of employment, particularly at the lower and middle management side and for the employee side as well. The incentive that should be there for employees to report every infraction of health and safety is no longer there because there is a concern that this is going to tag them for future redundancies. We have to realise that a lot of unintended consequences are operating here and it is not about questioning the bad faith of the people who are running the industry, it is just recognising what is happening and how we can best tackle it. Sorry convener, is there a system of anonymised reporting? There is a health and safety hotline but it is rarely if ever used because of the regulator's inability to announce unannounced visits. The lead-in time and the investigation time invariably identify the individual who is reporting. What we have really is the hotlines on Tommy's desk and my desk and we take it round that way. Lewis MacDonald has some questions in the same area. I am a co-convener of the cross-party group on oil and gas and we have had very good evidence there from Trajanians over a period of time in terms of the industry. However, one of the things that Stephen Boyd's paper highlights particularly is the high cost base of the UK continental shelf compared with other parts of the North Sea, and I think that was mentioned again this morning. I wonder if you could say why you think that is. I think that there has been some mention of one or two aspects of that, but why that is the case and what can be done with your support to reduce that cost base that does not involve people losing their jobs or the terms and conditions of the offshore workforce being undermined? At $130 a barrel, a lot of operators were reluctant to shut down and do maintenance. We have seen that play out in the early 90s and we are seeing it regrettably playing out to some extent now and that is what worries me about the maintenance side of it. If workers were educated and trained and able, and at this moment of time they are not, but able to police maintenance backlog, safety critical maintenance, then you have got to use an industry term, a win-win situation, where the infrastructure has been maintained to the highest standard and it is usable going forward to exploit those resources that are left. Even now, and there was a speaker yesterday morning, Bob Egan, who works with HSE now, highlighted that only 70 safety reps of some 2,500 have gone through training, which will allow them to fulfil their roles to that extent, where they can go out and do competent inspections and competent assessments of maintenance standards. To ask you a question, to reduce costs you have proactive maintenance so that, when you have a breakdown, it is not a breakdown that lasts for a year or more, as has been the case in the past, and that is where we are heading again. We have infrastructure, which is fit for purpose, has greater uptime, greater productivity and, with more maintenance, you reduce the level of activity on the installation and save costs there as well. I had this debate at the last energy jobs task force. We are seeing global corporations operate their business on a day-to-day basis. I am not aware of any corporate body, the size of some of the companies that we are talking about here work that way. You normally have year, two-year, three-year plans. Everything has been torn up right now. We are literally working on a day-by-day basis and they do not know what they are doing the next day. That cannot be conducive to improving efficiency, reducing costs and improving productivity. The first thing to say is that I do not think that it is a question that can be answered with any great degree of certainty, because I am not aware of any rigorous analysis being published that looks at the relative cost bases and the reasons behind them. I remember that I left to speculate. It is important to stress areas that do not cause the higher cost base. I do not think that you can attribute higher UK CES costs relative to Norwegian costs down to wages, because I think that wages in the Norwegian sector are at least as high as in the Danish sector. I do not think that it is down to tax either. We can maybe come back to fiscal issues later if you want. In the past, some might have attributed at least part of that explanation to regulation, but I think that post-wood review we now have the regulator of industry wants. I think that that has been removed as perhaps an explanation. I think that probably the deeper reasons around the lack of collaboration would describe in house review. It is a highly atomised sector of the UK CES compared with the other jurisdictions. I think that there is a lack of innovation. Clearly, if you are stat oil, there is no risk if you want to innovate in the Norwegian sector, because you hold the benefits of that innovation yourself. If you are a player in the UK CES, there is a major risk if you are taking that initial innovation, because the benefits of that might not capture them. It is an age-old problem about risk-taking. It is round about innovation and collaboration, but I think that that requires much deeper analysis that I am not aware of being undertaken. I will simply say that if you zone the industry when it was nationalised and the crisis was still the same, we have been knocking your door in the sense that, instead of paying these highly skilled workers off, there is all this maintenance that needs to be done. In a smaller scale, it is like a transport company that runs a bad patch. I come across that. I used to do the road haulage industry, and there will be downtime for maybe a couple of weeks. There will be people cleaning up the yards and doing a bit of the odd jobs, a bit of maintenance work and all the rest of it. In the micro sense, the same could be done. Do not be transferring the skills to an onshore situation. They are in their own territory. They know that this is their work environment. They are simply relocated to do other kinds of high-maintenance work. Just because they turn the tap off production does not mean that they should just disappear, just like that. That needs your intervention to be a starting point to think about. Those skills should be kept there. While we are waiting for the upturn to come, people could be getting on with their own maintenance programme. As Jake said, in the short term, somebody's budget just will not allow for that. They might know that it should be happening, but somebody above them is saying that there is no money in the kitty, and that is it. Somebody needs to bring that pressure to bear and say that there is money in the kitty, because at the senior level, at the higher oil companies, use have got that money, and you can release it to allow that to happen. Yesterday, I think that Shell