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Scottish businesses back net zero but fear ban on oil exploration

  • September 2023

Businesses support net zero aims but don’t believe stopping North Sea exploration is good for the economy, according to a new quarterly survey of Scottish businesses commissioned by 56° North and research group Diffley Partnership.

The latest Understanding Business report has found that more than two-thirds (68%) of Scottish businesses surveyed are supportive of Net Zero goals but almost three-quarters (74%) also fear that stopping oil and gas exploration would not help the economy.

Cost is seen as a significant barrier and more than a third cite a lack of government funding as a barrier to achieving Net Zero.

The findings of the independent nationwide survey, which was conducted in August and September, come as Prime Minister Rishi Sunak announced controversial plans to scale back the UK’s move to Net Zero including extending the period before scrapping petrol and diesel cars to 2035.

The survey of over 500 businesses across Scotland also shows continued pessimism about prospects over the coming year though many feel that price increases may have peaked.

The results also suggest that First Minister Humza Yousaf’s more inclusive approach to business may be beginning to reap dividends. While businesses are still negative about both the UK and Scottish governments, they are more supportive of the Scottish Government.

Almost three-quarters of those questioned (74%) as part of the latest Understanding Business report said that they believe the SNP/Scottish Greens government and Labour’s position on ending North Sea development now, would not be beneficial to the economy.

The level of support for oil and gas exploration could prove problematic for Labour in the run up to the Rutherglen and Hamilton west by-election next month. Labour leader Keir Starmer caused concern in parts of Scotland earlier this year when he committed to ending further exploration. The survey suggests Scottish business is strongly opposed to Labour’s position.

The survey is produced by research specialist Diffley Partnership and communications and public affairs consultancy 56° North.

Mark Diffley, Founder and Director of the Diffley Partnership, said: “The second wave of our Understanding Business survey allows us to start measuring trends in the business community and build a detailed picture of sentiment and attitudes.

“It is clear that, amidst the ongoing cost of living crisis, businesses remain downbeat about the current economic situation and optimism about the next 12 months is scarce. It is also clear that, despite the majority of businesses supporting the Scottish Government’s ambitions on achieving Net Zero by 2045, significant barriers remain to achieving that goal and businesses are looking to both Scottish and UK Governments for greater support.”

John Penman, Managing Partner at 56° North, said: “The Prime Minister has divided opinion and even his own party with his bold approach to delaying the move to Net Zero. This survey demonstrates that while business supports Net Zero, its worry over ending oil and gas exploration shows that it may be sympathetic to a more gradual approach.

“The survey also offers some positive news for the First Minister early on in his relationship with Scottish business, though it is clear that business believes more Government support is needed.”

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