Armed Forces Bill
Debate between Lord Beamish and David Anderson(8 years, 9 months ago)
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Mr David Anderson (Blaydon) (Lab)
I start by doing something I have done very rarely in this House, and that is to say “Thank you” to the Government. I thank them for the important steps they have taken in treating people who have served this country, in many years of war, in the way that they should be treated. Sadly, though, because of the potential effects of retrospective legislation, some people may be left behind, and I want to focus on them.
I spent a lifetime working in the trade union movement before I came here, including representing people in the mine works who had a variety of diseases such as vibration white finger as a result of being exposed to the damage caused by pneumatic tools, and pulmonary diseases caused by exposure to coal dust and stone dust. However, I had never heard of mesothelioma until about 15 years ago, when I was asked by a friend if I could do some fundraising on behalf of an organisation that was being set up by a woman called Chris Knighton—the Mick Knighton Mesothelioma Research Fund, of which I am very proud now to be a patron—and I asked them what it was about. I have been castigated in the past by a member of the public for the brutal way in which I have exposed this disease, but it is a brutal disease. I was told about it very bluntly by a solicitor from Thompsons some 15 years ago.
When someone is exposed to asbestos, the fibres lie dormant for decades, but one day they wake up, they suffer horribly, and then they die. There are no two ways about it. Once someone has full-blown mesothelioma, they have a death sentence. The only thing that is questionable is how long it takes to happen. In a small number of cases medication and drug treatments such as chemotherapy can help, but it only slightly extends the time in which people suffer and eventually die.
There is a huge moral issue for all of us regarding what happened. Asbestos was shown to be poisonous as far back as 1892—a long, long time ago. It was banned from 1965 onwards—50-plus years ago. It was seen as one of those wonderful things that did so many good things for people. In a huge number of different areas, it was seen as being something worth working with, so it was in lots of places that people would not even have thought about—when changing brake drums, lagging pipes, and all that sort of thing. I myself have worked with it. It is in schools and other buildings. It is in our own homes.
As long as asbestos is not disturbed, people are usually okay, but a lot of those who were exposed to it worked in places where it was in the air all the time, so they were working with it without knowing, and they should have known. Clearly, in some cases they were criminally exposed. I am not, by any means, saying that about the MOD. The history of fighting for justice for people with asbestos has been long, tortuous, and hard.
When my party was in government from 1997 to 2010, we would take two steps forward and one step back. There were challenges in the courts by insurance companies and £1.4 billion was handed back to them, because the Law Lords allowed them to no longer make payments for certain asbestos-related diseases. Thankfully, through the efforts of successive Governments, people with mesothelioma are treated much better now than they used to be, but the truth is that a significant group of people are still affected by that case. I am not going to argue about the numbers, because that case is so moronic that it overrules any discussion about numbers.
Mr Kevan Jones
My hon. Friend is explaining very well the history behind how we have got to where we are today. Will he join me in paying tribute to the trade union movement? Without its expertise and campaigning zeal, the conversation taking place with regard to not just this Bill but others would not have started.
Mr Anderson
I appreciate the work my hon. Friend has done on behalf not just of the armed services, but of our part of the world, where he has been an MP for many years, and long may that continue. He is right to say that the trade union movement has been involved from the beginning, and without it we probably would not be where we are today in trying to right this wrong.
The issue is of interest to Members across the House. On 4 November 2015, in the lead-up to Remembrance Sunday, the leader of the Scottish National party, the right hon. Member for Moray (Angus Robertson), asked the Prime Minister:
“Does the Prime Minister agree that everything must be done to deliver on the military covenant—both the spirt and the letter?”
The Prime Minister’s response was unequivocal:
“I certainly agree with both parts of the right hon. Gentleman’s question…We make a promise to our military that because of the sacrifices they make on our behalf they should not have less good treatment than other people in our country and indeed that, where we can, we should provide extra support.”—[Official Report, 4 November 2015; Vol. 601, c. 961.]
He did not say that we should support service people only up to a certain cut-off date or, “Well, I’m really sorry, but retrospective legislation doesn’t apply.”