was paying £20,000 or £1000 for the leak of the oil, one of the biggest leaks, as I understand it. You ask BP if they were to reflect back about deep CRIs and what happened there, and how much that cost them. They need to think forward as well, instead of just looking at the immediate budget. The money is there, and it could be planned. Before we come back in the result of the observant, we are about halfway through our time. I have a long list of members who want to ask questions, so we need to tighten up a little bit if we can on questions and responses. I have a very brief follow-up. I guess specifically to Stephen in response to his answer. People in the industry and regulators say that they get it that the period of cut-throat competition has to be behind them, and collaboration has to happen. Is that your experience and that of the trade unions? Is there a culture shift or a recognition of the need for a shift in behaviour within the industry leader? I mean, Tommy and Jake might have a better perspective on that than myself, but I mean, I think there is an understanding that that culture shift has to happen, and I think it might be appropriate to say that there are nearly days of that culture shift happening, and certainly when you have had meetings with senior players in the sector, they all absolutely recognise that this has to happen. Again, when it comes to driving that culture change right through what are massive multinational firms, and that atomised contractor base that I was discussing, that is our major job. I mean, it is not something that is going to happen overnight, but the other side of that is that it is not something that we can leave for the future either, and when we have to be working as hard as we can at this moment, time to drive the culture change. I think the people involved in the energy jobs task force tell me that that is beginning to make a difference, and people are speaking to each other in a way that they have done in the past. You are beginning to see some of that collaboration happening, but I mean, I think that we are at the very early stages of the journey. If I can move on to the other area, I was keen to explore, which was the question of the wider impact on the economy, and there was a bit of Tommy Cameron made a reference to that at the outset. Neither the Scottish Government nor the UK Government has thus far commissioned any assessment of that impact. I wonder what that impact looks like from a transunion perspective, both within the north-east and across the Scottish economy. I will give you another example of beer delivery in the city of Aberdeen. Guys are telling me that there are pubs now that they used to deliver to once a week. Now you do it once a month. I was here last night in Edinburgh. I was walking around to find out how some of the places were busy. You will get that in Aberdeen now. When passed, I drove past a city centre restaurant on Monday evening at the back of 6 o'clock, stuck on the traffic, had a look over, and I had seen two people at it. That type of business is going to need more than two people at it. I know from talking to people in the pub business that even the hotel industry has announced recently that they have seen a downturn, and I will give you an example of that. This time last year, we were trying to book shops in the hotels for our training courses. The average cost was £150 a night during the week. Monday of this week, we got somebody in for two nights in to a city centre hotel for £51 to spend breakfast. I will give you an example. I spoke to people from Acast at the meeting yesterday with the negotiations with OCA. They were another major city centre hotel, and they were saying that, at the back of 8 o'clock, they were the only people in the breakfast room, and they got a sense. They didn't ask the hotel to get the sense, the hotel was very empty. In that part of it alone, there is a shriplen effect in the smaller industries. I know from Indian restaurants that I frequent in Aberdeen just speaking to the owners of them. They, anecdotally again, were telling me that they have seen lots of faces of customers that have not been back this year. I was saying that there will be men, women that go offshore, come in for something the night before, and that they are now gone. They said that the hospitality sessions that they have with companies may have an eye out for their management team and that workers must go on as well. It is rippling itself all the way down. The idea is that, because the price of the oil has come down, there is a knock-on effect in the plus for people in the road transport industry, where fuel and the consumer are having this, but it is not showing the upturn on the other side. It would be fantastic if I could answer that question in a data-driven way. Every time I come to the committee, I am wondering about the quality of Scottish economic statistics. It is true that we simply do not have the regional growth or the regional labour market up-to-date data that would allow us to answer that question in an incredible fashion. All we really have is the anecdotal evidence that Tommy has described. That is something from an SDUC perspective that we have heard right across the board. As Tommy has already alluded to, we began to see that seep into the rest of the Scottish economy as well. Yes, it is primarily a north-east Scotland issue, but it is not just a north-east Scotland issue. I think that a few Scottish engineers have already said that there has been knock-on across the manufacturing sector. For me, it is the Highland economy that has been doing relatively well over the past couple of decades, particularly up to the north. The oil and gas supply chain tracks right up to cathness. If it begins to lose that economic benefit, that is a concern, and perhaps we risk losing a lot of those. Those are pretty significant advances that we have made over the past couple of decades in trying to equalise the Highland economy in the rest of Scotland economies. Very quickly, Lewis. It is on the other side of it that we are losing innovation. We are losing skills. We have been market leaders for decades now. Much of the innovation that has been introduced worldwide has come from the North Sea through our learnings. We are losing that. The knock-on effect for that goes into university schools, the whole apprenticeship model. Everything could be affected if that continues in the way it is. We will need to move on. Just getting back to the subject of costs. Obviously, one aspect of cost is productivity. Indications that we have seen is that the Norwegian sector has a higher extraction rate than the UK continental shelf. Is there any particular reason for why the UK has a 40 per cent extraction rate while the Norwegian sector has a 60 per cent extraction