(3 years, 8 months ago)
Public Bill CommitteesParagraph (e) would take the Government’s analysis in the statement of policy intent and put it into action. It recognises that national security risks are most likely to arise when acquirers are hostile to the UK’s national security or when they owe allegiance to hostile states. The origin and source matters—I hope the Minister agrees with that. The former chief of MI6 told us about Chinese intelligence organising the strategic focus of both Chinese commerce and Chinese academic study in ways that are challenging to identify unless we have regard to the country of origin of those parties, which the Bill currently does not have.
The hon. Lady mentions Sir Richard Dearlove’s evidence to the Committee a couple of weeks ago. He made very clear that his opinion, as a former head of MI6, was that having a statutory definition of national security would be very prohibitive and do damage to what we are trying to achieve by getting this Bill on the statute book.
Absolutely. That is why we are not seeking a statutory definition of national security. That is why we are seeking to include and to set out points that the Secretary of State may take into account. The hon. Member should recognise that the Government’s statement of intent is designed to give guidance as to how the Bill will work and be used in practice, and what might be taken into account. The guidance is there. It is just that it is very limited.
We are deliberately not seeking a prescriptive definition of national security. We recognise, as Sir Richard Dearlove did, that it can and must evolve over time. We are seeking to give greater guidance and to promote a better understanding of the remit of the Bill, so that it can be better interpreted and better implemented and so that all those who come under its remit can share that understanding. That is what other nations do. The new clause takes our security context seriously, and signals to hostile actors that we will act with seriousness, not superficiality.
Paragraph (f) bridges the gap between the Government’s defined sectors and focus and the critical national infrastructure that we already define and focus on in our wider intelligence and security work. It brings us in line with allies. Canadian guidelines list the security of Canada’s national infrastructure as an explicit factor in national security assessments. In Committee on Foreign Investment in the United States cases, Congress lists critical infrastructure among the six factors that the President and CFIUS may access.
The provision also acts on the agreement of the ex MI6 chief. In relation to having a critical national infrastructure definition in the Bill, he said:
“I would certainly see that as advantageous, because it defines a clear area where you start and from which you can make judgments”.––[Official Report, National Security and Investment Public Bill Committee, Tuesday 24 November 2020; c. 24, Q31.]
Some of the interventions have been about whether the new clause hits the right spot between prescribing and defining what national security is and giving greater clarity and focus. We would argue that the evidence that I have just set out shows that it does.
Paragraphs (g), (h) and (i) recognise that national security is about more than a narrow view of military security; it is about human security, clamping down on persistent abuses of law—as other countries do—and recognising that a party that consistently abuses human rights abroad cannot be trusted to do otherwise at home. It is about knowing that the single greatest collective threat we face, at home and across the world, lies in climate risk. It is about acting on illicit activities and money-laundering threats that underpin direct threats to national security in the form of global terror.
I recognise that many Government Members have recently raised the importance of human rights, illicit activities, money laundering and climate change in our security. In the statement on Hong Kong this week, the Minister for Asia acknowledged that human rights should be part of our considerations when it comes to trade and security but said that he did not feel that the Trade Bill was the right place for such provisions. I argue that today’s Bill is the right place for them because it deals with our national security.
The new clause would show the world that the UK is serious about national security. We must protect our national security against threats at home and abroad, and build our sovereign capability in industries that are the most strategically significant for security. We must view security in the light of modern technologies, climate and geopolitical threats. None of those constrain the Government’s ability to act; they simply sharpen the clarity of that action, and its signal to the world.
When we began line-by-line scrutiny, I spoke of my astonishment that the Government’s impact assessment referred to national security as an area of market failure that therefore required Government action. I hope that the Minister can confirm that he does not believe that national security is an area of market failure, but that it is the first responsibility of Government. The new clause sets out to give bones to that assertion and to demonstrate to the world that we understand our national security and the interests at play in promoting and securing it, and that we will act decisively in the interest of national security, taking into account this range of factors to protect our citizens, our national interest and our economic sovereignty, now and in the future.
(3 years, 9 months ago)
Public Bill CommitteesQ
Professor Martin: One of the reasons that this is so difficult, as I said in my first answer to Ms Onwurah, is that I can think of at least three areas of expertise that the unit is going to need to draw on. Technological, yes, because of what technologies will matter. Geopolitical, yes, and I do not have a strong view on whether it needs Mandarin speakers because the UK has a strong and intelligent foreign service mission in country in China and all over the place that can provide input. But the third thing is actually quite a lot of commercial nous—patent laws and so forth.