There is absolutely no doubt that these people are a special case, because of what we ask them to do. By “we”, I mean us as a nation and, more pointedly, us as representatives of the state. We ask them to go to places where human beings should not usually be made to go. As part and parcel of them doing that on our behalf, they have been exposed to this horrible disease.
On the same day, I raised with the Prime Minister the specific issue of people who were exposed before 1987:
“Thousands of people who served our nation in the Royal Navy before 1987 are not entitled to full compensation. That means that people who have been exposed to asbestosis and have contracted the cancer disease mesothelioma stand to lose out massively when compared with people in civilian life.”
His response was:
“I am very grateful to the hon. Gentleman for raising this issue. I understand that the Defence Secretary is looking at the matter. As I have said, since putting the military covenant into law, we have tried every year to make progress…I am happy to go away and look at the point that he makes.”—[Official Report, 4 November 2015; Vol. 601, c. 962-63.]
I am delighted with that response and, as I said earlier, with the fact that that the Secretary of State came back to us on this and moved some way when we debated the issue towards the end of last year.
The truth, however, is that while we are looking into this matter, people are dying, and they are dying without getting compensation equivalent to what they would get if they had not been in the armed services. That is quite simply wrong. I know that it asks a lot of the Government to go back and try to redress the issue, because there are always problems—unintended consequences—when we open up access to compensation, but this issue is far too important to ignore, and it would be wrong and, I believe, a breach of the military covenant if we do not address it.
The Prime Minister has said that we will go the extra mile for these people. I know that this is not part of the new clause, but I ask the Minister, please try to do more. Let us work together across the House to make this work in a way that delivers what these people deserve.
Mr Kevan Jones
It is a pleasure to follow my next-door constituency neighbour, my hon. Friend the Member for Blaydon (Mr Anderson).
I, too, pay tribute to the Minister for accepting amendments that I tabled in Committee, and for looking at this issue in a practical way. That has been his approach to the Bill: he has looked at where he can make a practical and real difference to people’s lives. In Committee, he announced that, from that date onwards, people would have a choice about whether to accept compensation as a lump sum payment or as a war pension.
My hon. Friend has just outlined the issues involved in retrospection. I am aware of them from my time as a Minister, when I had to deal with issues such as pensions, but will the Minister consider this point? Will he make an exception for individuals alive today who were diagnosed just before the cut-off date that he had to introduce? As my hon. Friend said, they are under a death sentence—in many cases, they will not live for very long—so can that specific group be looked at? From speaking with my hon. Friend, I understand the difficulties of retrospection, so I know that there is a broader issue, but could individuals who already have a diagnosis and may be in receipt of a war pension be looked at? I do not expect the Minister to come up with an instant solution and say yes, but it would be very much appreciated if he could go away and consider that point.
Mesothelioma Bill [Lords]
Debate between Lord Beamish and David Anderson(10 years, 11 months ago)
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Mr Anderson
I did not say that the Minister said that. The issue should have been resolved, because the facts have not changed between then and now.
My hon. Friend the Member for Wansbeck mentioned the Mick Knighton Mesothelioma Research Fund. I have been a patron of that fund for more than a decade. When I was president of Unison I was approached by a former colleague I used to work with in the mines who asked, “Can you help these people out, Dave?”
It is worth listening to the story of Chris Knighton, whose husband was a classic sufferer of mesothelioma. He would think nothing of getting on a pushbike and riding from Newcastle to Berwick and back again on a Sunday morning before going to the club to see his mates, who had just staggered out of bed. They would be standing at the bar, bleary-eyed, asking, “Where have you been, Mick?” He had done a 100 mile bike ride on a Sunday morning.
On one of those Sunday mornings, the lad fell on the floor. The following day he went to see his doctor, who told him he had mesothelioma. “What’s that, doctor?” asked Mick. He told him it was asbestosis of the lungs. “What can you do?” asked Mick. “Nothing,” said the doctor.
Within a matter of months, the lad was dead. His widow set up the research fund with a good friend, Anne Craig, and they pledged to raise £100,000. Two years ago they raised £1 million, and all that money has been put into research into this disease. It is people like them and the men, women, children, daughters, wives and husbands who have suffered that this debate should really be about.
