Russian Oil Import Ban

Andrew Bowie Excerpts
Wednesday 9th March 2022

(2 years, 1 month ago)

Commons Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Kwasi Kwarteng Portrait Kwasi Kwarteng
- Hansard - - - Excerpts

As Energy Minister and now Secretary of State, I have been totally committed to increasing the supply and production of renewable power. We reopened the pot one auction for onshore wind. For the first time ever, we had a pot ringfenced for tidal stream technology. I have introduced an annual auction for offshore wind. I am completely with the hon. Member in being 100% behind renewables and the green revolution.

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Hansard - -

I thank my right hon. Friend not only for his statement, but for his continued and unflinching support for the oil and gas industry that I am proud to represent much of in West Aberdeenshire and Kincardine. On that, despite the importance of energy security, which has been brought home to us all through the tragic scenes we are seeing on television right now, is it not absurd that the Scottish Government’s official position continues to be that we should have no new licences, no new exploration and no new drilling in the North sea?

Kwasi Kwarteng Portrait Kwasi Kwarteng
- Hansard - - - Excerpts

My answer to my hon. Friend is that he is absolutely right. It is the North sea transition deal—“transition” is the key word—not the North sea extinction deal, as the hon. Member for Aberdeen South (Stephen Flynn) and his Green friends north of the border are pursuing. We have a very different approach from Members on the Opposition Benches, and long may that continue.

Oil and Gas Producers: Windfall Tax

Andrew Bowie Excerpts
Tuesday 1st February 2022

(2 years, 2 months ago)

Commons Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Hansard - -

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.

Oral Answers to Questions

Andrew Bowie Excerpts
Tuesday 11th January 2022

(2 years, 3 months ago)

Commons Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Lee Rowley Portrait Lee Rowley
- Parliament Live - Hansard - - - Excerpts

I know that this is a surprise to the Scottish nationalists, but we have made the decision as a country to leave the European Union, and we are now in the process of ensuring that that is a success, not just for businesses in Scotland, but for businesses all across the United Kingdom as a whole, and we will continue to do that in the months ahead.

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Parliament Live - Hansard - -

Given that shops in Scotland had a greater reduction in footfall than any other part of the UK, given that the Scottish Licensed Trade Association has called the additional restrictions in Scotland a “knock-out blow”, given that the Aberdeen and Grampian chamber of commerce has called on the Scottish Government to pay up or open up, and given the abandonment of the Scottish oil and gas sector and its workforce, will my hon. Friend be able to give an assessment of Scottish businesses’ confidence in the Scottish Government?

Lee Rowley Portrait Lee Rowley
- Parliament Live - Hansard - - - Excerpts

I am grateful to my hon. Friend for his apposite and very important intervention this morning. He is a huge and doughty campaigner for Scottish interests, unlike individuals on the SNP Benches. It is comments such as those from the Aberdeenshire chamber of commerce that demonstrate how the confidence of Scottish businesses should be in the UK Government rather than the Scottish Government.

Storm Arwen: Power Outages

Andrew Bowie Excerpts
Monday 6th December 2021

(2 years, 4 months ago)

Commons Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Greg Hands Portrait Greg Hands
- Parliament Live - Hansard - - - Excerpts

I thank the hon. Member for that contribution. I understand the passion that he feels, but a lot has been done on the ground. I saw for myself the provision of accommodation by hotels, inns, pubs and so on, as well as the provision of food and hot meals—everything from a cup of tea in a community hall. There has been a huge community response right across the affected regions. We have also worked closely with the British Red Cross in providing relief to people on the ground.

It is completely unacceptable that some people are still without power. I think that 99.8% of people have now been reconnected, but it is an unacceptable time for the 1,000 or more people who are still not reconnected. The Secretary of State, the Prime Minister and I have all said that. We obviously need to learn the lessons, and an established process is in place for that. I have already pointed out how previous such storms have led to really strong improvements to the system, and I would also expect that to be the case this time.