This is where there is a distinction. This is not all about China. It is layered, and there will be things that we would not want to see going even to quite friendly countries. Arm is a case in point, with the concentration of power in a couple of US companies—particularly when one of them is derived from UK technology. That is not comparable as a strategic threat to Chinese dominance—I hope the Committee does not think I am saying that—but there are times when it would be a damaging foreclosure, if you like, of UK freedom of action and freedom of choice. We know that the US has a strong and sometimes aggressively used extraterritorial legal system in which it can use the power of US companies and block trading with US companies and so on, so we need people who understand those areas where we think, “We are not sure we would want that to leave the country at all” as well as people who understand Chinese. That involves a lot of expertise in things like patents, international law, US commercial law, sanctions and so on.
Q
Professor Martin: I do not vehemently disagree with that suggestion, but I am not persuaded by it. It is not a new issue. I remember cases—they have nothing to do with this—going back to the aftermath of the so-called global war on terror, with demands during inquiries for definitions of national security. I am not sure what that would achieve other than it would be heavily litigated. In terms of both definitions of national security and the categories of technology, a better answer is a drumbeat of reviewable activity, which is by definition transparent, about how the Government interpret the scope of the Bill, if it becomes an Act, and the sort of cases it applies to so that, over time, you build up a broadly accepted framework—of course, not everyone will accept it—that is seen to be fair and rational.
Q
Professor Martin: I certainly would not be against things like that, if it could be done in a way that did not compromise the wider use of the Bill, because I do not think there is intent to interfere in the democratic process. I think the intelligence services take that pretty seriously. I remember in other contexts, when asked to co-operate on cyber-security with other countries, given that some cyber-security capabilities—by no means all—can be intrusive, that a lot of due diligence is always done on whether they could be turned by more authoritarian regimes against their own people. I would not object to that in principle. I do not know whether you have a case in mind when you say that might be necessary, but I have an open mind on that.
(3 years, 9 months ago)
Public Bill CommitteesQ
David Offenbach: Well, I remember there was an outcry years ago when Michael Portillo was a Defence Minister and they were going to sell the Ministry of Defence. There was an outcry and it was withdrawn. Should Admiralty Arch become a hotel or is that an asset? These are the sort of issues which, if they come up, will be dealt with at the time. I like to think that certain things are fairly sacrosanct. We would not sell Buckingham Palace or Windsor Castle to a foreign buyer if we did not know who they were—or at all, in fact.
Q
David Offenbach: The answer is that one is not quite sure. That is why I want to widen the definition. The reason why there are 17 different areas and categories in the Bill is that it is hard to know what national security is at any particular time and how it is reflected in the business that is actually being considered. The only way to make sure that something does not slip through the net is to have a slightly wider definition. There is no definition of national security itself in the Bill, which is perhaps why strategic, research and development, innovation or other issues should be brought in. Then one can be quite sure one has not accidentally lost an asset where there are national security issues.
Q
David Offenbach: Completely. It has also changed how the Government view it. In the summer, public health was added to the list of items on which a public interest intervention notice can be given. So it is clear that, in the face of the national emergency that, alas, we face—according to the Chancellor it is the greatest economic crisis for 300 years—we have to hang on to our assets. That is why the Bill is even more necessary than it was before. The pandemic gives added weight to the arguments that I was making even before we had covid. We need to have a wider test to protect our national assets.
Q
Will Jackson-Moore: It is already having an effect, in that it is being discussed by organisations that are considering investments into the UK right now. People do not necessarily want to be seen as a guinea pig or have high-profile investments unless they really have to. It is not that it is stopping it; it is just another factor on the balanced scorecard as to whether you are going to make an investment. It is one factor to consider and it is a degree of uncertainty, which is never helpful.
Q
Will Jackson-Moore: Not as the Bill stands in its own right. As you say, we are the largest inbound country for venture capital, for private equity and for infrastructure, and we have been seen as the gold standard for the location in Europe to invest into. Many other European territories have equivalent legislation, but again it is about the application of the legislation, in particular the process, the ability to pre-clear and the timelines actually being met. To understand some of these technologies is not going to be straightforward. These are emerging, cutting-edge technologies in some cases, and the talent required to assess that will not necessarily be easy to attract. Some consideration needs to be given to partnering with research institutes or academia in specific areas, so that there is a panel available to assess certain technologies, not only to understand its position right now but also its trajectory—where that technology may go in the next two or three years.
Q
Will Jackson-Moore: It is not something I have specifically considered. It certainly would not that be within what I considered to be a matter of national security under the auspices of the Bill. I do not think I am in a position to comment any further.
