Energy (Oil and Gas) Profits Levy Bill

Alan Brown Excerpts

Committee stage
Monday 11th July 2022 Commons Chamber

Clauses 3 and 4 set out the types of operating and leasing expenditure that are eligible for the investment allowance, and they are modelled on the provisions for the supplementary charge investment allowance. For operating expenditure, the expenditure must have been incurred for one of the listed purposes, such as increasing oil extraction rates or oil reserves, and must be incurred in relation to a qualifying facility or oil well. However, the allowance is not available for routine repair and maintenance. Leasing expenditure must be for leases of at least five years, and must be for mobile production or storage assets such as floating production storage and offloading ships.

[Alan Brown]

The right hon. and learned Lady sent a letter to MPs saying that electrification will be covered in the offsetting, but does she agree that it should really be in the Bill? Ministers and Prime Ministers come and go, as we have seen, so the only way the industry can have full certainty and clarity is to have something in the Bill about electrification, which is the purpose of SNP amendment 9.

--- Later in debate ---

Most importantly—and I really do wish that this Bill had been smothered—what does a tax rate of 65% say about doing business in the UK? Does it say, “Do well, and we may change the tax rate rather quickly on future profits, because you are doing rather too nicely”? My hon. Friend the Member for Waveney (Peter Aldous) made the point on Second Reading that these companies are fleet of foot. They can invest wherever they like. There is plenty of oil and gas around this world that they can go to, but where their investments may not be carried out and administered in such an environmentally positive way as in the UK. There might be very little monitoring of how much methane is being vented off and of the actual working conditions of people working off the coast of Brazil or the coast of Africa. I would rather that that was done in the UK, but that is a wider argument about energy security and why we should be doing things for ourselves.

[Alan Brown]

Is the hon. Member seriously saying that the companies that currently work in the North sea—companies that are environmentally responsible, take workers’ rights very seriously and look after their workers—might just move somewhere else in the world and give up on workers’ rights and the environment? That does not sound like responsible companies, yet that is what he seems to be saying they would do.

[Craig Mackinlay]

I am saying very clearly that big companies can make investments anywhere they please in the world, perhaps with tax regimes that are more suitable to them and where they are not being taxed at 65%. I would rather that they were investing here and staying here than going abroad to invest, with all the potential consequential impacts on the environment and employment. It seems that the hon. Gentleman agrees with me.