US president to meet the UK and Scottish leaders, as trade and renewables policies loom large in push for growth
Good morning from Edinburgh, where protesters are warming up to voice their displeasure at Donald Trump’s arrival in Scotland this evening.
Licence to drill
Trump’s visit to his two golf resorts — in Ayrshire and Aberdeenshire — will include meetings with Prime Minister Keir Starmer and Scotland’s First Minister John Swinney.
Both leaders will be hoping to leverage Trump’s warm feelings towards his mother’s homeland as talks seek to refine the thin UK-US trade deal.
Most Scots, however, seem unmoved by his ancestral links. Ipsos polling in February found 71 per cent of Scots hold an unfavourable opinion of the US president, compared with 57 per cent in the rest of the UK.
Trump’s visits — this is his fifth since 2008 — have mobilised many protests, from city-centre marches to Palestine Action’s vandalism of his Turnberry course in March over Gaza. There are already three demos planned for tomorrow, including one at the US consulate in Edinburgh.
The late comedian Janey Godley’s “Trump is a c***” placard displayed outside Turnberry was perhaps the most vivid representation of this strain of Scottish sentiment.
The resort, where the president will relax over the weekend, has been encircled by a metal fence amid road closures, airspace restrictions and an elevated police presence.
Balancing the president’s controversial profile with the trading interests of both Scotland and the UK will occupy the leaders’ minds.
Between raising the horrors of starvation in Gaza and protecting Scotch whisky exports in delicate tariff talks, it would be no surprise if Starmer and Swinney face questions over UK energy policy, a favourite topic of the president.
They are both somewhat paralysed by the polarised debate over whether the focus on renewables, which are increasingly criticised as too expensive, should be complemented by a boost to North Sea oil and gas despite UK climate commitments.
When the president travels north next week to open a new course at his resort near the UK’s oil capital, Aberdeen, Trump will be greeted with the sight of an offshore wind farm he spent years unsuccessfully trying to block.
“They should get rid of the windmills and bring back the oil,” he said earlier this month, citing turbines’ detrimental impact on the beauty of Scotland and Aberdeen’s abundance of hydrocarbons. The energy transition is indeed a hot topic in Aberdeenshire.
“Drill, Scotland, drill,” is Reform UK’s pitch to its growing support north of the border, echoing Trump’s call for maximal oil and gas output.
It resonates with many Aberdonians frustrated at declining investment in the maturing North Sea basin who say the Labour government’s increased Energy Profits Levy (EPL) is exacerbating the pace of job losses.
The so-called “windfall tax”, introduced after energy profits soared after the Russian invasion of Ukraine, is a misnomer given lower prices, they argue.
Revenues from the EPL have not been included in HMRC’s monthly tax receipt data for the past three months, said Sheena McGuinness of audit firm RSM in a note this week. She expects the revenues to continue a “broadly downward trend”.
Redundancies are mounting as the decline in the oil and gas sector outpaces renewables jobs growth, leaving the once-booming city bereft. Marine engineering expertise is vanishing, eroding the skills base and supply chain for offshore wind.
Industry lobbyists are calling for Rachel Reeves, UK chancellor, to cut the EPL in her autumn statement to encourage investment.
OEUK, a body representing offshore energy, claims the UK could meet half of its oil and gas from the North Sea, double current projections, with additional output injecting £165bn extra into the economy.
Given the UK requires 13-15bn barrels of oil and gas by 2050 to align with net zero targets, maximising domestic production would reduce imports of less environmentally friendly gas from abroad, it argues.
The polarising debate pits green activists against net zero sceptics — epitomised by Reform UK’s Nigel Farage, who would scrap support for renewables.
Uplift, which campaigns against fossil fuels, said Trump’s energy position confounds reality as new exploration licences would reduce gas import dependency by under 2 per cent and new drilling is incompatible with UK climate commitments.
Ed Miliband, UK energy and net zero secretary, is regarded as a bastion of the climate consciousness that fears reverting to oil and gas would jeopardise the rollout of renewables needed for the UK’s target of decarbonising electricity by 2030.
But some Labour politicians are pushing for more flexibility around Labour’s manifesto commitment of no new exploration licences. Easing the gradient of production decline would save jobs and boost growth, they say.
Gail Anderson, a research director at Wood Mackenzie, believes the Treasury is heading in that direction, even if Reeves refuses to heed calls to fast-track her replacement for the windfall tax to 2026 from 2030.
“There is a third way,” said Anderson. “You can get growth going in renewables without letting the North Sea wither — we need workers and companies investing to create cash flows to plough into low carbon technologies and renewables.”
Swinney has yet to clarify his position — perhaps unsurprisingly, given that energy policy is reserved to Westminster. The Scottish National party, while no longer in coalition with the Greens, has a strong climate-conscious constituency, especially among the young in urban areas.
But Stephen Flynn, the SNP Westminster leader who represents Aberdeen, is standing in next May’s Holyrood elections.
Regarded as a future leadership candidate, his clearer stance on protecting traditional oil and gas jobs could add heft to the growing national debate over the North Sea’s role in economic growth.
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