(3 years, 9 months ago)
Public Bill CommitteesQ
Charles Parton: I have to say that that is outside my expertise, but I do think it is an extremely good and important question that could be researched relatively easily. Forgive me if I am pushing RUSI here, but I suspect that RUSI has the capability in one of its teams to do some data mining on that, and come up with an answer. It is a very important question, but I am not aware of any research, though there may be some, that goes deeply into that question. It is certainly one that should be followed up.
Q
Charles Parton: Again, I am not a legal expert, but it seems to set out the legal framework. It all very much depends on the structures and mechanisms, and the resourcing of them, that are set up to ensure whether the judgments about a particular company or a piece of academic research and the technology from them should be blocked or allowed through. I put it back to the Committee: if its detailed research, and the measures that go into the Bill, show that whatever organisation is set up is sufficient unto the job, and that the channels are there to ensure that all these small and sometimes obscure technologies are at least passed by it, that is a really important piece of work.
Q
Charles Parton: I have not done comparative research on that, or done a paper on it. That is something that needs to be done by the Government. Perhaps they have done that. The impression that I get from discussions of this sort of question in the various fora that I mix in suggests that the Americans and Australians have taken a much more hard-hitting approach than we have. Again, it depends on what structure is set up by the British Government, and how it functions in line with the Bill. Forgive me for not giving you a full answer, but that is the sort of research that needs to be commissioned by the Government in order to make decisions on how to deal with that question.
Q
Charles Parton: The question of elite capture is very important and very topical. First, I have called for this in various papers that I have written. The Cobra committee that makes decisions on employment after political or civil service careers definitely needs strengthening. I am not sure of the degree to which work on that is going on; in fact, I do not think much is. Certainly neither the provisions, nor the exercise of those provisions, have been sufficiently rigorous. It is very much a question of lengthening the amount of time between leaving a particular post and taking up a job where, in some cases, you are laundering the reputations of some of these companies. If that period is too small and the criteria are too weak, there is a great risk of people, while still in office or still in post, saying to themselves, “I’d better not be too harsh on this, because in a couple of years’ time, I might be approaching these people, or they might approach me for a job.” That is pretty crude, I know, but it is perhaps easier to see in the case of a defence company. If you were in the MOD, say, and you had to make a decision, one hopes you would make it entirely in the national interest, rather than with a view to possible employment by whichever company might be bidding for a contract, but that is one area that needs strengthening.
The other area in all influence problems, of course, is that sunlight and transparency is the one weapon we have, but if a Minister, an ex-Minister or a top civil servant is running a consultancy company, and let us say Huawei is employing that company—I choose this example by sheer chance—that should be known. That should be declared, because if such people—who are still influential with their old colleagues, whether parliamentary, ministerial or civil service—are urging a certain line, as I have heard some urge, it may not be disinterested; in fact, it certainly is not in some cases. That needs to be made clear. Sorry, could you just repeat the second part of your question?
Q
I was going to ask you a question I put to Mr Parton, although it is probably more relevant to you. How does what the Bill proposes compare with what is being done in other, comparable countries, such as our Five Eyes partners? Does it go as far as the Australians and the Americans, or are we still some way short of where we should be?
Sir Richard Dearlove: No, I think we will catch up. A very good example for us is Australia. They are hyper-dependent economically on their relationship with China, but the current Australian Government had the resolve to take a tough line on strategic issues, and they have suffered as a consequence. But their relationship with China will come back into balance, so the idea that you cannot be hard with the Chinese on these issues because it will prejudice a good trading relationship is rubbish.
The Chinese will probably respect you more if they know you mean business, they want a clear-cut relationship, and they see you have the legal means to impose that domestically, so they cannot just buy a high-tech company and walk off with the intellectual property, thank you very much. In the past, we have been so laissez-faire, it is ridiculous.
Chinese involvement in the oil industry is an interesting example too—I mean, look what they are doing now. They are doing deals with Iran and with Saudi Arabia on carbon fuel, exactly in the way I explained earlier. They are not going to cut their fuel emissions until they are ready to go for a nuclear-hydrogen economy, which they will have the means to do. We are sitting by and watching it happen, in a manner of speaking, and not worrying about the consequences for us.
One of my friends, who is a Chinese scholar, drew my attention—you will enjoy this, I think—to the 36 stratagems from the era of the warring states, which is 481 to 221 BC. I will mention three of the stratagems, because I think they are appropriate to the thinking of this Committee. Kill with a borrowed sword—that is, get what you can. Loot a burning house—bear that in mind in terms of taking advantage of the current pandemic. The third one is hide a knife behind a smile.
