Now that Labour is firmly in Government, with an almost overwhelming majority, it’s about time someone analysed their green policies and how they’ll affect Scotland.
At Scholes CA, all the directors have been analysing the policy in depth – not least because many of our clients have a vested interest in the way the policies might affect them.
Spoiler alert: There’s positives and negatives to Labour’s plans for Scotland.
If you’re a Scottish business owner (especially a farmer or someone involved in the renewables sector), I highly recommend you read on to find out exactly what’s coming our way over the next few years.
The green policy in brief
The main headline of the policy is “Make Britain a Clean Energy Superpower” and in many ways this really shows you where the Government are heading with their agenda.
In short, Labour wants to:
- Set up a Great British Energy company to reduce bills.
- Achieve energy independence from the likes of Russia’s Vladimir Putin.
- Create 650,000 new high-quality jobs (many of them in Scotland).
- Build and modify homes to be warmer to reduce fuel poverty.
- Force water companies to clean up British rivers.
They have said they’ll maintain “a strategic reserve” of gas power stations to ensure security of supply.
Under the plans, the North Sea will undergo a phased and responsible transition in Scotland and the North East of England, while recognising the ongoing role of oil and gas in the energy mix.
They plan to maintain oil and gas contracts until they run out but have said they intend not to renew them or allow any more to be agreed.
All ambitious targets to be sure, but the policy isn’t without its criticisms.
Criticisms
For a start, it’s obvious that “transitioning” from oil and gas is likely to put many people out of work in that industry. Presumably they intend to offset this by creating more jobs in the renewables sector.
With onshore wind and solar now back in the picture, criticism has also emerged from farmers who are worried about the impact to livestock and wildlife that turbines and solar panels would have.
This also brings up questions of food security – if farmers can’t keep farming, where is our food going to come from?
It’s all well and good being independent from Putin’s energy but do we want to rely on other nations for our food supply? Definitely not!
Equally, creating clean energy is great, but the decarbonisation of homes (getting rid of gas and reducing inefficiency) is a herculean project that must be done in concurrence with the energy plans.
Having one without the other is fairly pointless – so that’s double the work that needs to be done!
On top of this, in February 2024, Labour cut their original pledge for the project of £28 billion in half, suggesting they might not have full control of their budgeting to manage the green changes they intend.
Perhaps they do know what they’re doing with the money side of things, but time will tell.
The impact on Scotland
We’ve been calling for investments in Scotland for some time and it seems we now have a Government in Westminster that’s keen on the idea.
Certainly, we’re all pleased that the Labour Party are taking green energy and environmental impact seriously.
When discussing the issue at Scholes CA, two things repeatedly came up:
- The impact on Orcadian and Scottish farmers.
- The employment and investment opportunities.
Fundamentally, our team was split into two camps.
One group argued that Orkney (where Scholes CA started) and Scotland’s wider farming community relies on cattle and livestock for much of their income – wind turbines and solar panels would have a significant impact on these industries.
The other group suggests that the employment opportunities and investment into the Scottish economy far outweigh the potential downsides.
Both arguments, in my opinion, are fair and have their merits.
A word to our clients
We have clients in the farming sector and the renewable energy sector (as well as many other industries), and we’ve been listening to your thoughts recently.
There’s plenty to discuss and prepare for.
For example, we’ve been looking into ways to help energy producers capitalise on the policy through tax planning advice and investment strategies.
Similarly, we’ve been advising farmers on how to protect their businesses and create robust growth and profits.
We genuinely believe that throughout the changes to come, both industries can profit and work side by side with one another.
However, it doesn’t hurt to speak to a tax adviser or accountant for guidance aimed at your specific business and personal situation.
With that being said, our team would be happy to discuss Labour’s plans one-on-one with you so please get in touch with one of our directors!