There is a history of people exploiting asbestos throughout the world. I was proud when a member of my trade union went to South Africa and worked alongside Thompsons Solicitors to litigate against companies there. One of the stories they heard in Namibia was that one of the ways in which companies ensured maximum output was by filling big plastic bags with raw asbestos. How did they make sure they were full? They put young Namibian kids in them to tamp down the asbestos as if they were pressing grapes. Those kids were exposed to raw asbestos at the ages of six, seven, eight and nine. Those are the sorts of people behind the desperate negligence under discussion.
Other diseases have been mentioned. When compensation for plural plaques was challenged in the courts in 2007, the case was won and people stopped getting compensation. As I said in an intervention on the hon. Member for Chatham and Aylesford (Tracey Crouch), KPMG announced a £1.4 billion windfall on that same day. That is what the insurers got as a result of the Law Lords’ ruling. Members on both sides of the House tried to get our Government to change the law so that those people could get compensation again.
Other parts of this nation have managed to change the law. Earlier, the right hon. Member for Belfast North (Mr Dodds) intervened on the Minister in relation to Northern Ireland, and the Scottish Parliament has been able to do it, but we were told that it could not be done in this part of the world. We should have done it.
Equally, people may not have mesothelioma or anything life threatening, but the truth is the same: they were negligently exposed at work to substances that the employer knew would be damaging. Employers have known that since 1892, when asbestos was first recognised as a poisonous substance. As we have heard, they have known since 1965 that it should have been illegal to do so, but they kept on exposing people to the substance for days, weeks, months and years.
We are now told that people can have 75% of their compensation. One thing always sticks in my mind in talking about this. I first had real evidence of mesothelioma when I spoke to a lawyer dealing with it, a guy called Ian McFall, who works in the Thompsons north-east office and is a renowned expert on the issue. He told me that the fibres lie dormant for decades, but all of a sudden they become active, the person suffers horribly and then dies.
I used those words when there was a discussion about this issue some years ago. I was approached via e-mail by a woman who was not one of my constituents, who said that I had really upset her. Her family was sitting there, with their father going through the process, and she had tried to be careful to shield her family from knowing the truth.
I am sorry that I have to repeat those words today, but the people of this country need to understand how serious this disease is. It is to the credit of the Government and others that they have accepted that this is a very special case, because it is a killer. There are no two ways about it: if you get this, you are going to die. That is the main reason why the situation has been challenged to the extent it has over many years.
The insurance companies have put forward the compensation as somehow an act of benevolence: “We are being really nice to you, aren’t we?” No, they are not; they have been caught on the hop and forced into a corner to put right what they should have done. The deal struck between the Government and the insurance companies is just that—a deal. It has not involved the people it should have involved to the extent that they should have been involved, whether they are claimants, their support groups or, crucially, the trade unions.
My hon. Friend the Member for Wansbeck spoke about the work of the trade unions, but that had an impact not only on trade union members but on every member of the public in this country. Many people are not in trade unions or in unionised workplaces, but they have the same rights to compensation and legal redress as those for whom the trade unions work.
Mr Kevan Jones
I read Lords Hansard last night. Does my hon. Friend agree that throughout all the negotiations the Government have had on the Bill, those in the driving seat have been the insurance companies? The fact is that we are having to accommodate the situation to suit the insurance companies, rather than the victims.
Mr Anderson
That is absolutely right. The Government are saying that they can go only so far, because the companies cannot afford more, but they are forgetting the fact that companies have received millions and millions of pounds, which they could and should have put away since 1965, in the knowledge that this might come along one day. Is not the whole point of insurance that people should save for a rainy day? Well, the umbrellas are up now.
Mr Anderson
Those people must obviously have realised that there was a potential for that. If the consultation had lasted for a short period, it would have been that date, but without a shadow of a doubt, they clearly could have thought that it might be the start date.
My hon. Friend the Member for North Durham spoke about some of the consultations. I went to some of the meetings, which Ministers opened and then virtually handed them over to members of the insurance companies to run and to answer questions. Civil servants and Ministers were not engaged; it was people from the Association of British Insurers who answered all the questions, and it was clearly in their interests to do what they have now got away with. It is clear that the scheme will not provide full protection or full compensation.