(3 years, 9 months ago)
Commons ChamberI am grateful to my hon. Friend for raising this. The oil and gas sector, as he knows, is currently developing its own proposal for a transformational North sea transition deal, as we call it now. Once we receive its input and ideas, we will be able to negotiate with the sector to make sure that we have the right level of ambition with regard to net zero while preserving the much-valued jobs and expertise that he and others are so keen to promote.
(4 years, 6 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I beg to move,
That this House has considered the UK oil and gas industry.
It is a pleasure to have you in the Chair, Mr Robertson, for this important and timely debate. It is important because the oil and gas industry is a major employer and a major contributor to the Exchequer, and its success is vital to the economic growth of not just my constituency but all those represented in the Chamber and indeed the entire country. It is timely because never before has an industry—indeed, a country—faced such challenges, had to react to such quick-changing expectations and move at such speed alongside an ever-evolving debate about our future energy needs and how we address the UK’s contribution to anthropogenic climate change.
It was nearly two years ago, in April 2018, that the last debate on the UK’s oil and gas industry was held in this place, led by my former colleague and constituency neighbour, the former MP for Gordon, Colin Clark, and responded to by the then Minister for Energy and Clean Growth, the former MP for Devizes, the right hon. Claire Perry—how times change! When I read that debate in Hansard at the weekend, what really struck me was how little reference there was to climate change: in fact, the phrase was used just four times. There was little comment from anyone on how the UK and indeed the world needed firm, ambitious action to reduce our climate emissions.
That is remarkable, given that but a year later, in May 2019, the UK Committee on Climate Change recommended a target of net zero carbon emissions by 2050. A month after that, the then Prime Minister Theresa May committed the UK to that target and, a month after that, on 27 June, the United Kingdom passed legislation committing us to net zero by 2050, making us the first, and as yet only, major economy to do that. I bet that no one in the Chamber for that debate two years ago—or here for this one—foresaw the speed of that change. No one could have envisaged Her Majesty’s Government committing to such an ambitious and challenging target. Likewise, I bet that nobody could have ever imagined the chief executive officer of BP saying, as Bernard Looney did last week, that
“The world’s carbon budget is finite and running out fast. We need a rapid transition to net zero…We all want energy that is reliable and affordable, but that is no longer enough…It must also be cleaner.”
He went on to say:
“This will certainly be a challenge, but also a tremendous opportunity. It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change. And we want to change. This is the right thing for the world”.
He did that as he unveiled BP’s commitment to be a net zero company by 2050.
Perhaps we should have foreseen such a speech from one of the world’s largest and the UK’s most successful companies, engaged in the extraction of fossil fuels and with a long history in the North sea; the UK oil and gas industry has, throughout its history, had to battle for its success, be that through economic slumps, environmental challenges, tragedy offshore or simply the difficulties that arise from extracting oil and gas from under the North sea. The industry has had to fight, develop, innovate, experiment and persevere to maintain its continued success. I know, from talking with men and women across the industry at all levels, that it stands ready to do all that again as it plays its part in our future energy mix, leading the way as we transition to net zero.
The hon. Member is making a knowledgeable and impassioned speech about a subject equally dear to my own heart. I would not have settled in Easter Ross and brought up three children if it had not been for the UK oil and gas industry; I owe it everything, as does my family.
More recently, we have assembled wind turbines in the Nigg yard in Easter Ross, which now make up the Beatrice field. The hon. Member talks of reaching targets—surely offshore wind farms such as the Beatrice farm off the coast of Caithness and Sutherland are the way forward.
I thank the hon. Gentleman for his intervention and I could not agree more. The importance to the wider Scottish economy, and indeed the UK economy, is demonstrated by what we see going on in Caithness, Aberdeenshire and further south. Offshore wind is vital to our wider energy mix and meeting our target of net zero by 2050. We have seen such advances in that field over the last few years in terms of reducing the cost of producing energy through offshore wind, so it is incredibly promising and very good to see as part of a wider energy mix.
I represent a constituency in the north-east of Scotland: West Aberdeenshire and Kincardine—a part of the world synonymous with the oil and gas industry. According to the House of Commons Library, some 151,000 people are employed directly by the oil and gas industry across the UK. Of course, in reality, the number is much higher than that: Oil & Gas UK puts the figure at about 270,000, with many support, engineering, technology and even legal recruitment and accounting companies involved, engaged and reliant on a thriving oil and gas sector. Nowhere is that more apparent than in the north-east of Scotland. More than 68% of all direct employment in UK oil and gas is in Scotland and more than 80% of that is in the north-east of Scotland, in and around Aberdeen.
