Photograph: Murdo MacLeod/The Guardian
People in Aberdeen are a total of £45,000 worse off since 2010 after suffering the worst growth performance in the UK over the last decade, according to a report exposing the dangers of dependency on the fossil fuel industry amid the climate crisis.
Warning that every part of the UK had been “levelled down” after years of weak economic growth, the Centre for Cities said the Scottish oil and gas capital had lost out the most of the 63 UK towns and cities it had analysed.
Aberdeen was one of the most prosperous places in Britain after an energy industry boom in the 2000s, with about a third of jobs in its export base – the part of the economy that trades with the rest of the UK and the world – directly related to oil and gas.
However, the granite city has suffered over the past decade from an energy sector slump amid the US shale oil revolution, highlighting the risks of being dependent on an industry exposed to increasingly volatile global shifts.
The Centre for Cities said near-stagnant progress across the UK since the Conservatives came to power in 2010 had left people with £10,200 less to spend or save on average than if the economy had grown at pre-2010 trends.
However, there were differences in the size of shortfall for some towns and cities, and Aberdeen had experienced a shortfall more than four times the national average.
The people of Burnley were also out of pocket; there, the average person was £28,090 worse off, while people in Cambridge and Milton Keynes were poorer to the tune of £21,000.
Highlighting Aberdeen’s boom and bust tendencies, the report said gross disposable income per head in the city was £45,240 lower on average than it would have been if the local economy had continued to grow at the rate seen between 1998 and 2010.
“Aberdeen has gone from being one of the best performers to [having] a pretty disastrous decade,” said Paul Swinney, the director of policy and research at the Centre for Cities. “All of this stems from over-reliance on one industry, which has knock-on effects.”
The report found that while an estimated 9,000 jobs had been lost in areas connected with oil and gas, this was likely to have affected the amount of money spent in the city and hurt other areas. The city suffered a 30% drop in retail jobs, compared with a 6% downturn nationally. House prices have also been hit, with prices only 3.4% higher in 2022 than in 2010, compared to a 50% rise nationally.
It comes as Rishi Sunak doubles down on anti-green policies to create a wedge issue with Labour before the general election, while pushing to advance North Sea oil and gas exploration to “max out” the UK’s reserves.
However, economists – including the former Bank of England governor Mark Carney – have warned that the strategy could cause Britain to fall behind its global competitors amid the transition away from fossil fuels, while leaving the nation too heavily invested in the “sunset industries” of the past.
Swinney said the UK had painful past experience of the transition away from industries including coal and shipbuilding during the 1970s and 1980s.
“Notwithstanding the shorter-term policies the government has announced, you would expect that oil and gas is not going to play as big a role in the next 50 years as it has in the last. The question for Aberdeen and the rest of the country is about the transition.”
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