I share the concerns of other hon. Members about the level of payment. For the life of me, whatever the cut-off date, I cannot see why the payment should be anything less than 100%. I made the point earlier that there is 100% liability on the employer and the insurer, while 100% of those with this disease have died. If people go through all the hoops they have to go through, which are the same as those in civil litigation, it is not their fault that insurers, employers or both have disappeared; the fault lies with the industry, which collectively should be putting this right. The insurers have had the premiums and have invested them, so they should pay up.
We are talking about at least 6,000 people who, between them, have lost somewhere in the region of £800 million. Compensation of 75% means that people have to absorb 25% of the ongoing costs. My hon. Friend the Member for Wansbeck said that that is at least £43,000. To somebody who is probably on the sick, and whose family is probably not working because they are taking care of them, £43,000 is a life-changing sum of money. It might not be very much to insurance companies or to some of those funded by insurance companies, but it is clearly a lot of money for people at a time of grief.
I want to pick up what has been said about the exclusion of other diseases. If people have been criminally exposed to a poisonous substance, those who did that should be brought to book, and the way to do that is to make them pay compensation. I hope that we would support that and that as the Bill goes forward we can make that case more and more strongly.
Again, why is the cut-off date not February 2010, which is when the consultation was announced? The written ministerial statement came out two and a half years after that consultation was announced. That was two and a half years of what—things gathering dust and people having discussions? What were civil servants doing? All of a sudden, there was a statement two and a half years later, followed by a discussion period to bring us to where we are now. That clearly is not fair. The minimum has to be February 2010, and I agree with my hon. Friend the Member for North Durham that if we really are serious, we should go back to 1965. My guess is that we probably will not, but we must address that issue in Committee as a matter of real urgency.
Mr Kevan Jones
Does my hon. Friend agree that there is at least some logic in that? The arbitrary date of 2010 is when the consultation started. The fact is that when that started in 2010, the companies knew about the liability. My hon. Friend has pointed out that they took the premiums and saved money by not paying out.
Mr Anderson
Absolutely. The truth is that the companies knew. What was happening was not a secret. It was not the case that all of a sudden the consultation found that mesothelioma was not caused by exposure at work or employers neglecting their duty in not providing proper safety equipment and so putting people at risk. They knew the likely outcome was that there would be implications for the industry. Clearly, they should have said, “Right, we need to start on this at least as a bottom line.”
The insurers have apparently said that they think the legislation will be retrospective and amount to unlawful interference with insurance property rights. What a load of gobbledegook. They mean, “We want to keep more money in our pockets. We want to deny people their rights.” They are denying people, either those seeing out their last few days or their families, the right to have a decent life.
Mr Jones
Does my hon. Friend agree that the sums are in stark contrast to some of the eye-watering figures paid out, for example, for the mis-selling of payment protection insurance? These groups of people clearly need the money, and in some cases the victims have suffered a very horrible and painful death.
Mr Anderson
There is absolutely no comparison between the two, and seeing what has happened for people abused by being wrongly sold PPI when they did not need it does not make this situation any better. This is about people deliberately being exposed to this substance at work. To reiterate, I see no logic in the state saying, “We want back 100% of DWP benefits.” Reading between the lines, my guess is that there is probably nothing else the state can do, but if so, it has to get its act together and change that part of the Bill.
Some say that we should feel sorry for the insurers and their balance sheets, because if we go beyond the 3% level they will struggle and so put the costs on to people buying insurance today. My hon. Friend the Member for North Durham has already mentioned Lloyd’s making £2.77 billion; it clearly is not suffering too much. I would be much happier if the insurers were so strapped for cash that they were not donating huge sums to the Conservative party. Every Wednesday, our Prime Minister comes here, talks to my leader and accuses us of being in the pay of our paymasters, the trade unions. Let us look at the Tory party’s paymasters in the insurance industry.