In Westhill, I have the privilege to represent the subsea capital of the world, with more subsea engineering companies per square mile than any other place on the planet. At Badentoy business park in Portlethen, at Blackburn, in the neighbouring constituencies of Aberdeen North, Aberdeen South, Angus and Gordon, and further north along the Banff and Buchan coastline—and even further north than that, in Caithness—there are hundreds of companies employing thousands of people engaged in every imaginable aspect of work in and for the oil and gas industry.
I congratulate the hon. Member on securing the debate, which is important for Teesside as well. I join him in paying tribute to the people who ensure that we keep oil and gas flowing and support our economy. Does he share my concern about helicopter safety? The Civil Aviation Authority recently published CAP 1877, its review of measures after the fatal crash in 2013. Is he surprised that 14 of the CAA’s 20-odd recommendations from 2014 are still considered to be ongoing? The CAA really needs to get on with that so we can further reassure offshore workers about their safety.
I thank the hon. Gentleman for his intervention. I am not surprised because I was aware of that, but it is regrettable. The CAA should, first, do much more to complete its findings and, secondly, move to reassure all of those who rely on helicopter transport out to the offshore rigs in the North sea.
It would be wrong to think of this solely as a north-east of Scotland industry; that has been demonstrated by the hon. Member for Stockton North (Alex Cunningham), whose constituency is in Teesside. This is a UK industry—indeed, a global one—that has contributed over £330 billion to the British economy, supports hundreds of thousands of jobs across the United Kingdom and has a supply chain worth nearly £30 billion, stretching into every nation, region and community across our islands, servicing both domestic activities and exporting almost £12 billion of goods and services to other basins around the world.
Globally, we see British energy companies engaged in work in Mozambique, where, with UK Government support, we are exploiting one of the largest and most recently discovered natural gas fields in the world. In the gulf of Mexico, in the Persian Gulf across the middle east and into the Mediterranean, from Vietnam to Australia, western Africa and the south Atlantic—all those places and more, we find people trained in using technology invented in and working for companies with bases in the United Kingdom.
However, the industry is not without its challenges. It is still emerging from one of the deepest and most sustained downturns in its history. The oil price crash of 2014 to 2016 saw an oil price drop of 70%, which had a huge effect on the industry, particularly in the north-east of Scotland, with many people retraining and leaving the industry altogether. Many of the smaller support companies struggled to survive; some did not. Some, particularly in the supply chain, are not out of the woods yet, but, as I said, resilience, inventiveness and ingenuity are bywords for the oil and gas industry in the United Kingdom and, alongside UK Government support to the tune of £2.3 billion, including investment in the Oil & Gas Technology Centre and the global underwater hub, the industry is confident about its future. We need it to be, for it is from this industry that the skills, technology and investment will come if we are to maximise economic recovery from the basin and reach our target of net zero carbon emissions by 2050.
Many people who do not know the industry—or, indeed, the people in it—might expect it to be averse, even hostile, to the Government’s climate change targets, but nothing could be further from the truth. One need only speak, as I have in recent weeks, to companies such as Total, BP or Equinor, the people at the Oil & Gas Innovation Centre, the technologists and engineers of the Oil & Gas Technology Centre, and the industry body itself, Oil and Gas UK, to learn that the industry is not only not averse to the challenge, but actively embracing it. I recommend the ambitious industry plan Roadmap 2035 to anyone who doubts the industry’s commitment to leading the way, embracing the change and engaging with the challenge as we strive towards net zero, committing the UK continental shelf to be a net zero basin by 2050.
That will, of course, require significant investment and new technology, but it cannot happen in a vacuum and the industry cannot do it by itself. It is committed to developing carbon capture and storage, making it work and making it affordable. That needs to happen. According to the Committee on Climate change, some 175 million tonnes of CO2 a year will have to be stored and captured in the UK alone by 2050 if we are even to come close to meeting our targets.
Teesside is one of the preferred sites for carbon capture and storage, and we hope that the project will go ahead. I wonder what role the hon. Gentleman thinks the industry could play in making sure that the project comes together. To my knowledge, none of the major oil companies is actually involved in the project on Teesside.
I was not aware that no major companies were involved in the project; I think it is important that they should be. If we are to try to engage Government and get governmental support, the industry must lead the way, to show that it has confidence in the technology first.
Far be it from me to override what the hon. Member for Stockton North (Alex Cunningham) says, but I have just come from a breakfast briefing on carbon capture and storage, and BP is involved in the Teesside cluster. Hopefully that addresses that concern.
On the vital need to develop carbon capture and storage, does the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) agree that the UK Government cannot pick just one project? At least a few clusters must be given the go-ahead in the forthcoming couple of years.
