Oral Answers to Questions

Debate between Lord Harrington of Watford and Kirsty Blackman

Tuesday 27th June 2017 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

1. What recent discussions he has had with trade bodies and companies involved in extracting oil and gas from the North sea.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

My Department is in regular contact with the oil and gas industry. As hon. Members will be aware, my predecessor, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), met industry representatives regularly, both in London and in Aberdeen. On 23 March the Oil and Gas Authority awarded licences for 111 blocks to enable exploration and production across frontier areas—the first licensing round to focus on frontier areas in two decades. I look forward to continuing this relationship, which is very important for jobs and the wider economy. Indeed, in my first week in post I attended a reception at Imperial College London and met several companies and trade bodies in the field.

[Kirsty Blackman]

I thank the Minister for that answer and warmly welcome him to his new post. In 2016 the Chancellor announced that action would be taken to improve the tax regime for late-life asset transfers. In the 2017 Budget he re-announced the same policy, but now an expert panel is to be set up. Can the Minister let me know how many times the expert panel has met so far, and when we can expect the outcomes of its deliberations to be made public, as it says they will be on the gov.uk website?

[Richard Harrington]

I thank the hon. Lady for that question. She and I have worked together in previous roles, and I look forward to visiting Aberdeen, where hopefully she will be able to explain this further. As far as late-life assets are concerned, we realise how important it is to get this right, and not just for the jobs and tax revenue, but for generating further investment. The discussion paper and the panel of experts are considering this. We look forward to hearing a wide range of views and will report our findings at the autumn Budget.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

T4. The National Audit Office recently published a report on Hinkley Point C that is nothing short of damning, describing it as “risky and expensive”. When will the Government listen to the experts and scrap this costly expenditure, and when will they invest instead in carbon capture and storage?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

If ever you decided not to be Mr Speaker, a career as chairman of the BBC Radio 4 programme “Just a Minute” would be appropriate. In answering the hon. Lady’s question, I will try to keep to your one sentence rule.

The Hinkley Point contract is entirely designed so as not to get the Government involved in expensive capital expenditure, and the nuclear power produced by Hinkley Point will be an excellent part of a mix of power for decades to come.

Digital Equipment Ltd: Pension Scheme

Debate between Lord Harrington of Watford and Kirsty Blackman

Tuesday 17th January 2017 Westminster Hall

[Richard Harrington]

I agree with the hon. Lady that the company’s obligation appears to be a moral obligation—that point has been made clearly. The Government’s obligation is to pass laws that have to take everybody’s views into consideration. As I have learnt, because it has dominated my life since last July, with pensions and defined-benefits schemes, particularly on the private side, there are the interests of employers and the interests of employees and pensioners. As Governments of all political complexions—all three, if we include the coalition—have done, the Government have had to find ways to take consideration in from the others. I will come to the Green Paper a bit later on.

[Kirsty Blackman]

I fear that we might end up going round in circles about whether or not it would be affordable for lots of companies to do this, without having the data. I appreciate the Minister’s commitment to look at obtaining more data about how this might work, or the potential costs, and would appreciate it if he would consider sharing those data once he has gathered them, so that we are all in a position to understand the costs.

[Richard Harrington]

I think that is very reasonable. As I said, I am not trying to hide any data—nobody is—because I am sure that the HPPA would have included them in its paper, had it known. I suppose that in the end, they can just be estimates because we do not actually know for the moment what companies fit into this category. From speaking to people since I became aware of this issue, I believe it is true that one of Hewlett Packard’s predecessors—I cannot remember if it was Digital or Compaq—did increase the pension rates most years to some criteria for inflation, although I do not know exactly what criteria.

As I said, I have not come across any views that Hewlett Packard has broken the law, but I will say that many things that companies do are beyond the law in many ways. They have policies on this and policies on that, and many of them have moral, socially responsible policies in many areas. That is the sort of thing that boards of companies decide. They do not just have to comply with the law—that is the minimum. Obviously everybody, individuals and corporates alike, has to comply with the law. In a way, that is why we are all here in this building.

I want to make progress, although Mr McCabe has kindly allowed ample time for interventions if there are any. We believe that the Government retrospectively changing the legislative requirements on indexation would be inappropriate and would have a significant impact on the schemes of employers involved. The legislation introduced in 1995, by Harold Macmillan’s successors in a Conservative Government, was introduced to provide a limited level of inflation protection. The then Government were conscious of this balance between protection against inflation and the ability of the schemes, and the employers who stand behind them, to afford such protection. Of course, the financial deficits in defined-benefit schemes are very much a topic of conversation in this House and in the press—particularly the trade press—and are something that will be discussed in the Green Paper.

I am not a great believer in providing people with straws to clutch on to. Many politicians across the House do so in politics, and probably the reason for my lack of progress, compared to certain people of my age in all political parties, is that I try to be as candid as possible. I do not want to give a straw to clutch on to, but I do think that hon. Members have to remember that costs of business are also a factor to consider. Hewlett Packard, Compaq and Digital before them have been regarded as good employers; they employ a lot of people in this country and help to generate the prosperity of this country.

I accept the point made by the Opposition spokesman, the hon. Member for Stockton North, that there are people in Hewlett Packard who earn big money—it is all relative—but that is also true about footballers and many other people. It is not the actual position—I know that it makes a good comparison in a speech, but the fact is that the quantum of pension fund commitments that Hewlett Packard took on amount to many, many millions of pounds. The company knew that when it was acquiring the business. I am sure that if it felt that was far too much, it would not have done so. It would have calculated the cost and taken it into account.

I had better make some progress now, Mr McCabe, because time is running out.