The city boasts the highest concentration of millionaires in Britain and an unemployment rate of just 2% – but wage inequality and astronomical rents have heightened calls for change

The taxi driver swings his brand-new BMW out of Aberdeen train station. Behind him the sleek glass-fronted £250m Union Square shopping centre, with its Apple store and Hugo Boss shop, glistens in the afternoon sunshine. "Welcome to the oil capital of Europe," he says with a smile.



As we drive past Aberdeen harbour, crowded with cargo ships, he talks about his grandson. A multinational oil company is paying the 17-year-old £12,000 a year to study mechanical engineering at college. He will graduate into a guaranteed job. "He’ll be on £100,000 by the time he’s 25," the cabbie says confidently.

Such stories are common in oil-rich Aberdeen. The Granite City boasts the highest concentration of millionaires in the UK. Three-star hotel rooms can cost upwards of £370 a night. In a city of 220,000, unemployment is just 2% and average annual salaries more than £39,000, around £12,000 more than the UK average in 2013.

Spiralling cost of living has led to calls for the introduction of an Aberdeen weighting, similar to the mechanism used in London. The city has one of the most unequal wage structures in the UK [pdf]. Yet despite being awash with oil money, and the fact that it is Scottish National Party heartland, surveys suggest Aberdeen is one of the areas where support for independence in September's coming vote is weakest.

Indeed, Aberdeen can feel like a world of its own, uncoupled from the rest of Scotland. Locals speak a distinctive Lowland Scots dialect known as Doric; the solidly regional Press and Journal is Scotland’s most popular daily newspaper. The capital, Edinburgh, is a hundred miles south; London is a further 300. "There is no city in Europe that is as distant from government as Aberdeen," says Barney Crockett, convenor of the enterprise, strategic planning and infrastructure committee on Aberdeen city council. "It is an almost purely private sector city. Aberdeen is more buoyant now than at any other time since oil was discovered [in the 1970s]."

A copy of the Financial Times lies open on the councillor’s desk. Outside his window, miniature flags of world nations hang from streetlights on Union Street, Aberdeen’s mile-long main thoroughfare. "This is the centre for world oil, not just the North Sea," he says. Over 900 companies serve the energy sector in Aberdeen, employing around 40,000 people.



Facebook Twitter Pinterest The Union Square shopping centre. Photograph: Murdo MacLeod

With average rent more than £1,000 a month, Aberdeen is by some way the most expensive city in Scotland. In the leafy West End, elegant Victorian houses routinely sell for seven figures. Across the city, house prices rose a vertiginous 17% in the last year. "Aberdeen is a good place to stay. It’s a nice place to bring up your kids. It’s near the sea," says David Geddie, property partner at Simpson and Marwick.

Development is brisk. Cranes signal the arrival of yet more new office blocks and hotels. Kingswells, five miles outside the city, was just a village in the early 1980s. Now this booming suburb is home to thousands of oil industry workers, as well as Prime Four, billed as "Aberdeen’s first and only world-class business park". Oil and gas companies such as Apache North Sea, Nexen and Transocean are all based here. Norwegian giants Statoil will soon be joining, too.



And yet with the independence vote looming, there are concerns about the future of Aberdeen's oil and gas economy. Around 30,000 people work offshore, with as many as 10 times that employed in tertiary sectors. Some are bullish about the industry’s prospects. "There’s probably about 30 to 40 years of oil production left," says Robin Watson, chief executive of Wood Group PSN, one of the Aberdeen’s biggest employers.

Others are less sanguine. "We are already in decline," says Jake Molloy, Aberdeen-based regional organiser for the RMT union. Molloy, like many in Aberdeen, is critical about the lack of investment in infrastructure; there is no rail link to the airport, and construction has yet to begin on a bypass, announced in 2003, to deal with the city’s chronic congestion.