I thank the hon. Gentleman for his intervention and for enlightening Members about BP’s involvement in the Teesside carbon capture and storage project. I agree with him. He has foresight, because what he said was exactly where I was going next in my speech. We need at least five projects across the UK if we are going to come anywhere near reaching our target in the next few years.
I am grateful. I am always happy to be corrected on such matters, and I had forgotten that BP is involved, but of course there are many other companies—international companies—that could play a far greater role.
I feel as if I am working as an interlocutor between the two hon. Gentlemen. The hon. Member for Stockton North is right. We need every company to be involved at every level to ensure that the projects are a success, but we also need Government.
Having come from the same breakfast briefing as the hon. Member for Kilmarnock and Loudoun (Alan Brown), I was going to confirm that BP is involved in Teesside. Of course, Shell is involved in the so-called Scottish cluster, between Saint Fergus and Grangemouth. I just wanted to make the point that other clusters are available.
I am glad that everyone enjoyed the breakfast and, yes, I was aware of Shell’s involvement in what is known as the Acorn project, between Saint Fergus and Grangemouth. It is a really promising project and I hope it gets the support that it needs to move forward. However, we also need Government, and that is why I ask the Minister to commit to increasing Government support for the five current carbon capture and storage projects at work across the UK, one of which is the Acorn project in north-east Scotland, and to look to future investment in, and the creation of regulatory and commercial frameworks to support, the future transport and storage of CO2.
We also need the Government to commit to supporting the industry as it exploits the opportunities that it has through the expansion of hydrogen as a key element in the energy mix. According to research, 30% of the UK’s gas supply can be replaced with hydrogen without any modification of domestic appliances, which is quite incredible. Scaling up investment in the creation of hydrogen from natural gas is crucial and shows the importance of natural gas to our future energy requirements as we move forward. I am sure that the Minister will confirm later that all those commitments and more will be outlined in the Government’s forthcoming, soon to be unveiled and long-awaited oil and gas sector deal.
All those advances, however, and all the optimism for the future—embracing the challenge of net zero, investment in new technologies, maintenance of an indigenous energy production sector here in the United Kingdom, investing in British talent and maintaining and creating British jobs—are dependent on one thing: fiscal stability in the North sea.
Teesside, of course, is the centre of the hydrogen production industry in this country. More hydrogen is produced there than anywhere else in the UK, so I thank the hon. Gentleman for encouraging the Government to recognise that they need to play a huge part not just in hydrogen but in carbon capture and storage. After all, the Government removed £1 billion of funding just a few years ago. We really need that to be reinvested, so that such projects can drive places such as Teesside and, of course, large parts of Scotland as well.
I suspect it will come as no surprise to the hon. Gentleman that I could not agree more with what he said: we need Government investment to drive technology in relation to hydrogen. It is great to see Teesside following the north-east of Scotland in developing that technology.
As I was saying, to do any of what I have been describing, we need fiscal stability in the North sea. The North sea is at present one of the most attractive mature basins in the world in which to invest. That is largely because of the long-term and fiscally sensible approach that the Treasury has taken to the industry in recent years. With a Budget but days away, I urge the Government to avoid any abrupt action—any change in the tax regime—that would undermine investment in an industry that is not only embarking on its biggest and most challenging transition in history but still recovering from the shock of the downturn of 2014 to 2016.
We need the oil and gas industry to be a success. We need to maximise economic recovery and support the companies that are investing in our low-carbon future. We need to maintain a local supply chain, local capability and, ultimately, local jobs. The message from this Chamber and this Parliament, and, indeed, from Government, should be that we support the oil and gas industry in the United Kingdom—that it is an industry that we should champion and be proud of, that we understand, and will invest in and work with, as we ensure the North sea’s attractiveness to investors through the maintenance of a steady and sensible fiscal regime for many years to come. It is the industry and the sector from which will come the talent, the ideas and the investment in technologies that are key to addressing the real issues of our age. It is up to us as legislators to support it.
It may help Members if I say that I want to call the first Front-Bench speaker just before 10.30 and to leave two minutes for Mr Bowie to wind up at the end.
I thank the Minister for his remarks. Indeed, I thank everybody for coming along and contributing to an important and timely debate. What has been demonstrated is that, although we are very proud of being home to the subsea capital of the world, and to the oil and gas and energy capital of the world, in Aberdeen and Aberdeenshire, it is a UK-wide industry. We have heard contributions from Strangford to Strathdon, and everywhere in between, down to Suffolk, Teesside and elsewhere.