rate? Because of the infrastructure and the lack of investment in that infrastructure, instead of moving forward when times are good and putting equipment that is able to extract greater amounts from existing reservoirs, the tendency here has been to sit tight while going good, whereas Norway seems to be talking to my Norwegian colleagues and there is a couple of them in Aberdeen waiting for me right now. They seem to be a perpetual motion of going forward with technology and improving and investing in the existing infrastructure. There are good examples as well. Look at 40s, they have just found new oil, barrels, smaller operators coming in are prepared to make that investment, but I think that the deterrent for them is in the way things are operated with the existing infrastructure. I made this comment to Oil and Gas UK that, for every barrel of oil that Apache produces in 40s, they have to pay BP revenue to put it into their pipeline to get it ashore. Nobody does that in Norway, nobody does it in Denmark, nobody does it in Holland, so the big oil that owns most of the infrastructure and takes revenue from it is a deterrent to producing more oil as well because there is a cost element to it. There needs to be a different approach there as well. Just looking at that whole cost element, do we know what the production break-even point is? I know that all the rigs are in different places and therefore they are different challenges, but do we know roughly what the break-even point for oil production is? The North Sea has been in production for 40 years and for 30 of those years the Brent crude price has been below $40 a barrel and it has been as low as $13 a barrel as 1998. Given the price that we have now, why is the industry in the crisis that it is now, when for 30 out of the 40 years that it has been in operation, the oil price has been below $40 a barrel? It was actually at $9 a barrel around 2000. You need to get industry to answer that one, but we cannot get our heads around it either. We do know that they have been paying more for drilling rigs, manufacturing goods and more for engineers, but that is again a lack of investment. That is picking from the same pot rather than developing new people and developing people on the ground that they have. Bad management—there is no question about it, and I think that most of the top players will admit to that. They have not managed it properly. Lack of investment and a lack of drive, which is why we have now got the oil and gas authority to collaborate, has meant that it is a high-cost environment. In terms of oil and gas UK, recent job losses are one of the reasons that I have given, as some have also come from efficiency improvements as the industry looks to enhance its working practices. Is oil companies using the lower oil prices as an excuse to lay off workers in order to boost their margins? To my mind right now, that is what it has become. It has become opportunistic. They have put workers on to two or three weeks off telling them that it was good for work-life balance, that it was good for safety, that it was good for their occupational health. They are now putting them back to three on three off telling them that they need to reduce costs on helicopters. There is no mention of the impact on their health of working 350 additional hours on top of the 1800-1900 hours that they already work. To me, that shows that they are being opportunistic. As I told the meeting yesterday, if we were really collaborating and really working to drive efficiency and maintain a safety culture that delivers, why not collaborate and make a standard in the UK sector, as it is in Norway? Not two weeks on, four weeks off, as it is in Norway. I was too late for that here now, but two on, two off for everybody. Not three on, four off, three on, five off for Shell and BP and Marathon. Not two on, three off for Nexon. Not two on, two off for this one or that one. And three on, three off for the poorest of contractors. Give us a standard and by doing so you can collaborate to a greater extent and utilise helicopter seats, helicopter space, ships. Everything can be co-ordinated and collaborated around by adopting a standard. If we get a view on the future oil price, if we are going to get employment back and investment back, it is about getting that price back and back off again. In the world bank in June, it is estimated that oil prices will start climbing again and be over $60 by 2017. Is that the confidence that you are getting elsewhere? Nobody really knows, do they, but I think that our written submission has referred to the economics of industry fundamentally changing. I think that they have and I think that the introduction of US Shell has been the kind of structural shock that the global industry has not had to cope with. They have had to cope with short term, occasionally very significant fluctuations in the price. It has never had to cope with that kind of structural shock. I have been really encouraging people to read this paper here. It is called The New Economics of Oil by a chap called Spencer Dale, who was until recently the chief economist at the Bank of England. He is now chief economist at BP. His argument is that the economics that have underpinned industry for the last 30 years have changed, which we used to believe about. The industry, for instance, that oil is an exhaustible resource that will eventually run out, that oil flows from east to west, that OPEC stabilises the oil market. None of these is true anymore. In that environment, I think that the IEA's estimate that it will not return to above $80 until 2020, at least is probably about correct. The concern for that is to go back to your previous question, what is the break-even price in the North Sea? Well, people tell me that it is $70 to $80, and certainly international evidence shows offshore production around that category. It is a major concern. I know that it will move on very quickly. I will come back to a couple of your other points. It is massively important that we recognise that the Norwegian sector is running two weeks on four weeks off, and it is still holding that kind of productivity advantage over the UK continental shelf, when that tells you something really quite dramatic about both sectors. Rather than speculating what might underlie that, I think that my call will err on for some pretty robust research to be undertaken on the differences between the sectors that I would go back to again. I think that that would be very important. Good morning. It is instructive. I am hearing Gordon's question. The whole price rose by nearly 6 per cent this morning, just because of national events. Of course, we cannot predict those. I have two questions. One is that you talked about the impact, or the local impact, of downturn