North Sea Oil and Gas

Baroness Wheatcroft Excerpts

Thursday 10th February 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness makes some good points. As I said in response to my noble friend earlier, we keep these matters under review. If it can be demonstrated that fracking can be carried out in a safe and reliable manner, then of course we need to consider it. But we have to be realistic about this: it is not going to be the answer to our short-term difficulties. In preparation for this, I was chatting to some specialist officials and they said it could easily be 10 years—even if we got rid of the moratorium tomorrow and overcame all the environmental problems that were caused—before any fracked gas came on stream.

[Baroness Wheatcroft (CB)]

My Lords, the oil companies, including BP and Shell, have been making record profits. Yet for their North Sea operations they have had a negative tax rate for several years. Given the current circumstances, might the Government re-examine the fiscal regime in the North Sea? Can the Minister tell the House?

[Lord Callanan (Con)]

Of course, I leave all tax decisions to the Chancellor. But, again, I think that the noble Baroness is wrong and looking at this too simplistically. First, most of the profits announced by the companies in recent days were made in worldwide operations; a very small percentage came from British domestic production. Secondly, it was only last year or the year before that they were making net losses; I do not remember the noble Baroness or others saying that we should give them taxpayer support. Thirdly, where do these profits go? First, they pay more corporation tax and, secondly, they go to UK pension funds, shareholders and people who need that income to help them though the crisis. There are no easy answers; the idea that there is some magical, mythical pot of money that we can just extract from to solve all of our problems is not true, I am afraid.