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Parliament Live - Hansard - -

I am sure that my right hon. Friend will agree that it is quite rich to hear criticism from Scottish National party Members after it took the Scottish First Minister four days to even comment on the fact there was an issue in the north-east of Scotland, given that the power went off. I join him and my hon. Friend the Member for Banff and Buchan (David Duguid) in thanking the workers from Aberdeenshire Council, the emergency services, the armed forces and, of course, the Scottish and Southern Electricity Networks engineers who did a power of work to restore electricity to north-eastern Scotland.

Although a lot has been said about the resilience of the energy network and a review of that, will the Minister join me in looking into a review of the communications network? Part of the problem last week seemed to be that whether someone was able to report faults or was offline in their area depended on which mobile network they were on, so I ask for his support in calling for a review from Ofcom of the mobile communications network.

Greg Hands Portrait Greg Hands
- Parliament Live - Hansard - - - Excerpts

I thank my hon. Friend for his invaluable assistance on Friday in Aberdeenshire. I do not think he and I will ever forget meeting the engineers who had been working up to 17-hour shifts just outside of Kemnay. They had been at that all week, including with help from right across the UK. My hon. Friend makes a very good point about the communications network. We have become more dependent on electricity and networks. I am sure that that will be part of the review to see what lessons might be learned and whether there can be other ways to approach the communications problem in future.

Storm Arwen

Andrew Bowie Excerpts
Wednesday 1st December 2021

(2 years, 4 months ago)

Commons Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Kwasi Kwarteng Portrait Kwasi Kwarteng
- Parliament Live - Hansard - - - Excerpts

On the situation with regard to the climate change emergency, the right hon. Gentleman and I have very similar views. Clearly Storm Arwen was an event the likes of which we have not seen for, certainly, 16 years, since the records of the DNOs started. We have to be prepared for similarly extreme difficult weather conditions in future and make sure that our system is resilient in that eventuality.

Turning to the right hon. Gentleman’s specific questions, the 105 line is the one number that people are being asked to call; it has been centralised. He is right to say that there was initial pressure. My understanding is that over the weekend, it took people up to two hours to get through, which is clearly unacceptable, but the storm hit and the companies did not have the communication networks, the call centres or the people there to deal with the situation. When I spoke to the CEOs of the companies yesterday, they said that the waiting time has been reduced to 10 minutes to a quarter of an hour. That is what I was told. If people are finding difficulties, they should definitely get in touch with their MPs, Government and also the distributors.



On the right hon. Gentleman’s second point, the North East South West Area Consortium is a very effective means by which the generating companies can share and deploy engineers across different networks. That is very effective, I am told by the CEOs of the companies, but I will have more calls today with local resilience leaders to ensure that what the generating companies are saying is matched by what people are experiencing on the ground, because, as he well knows, there can be a mismatch between the two.

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Parliament Live - Hansard - -

May I echo the words of my right hon. Friend in thanking all those in our emergency services and the local authority workers who went out over the weekend and have been doing so much to support our communities across the United Kingdom that have been affected? I also thank the people in local businesses who have opened their doors to look after those people who are more vulnerable and need support, such as the Fife Arms in Braemar, where temperatures dropped below zero over the weekend and people lost power and water. Lumphanan, Crathie and Corgarff in my constituency remain without power and do not even have access to a temporary generator. Can he expand on his discussions with Scottish and Southern Electricity Networks? What discussions has he had with the Scottish Government to see what the two Governments in this country might be able to do to speed up the response and support those people who are going to their fifth day without any power, heating or electricity in general?

Kwasi Kwarteng Portrait Kwasi Kwarteng
- Parliament Live - Hansard - - - Excerpts

My hon. Friend will accept that we are in an extreme situation. He will also know that I have spoken to Mr Alistair Phillips-Davies, who is the head of SSE. He and I and colleagues in the Scottish Government are apprised of the situation. Generators are being distributed that can take up the slack when important power infrastructure is down, but it is an ongoing situation and I would be happy to engage with my hon. Friend in the next few hours.

