Energy (Oil and Gas) Profits Levy Bill — House of Commons, 2022-07-11
Topic: Macroeconomics
Stephen Mark Flynn (Scottish National Party, Centre-left): It would be remiss of me as MP for Aberdeen South not to reflect on the fact that last week marked 34 years since the Piper Alpha disaster. It is all well and good for Members to talk about the Bill, but it is important to reflect on the sacrifices that many people have made in the North sea, particularly my constituents and those of the hon. Members for Banff and Buchan (David Duguid) and for West Aberdeenshire and Kincardine (Andrew Bowie), who continue to work in inhospitable terrain daily. I also reflect on the ultimate sacrifice that was paid by so many people long ago; I am sure the Minister will join me in that in her summing up On a less serious note, it is funny that we are in the midst of a leadership contest where all we hear about is tax cuts—some have promised £200 billion of tax cuts—yet the Chief Secretary to the Treasury is in the unenviable position of coming to the Chamber to tell us that he will hike taxes to 65% on the oil and gas sector. The irony of that will not be lost on anyone present. Importantly, that tax hike is four times greater than the £1.2 billion that the Opposition pushed for in January, so I congratulate him on being the only Conservative at this moment who appears to want to hike taxes Seriousness is important in this debate, however, because we are talking about why the legislation is needed. All hon. Members present are aware of the severe challenges that people up and down the country are facing. Energy prices are absolutely skyrocketing and we have all seen the troubling news in the last couple of days that they are expected to go higher than even Ofgem anticipated. There is also the knock-on impact of inflation, which is away to hit double figures. Fuel costs are skyrocketing. Clothing costs are skyrocketing. Food costs are skyrocketing. Interest rates are going up. Whichever way people turn, irrespective of where they live on these isles, they are getting squeezed and hammered. And the situation is not going to get better: we know the UK under the leadership of the current United Kingdom Government has the slowest growth in the entire G20 outside of Russia and the true effects of Brexit continue to be felt. So implementing a policy that puts money into people’s pockets is necessary and we of course support the principles of what the Government are seeking to do in that regard. It is worth reflecting on the fact that we are now at a point where the UK Treasury has coined some £400 billion from Scotland’s North sea oil and gas sector. Is it not a pity that we are returning to the well once again? We look enviously across the North sea at Norway, which has a sovereign wealth fund from its own oil and gas sector. It is a bigger basin there, but that fund sits at around $1 trillion. What a comparison to this Government. Not only are they going back to the Scottish well to try to put in place financial support for people, but they are at this crux, where they do not necessarily know what it is and where they are seeking to go, because the Bill was undoubtedly hastily written on the back of Sue Gray’s report, as the Minister acknowledged earlier, when he could not even tell us at what price the levy would be removed. He talks about a normal price for oil and gas. I do not know what a normal price is for oil and gas; I am the MP for Aberdeen South and I have no idea what a normal price for an oil and gas barrel should be, and I do not think any Members on the Government Benches do. That offers absolutely no certainty to industry, irrespective of what the Government seek to suggest Perhaps the most glaring omission from the Bill is the fact that the Government are going to offer tax incentives in relation to further exploration, but we will not have anything in the Bill on renewable technologies directly linked to the offshore industry. Those tax incentives are not going to be applied to the renewables industry itself. We were told that is outwith the scope of the Bill, but it is a great disappointment that the Government had an opportunity to seriously incentivise investment in renewables and chose not to do so We are of course talking about the wider picture at the present time and I reflected earlier on the UK Government’s desire to cut taxes, but we have not heard about climate change from any single Tory leadership candidate; what are their views on climate change? It is disappointing that there is no talk in relation to this Bill about the journey to net zero or the climate compatibility checks that I think we all across this Chamber, and indeed in industry, agree with It is clear, from looking at the situation at the moment, why the Bill is needed. The Government chose to introduce it when they did for reasons of political expediency, but we cannot allow the Bill to simply go through without attempting to improve it and I look forward to doing that at Committee stage.