in the industry. What conversations have you had with further downstream in terms of the impact of oil production and lack of it on industries such as life sciences? We all know that burning oil, petrol and diesel are environmental considerations that will be addressed, I am sure, over the next few years. What conversations have you had with, as I said, downstream activities and manufacturers who use oil as a base product in their products? It is something that we discuss regularly with all the industrial sectors that we work with, and I think that the work that is carried out by ONS and other shows is very clearly the fallen oil price that has been of significant benefit to a number of industrial sectors. As we tried to say in our written submission, global level of the fallen oil price has been a very significant stimulus to the economy. It is probably the one factor that stopped the eurozone falling into outright significant deflation last year across the UK as a whole. It has been estimated to know if the price holds around about $50. It will probably add about 1 per cent to GDP over the next four or five years. It has been a significant stimulus, but in Scotland, an all-producing nation that is quite reliant on the North Sea, that situation does not hold. We have discussed this in a very constructive way in great detail with the Scottish Government economic team. Six months ago, they thought that the effect would be roughly neutral in Scotland. They are shifting more to a position that it will be negative. I think that the data that we are currently seeing flown through suggests that it will be the case. It is about exploration. In the past three years, I have been doing an exercise about oil and gas in the Clyde and the Atlantic margins. A village was built for oil workers, a port of ardy, a draws and harbour was occupied, and it was acquired. Key workers' houses were built in Allaway. More recently, about half a billion barrels of oil have been predicted just off Rathlan Island. There is now a probe going on to oil and gas in the Clyde and the Atlantic margins, and yet we focus and understand the depression around the North Sea. What push have you made as key players in this in terms of improving exploration outcomes, as referred to in Ian Wood's report? We need to do that now. If the price of a barrel of oil is going to go up to $80 by 2020, we need to be pushing as hard as we can. I make no apology for being very parochial in terms of what might have happened over the past 30 years, but Mr Heaseltine in his wisdom stopped all drilling of a production licence, 262 for BP, because of nuclear submarines at Faslain. What effort can you make to encourage exploration in the areas that I have mentioned? We have already got the clear ridge field off Shetland, which is supposed to be the biggest oil field ever. What efforts can we make to encourage more exploration and find out in an hour and a half in terms of financing and encouraging more exploration activity? I make no apologies for climbing the Atlantic margins. That is the new frontier. We have all recognised that for some considerable time. The efforts that we are making is to ensure that we retain innovation and investment in skills. We retain skills and experience people. We drive oil and gas authority that has been created to drive that agenda, because that is where the skills that have been honed in the North Sea can be utilised on the new frontier. We do not want it to be a frontier for social dumping and exploitation of a foreign asset. We want to exploit the resources of this country for the benefit of the people in this country. That is on the agenda all the time. That is part and parcel of what we are doing. Because the cost reduction would be a lot lower, because it is nearer ashore? It is nearer ashore, yes, but the stuff that is further out is deep water. You cannot use the infrastructure similar to the North Sea. You are looking at shipping and transferring. That is where, again, the Clyde diversification could be utilised quite significantly. The cultural shift would have to happen. My understanding, in simple terms, of Aam Wood's report, was that the idea was that there needs to be greater co-operation and less of the competition and more planning. The benefit of that would be, as Gigan said, that we exploit the resources for the greater good of everybody. We would welcome that. We have been long to the meetings and we support that approach. In a sense, we would have national planning and regional planning, bringing together, at the same point, not just the direct companies in the oil and gas, but other companies that are the customers. We are producing a product that generates energy that goes right across our economy. It is not just buses, lorries that are using oil and the personal consumer, but it goes into factories for all sorts of production as well. As a consequence of the money that is flowing on that, people are earning money, and that is my point. They then spend money, but they do not hoard it. They spend money, and it gets back into the economy. We see things lifting up. We see the upturn coming, not just in the specific industry itself, but we see the waves of investment coming right across the board. That is what we want to aim towards. That is what we want to see when we say that we want everybody to pull them together. I find that many years ago, when I worked in construction with a foreman, he had a very simple statement that he said that the happy crew is the productive crew. I worked in his crew, and I can tell you that he did not crack a whip or break our backs, but we were always ahead of schedule compared to the other building squads where they did have the whipmasters. That taught me, as a young man, the very simple lesson that how do you measure productivity? I use this very carefully to say this. I think that the experience in the Norwegian sector is that there is this level of co-operation between the state, the trade unions and the employers there. I am going to be the same employers that are working on this side of the North Sea, yet the crews are, I used to put carefully, more content because they have all those infrastructures there. They have got the collective burden arrangements, good terms and conditions, and there is not a race to the bottom to make that workforce discontented and unhappy that they become unproductive. I think that there is an element of that going on here. We need to get the national oil companies to realise that the idea of keeping the contractors and everybody else on their toes and having them fighting amongst each other and having them racing to the bottom as well is not a good business approach. Again, that is where we believe that the state intervention comes in to say that the rules of engagement