Subsidy Control Bill (Sixth sitting)

Andrew Bowie Excerpts
Tuesday 2nd November 2021

(2 years, 5 months ago)

Public Bill Committees
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Kirsty Blackman Portrait Kirsty Blackman
- Hansard - - - Excerpts

The very nature of natural disasters is that they do not occur across the entirety of the UK in one go. Let us hope a natural disaster does not occur across the whole of the UK in one go! Generally, they are regionally specific; they will happen in a relatively confined geographical area. Whether it be flooding, an earthquake or something of that sort, not everywhere will be affected. Therefore, thinking about how this provision could apply, it makes a huge amount of sense for there to be an actual mechanism through which the devolved Administrations can request for the Secretary of State to declare a natural disaster. I would hope that the Secretary of State would be doing so anyway, and would recognise that a disaster in Wales—

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Hansard - -

Surely that is exactly the point. If a natural disaster has occurred, it is almost certain that the Secretary of State would declare a natural disaster. There is nothing that I can see preventing any devolved Administration within the United Kingdom from requesting that the Secretary of State does that in law anyway. I do not think this amendment is required at all.

Kirsty Blackman Portrait Kirsty Blackman
- Hansard - - - Excerpts

The hon. Gentleman said that it is almost certain—probable, at least—that the Secretary of State would do so, but it is not certain. The amendment allows an actual mechanism for the devolved Administrations to make that request. It also makes it clear that if the Secretary of State refuses a request of this nature, they have to explain why. That is very important for transparency. This transparency issue is also important—

Subsidy Control Bill (Third sitting)

Andrew Bowie Excerpts
Thursday 28th October 2021

(2 years, 5 months ago)

Public Bill Committees
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Seema Malhotra Portrait Seema Malhotra
- Hansard - - - Excerpts

Thank you for allowing me to speak to the amendment, Mr Sharma. I want to speak about why I think this is so important. The reason for this amendment is that the Bill should prevent subsidies that unnecessarily harm or impede the UK’s work towards net zero. In the Bill as it currently stands, subsidies not related to energy or the environment can meet all of the subsidy control principles, but could work against the Government’s overall goal of moving towards net zero.

To prevent this the Government are seeking to amend principle G of the schedule, in order to state that the subsidy’s beneficial effects must outweigh any negative consequences they may have on the UK’s net zero commitment. This was supported in evidence by Alexander Rose from DWF Group, who noted that all civil servants would be mandated to take account of net zero. Why not extend that thinking to other public authorities and to every single subsidy? Similarly, subsidies related to energy and the environment should not impede the UK’s work towards net zero. More than that, they should actively work towards the UK reaching its targets. We are having this debate and seeing the Bill pass through Committee during COP26; in fact, we are leading into COP26 and we will pick up after it. Does the Minister agree that if the Government want to show they are serious about this, we should be thinking about how to ensure that when public money could be used to support policy objectives, we include the United Kingdom reaching its net zero commitments as part of that?

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Hansard - -

I find nothing objectionable in what the hon. Lady is saying or indeed the amendments. However, possibly due to what she has said about the Government’s amendment and what is already in the Bill, I do not know whether what she is proposing is entirely required. Directly underneath where her proposed sub-paragraph (c) would be inserted, principle A in schedule 2, on the aim of subsidies in relation to energy and environment, refers to the aim to deliver

“a secure, affordable and sustainable energy system”,

and, in sub-paragraph (b), the aim to increase

“the level of environmental protection compared to the level that would be achieved in the absence of the subsidy.”

Both are very much in line with, and compatible with, our aim to reach net zero.

Seema Malhotra Portrait Seema Malhotra
- Hansard - - - Excerpts

I thank the hon. Gentleman for his comments. My understanding is that the energy and environment principles would apply to subsidies in relation to energy and the environment. We are talking about a slightly broader principle here, which is that any subsidy granted under the regime should not have a harmful impact on achieving our net zero outcomes. That would seem to be a slightly perverse use of public money when net zero is such an explicit goal and when civil servants will need to be working towards it. Indeed, as Dr Barker outlined on Tuesday,

“the green industrial revolution that we are all seeking to work towards in order to achieve net zero is also something that will require…partnership between business and Government”,

and

“an effective subsidy system can be part of that.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 39, Q52.]

