Labour's GB Energy could finally do what BNOC was intended to do

In 1975, the Labour government created the British National Oil Corporation and located its headquarters in Glasgow, on St Vincent Street. The North Sea was in its early days and it is always worth remembering that when Labour lost office in 1979, it had not received a penny of North Sea revenues.

BNOC should have become the equivalent of Norway’s Statoil, underpinning energy security, taking stakes in the North Sea and partnering in offshore ventures around the world. It was these foreign investments which eventually created Norway’s sovereign wealth fund, rather than domestic royalties.

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One of many reasons why bringing down the Labour government in 1979 was a historic tragedy – probably the most significant General Election in my lifetime – was that all this was brought to an abrupt end. Instead, the oil revenues went to paying – with uncanny symmetry – for the cost of additional unemployment.

When elected Tory leader, one of Margaret Thatcher’s first commitments was to privatise BNOC, which she duly did step by step. By 1988, the UK became one of the few oil producers in the world without a national champion. Anyone who complains about “the difference from Norway” should have their noses rubbed in that history.

The creation of GB Energy could be an opportunity on a similar scale if the commitment is matched by necessary powers. It is scandalous that, so far, the UK’s seabed has been licensed to private companies, including several foreign state entities, without any vehicle for public participation.

In Scotland, the disgrace is compounded by the fact that it has been leased at knock-down prices, compared to the rest of the UK, on the utterly-unproven basis this will result in higher levels of commitment to the domestic supply chain. That will take years to disprove by which time the politicians responsible will be long gone, one hopes.

The first step in the direction of reality should be an urgent audit of how much of the value chain in offshore wind already licensed is likely to remain within the UK or Scotland. The answer will put in perspective the scale of task which awaits GB Energy domestically, never mind the rest of the world which should become the objective.

Labour should recognise but not flinch from the challenges it will face to lead a radical energy transition. At present, we don’t build a single wind turbine of size in Scotland or the UK. To go from that to being a renewable energy superpower will remain fanciful without sustained commitment from government and an agency armed with powers, expertise and resources. There can be no half-measures.

This can be a huge electoral positive not just in Scotland but throughout the UK which requires a lot of work between now and the General Election. We have been hearing about renewables revolutions for years without much evidence on the ground in terms of infrastructure or jobs. Credibility will depend on evidence of serious, strategic thinking.

This is where we come to the negative which Labour still has to extricate itself from. An incredibly stupid piece of media briefing last month set the scene on exactly the wrong terms. It was about what Labour would ban rather than deliver. A virtue-signalling ban on new North Sea developments was the headline which its instigators sought and was the last thing Sir Keir needed.

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Since then there has been some softening of the position. North Sea licences granted before an election will be respected. I expect that as the impending collision with reality for an incoming Labour government moves closer, it will lead to ongoing readjustment on grounds of energy security if nothing else. But it is still difficult to see why Labour volunteered for an electoral millstone.

I hope  Dir Keir noticed a poll showing 24 per cent support in Scotland for the policy of no new North Sea licences and inquired how many potential Labour voters that minority is likely to include? Until there is a satisfactory answer to why it is more virtuous to import than use a domestic resource, for as long as we need oil and gas, common sense will remain an obstacle to persuasion.

One might think that, just when Labour has learned the lesson that “banning” new nuclear power stations opened the door to gross over-dependence on imported gas, it might be cautious – on security grounds alone – of promising to “ban” any form of indigenous energy on which we might in future depend.

Getting rid of that word “ban” would strengthen a Labour government’s position with the industry. One role of GB Energy should be to constantly challenge them on their commitment to the energy transition. I certainly wouldn’t take their green words at face value. That will necessitate working closely alongside them to ensure they play their part, rather than putting them on a counter-productive exit route.

On carbon capture and storage, hydrogen and all forms of marine energy, there are synergies which can be developed and then exported around the world. The question that Labour has to ask itself over the next few months is whether that is more or less likely if it is accompanied by a prohibition on investing in what they already do.

I think the logic of that argument will eventually prevail so meanwhile I am happy to concentrate on the positive prospect of a powerful state agency leading an energy transition that can bring huge economic benefit to every part of the United Kingdom and Scotland in particular. It was vital in the 1970s and it is equally needed now.

Brian Wilson is a former Labour Party politician. He was MP for Cunninghame North from 1987 until 2005 and served as a Minister of State from 1997 to 2003.