What's more, if you walk just a few minutes from the council offices you can see a very different side to Aberdeen's boom. Craig is at the local food bank making his weekly shop. In a former fish-filleting warehouse lined with rows of tinned soup and bags of rice, he picks up a few punnets of yogurt, a block of cheese and a packet of pasta. "I’ll make macaroni and cheese when I go home tonight," says the slight 27-year-old.

Facebook Twitter Pinterest A food bank in Aberdeen. Photograph: Murdo MacLeod

Craig sleeps on a sofa bed in his friend’s bedsit. He and many others just can't afford Aberdeen's astronomical rents. "If the food banks weren’t there a lot of people would struggle, and that’s even people that’s working," says Craig. "I’ve seen a lot of people coming in here who work."

There has been a dramatic increase in demand for food banks, says Dave Simmers, chief executive of Community Food Initiatives North East, which forms part of the Aberdeen Food Bank Partnership. Over 70% of those attending are experiencing problems related to welfare reform. "The perception is that Aberdeen is affluent, but we have people who are on low incomes and their poverty is reinforced by the affluence around them," Simmers says.



On Union Street, the payday loan shops, half-hidden among the imposing granite facades, attest to the difficulties. Down an adjacent side street, a dozen men sit finishing an evening meal of vegetable soup at a drop-in centre run by the Cyrenians homeless charity. Music television blares in the background. Some of these men sleep rough in derelict buildings, others in cars by the beach.

The number of people using the drop-in centre has doubled since January. "I’ve never seen anything so bad," says Scott Baxter, deputy chief executive of the Aberdeen Cyrenians. "A lot of guys who come to us maybe would have worked in the oil and gas sector all their lives, and suddenly have found themselves in need."

Although the 2008 financial crash registered as a temporary blip in Aberdeen’s upward curve, for local charities the fallout was severe. The Cyrenians saw their budget reduced by more than a third as Aberdeen city council made swingeing cuts in response to a fall in the block grant it receives from the Scottish government. "The city has more lap dancing clubs than libraries now," says one local resident.

The corporate sector took up some of the slack. Many blue-chip companies provide volunteers and help with fundraising drives. But even that is not enough. "Aberdeen is just too expensive for many people," says Baxter, sipping tea from an Exxon Mobil mug.

Facebook Twitter Pinterest The Marine Operations Centre directs ships in and out of Aberdeen harbour. Photograph: Murdo MacLeod

The North Sea’s resources are not just an economic issue. Oil is a central plank of the SNP’s independence pitch, with the party committing to establishing an oil fund if Scotland votes yes on 19 September.

"Resources taken from the North Sea have been squandered by the Treasury in London," says Kevin Stewart, SNP Member of the Scottish Parliament for Aberdeen Central. "The UK and Iraq are the only two countries that have oil but don’t have an oil fund."

Although the SNP holds all the North-East constituency seats in the Scottish Parliament, surveys suggest Aberdonians are mostly opposed to independence, says Lynn Bennie of the social science department at Aberdeen University. Many here, even Scottish nationalists, are wary of constitutional change potentially disrupting the oil industry, Bennie says. "There will be lots of people who vote SNP but won’t be voting yes in September."

Whatever the referendum result, Aberdeen needs to think seriously about how its economy can transition from fossil fuels. "There will be a time when the oil runs out," says Greg Williams, a supply chain manager in the oil industry. "The big question is can Aberdeen attract non-oil business on account of its skills base and its infrastructure?"

For many, however, the most pressing concern is the present, not the future. At the small cafe in Powis Gateway Community Centre, young mothers play with their children and munch on homemade scones (25p) and sandwiches (£1). But with unemployment in the nearby rows of neat postwar social housing running at almost 30%, many cannot afford even those reasonable prices.

"There is poverty here," says local pastor Andy Cowie. "You have to use your eyes. You'll see kids wearing the cheapest of shoes, the soles falling off. You'll meet people who are three or four generations out of work. The vast bulk of Aberdeen is in denial."