The industry obviously faces challenges, but it is embracing the challenge of reaching net zero by 2050. Its commitment to being a net zero basin is world leading; we have not heard that from any other industry around the world. The Government must work with the industry to face its challenges, not least on visa issues. The hon. Member for Aberdeen North (Kirsty Blackman) talked about the visa problems in Aberdeen, but in Aberdeenshire, and especially in Portlethen, where we have a large Nigerian diaspora, I too have seen issues occur because of visas.
I am delighted to hear that the Government are committed to CCUS. I would have been even more delighted to hear a more detailed timeline for when we might see the oil and gas sector deal, but we live in hope, and we will be watching with bated breath for it to be very soon.
Question put and agreed to.
Resolved,
That this House has considered the UK oil and gas industry.
(5 years, 9 months ago)
Commons ChamberAs I said in response to an earlier question, prompt payment is very important for businesses large and small, and supply chains rely on that. My colleagues across the Government and in the Cabinet Office have close relationships with all the suppliers to the Government so that we can be aware of the prospects, and we have nothing further to report.
The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Richard Harrington), has given us a welcome update on progress on the tourism sector deal, and I was wondering whether we could get a similar update on the oil and gas sector deal.
My hon. Friend will know from the recent visit to Aberdeen that these conversations continue, as this is a vital sector. Let me pivot slightly by saying that in this Offshore Wind Week—that sector is equally vital to the Scottish economy—I wanted to announce to the House that we are in the final stages of concluding our offshore wind sector deal. It will include both £60 million for the contract for difference auction next spring and a series of substantial commitments from the operators in the sectors to increase the UK content that will be spent—
(5 years, 9 months ago)
Commons ChamberI rise to speak in this Budget debate, concerned about the unfairness that this Budget has created in this country—concerned that for one part of the country, there remains no tax cut for hard-working people; concerned that in one part of the country, the measures unveiled to support our high streets and SMEs are not being replicated, extra measures to help young people on to the housing ladder will not apply and the potholes will remain unfilled. I speak, of course, of the north-east of Scotland, which suffers under a central-belt-biased, economically illiterate, ideologically dogmatic, anti-aspirational, anti-wealth-creation, anti-business, distracted Administration, who punish the strivers and the grafters while we in the Conservative party reward them. Nurses, doctors, teachers, policemen, entrepreneurs, small business owners, the people that get up at the crack of dawn to open the shops in rural Deeside or Donside and the guys and girls who take off from Aberdeen airport to spend two weeks offshore doing hard, sometimes backbreaking work to maintain our energy supply are punished and taxed more, simply by virtue of living in Scotland. They are the people who this Government—this Conservative party—are committed to supporting.
The SNP’s decision not to match our plans to raise the threshold for the higher rate of income tax means that hard-working people in Scotland will be £1,000 worse off than their counterparts south of the border—£1,000 worse off for doing exactly the same job in the same country. Well, the Scottish Conservatives say, “Enough!” Today, we call on the SNP Administration to match this Government’s commitment to those who deserve a break and pass on this tax cut to the Scottish people.
It is safe to say that, in terms of totemic industries in Scotland, fishing and whisky are probably up there. Add to that brewing, and it makes for quite a good Friday night. All the above are reaping the benefits of decisions made by this Government and in this Budget: beer duty frozen, spirits duty frozen, and for the fishing industry, as we look towards that sea of opportunity that leaving the EU will bring—remembering, of course, that the SNP would have us back in the common fisheries policy—we welcome the £10 million of investment from UK Research and Innovation.
Of course, by far the biggest industry for the north-east of Scotland is the oil and gas industry, and far from the doom and gloom espoused by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), the sector has made it clear to us that the UK Government’s support over the past four to five years has been crucial to ensuring its survival, as it was buffeted by the winds of dramatically fluctuating oil prices and the longest sustained downturn in the sector’s history. The £2.3 billion of support from this UK Government since 2014 has been welcomed—[Interruption.] I would love to hear it welcomed by the hon. Gentleman; perhaps that is what he is trying to say from a sedentary position. I am not sure. That support has been welcomed by an industry that has contributed over £330 billion to the British economy, that supports over 330,000 jobs across the United Kingdom and that has a supply chain worth nearly £30 billion, stretching into every nation and region across our islands—servicing domestic activities and exporting almost £12 billion of goods and services to other basins around the world. It is a shame that the Scottish National party does not support it as the Scottish Conservatives do. That is why I and the wider oil and gas industry and the subsidiary industry that I represent have welcomed this Government’s decision not to increase tax and welcomed its commitment to maintaining fiscal stability.
Exactly; we have done nothing. That was what the oil and gas industry was asking us to do. They want stability. Indeed, Oil and Gas UK has stated that the fiscally stable regime implemented and overseen by this Government, combined with our support for the sector and the industry’s own huge strides forward in cost cutting, slashing waste and pooling resources, has made the UK continental shelf one of the most attractive basins in the world in which to do business—something that we would not know from listening to the hon. Gentleman earlier on.