should be this. That is what we expect of you. I will return to the issue of the volatility of the price. I particularly wanted to ask Jake who was around in 1997-98. You saw that 40 per cent drop in oil price between those two years. You must have seen quite an effect on Aberdeen and the economy. There must have been real concern then. What is the difference between then and now? How did the city get through that? In 1986, even in the mid-90s, we had big oil fields. We had infrastructure that was fit for purpose. We had a great demand for oil, especially in the States. Today, if Stevens alluded to America's self-sufficient, that market has gone. The Chinese and Indian economies have dropped off. We have very small oil fields with very old infrastructure. That combination means that this time around, although it was bad in 1986, I remember, all the hotels getting sold off and all the guest houses and Crown Street in a vyingoon. It was bad in the mid-90s. This time around, it is getting bad, but the fear is that it will be bad for a lot longer and possibly in some cases forever. The fear now is that some of the big hubs, some of the older hub platforms, which lots of fields produce into them. If they go down, it wipes out huge areas. The nervousness is an atmosphere in Aberdeen in the industry that I have never encountered in 35 years. I have never seen anything like this in my entire history in the industry since 1980. That is why I am so concerned about what is going on across the board in every aspect of operation. The evidence that you have all given that nervousness is allowing big oil and other companies to exploit people? I take great pride in the fact that we were the pioneers. The workers produced what we have in the North Sea. Yes, big oil invested in us, but it was the workforce at the end of the day that delivered on it. It is that exploitation of our natural resources, because it is still there, but trying to do it on the cheap and on the sly and the way that it is being done—the underhand approach, the lack of engagement. All of that is creating a culture and environment that I have not seen since really since 1986. When we went back—as I said, I got wakened up and told you that you are doing the road along here on Earth 7000—when you went back, you kept your head to it and you did not engage, you did not get involved and the NRB did not require back loom large. I do not think that they are at that stage now offshore, but onshore that is the environment that we are creating. When you sit and represent workers daily who are going through consultations and challenging their selection for redundancy, you get a feel for how deep this fear and concern is for their futures. As I said, it is appalling the situation up there just now. I am glad that I am going to leave at the end of the day for a couple of weeks. I noticed earlier this year that Royal Dutch Shell, for example, we are talking about drilling in the Arctic. I would have thought that that is—I am not an engineer, but it is technically very challenging and requires a huge investment. How can a company like Royal Dutch Shell talk about drilling in the Arctic and then give this impression generally that it is not commercially viable to exploit the North Sea? You would really have to ask Shell, but I know that they have pulled the plug on it now. Four billion down the drain, lots of fines and the reputation tarnished to a point that I doubt they will get back up there again. They will not have it up there any longer, given their record up there. The economics that I do not understand, I do not think that any worker does. What about going forward in terms of—Steven mentioned diversification into offshore renewables? Obviously, that slowed down in terms of investment and the messages coming from the UK Government have put investors off. Do you think that there is any hope there? Do you have any optimism in terms of that particular sector diversifying into that sector? At this minute in time, no, because I do not see any investment, any interest in moving that agenda. To me, it is a no-brainer, but there does not seem to be any real drive up here. I mean, I have seen it down south, around the south coast and up the east coast there, there is a lot of money being spent. Again, it is being done primarily by Dutch companies and Danish companies. We are losing out on that as well. That is why I am worried about the future and that if we do not grasp this, this is an opportunity that we need to exploit. Otherwise, we are going to lose it. I am very interested in the fact that you are saying that you are the hotline for people who are concerned. That makes perfect sense in an industry that is under pressure. Have you made representations health and safety executive directly about that so that they do recognise that those are problems that have been identified to you of a seriousness and a scale? It is not just people who are not very happy about their work but the kind of things that Jake Malloy suggested, but what may be happening in the future and if you have done what responses have you had? We have raised it and we will always continue to raise it. We are totally against the idea of the move towards the three and three rotas. Again, the bounce back that we get from the employers is that there is no evidence to show that it is less safer. In fact, the produce figures to us yesterday at the OCA meeting that showed that there are, in relation to the three and three rotas, less accidents happening. As we pointed out, there are less people involved in the three and three rotas, but the issue that we want them to address is to go and speak to the medics offshore because we are anecdotally being told that medics are being approached by workers who are saying that they have never approached the medic before and have now gone because I am feeling tired. Look at it in simple terms. If somebody came to you from the Scottish Ambulance Service or the Scottish Fire and Rescue Service and the management said that we are coming up with an idea to have three week rotas, we are going to have firefighters and paramedics and police officers as well working 21 days in a row and 12 hour shifts, what would your reaction be? It is the same reaction offshore just because it was acceptable to work 14 days in a truck that it is okay to do the extra seven. The serious concern is that it is not just the 21 days. There are many times when offshore workers find themselves to panic it off the platform for reasons of the jobbers are not flying and therefore they are staying on for the extra few days and they are wanting to get home to their families. There is a serious concern there and we chip away and say to them that the sadness for us is that the hard evidence would only come when there is a