It might be coincidental that the Tory party is bankrolled massively by the insurance industry, but it might not. Let us look at some of the figures. [Interruption.] If I can find my glasses, I might be able to tell hon. Members—aged 60 today, I’m not doing bad! Sir John Beckwith and the Beckwith family have donated £524,000 to the Conservative party at central and local level; Caledonia Investments and the Cayzer family have donated £275,300; Centrepoint Insurance has donated £10,000; Dickinson insurance brokers has donated £2,000; General Insurance Brokers has donated £5,000; Hampden insurance has donated £16,800; Michael Spencer and IPGL—this is eye-watering—have donated £3, 929,892.52; the Keswick family in Scotland have donated, between them, somewhere in the region of £523,000; Norwich Union has donated £8,500; R L Davison and Co., from Lloyd’s, donated £5,000; and Theodore Agnew, who founded Town and Country Assistance, has donated £134,000.
If someone today, instead of those names, was saying, “Unison, T&G, Amicus, Unite, the GMB”, we would be being told, “You’re being bought off by the trade unions,” but I could never be that callous towards the Minister or his friends. It does make us think though. This deal has been hatched between the Government and the insurance companies. The restrictions in the Bill are illogical. The clawback from the DWP, the start date for claims—they really say, “There’s something going on here.” Is the Conservative party worried about going too far and upsetting the insurance companies? I hope we can flush this out in Committee and say, “Listen, this has to be paid, because it’s a moral duty.”
We are in a cleft stick tonight. I will probably vote yes tonight, but I feel abused. I feel abused on behalf of the people I work with day in, day out and the families who are helping them to get through this thing. I feel as though I am being blackmailed, because if we do not support the Bill tonight, we will be accused of stopping the Bill and not supporting what we all need to do for these people. I support the Bill with huge reluctance, therefore, and hope that when it returns here, it is in much better shape than it is tonight.
Finance (No. 3) Bill
Debate between Lord Beamish and David Anderson(13 years, 6 months ago)
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Mr Anderson
It is not only my hon. Friend who disagrees with the right hon. Member for Wokingham (Mr Redwood); the OECD disagreed with him as well, saying that the actions of the previous Government prevented the recession from turning into a depression.
Mr Jones
I agree with my hon. Friend. The Tory spin doctors forget that if we had followed the first reaction to the Northern Rock crisis from the then shadow Chancellor, the right hon. Member for Tatton (Mr Osborne), we would have let Northern Rock go, which would have had a knock-on effect on other banking systems and the recession would have turned into a depression. It is perhaps not fashionable to say it, but we should thank the Chancellor and the Prime Minister of the time for the decisions they took to ensure that that depression did not materialise.
Helen Goodman
My hon. Friend has hit the nail on the head. This opens a huge hole in front of the Minister’s revenue forecast. There is total uncertainty. Every company will be able to turn up and renegotiate its own tax regime, which is ludicrous. How far will this be taken? Will it be a general principle established in the tax code for the purposes of all corporation tax, or personal tax? I hope that the Minister has a very good explanation for what is going on.
Let me return to the underlying worry that has been exposed in tonight’s debate—that the Government simply have not taken account of the importance of energy security. Everyone knows that the energy market is under a number of different pressures. On the one hand, we must have a market that is environmentally sensitive and reduces our carbon footprint; on the other hand, we must have prices that are affordable for people in this country and that tackle fuel poverty. We must also have security of supply in a world that is particularly uncertain at this time. Wars are taking place in north Africa and there is conflict in the middle east, and it is at this moment that the Government have chosen to impose taxes that are so insensitive that they put the North sea oil and gas regime at risk.
Mr Anderson
I want to speak in support of amendment 10, but first I want to say something about the speech of the right hon. Member for Gordon (Malcolm Bruce). I am pleased that he has returned to the Chamber, because I was very interested in what he had to say. Most of those who have spoken in the debate on these amendments have done so on the basis of a degree of experience, which was not the case in earlier debates.
I wonder whether the case made by the right hon. Gentleman was made to the Government before the Budget. It appears from what was said by him and by the hon. Member for Dundee East (Stewart Hosie) that the industry has been saying to the Government for some time, “If you are going to do this, please talk to us and please make sure that we get it right.” The industry does not want to end up with the circumstances described by my hon. Friend the Member for Bishop Auckland (Helen Goodman), in which anyone could do whatever they want whenever they want.
If that information was shared with the Chancellor before he made his statement on 23 March, it would seem from what was said by the hon. Member for Dundee East (Stewart Hosie) about why he had ignored the voices of experienced people such as the right hon. Member for Gordon and those in the industry that the only thing that matches the Chancellor’s arrogance is his ignorance. Clearly he has decided to say, “I know better. I will impose this on the industry and on this country.”
