By MARK MACKINNON
Thursday, April 11, 2019
For decades, the dark North Sea waters that lap at this city's bustling harbour have provided bounty after bounty to residents of Aberdeen.
There are fish, plenty of them, in those chilly depths, and beneath them lies an even more lucrative catch: oil.
But with Brexit on the horizon, there's uncertainty over what the North Sea will deliver next. A pair of studies have forecast that Brexit - whatever form it takes - combined with Aberdeen's international work force and its reliance on export-focused industries such as fishing and oil production, will result in a perfect storm that will see this port city in northeastern Scotland hit harder by Brexit than anywhere else in Britain.
Residents say such a future would be doubly bitter given that Aberdeen, like the rest of Scotland, voted strongly in favour of remaining in the EU in the 2016 referendum that set Britain down its murky current path. If Brexit goes as poorly here as the studies predict, some say a fresh vote on Scottish independence - with an eye to rejoining the EU - could quickly follow.
Aberdeen - a grey city of granite buildings that can sparkle when the sun hits them just right - was already struggling before Brexit became part of the equation.
As oil prices fell from over US$100 a barrel in 2014 to less than US$30 just two years later, the city's fortunes tumbled with it. As job losses and pay cuts rippled through the industry, a city that was transformed from a fishing town into "Europe's oil capital" by the 1970s discovery of offshore reserves, just as suddenly became a place of deserted properties and food-bank lineups.
And then, just as oil prices started to inch back up (the current price is near US$70), and the local economy started to recover along with it, the June 2016 vote to leave the EU delivered a fresh shock. Almost three years on, the torturous Brexit process - best summed up by a series of parliamentary votes last month that saw MPs in London reject all eight proposed courses of action - is an unhappy obsession right across Britain. But Aberdonians are watching with an extra sense of unease.
One study, carried out by the Centre for Cities, a non-profit research centre, forecast that a "hard Brexit" that sees Britain depart the EU without a free-trade deal would cause a 3.7 per cent drop in Aberdeen's economic output. That would be almost a full percentage point worse than the fishing-and-financial-services town of Worthing, in southern England, which was ranked as Britain's second-most-vulnerable. If it's a soft Brexit, with trade links to the EU maintained, Aberdeen is still predicted to be the worst-off British city, with a 2.1 per cent economic drop.
Another study, financed by the People's Vote campaign that is lobbying for a second referendum to be held before Britain exits the EU, also found that Aberdeen residents were set to suffer the most, predicting that average incomes in the city would fall by £1,776 a year (about $3,100) in the event of a hard Brexit, or £1,008 if there's a softer version of Brexit that preserves access to the EU market.
On Wednesday, 48 hours before Britain was set to leave Europe without a deal spelling out an orderly exit, the EU gave Prime Minister Theresa May an extension - allowing her more time to try to find a way forward that would win parliamentary support. Many in Aberdeen say that while they hope to see a no-deal outcome avoided, they'll be nearly as irritated to see the uncertainty prolonged - especially as there's no guarantee that a hard Brexit won't come to pass anyway.
And the waiting is painful.
Mechelle Clark was one of the thousands of Aberdonians who lost their jobs as the oil industry contracted in 2015 and 2016. The former recruiter has successfully reinvented herself as a restaurateur - her gourmet grilled cheese shop in the centre of Aberdeen has become famous enough to draw visits from Scottish First Minister Nicola Sturgeon and actor Donald Sutherland - but the uncertainty surrounding Brexit has the 37-year-old reconsidering her plan to open a second restaurant.
"Most of the employees for this industry are EU nationals," Ms. Clark said. And even at this late hour, no one knows what the post-Brexit visa regime will be for EU citizens.
Because of the oil industry, as well as a pair of local universities that are popular with foreign students, Aberdeen is Scotland's most international city, with a quarter of its 228,000 residents born outside Britain. According to Scottish government figures, 11 per cent of Aberdonians are EU nationals.
"When you have a city that relies so much on international staff and workers, you can totally understand why people would be feeling quite discombobulated at the moment. No one really knows what the immigration policy will be in a few years," said Lynn Bennie, a professor of politics at the University of Aberdeen, which itself relies heavily on tuition from international students. The university is also bracing for the likely end to the millions of euros in research funding it has received from Brussels.
Ramona Obafemi is one of Aberdeen's many European residents. Born in Romania, she followed her husband's career to northeastern Scotland and found herself working in the finance department of a large oil services company. Similar to Ms.
Clark, she lost her job when the oil price fell, and she also went into the restaurant business afterwards, serving a mix of British and Romanian food from a converted double-decker bus parked on Aberdeen's windy waterfront, where a modest beach looks out onto a harbour busy with hulking ships serving the North Sea oil platforms.
Ms. Obafemi, too, was considering expanding and opening a second resto-bus, but with the possibility of a no-deal Brexit, the 32-year-old finds herself instead calling around to suppliers to make sure they're ready for whatever comes next.
"I don't know how it's going to play out.
If it's a deal, we'll probably have two years to get ready. If it's a no-deal, everything will happen overnight. People will panic and not buy as much, thinking things will get worse."
Uncertainty hangs over Aberdeen's big businesses as well, even as the oil price recovers. "More than anything else, everybody's just really frustrated," said Peter France, the chief executive officer of ASCO Group, an oil field services company that's headquartered in Aberdeen and has operations in Alberta and Newfoundland. Mr.