significant incident. That is what our greatest fear is, that it is fatigue. There were given figures yesterday saying how many people were maybe going to the medic for medication or for stage or some of that kind of injury. We are emphasising on the mental wellbeing and the fatigue that people are experiencing because that is the feedback that we are getting. Other samples say that there are people who are working 21 days on night shift. They are not just working during the day but they are working nights and they could be coming and finishing their night shift at six o'clock in the morning. The first chopper could be off at seven. They are coming on to firm land here and they may well be living away from Aberdeen and the temptation is because they want to get home to their families to continue driving. We are saying to them that these issues need to be completely stopped and checked so that you have the duty of care to take responsibility and say to the employee that you will be staying in the hotel because we know that you have just finished working on the rest of it. However, what they are doing is saying that if they want a hotel, they only have to ask. We are saying that you need to be more proactive than that and saying that you will stay. There is a very serious concern. As Jake said earlier, the road is that we would prefer, of course, listening to workers who had the benefit of the two on and the three weeks off. Clearly, our objective would be that, when the upturn comes, the two and three is better for me, is definitely the roster that people would buy into. Three weeks is definitely far, far too long, far, far too long. However, again, the industry is exploiting the fact that people are worried about jobs to cover the point that has been raised earlier. As Jake said, every single day, as union officers, we are dealing with more and more redundancy notices. It has been like that now for months. I used to deal with the drilling side. Every day, there were notices coming in. I am dealing with the offshore construction side and its redundancies. It has not stopped. We thought that it would come to summertime, maybe it would start to slow up, but it is continuing. You said that, if there were a car factory on the scale of the redundancies, it would cause alarm. I know anecdotally that, from one family in Lewis, people that they know of an island community realise that they often go offshore to work and allow their families to grow up in the islands. I do not know to what extent—I suppose that some people have the sense that they are itinerant workers who will get work somewhere else—are they able to track the extent to which, when people have become redundant, are they getting back into work? Again, the anecdotal story of fellow countryman yesterday. When the call came through and I saw the email address and recognised that it was Ireland, Southern Ireland, from Donegal. He said to me, he says, lucky for me, Tom, I have a brother in London, I have just been off the phone Tom. He said, if your job is finished at the end of the year, he says, give us a call, there is work that I can get you into. Workers in that industry will, of course, now with social media, be able to keep in touch with each other. There will be some that will find themselves able to get into jobs onshore. They have invested at the time themselves. They have got into a routine. I think that it is a very good point that you make, that the earnings that they are making is what is sustaining them in terms of their family unit. It is paying off their mortgage. It has given them a quality of life that they have become accustomed to, even though they are away from home from time to time. When that stops, basically, again, back to the point that I was making earlier, the social responsibility comes in. You can imagine that if you bring all this together on to the one roof, it is the equivalent to about 12 shipyards closing. If you had all those families living in London, the time would be finished, the city would be finished, but it is dotted all over the place. We are only becoming aware of it because, at a personal level, you know people. I have been in Aberdeen 30 years. I was there in 86. The project that I worked in, in fact, was an unemployed workers centre. I witnessed that bust in 1986 and seen the serious impact of it. I always remember the guy who came in one day and said, I have just been to the bank and handed it through the keys across the counter at them. He said, I am away home to my mum and dad, a young person in the industry who had bought a massive house because they have seen a future for themselves overnight. People, I remember, I think that it was Brit oil. Workers turned up that Monday morning, met by security firms at the doors, marched to their desks. This was the on-shore workers' keys of this and that, off the premises straight away, the humiliation of all that. As Jake said, now we have a situation where it just does not seem to be stopping at all. We cannot say to workers, well, the turnaround is going to come next week. In the drilling side, I was getting told by their own companies that they are looking into 2017, and the earliest kind of penciled in dates around Aberdeaster. They are just saying, earliest, possible, not definite. I am very specific about whether unions involved in oil and gas UK's efficiency task force. We were invited in January to participate and we asked if they could ask their member companies to stop temporarily what they were doing by way of new rotas and cuts to terms and conditions. We were told that they could not mandate further member companies. We were then forced to go back to our collective bargaining partners and try to negotiate with them. We have endeavoured to do that throughout the year without any real success, which is why we are in the situation that we are in now. However, there is a tinkle like STUC and the unions have met recently with oil and gas UK through the energy jobs task force. They have agreed through their ironically termed shared principles and values approach that we will meet with the trade unions to discuss our issues, so we are getting there. However, to answer your question about health and safety, we meet with the HSE regularly and we meet recently with oil and gas authority and the CAA, so we do engage with all of the regulators about health and safety. That is the very last question from me. I was very interested in what you had to say about UK seafarers, numbers that are being excluded from the North Sea because of loopholes in the legislation. What would you need to change in the legislation in order to protect the safety in that sector and protect those jobs? That is one of the frustrations that I have. I have a letter in my pocket here that I have been asked to give to