This was a great Budget for the people and businesses of the north-east of Scotland. Oil and gas, spirits producers, brewers and the fishing industry have all benefited from this Government’s decisions.
In Scotland, we have two Governments, sadly, and the contrast could not be starker. [Interruption.] Well, it is sad in terms of who is in government in Edinburgh. One is a nationalist Government, governing for their own base, focused on the central belt, focused on raising taxes, punishing aspiration, creation division and fostering grievance. The other is a Unionist Government, governing for the whole United Kingdom, backing business, rewarding hard work and supporting growth and aspiration. One is focused on ripping up our country, the other on growing it and helping our people grow with it. That is what this Government do, and that is what this Budget does, and that is why I am pleased to back it today.
(5 years, 10 months ago)
Commons ChamberHas my right hon. Friend made any assessment of the impact on business growth in Scotland if it left the UK’s internal market?
It would be disastrous. The value of exports from Scotland to the rest of the UK is £45.8 billion, compared with around £12.5 billion to the rest of the EU, so anyone who, like me, is interested in being able to trade without frictions should apply their own analysis to their own policy of pulling out of the UK.
(5 years, 10 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Falkirk (John Mc Nally) on securing this important and timely debate.
Hailing from the north-east of Scotland, having grown up surrounded by the oil and gas industry, having worked for an incredibly brief time in the sector, and now representing a constituency to which its continued success is vital, I know all too well the importance of the industry to not just the north-east of Scotland but the wider UK economy. Looking around the Chamber, contributing to debates about the industry’s future seems to be the preserve of Members who represent such constituencies as mine, which is unfortunate. Yes, the industry is based proudly in the north-east of Scotland, but it is a UK-wide industry that has contributed more than £330 billion to the British economy, supports more than 330,000 jobs across the UK and has a supply chain worth nearly £30 billion stretching into every nation, region and community across our islands—as demonstrated by the hon. Member for Strangford (Jim Shannon)— both servicing domestic activities and exporting almost £12 billion of goods and services to other basins across the world.
The success of the North sea oil and gas industry is, of course, a story born in the north-east of Scotland—all good things are—but it is a whole-UK success. It depressed me beyond belief to hear, not that long ago, a colleague exclaim, when he heard about the recent discovery west of Shetland on the Glendronach field of around 1 trillion cubic feet of extractable gas—the largest discovery of conventional gas in the UK since 2008, with a productive life of 10 to 15 years—that that was remarkable. He did not know that any exploration was going on anymore. He thought it was all decommissioning and closing up shop for the North sea oil and gas industry.
Sadly, that is a common misconception. Of course decommissioning is taking place in the North sea at the moment, and the rate of decom activity will increase in the years ahead, but that is only one small part of the story. Anyone who takes a stroll around the Oil & Gas Technology Centre in Aberdeen or visits the Oil & Gas Innovation Centre in Bridge of Don, in the constituency of my hon. Friend the Member for Gordon (Colin Clark), will be blown away by the great advances in technology being made. There is exciting, explorative work being done on the smaller fields in the North sea, led by enterprising smaller companies growing in the sector, such as ROVOP in my constituency. There is also the sustained commitment to the area of big companies, such as BP, which recently announced its two North sea developments, which are expected to produce 30,000 barrels gross of oil equivalent per day at peak production.
This is not an industry in decline; this is an industry with a positive future, but it remains in recovery. We are still emerging from the deepest and most sustained downturn in the sector’s history. Many jobs were lost, some companies disappeared completely and others had to radically change how they did business. However, through shared learning and experiences, through economising and doing much more with much less, and with the support of the Scottish Government and the UK Government, which has supported the sector to the tune of £2.3 billion, the industry is confident about the future.
However, as many Members have said, what the industry needs more than anything else is fiscal stability. The North sea is one of the most attractive mature basins in the world in which to invest today, because of the long-term and fiscally sensible approach taken by Her Majesty’s Treasury since 2014. It was evident a couple of months ago, however, when there was just a hint of a change in policy or an increase in tax, that that would upset the recovery and put off investment, which could have damaging consequences.
Let the call go out from the Chamber today, from every Member and from every party represented, that we wholeheartedly support our oil and gas industry, that we recognise the huge value that it brings to the entire United Kingdom and that now is not the time to consider changing the fiscal situation, increasing tax or putting off further investment. Let us work with the sector and both of Scotland’s Governments to ensure a positive, long-term and productive future for this world-leading industry.