These amendments are simply saying that if we are serious about what achieving net zero will mean, we should not allow a system to be established, at the same time as COP26, that could work against that, and do so using public money.

--- Later in debate ---
Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Essentially, the framework and the clause minimise, but cannot eliminate, distortion. That is the purpose of the Bill.

Andrew Bowie Portrait Andrew Bowie
- Hansard - -

This is relevant to principle G, which says:

“beneficial effects…should outweigh any negative effects, including…competition or investment within the United Kingdom”.

I cannot see where the hon. Member for Aberdeen North is coming from when she says that more clarity might be good for local authorities and other granting bodies. That is quite clearly addressed in the Bill, so the Government are clearly trying to stop the negative effects she has described.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

My hon. Friend makes a good point. The Bill weighs up the benefits versus the disadvantages, and minimises rather than eliminates distortion—we cannot eliminate distortion. We have talked about this a number of times, and we will continue to, but the upcoming guidance will start to flesh out some of the specifics, which it is probably not appropriate to get into now.

Subsidy Control Bill (Fourth sitting)

Andrew Bowie Excerpts
Thursday 28th October 2021

(2 years, 5 months ago)

Public Bill Committees
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

The spirit is certainly there, but I do not want to bind future Administrations to a requirement to respond in emergency situations.

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Hansard - -

I concur with my hon. Friend. We have seen in the past few years—with British Steel, for example—that the Government have had to move incredibly quickly to get subsidies in place. Adding that one-month period could determine the success or failure of such subsidies in supporting a specific UK industry. Time is of the essence.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Absolutely. The Government have determined—as we did in debate on the United Kingdom Internal Market Act 2020—that subsidy control is a reserved matter, so it is right that subsidy control policy is made and voted on in Parliament. Clearly, we must ensure that those schemes are scrutinised, and we will continue to engage with the Scottish and Welsh Governments and the Northern Ireland Executive, as we have done in drafting the Bill and since its introduction. We are committed to engaging with them regularly and listening to their views during the Bill’s passage and beyond. That includes engagement on the definitions of “subsidy, or subsidy scheme, of interest” and “subsidy, or subsidy scheme, of particular interest”. I therefore ask the hon. Member for Feltham and Heston to withdraw the amendment.

--- Later in debate ---
Kirsty Blackman Portrait Kirsty Blackman
- Hansard - - - Excerpts

I beg to move amendment 17, in clause 13, page 7, line 30, leave out

“in relation to energy and environment”.

This amendment would require public authorities to consider energy and environment principles when giving any subsidies, not just those related to energy and environment.

The reason I tabled the amendment is something that we covered earlier today in relation particularly to net zero and thinking about the obligations that we all have to ensure the protection of the environment. I think it is really important, as the Minister agreed earlier today, that in every policy decision that is being made by every authority, whether it is granting a subsidy or doing anything else, those authorities are considering the environmental principles of that decision.

This proposal would ensure that consideration was given to the energy and environment principles in schedule 2 in relation to every subsidy that was given. That is not too much for us to ask of granting authorities. They are giving subsidies, and we have to remember that the subsidies they are giving represent significant amounts of money. We are talking about hundreds of thousands of pounds; we are not talking about when a local authority gives a grant of 100 quid to a small community council to put up Christmas lights. As we are talking about big sums of money, it is totally reasonable that we expect these public authorities—which do anyway a huge amount of audit, and a huge amount of sense checking of any spend that they do and consideration of any spend that they do— to think about all that spend. They should do so not just in relation to subsidies, but in relation to the energy and environment principles.