every MP, but I am not going to because it is not worded as it should be. However, what it is talking about is the fact that no one from the UK can go and work off shore Australia, Canada or Brazil or Gulf of Mexico or America or even some regions of Africa because of the privatised rules in which employment must be drawn from the state and only when there is a shortage of skills can you then look to engage workers from out with that jurisdiction. That does not happen here. We have ships with British workers that sail to these areas and they have to be off those vessels and be replaced by those jurisdiction nationals. That is not happening here. The only way I can see that could be averted, the demise of the British stroke EU seafarer would be to have an EU caviar, an EU cavitage structure that restricts employment on vessel servicing our exploitation of our natural resources to EU and UK seafarers paid at minimum wage. I would even accept that as a startling point. Otherwise, as an island nation and as an oil and gas producer, we are not going to have any bit of seafarers. That is a fact. They have already taken a 25 per cent cut to their wages. They are only earning £23,000 a year. They are now going to wait to work six on and six off in the North Sea to try and save their jobs, to try and compete. It is not a good place to be. Can the UK Government do something while the European Union works its way through the stabs and such a scheme, if it feels like it will take a long time? Is there not something immediate that could be done at a UK-level round employment legislation? Extending national minimum wage to seafarers or extending the tier 1, tier 2 immigration provisions for work permits might facilitate or at least restrict it in some way, but without that, it is the end for British seafarers. Decommissioning has been mentioned but only slightly, and I would like to explore that a little bit with you. I get the feeling sometimes that the Government is still a bit nervous about saying anything other than that decommissioning is a long-term opportunity, but there is decommissioning work out there already. Some of those bidding for it in Scotland are worried that they are going to lose out, that that work will go overseas because we are not ready, either because of skills or infrastructure, some of which is publicly owned and has not been invested in. Is there not a danger in the Government being a little bit too cautious to embrace the opportunities that come from decommissioning because it worries about sending a signal that the North Sea is going to shut down before it is ready? Is there not a danger that we end up, as happened with manufacturing the high-quality jobs in the wind industry, for example, seeing somebody else get all of the benefit? We carry on paying for that work one way or another, but we do not get that work in Scotland. I agree more yet. My understanding is with the developments up in Aberdeen with Aberdeen harbour when they are going to move up to Cove Bay. It could be in a position and should be in a position to do some decommissioning work, that if there is work going, we should be trying to use the term carefully to keep it in-house, keep it on our own doorstep because it generates jobs and that infrastructure should be there to do that. Again, that is back to the point that we made earlier, it is about the planning of it and it is about saying again to the oil and gas industry, what are you going with that? We can do that here. Why are you taking it somewhere else? So we start pointing the finger at them and making them more accountable and then cover the point that was made, the question that was made earlier, what could a government do? Well, this is your house and you say these are the rules, you are going to operate within it, we are going to set the rules, we are going to say this is what is happening and I think there needs to be a wee bit more of that because they have it too easy for themselves. There seem to be the ones that are dictating everything and it is about time that we turn that power relationship round and I think if we do that then at least we will move some way towards that kind of planning to make sure that we are going to fight against the worst aspects of the industry as it will one day, probably beyond our lifetimes, the oil and gas might not necessarily be there. So these ideas that are in their infancy, we should be proud that we are still looking at that whilst we are dealing with the immediate situation because then our children and their children's children maybe will look back in history and say, well thank God we are back in the early part of the 21st century, people did have the foresight to see 50-100 years down the line that this is the way we are going to move towards. But we have an immediate responsibility to the people we represent, which is why we will proportionately concentrate most of our time on the oil and gas. But decommissioning is going to come and as you say it has happened and it is happening, so why shouldn't it be done on our own doorstep? You mentioned planning, economic planning and you mentioned that in your opening remarks as well. I take the view as well that economic and industrial planning has to be part of how we manage change, how we manage a transition. Whether you take the view that that transition needs to happen now or as Fergus Ewing takes the view that there will be another 40 years of oil and gas extraction, that transition, that change has to happen. And if we don't want people who are currently dependent on an industry to be left on the scrap heap when that change comes, we need to plan for it. But I want to ask whether you are at least open to the possibility that that transition is happening now, that it is not in the long-distance future. I am going to quote from somebody here. Take for example the IPCC's estimate of a carbon budget that would likely limit global temperature risks to two degrees above pre-industrial levels. That is the target that the world is trying to move towards. That budget amounts to between one-fifth and one-third of the world's proven reserves of oil, coal and gas. If that estimate is even approximately correct, it would render the vast majority of reserves stranded. Oil, coal and gas would be literally unburnable without carbon capture technology, which we don't have and in any case doesn't apply to transport fuels. Now that wasn't an environmental activist speaking, that was the Governor of the Bank of England, Mark Carney, speaking to a finance industry audience. And he went on to prefigure the possibility that any remotely credible climate change deal will result in a flight of investment from fossil fuels. Is it not seriously a danger that if we don't begin that transition now, if we don't invest in that