It was fascinating to see the recently announced plans from the UK government – investing £20bn in a network of small modular reactors (SMRs) to achieve its net zero targets – threatening to go nuclear between Westminster and Holyrood.
The project aims to decarbonize electricity generation across the UK, but with the Scottish Government’s opposition to new nuclear energy capacity in Scotland, its stance poses a significant hurdle to the use of SMRs within the country.
Critics of SMRs have voiced apprehension that the technology remains untested and could suffer from cost overruns and delays, echoing the challenges faced by larger nuclear projects.
But, with Rolls-Royce and GE Hitachi leading the development and already selecting sites for their initial stations, UK Energy Secretary, Grant Shapps, has hailed the investment as positioning Britain at the forefront of global innovation.
For now, it’s a hard no from Holyrood, but with the plans expected to unlock billions of pounds of private investment ahead of the government’s target to decarbonise electricity generation by 2035, I’m inclined to think the Scottish government’s opposition to the scheme may soften.
There’s no escaping that Scotland must wean itself away from fossil fuels at some point in the future though. So, parallel to the recent nuclear energy deliberations, it was interesting to see that the Scottish government has also been exploring the potential of hydrogen energy.
Environmental campaigners, Friends of the Earth Scotland, last week accused hydrogen companies of lobbying Scottish politicians since 2018 and alleged that the Scottish government is “greenwashing” hydrogen as a fuel.
However, a Scottish government spokesman was quick to swat away the claims and defend hydrogen’s potential, stating it could facilitate an energy sector transition and bring tangible economic benefits, with the potential for Scotland to become a leading nation in renewable hydrogen production and export.
Amid both of these energy developments, it’s clear to me that without a concise plan for transitioning to greener energy and having less reliance on fossil fuels, the Scottish economy faces some serious challenges.
This was confirmed by a recent report from the One for One campaign which highlighted the risks facing the UK’s financial services sector alone due to an energy transition and the potential collapse in the value of fossil fuels.
The report warns that approximately 500,000 jobs could be lost, and the UK might need to spend over £600bn of taxpayer money to rescue the sector, if it fails to prepare for this transition.
Drawing parallels between the 2008 credit crunch and the potential financial repercussions of shifting away from carbon-intensive industries, the report underscored the importance of financial institutions holding enough capital to cover potential losses resulting from new regulations aimed at achieving net zero emissions targets.
The report predicts that the shift to greener energy sources will make it harder for companies to sell oil and gas, leading to a reduction in the value of carbon-heavy assets like fossil fuel shares and loans. This, in turn, could harm institutional investors holding such assets.
Scottish stakeholders within the financial sector commenting on the report emphasised the need for a carefully planned transition with clear government policies and proper regulation changes.
It was perhaps comforting to read that they believe the Scottish financial sector is not yet facing stranded assets, but their warning on the importance of investing in long-term, low-risk projects, particularly in renewable infrastructure, should be well heeded by the government.
What is certain is that the Scottish economy stands at a crossroads, staring down both the challenges and opportunities presented by the UK’s energy transition. Navigating away from fossil fuels requires careful planning, clear government policies, and proper regulation changes to ensure a just transition while fostering sustainable investments and securing a prosperous future for Scotland.
However, with the Greens still appearing to hinder the SNP’s ability to govern by impeding on sensible business decisions relating to investment and the economy, only time will tell whether we can do this under the current administration. After all, being able to strike the right balance between economic growth and environmental sustainability will be paramount as we chart a course toward a successful, greener, and more sustainable future.
Tough Decisions and Trust in Staff
When a company’s owners all look at retirement, what happens to the business they leave behind?
The usual answer is to find an external buyer, such as an existing competitor or other investor. There are alternative ways though, as Tough Construction Ltd has recently shown.
Shareholders Bob Leishman, George Duncan and Kenny MacKenzie took over Tough Construction together after a management buyout in 2007 and now, after 16 years, they have successfully retired.
Like the previous owners in 2007, they looked internally to pass the torch. Rather than a manger buyout, it became clear that an employee trust was a serious option for Tough Construction’s future.
With the help of Ownership Associates and the Scottish law firm Wright, Johnston & Mackenzie, the company is now in the hands of those that know it best – its 500 plus employees – making it the largest employee-owned firm in Scotland.
A move like this has benefits that go beyond simply sentimental reasons. By selling to an Employee Owned Trust (EOT), shareholders can avoid capital gains tax, which makes it a good deal for all parties.
Employment Ownership Trusts are a government initiative, and despite the name it does not involve direct ownership by employees, but rather a “controlling interest” in the company is transferred to an ‘all-employee trust’.
It’s reassuring when the employees believe in the business and each other to such an extent that they back it with their own pockets.
It Made Me Laugh
Too Busy? Aye, Right!
Travel website, The Thinking Traveller, has conducted analysis into which European tourism spots are the most overcrowded, with Edinburgh Castle taking the unfortunate top spot.
Many Edinburgh residents complain there are too many tourists clogging up the old town, with businesses catering to the needs of tourism rather than locals, but even they might struggle to believe this discovery.
The Royal Mile is incredibly busy, but if you have ever waited in a queue for the Sistine Chapel or the Palace of Versailles you might struggle to take this at face value – and rightly so.
Apparently, the robust analysis included looking for phrases such as “too busy” on TripAdvisor. Conclusive proof, I’m sure you would agree.
It Made Me Weep
A Crisis in Care
Scottish Care has stated that one care home closes for good every week in Scotland.
National Records of Scotland projects that the number of people aged 65 and over is expected to grow by 29.7 per cent by mid-2045.
Together, these are worrying figures.
Many operators close to the brink are family run businesses that take on state funded patients. So, the recently agreed upon six per cent increase in funding between care homes and councils is unlikely to be enough for their long-term sustainability.
I’m usually critical of where taxpayer money is spent, but it is easy to see that the government should do more to make caring for our most vulnerable a viable field in which to operate.
