Budget Resolutions

Colin Clark Excerpts

Monday 27th November 2017 Commons Chamber

[Colin Clark (Gordon) (Con)]

It is a privilege to have the opportunity to speak. I congratulate the Chancellor on the Budget. This Budget, with one apparently small tax change—a first in the world—is predicted to inject £40 billion into our economy. That is important to the UK and monumental to the Scottish economy. Scottish Conservative colleagues and I have relentlessly lobbied Treasury Ministers on that change. Following on from my hon. Friend the Member for Gainsborough (Sir Edward Leigh), I believe that this was a good Budget for Scotland. I am, of course, referring to transferable tax history for the oil and gas industry, the measures on VAT relief for the Scottish police and fire services, and the measures on whisky and spirits. Twelve Scottish Back Benchers, an excellent Secretary of State for Scotland and our Holyrood colleagues were very convincing—perhaps as convincing as the DUP.

I will focus on the global opportunities of oil and gas. The industry still employs 300,000 people in the UK and it has produced a staggering 40 billion barrels of oil. The oil and gas industry has been a huge contributor, and that is far from over. UK production met 79% of the UK’s oil demand and 53% of gas demand in 2016. Now, imagine how the Germans feel about being supplied with Russian gas. So it is globally significant to us that the North sea is still of such importance.

The sector has contributed massively to our engineering skills and has huge global opportunities. The UK continental shelf is one of the most challenging offshore basins, and UK technology has spread throughout the world. In my constituency, we have STATS Group, which is a pipeline intervention company based in Kintore; Hoover Ferguson, which is now a global company; and Wood Group, which started in the north-east and has now become a £5 billion company following a merger with Amec Foster Wheeler. The Treasury has helped to create the most fiscally attractive place to produce oil and gas. That is recognised by Shell and BP, as well as newcomers such as Chrysaor, which recently invested $3.8 billion in the North sea. Let us not believe the myth that it is all over for the North sea.

Transferable tax history for the oil and gas industry could be a game-changer. Those who depend on oil and gas for their livelihoods will be celebrating. They are not the fat cats portrayed by the Labour party, and they are all too often overtaxed by the Scottish Government. Decommissioning is tax deductible, so the measure is transformative. The relief is from November 2018. I have spent my entire working life immersed in corporate finance, so I know that getting this right is very important. The Treasury must be commended for not acting too quickly. The industry has turned around its record on safety and the environment, and it is important that we recognise our continued dependency on the oil and gas industry because it is playing its part in decarbonising the UK and the rest of the world. Oil will also continue to dominate transport.

What is important about this investment is that it is leading growth. New players can improve productivity, which that investment ushers in. The investment is also a boost to the industry’s global reach and to Britain’s global reach, and it boosts inward investment.

At this time, during the Brexit negotiations, the oil and gas industry should be a beacon to British industry. It is global Britain at its best.