transition now, we're going to be seeing not in 40 years but over the coming years a continuation of the situation that's already begun in the north-east. We need to begin that transition now and make sure that we're investing in the jobs that will last, not for a few years or a few decades but for the long term. Completely agree. We've got to do it now. I think, as I said earlier, there are aspects of what's going on in other industries, the steel industry, the debate around trident and others, which dictate that we should be doing it. And carbon capture is another area where we were leaders in that and we've, whilst we've still got the possibility of it happening, to some extent, we should be investing in that and delivering on that. I think that's another role for the oil and gas authority to exploit as well. So, yeah, completely agree. Do you, I wonder if Stephen Boyd might comment on this or do you see any sign, because I don't, that the Scottish Government's economic strategy is placing its approach to the oil and gas industry in this context? Well, I think in that respect what's been interesting to me, although the Scottish Government have been very active through the end of the jobs task force and driving a lot of helpful activity, I think, in the north-east. They have really not grasped, I don't think, the change in economics over the sector and what that means for Scotland. I was extremely interested when, I think, just a matter of weeks ago, the council of economic advisers were before you saying quite bluntly that they hadn't even considered the changes in the north sea over the last few years, over the last year and what that meant for Scotland, which I found really quite remarkable. Which was particularly curious to me, given that Professor Muscatelli is the leader of an institution, which is the first university in Europe, to begin a fossil fuel divestment programme. I think you're all like Tommy, I agree with much of what you have to say. I think even if you took climate change right out of the equation and you focused on the change in economics of the oil industry that I discussed earlier on, I think that would shift you towards a position where you were looking at that transition happening much earlier than was previously anticipated. I was reading a stat this morning that says, against BPE research, saying that by 2035 the EU will be using the same amount of oil as it was using in the 1960s, even although the GDP will have quadrupled in that time. That is absolutely mind-boggling. The UK and the US reached peak oil usage over a decade ago and it's been on a continually downward trend ever since. All those things taken together with the change in economics would suggest that we'd have to be planning for a shorter lifespan in the North Sea than what we previously considered. The problem is that the debate is so polarised in economic policy as you know that any talk of economic planning is immediately pinched and told the central planning. We're talking about the Government and private sector trying to manage a transition process more sensibly and otherwise be the case to maximise economic and environmental and social benefits for the country as a whole. I think that if you take that as your starting point, you would have a different approach to the industry than we have in the world. Thank you very much. Most of the questions that I was going to ask have been answered. The point that Jake Malloy made is that Britain has been a seafaring nation for hundreds of years, the British merchant navy, but sadly it's been on a downturn and I certainly agree with the points that you made earlier. With the greatest respect to Mr Campbell, it's not our house, it's the UK Government's house in regards to oil and gas. My brief question is what, do you feel that the oil and gas authority, which was established in April 2015 by the Department of Energy and Climate Change, has worked and what involvement are they making? I wish you well and all the negotiations and I agree with all the points you've made. I didn't say that it was a Scottish house. I used the term our house in previous interviews. I've given a pointer out that it was a UK continental shelf as well. The pointer I was making was when you own a house and you've got somebody coming in to do something in it, you can decide the rules. That was the point I was making. I'm not thinking of OGE too early to say whether it's worked or not. I'm not thinking that it would be unfair given the scale of the task before at the time it's had. We had a very constructive meeting with them just a matter of weeks ago, very impressed by the chief executive who I believe is before you next week. They've got a huge task. I think that the early signs are promising, but the proof, as ever, will be in eating later on. I think that they've made a decent start. I think that we've certainly got the sense that they understand the nature of the challenges before them and the scale of those challenges and certainly understand that it has to be a collaborative process and certainly seem to value the trade union voice as part of that. Again, we'll just have to see if things pan out over the next few years. They've got a great title to their publication, a call to action. I love that title. It rings through with me, but as Steven said, I think it's too early. The big question that opposed to Sir Ian Wood when he took us up to brief his report and before the AOGA was established was the regulatory leverage. I still don't understand that, because if we've got poor performers and poor operators who refuse to collaborate and will not invest in their infrastructure and will not maintain their infrastructure, Sir Ian Wood said that he could see their licence revoked. If we set standards and we expect those operators to meet those standards, if they don't meet them, what do we do with them? Sir Ian suggested that we just get another operator in. I asked Sir Ian what happens if we can't get another operator in. What's plan B? What are we going to do with the infrastructure? Nobody yet answered that question. I suggested to Sir Ian that perhaps we could go back to the good old premise of statured days and have a UK oil plc, but an oil type approach, which Sir Ian laughed at and suggested that it would never happen. However, the way things are going right now, I think that we're going to reach that point at some stage and the decision is going to be taken. What do we do with it? Thank you, Sir Ian. Thank you very much. We've gone a little bit over time, but I think that that demonstrates the breadth of the topic and the questions that members want to ask. I thank you all very much for coming along and giving of your time. It's been very useful to the committee. We will now suspend and go into private session.