I probably would have written schedule 2 slightly differently. I maybe would have had slightly different energy and environment principles, including the Opposition’s suggestions around net zero, but given that those are in the Bill and that schedule 2 is in the Bill, it is totally reasonable for us to say that those authorities should consider the energy and environment in everything they do. That is not explicit or even implicit in schedule 1, in terms of the concerns that authorities have to look at with regard to the principles there. This is hugely important.

Andrew Bowie Portrait Andrew Bowie
- Hansard - -

Given that we did not accept the hon. Lady’s earlier amendment, does she not worry that this new proposal might weaken the Bill further with regard to what she is talking about—environmental protections?

Kirsty Blackman Portrait Kirsty Blackman
- Hansard - - - Excerpts

I think that, actually, schedule 2 does provide some environmental protections; I am quite comfortable in saying that. It does not do everything I would have wanted it to do. It does not create a requirement to meet the carbon commitments and move towards net zero in the consideration of the principles. However, increasing the level of environmental protection is in there, and it is important that all authorities are thinking about increasing the level of environmental protection in whatever they are doing. Now is the time for the UK Government to make that explicit in relation to everything that everybody is doing, whether it is subsidies or something else. That is why the amendment has been tabled.

--- Later in debate ---
Amendments 14 and 15 would ensure that rescuing and restructuring subsidies can be given to ailing or insolvent enterprises if they are of vital strategic importance.
Andrew Bowie Portrait Andrew Bowie
- Hansard - -

Will the hon. Gentleman expand on how Morrisons would fit into the definition of “national critical infrastructure”, as set out in amendment 14?

Bill Esterson Portrait Bill Esterson
- Hansard - - - Excerpts

Morrisons, as one of the big four supermarkets, is crucial to our national economy. The problem is that the Government do not show enough interest in businesses of such strategic importance.

Andrew Bowie Portrait Andrew Bowie
- Hansard - -

Will the hon. Gentleman give way on that point?

Bill Esterson Portrait Bill Esterson
- Hansard - - - Excerpts

As the hon. Gentleman has been wearing a mask today, I will.

Andrew Bowie Portrait Andrew Bowie
- Hansard - -

I thank the hon. Member; he is too kind. The decision to allow Morrisons to be taken over, in the way that it was, was made because it was deemed that that would be good value for shareholders, but also good for the company in general—it would be able to reinvest in its infrastructure here, in the United Kingdom. The decision was actually supporting one of the big four supermarkets to provide jobs and employment for this country. To try to define it in this way and say that the Government should step in when businesses like that are under threat of takeover—even when those takeovers could be to the advantage of that company and to the British people—would be, I think, a retrograde step.

Bill Esterson Portrait Bill Esterson
- Hansard - - - Excerpts

I am grateful to the hon. Gentleman for intervening. I think he is rather missing the point, which I tried to explain the first time around. I am making the point that the Government showed no interest in what was going on with Morrisons, nor the merits of what was happening.

Coming back to steel, the Government have belatedly woken up. Before I was intervened on, I was actually going to say that perhaps there are signs of improvement on this front. The Government have shown some interest in improving things, because there are amendments in the Budget that would give the Secretary of State for International Trade powers to overrule the recommendations of the Trade Remedies Authority. I am therefore mildly hopeful that we are seeing an improvement in policy and approach from the Government on that measure alone.

Subsidy Control Bill (First sitting)

Andrew Bowie Excerpts
Tuesday 26th October 2021

(2 years, 5 months ago)

Public Bill Committees
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Kirsty Blackman Portrait Kirsty Blackman
- Hansard - - - Excerpts

Q To follow that up, probably with Mr Pope, it says specifically that indirect subsidies are to be included. In the event that an indirect subsidy occurs, who is responsible for ensuring that there is transparency and information about that?

Thomas Pope: That is a very good question, and one that I am afraid I do not know the answer to.

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Hansard - -

Q Thank you very much for your evidence this morning. Coming to Mr Pope first, you spoke about the domestic subsidy control regime being almost unique, and said that we were charting our own course. On balance, do you think having a subsidy control regime is a good thing?

Thomas Pope: Yes.