France said the main concern for Aberdeen was ensuring that the U.K.'s post-Brexit relationship with the EU allowed for freedom of movement so the industry could continue to bring in the skilled workers it needs.
"If we don't get talent into the region, that's going to restrict what [companies] can do, and if we restrict what people can do, that's going to restrict investment and that's going to impact the economy."
In what would be a bitter irony, it might be the fisheries industry that's hit hardest if Britain tumbles out of the EU without a deal. While Scottish fishermen, like those in England, were among the keenest on leaving the EU - and the hated quotas set under the EU's Common Fisheries Policy - the industry is one of the least ready for the day after a hard Brexit.
Seventy per cent of British seafood exports currently go to the EU, facing no tariffs and minimal red tape. A no-deal Brexit would change that dramatically. Aberdeenshire council, which governs the farming-and-fisheries reliant region around the city of Aberdeen, estimates that it would see a 20-fold spike in the number of export health certificates it would have to produce - from the current 1,000 to 20,000 a year - something it simply doesn't have the staff to handle.
"That's one of our major industries. If we can't get their product exported, they're going to be in a disastrous situation," said Martin Ford, a Green Party member of the Aberdeenshire council.
The fishing industry, Prof. Bennie said, knows that hard times lie ahead, but is betting that the expected long-term gains - the end of the EU quota systems, and the trade deals they expect post-Brexit Britain will reach with the United States, Canada and other countries - will compensate for the short-term pain of losing frictionless access to the EU market.
Studies predicting that economic hardship will follow Brexit have only deepened Britain's bitter political divide. Those who voted Remain in 2016 see the research as proof that the referendum result was a national disaster that needs to be reversed.
Those who voted Leave see the studies as politically motivated, focusing only on what will be lost, while ignoring the opportunities that supporters say Brexit will create.
"People struggle to fully accept these studies when there was doom, gloom and recession forecast [during the 2016 referendum campaign]. We were told that 800,000 jobs would be gone as a result not of Brexit but of voting for Brexit, that we would be in instant recession," said Ryan Houghton, a Conservative city councillor who headed the Vote Leave campaign in Aberdeen and the surrounding area. Those doomsday forecasts have not yet come to pass, as the British economy has actually added jobs since the referendum result.
"Who knows what our trading relationship with countries like the U.S. and China will be?" But more instability - and maybe another emotionally charged referendum - seems to lie unavoidably ahead.
Mr. Houghton says the lingering possibility of another Scottish independence referendum is a much bigger economic risk than Brexit. But independence supporters say that it's precisely Brexit that makes another independence vote - after a 2014 referendum on the issue fell short, with 55 per cent of Scots voting to remain part of Britain - a necessity.
The No vote in 2014 was billed as a oncein-a-generation decision. But nationalists say Brexit - which 62 per cent of Scots voted against - so fundamentally changes Scotland's situation that the independence question needs to be revisited. Ms.
Sturgeon, whose Scottish National Party controls Scotland's Parliament in Edinburgh, has promised to lay out a timetable for the next independence referendum as soon as the details of Brexit are clear.
Aberdeen is something of a Scottish political bellwether, with roughly 60 per cent of voters here having voted both to remain in Britain in the 2014 referendum, and to stay in the EU in the 2016 vote. Once Brexit becomes a reality, voters here and across Scotland will likely be asked to decide which union they'd rather be part of.
"We were told by the [British] government that if we voted No to the independence referendum we would stay in Europe.
That was an outright lie," said Ms. Clark, the grilled cheese shop owner, referring to the pro-Union campaign's claim that an independent Scotland would not be welcome in the EU. "I think a lot of people would reconsider their No votes now."
Alan Petrie, a 43-year-old community support worker who doubles as an organizer for the Aberdeen Independence Movement, believes one of the unintended consequences of Brexit could well be an independent Scotland. "Brexit has bought on a massive change. We're hearing from people who never have thought of [supporting] independence but who are considering it now," he said ahead of a small pro-independence meeting last week at the University of Aberdeen.
Scots are a very practical people, Mr. Petrie said, and one reason the independence vote failed in 2014 was a fear that an independent Scotland would find itself outside the EU.
Spain and other member countries were - and remain - wary of encouraging their own secessionist movements by easing an independent Scotland's path, although some European politicians have indicated that Scotland, having voted against Brexit, would get a more sympathetic hearing now. "There was always a lot of uncertainty about [potentially having to leave] the EU," Mr. Petrie said. "Now, it's the U.K. that is very uncertain."
Whether Brexit happens with a deal or without one, export-reliant Aberdeen is expected to be the worst-hit city in the U.K.
Brexit would deliver a fresh shock to Aberdeen, Scotland, left. Once dubbed Europe's oil capital, the city's fortunes have tumbled with the sharp drop in oil prices.
The Aberdeen Independence Movement (AIM) meets at the University of Aberdeen, right, which relies on international students for tuition. AIM organizer Alan Petrie says he believes one of the unintended consequences of Brexit could well be an independent Scotland.
Ramona Obafemi, below, says she is having to check that her suppliers for her 'resto-bus' are prepared for Brexit. Mechelle Clark says she is reconsidering plans to open a second restaurant for her sandwich shop Melt, bottom, because 'most of the employees for this industry are EU nationals.'