Oil and Gas Producers: Windfall Tax

Andrew Bowie Excerpts

Tuesday 1st February 2022 Commons Chamber

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It is a pleasure to rise to speak in this debate and to follow the remarks of the hon. Member for Birmingham, Hall Green (Tahir Ali). It has been quite a remarkable afternoon, not least because I found myself in agreement with much of what was said by the hon. Member for Aberdeen South (Stephen Flynn), which is an uncomfortable and unusual position for me to be in—it is a shame that he has left the Chamber just now—because we keep being told by the Labour party that the grown-ups are back in the room and the Labour party is back to where it was and all the rest of it. We are hearing Member after Member on the Labour Benches get up and castigate successful British businesses for having the audacity to make a profit, and castigate successful British people who have chosen to invest in British success stories as somehow evil or the devil incarnate, because they have chosen to invest in oil and gas companies, which employ hundreds of thousands of people across this country and, indeed, many thousands in my constituency.

For most of my life, the Labour party dominated Aberdeen city politics. Until 2015, it held both Aberdeen North and Aberdeen South, ran the city council and elected numerous MSPs to the Scottish Parliament, not that we would know it listening to Labour Members today. The party of Frank Doran and Dame Anne Begg —or Donald Dewar when it comes to it, who represented Aberdeen South—seems completely disconnected from the oil and gas industry. It seems ignorant of how the industry operates and the workers who are employed by it. It is on those workers that the impact of the windfall tax would be most harshly felt were we to introduce the Labour party’s policy, as put forward today. I see some on the Labour Benches shaking their heads, but it is absolutely true.

The very reason that the UK’s oil and gas industry recovered to the extent that it has following the crash in 2014, is in very large part due to the fiscal stability offered to it by this Government. That led to the North sea becoming the most attractive basin in the world in which to invest, which was an incredible reversal of fortunes considering where the industry was in 2014. I just wonder how many international companies would look at a situation that the Opposition would have us in, where the tax regime could be changed at the stroke of a pen or the drop of a hat, and think, “That is the sort of stable fiscal regime I want to invest in,” and not take their business and create jobs elsewhere around the world—the middle east, Russia or the gulf of Mexico—anywhere there is another successful oil and gas sector.

When those companies fail to create new jobs or invest in platforms in the North sea, it will be my constituents, and the constituents of many Members in this House today, who will suffer. It will be the over 100,000 Scots who are directly employed by the oil and gas industry who will suffer. It will be the economy, particularly in the north-east of Scotland, that will suffer. And how exactly do Labour Members think the cost of living of the people I am elected to represent will be impacted if they have uncertainty about their future employment and how they are going to put food on the table for their families?

It is not a surprise that Labour is still so far behind in Scotland that it cannot elect a Member north of the Forth if this is how it understands, or misunderstands, one of Britain’s most successful industries. It is an industry, by the way, that has contributed—I heard the right hon. Member for Doncaster North (Edward Miliband) say its profits were unearned—£330 billion to the UK Treasury. It has a supply chain worth £30 billion. We heard that exports were somehow a bad thing. It exports almost £12 billion of goods and services around the world. The north-east as a region was only just recovering from the oil price crash of 2014 when covid struck. As the hon. Member for Aberdeen South said earlier, this time two years ago the oil price was barely scraping zero.

That is a key point: oil and gas prices fluctuate wildly. Gas may be sitting at near record prices today and oil may be sitting at $88 a barrel right now—that is, of course, impacting on energy bills—but tomorrow that might all change. It is grossly incompetent, naive, inept—this is the Labour party, of course—and totally ignorant to base a policy around the price of oil and gas. Imagine anybody being so stupid, short-sighted or ignorant as to do that. The SNP would never base a significant policy proposal on the price of oil or gas, I am sure.

More than that, the measure would be bad for the environment. It would almost certainly cause companies to cease or pause investment in what is already one of the cleanest basins in the world, which will be net zero by 2050, with the vision being 2035. As all eyes are trained on Ukraine, the Labour party’s policy would lead Britain to a place where we were less secure in our energy supply and more reliant on Vladimir Putin of Russia and countries in the middle east. That is why the Labour party should think again before it comes in here with headline-grabbing stunts, instead of well-thought-through policy, when it has no idea about how those stunts would impact on the working people of this country.