Andrew Bowie Portrait Andrew Bowie
- Hansard - -

Q Why do other countries around the world choose not to do it?

Thomas Pope: That is a very good question. I think there are various benefits, and in our research we have outlined them. I think there is a particular case, in a system where competing jurisdictions can offer subsidies, for worrying about subsidy races. Actually, that is effectively a co-ordination problem, and a subsidy control regime is effectively that co-ordination.

I also think that, in general, there are benefits to setting out very clearly what the principles are by which you are going to offer subsidies. An interesting analogy—it is not quite the same—is fiscal rules; they are not legally binding in the same way, but these rules are set out by politicians to indicate what we think is sensible policy. They can sometimes help you to resist, for example, political pressure to save a business that is going under but that has no long-term prospects. Those rules can also be quite helpful.

In general, it is quite hard to hold the line on those things, and that probably explains why there are not domestic subsidy control regimes in general, because this is Governments tying their own hands. In general, it is quite hard to do that. It just so happens that we have an international obligation that requires us to do that, but I think that is actually a benefit rather than a cost. That would be my answer as to why there are not lots of subsidy control regimes elsewhere. Professor Rickard may know better than me on that.

Professor Rickard: No, Mr Pope is absolutely right. You are committing to saying that the regions within the United Kingdom will not compete with each other in trying to win business, jobs and investment by awarding subsidies. It is difficult to give up that ability, and say that we will not engage in that type of subsidy war, but we have seen the damage that competitive subsidy provisions have caused. Estimates suggest that in the United States $80 billion a year is spent by states competing for business with subsidies. If they agreed not to do it, and had their own subsidy control regime, real income in manufacturing alone would increase by 5%, so there are real economic gains to tying your hands and saying, “We’re not going to engage in subsidy races.”

Evidence suggests that subsidy races do not work in the long term. Even providing big subsidies does not necessarily guarantee that you will get businesses where you want them to be. For example, the US biotech industry is concentrated in five cities with world-leading universities and very deep and highly educated labour pools. Businesses locate there despite the fact that 41 out of 50 states have very generous subsidies to try to lure them to their regions, so evidence suggests that spending subsidies to try to attract jobs may not always work, and doing so is really a waste, in terms of spending a lot of money in a way that potentially hurts productivity and real income.

Kevin Hollinrake Portrait Kevin Hollinrake
- Hansard - - - Excerpts

Q Professor Rickard, Mr Pope said that he felt that the level for reporting should be lower than £500,000; it should be £175,000. You agreed, but you did not specify a level. What level do you think it should be?

Professor Rickard: I don’t have a strong feeling on the level. I am not sure where the £175,000 number came from. I heard Mr Pope mention it. I do not know the logic behind it.

10-point Plan: Six Months On

Andrew Bowie Excerpts
Tuesday 18th May 2021

(2 years, 11 months ago)

Commons Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Kwasi Kwarteng Portrait Kwasi Kwarteng
- Parliament Live - Hansard - - - Excerpts

I am conscious of the work that the hon. Gentleman has done, as he put it, to get this over the line. I was gratified to see Mr Tavares’ comments yesterday and I think that we are in a reasonable place. We obviously need to work very hard together to get it over the line, but the situation in Ellesmere Port is moving in a positive direction.

Andrew Bowie Portrait Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
- Parliament Live - Hansard - -

I thank and welcome everything that the Secretary of State has said today. May I join the hon. Member for Aberdeen South (Stephen Flynn) in extolling the virtues and benefits of the Acorn project in the north-east of Scotland—of course headquartered in Banchory in my constituency—as being essential to our drive towards net zero? Does my right hon. Friend not agree that, if his Department were to choose this project, it, along with the energy transition deal, would demonstrate again to the people in the north-east of Scotland the value of remaining a part of our United Kingdom?

Kwasi Kwarteng Portrait Kwasi Kwarteng
- Parliament Live - Hansard - - - Excerpts

I am delighted to see this degree of cross-party fraternity on that. All I would say is that the Acorn project has a lot to recommend it.