This is not just about places such as Aberdeen and the north-west, because a huge amount of work is going on across the whole of Tyneside and the north-east of England. Some of the most advanced technical work anywhere in this country is being done there in very small factory units by very skilled men and women who are doing a great job. Shipyards have reinvented themselves after the closure programme of the 1980s and are building exploratory rigs and doing work that is vital to maintaining the skills base and developing the new work that we want to do. That will be development for not only the oil industry, but the offshore wind industry.
Mr Kevan Jones
A large number of individuals, many of whom live in my constituency and that of my hon. Friend, worked in former shipyards and heavy engineering firms in the north-east and now travel to Scotland and other areas where the UK oil and gas industry is based. They have very good jobs and choose still to live in the north-east. Does he agree that they are an important part of the wages that go into the north-east economy?
Mr Anderson
My hon. Friend is absolutely right. These people are rightly still among the most well-paid people in this country—why on earth should they not be, given the work they are involved in and the risks they take in their daily lives?
I worked underneath the North sea bed as a coal miner, so I have some experience of working in the energy industry. I am not the person to feel sorry for multinational oil companies, but if the Government take crass decisions that will have a massive impact on not only the industry, but the people who are dependent on it right across the board, we should surely question that. I have no problem with saying to the oil companies that we want them to play their part in trying to help us to get this country back on an even keel. Clearly, when companies such as Shell and BP are making huge profits, that discussion should take place, but it should happen before decisions as serious as this are imposed on people.
Some 450,000 people work in the industry. Our subsea industry is at the cutting edge and leading the world. People talk about what happened in the gulf of Mexico only a year ago, but the probability is that that will never happen in the North sea because of the experience we have gained over many decades of working up there. We lead the world and we should be proud of that, but this taxation surprise has made the industry question whether it should carry on being there, and clearly the oil industry can go to lots of other places in the world.
Mr Anderson
My hon. Friend is correct. That debate went on in the Labour party for a long time long before that election. It was quite clear to the industry and to the people of this country that if they voted Labour on 1 May 1997, we would impose a windfall tax. Discussions had been going on and the companies were able to absorb the idea and plan for that.
As ACCA says further:
“The sudden change in rate came as a shock to those involved in the North Sea oil industry”—
the change was not a shock in 1997, because companies had been able to prepare for it—
“and has been widely condemned as reducing the competitiveness of the UK as a target for investment”.
Mr Kevan Jones
Does my hon. Friend agree that the windfall tax, which was a one-off tax and quite clearly understood, was different from what we are facing today with this tax increase, which is a potentially fluctuating tax that gives uncertainty to oil and gas producers about the level of profit they will make long term on their investment in the North sea or anywhere else?
Mr Anderson
In the learned advice that she gave, my hon. Friend the Member for Bishop Auckland spelt out more clearly than anyone else in this debate that nobody seems to know what people will be paying in tax. Nobody knows whether they will be paying anything or whether they will be able to say, “I want to get away with this while you get away with that.” That is absolutely ludicrous; even if we accept that the tax should be imposed, people at least need to know what the Government are going for.
Mr Anderson
I have read that report. Whatever hon. Members’ views, we respect the Chair of the Treasury Committee as someone who has done a good job for the people of this country and for the House, and when he says such things, hon. Members should listen. He is not someone who should be ignored: he speaks not from arrogance or ignorance but from a lot of knowledge. His Committee has undertaken a rapid investigation of an issue that is of massive importance to the country.
We have been here before with Tory Governments, who have a long history of making crass policy decisions on energy. In the 1930s, the Tories presided over a coal industry that was in internal decline and had massive problems, with more than 1,000 men a year being killed in the industry and with no investment whatever. Those men were using 19th-century technology—life was cheap and people were not allowed to live decent lives. The situation was pushed back after the war when the Labour Government came in and nationalised the coal industry.
Then there was another repeat in the 1980s. My hon. Friend the Member for Bishop Auckland has mentioned the POP forecast and the pricing of oil according to how much it costs to get oil from coal. In the 1980s, we led the world in getting oil from coal, but that industry was destroyed at the whim of the then Government, who did that for political reasons. I can see that you are getting annoyed, Mr Hoyle, which is not like you, so I shall move on rapidly.
The truth is that Tory Governments, and not just in the past, have taken policy decisions that were to the detriment of the energy system in this country. That is being confirmed today, because this is not just about the oil industry. As has been discussed in debates on the solar power industry, Ministers have changed the rules halfway through a process. I have received a letter from a company in my constituency saying that it is involved in a number of projects in which clients want to build solar arrays that do not fulfil energy requirements. Funders and clients are now cautious because of the uncertainty caused by the policy change halfway through discussions. The industry had been told that it would be able to set targets at a certain level, but that level was later changed and the same thing is happening now. If the Government spring surprises on companies that are investing in energy policy, those companies will not know where they are and will look at other markets. As I have said before, I am not one to stick up for the oil companies, but I am one to stick up for this country and the workers of this country, and this part of the Bill, along with many others, is detrimental to the workers and the people of the country.
Mr Kevan Jones
Let me begin by congratulating the right hon. Member for Gordon (Malcolm Bruce) and the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) on their amendment. They clearly care about the industry, know a lot about it and are arguing vociferously on behalf of their constituents. From the body language of the Economic Secretary and the Financial Secretary, it looks as though the right hon. Member for Gordon and the hon. Member for West Aberdeenshire and Kincardine are two unwelcome relatives at a wedding who had been forgotten about but turned up and started to argue about how this was not part of the wedding deal of the coalition.
The amendments raise serious concerns about the effect of the Budget not just on the constituencies of the right hon. Member for Gordon and the hon. Member for West Aberdeenshire and Kincardine, but on many others throughout the UK. I would have expected Members on the Government Benches who have oil and gas interests in their constituency—Morecambe bay has been mentioned, as well as the gas fields off the coast of East Anglia—to speak in the debate, yet we have not had a single contribution from the Conservative Benches. That should be noted by constituents who rely on the oil and gas industry for their livelihood. I am sure that if the former Member for Morecambe and Lunesdale were still a Member of the House, she would have been vociferous in making representations on behalf of her constituents. I hope she is watching the debate, even at this late hour.
The decision announced in the Budget to increase the supplementary charge on North sea oil was taken at the last minute, without any consultation with the industry. It led to the ludicrous situation mentioned by the right hon. Gentleman, with the profits of some of the mature fields being taxed at 80%. We are constantly told by the Conservative part of the coalition how important private sector growth is to the future of the UK economy.
There is no better example than the oil and gas industry. It is an economic engine for the UK economy. In 2010 alone it invested some £6 billion into the UK economy. It creates and supports more than 440,000 jobs, not just directly in the industry, but way down the supply chain and across the UK, as my hon. Friend the Member for Blaydon (Mr Anderson) noted. More importantly, it produced in 2010-11 some £8.8 billion in corporation tax for the Treasury, and it is estimated that for 2011-12, with the increase in the oil price, that revenue take will be about £13.4 billion. To treat such an important industry in the cavalier way that the Government have treated it is a disgrace.
I feel for the right hon. Member for Gordon. He said that the Government were listening, but I am not sure they are. I ask him to look at the report of the Treasury Committee’s meeting of 29 March, where the Treasury said:
“The 81% rate applies only to those mature fields where there is no further exploitation taking place that pay petroleum revenue tax. It is quite a high rate but, equally, there is not an issue with further investment needed there, and the oil is coming out of the ground. That is a pure”
profit.
Members asked whether that had been looked at in any detail. The Treasury went on to say that
“the Treasury does a lot of work on all the tax levers on an ongoing basis.”
It is clear from talking to the industry that investment in those mature fields is needed. For example, Total E&P UK says that production at mature fields will cease without further investment. The Alwyn area is a good example of why activity and investment need to continue. I accept that the industry requires a huge amount of start-up investment, but there is also an increasing need for investment over time. For example, Total has stated in its submission that investment is needed in the Alwyn field not only for ensuring that the field is secure and safe, but for living accommodation and other investments. It is absolute nonsense to suggest that such mature fields do not need continued investment, and to tax them at 81% or 82% is, frankly, ridiculous.