Oral Answers to Questions

Damian Hinds Excerpts

Tuesday 1st March 2016 Commons Chamber

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

1. What fiscal steps he is taking to support the oil and gas industry.

[The Exchequer Secretary to the Treasury (Damian Hinds)]

This Government are clear that the broad shoulders of the United Kingdom are 100% behind our oil and gas industry and the thousands of families it supports. Last March, my right hon. Friend the Chancellor announced a wide-ranging fiscal package, including reducing the headline rates of tax and a new investment allowance, further expanded at the summer Budget to drive investment and support maximising economic recovery.

[Stuart Blair Donaldson]

Oil and Gas UK has highlighted that headline tax rates of 50%, or 67.5% for companies paying petroleum revenue tax, are no longer sustainable. As the UK continental shelf enters an new, ever more mature phase, and the oil price remains lower for longer, the fiscal burden needs to reflect these changing circumstances and to be permanently reduced. Will the Government listen to the industry, and what fiscal support will they bring forward for the oil and gas industry in this year’s Budget?

[Damian Hinds]

In the “Driving investment” paper, the Government absolutely recognise the need over time to change the fiscal structure. The scale of what my right hon. Friend did reflects the fact that the figure stood at £1.3 billion. The most recent of the headline tax reductions took effect on 1 January this year.

[Peter Aldous (Waveney) (Con)]

I echo these points. The North sea oil and gas industry is facing very serious challenges at this time. Working with the industry and the Oil and Gas Authority, the Treasury can help to overcome the problems. May I urge the Minister to include in the Budget tax-cutting initiatives and support that build on last year’s measures and help to attract investment to this basin and to ease the worries of many very worried people?

[Damian Hinds]

My hon. Friend highlights the fact that many jobs supported by the sector are in England as well as in Scotland. I commend the work he has been doing with New Anglia local enterprise partnership on supporting companies that have found themselves in difficulties, working particularly on skills and so on. I assure him that we continue to listen to the industry, to the Oil and Gas Authority, to Oil and Gas UK, and to many individual companies to see what more can be done to support this vital sector.

[Mary Glindon (North Tyneside) (Lab)]

OGN in North Tyneside has now shed all its 2,000 jobs. The company has been in touch with the Government to ask for help with a rather difficult contract to develop wind farms, but as yet has heard nothing about any help that can be given. Will the Minister see whether there is going to be any help, or will he meet me and representatives of OGN for the sake of these jobs?

[Damian Hinds]

I thank the hon. Lady. I would of course be very happy to meet her and the company to see what proposal it would put forward.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

An application for shale gas exploration in my constituency may result in many millions of pounds in community benefits. Does the Minister agree that those community benefits should go to the communities most affected by development?

[Damian Hinds]

My right hon. Friend the Chancellor has said that the shale wealth fund could deliver up to £1 billion of benefits to communities hosting shale gas development. This is in addition to the existing industry scheme. My hon. Friend is entirely right that it is important that communities see those benefits and have the reassurance of additionality.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

2. What recent assessment he has made of the potential effect on the economy of the UK leaving the EU.

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[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

7. What assessment he has made of the effects on the economy of the reduction in duty on spirits announced in the 2015 Budget.

[The Exchequer Secretary to the Treasury (Damian Hinds)]

The 2% duty cut at the March Budget 2015 continues to support the 296,000 people across the sector, including such distilleries as Highland Park in the right hon. Gentleman’s Orkney and Shetland constituency.

[Mr Carmichael]

The Minister will recall that, last year, the Red Book estimated that the cuts in alcohol duties would lead to a reduction of £185 million in revenue. In fact, from April 2015 through to January 2016, we have seen a £190 million increase in revenues. Will he therefore look very carefully at the request from the Scotch whisky industry for a further 2% cut in spirits duties this year?

[Damian Hinds]

I know how much the sector values the cut in the duty—it was the first since 1996—and it is great to see the industry in good health, with the number of distilleries and exports to other parts of the world growing strongly. I have received representations from the Scotch Whisky Association among others in relation to the upcoming Budget.

[Mr Speaker]

On spirits, Mr Andrew Griffiths.

[Andrew Griffiths (Burton) (Con)]

Any changes or reductions in spirit duty will impact on the market for other drinks, such as beer. I draw the House’s attention to my entry in the Register of Members’ Financial Interests, but this Government and this Chancellor scrapped Labour’s hated beer duty escalator and cut beer duty three times, which led to more beer sales and more revenue for the Treasury, and which saved hundreds of pubs. Will he continue that support in future?

[Damian Hinds]

My hon. Friend speaks in exactly the right spirit. He is the representative of Burton, the home of beer, and nobody has done more to advocate for that important British industry. The Budget is on 16 March. My right hon. Friend the Chancellor makes any and all changes to any duties at such fiscal events.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

Scotch whisky is the biggest net contributor to UK trade in goods. Without it, the UK’s trade deficit would be 11% larger. Manufacturers across Scotland, including Spey in my constituency, that have experience of exporting know that domestic rates of tax have an impact on the attitude of international markets. What consideration has the Chancellor given to industry calls to reduce the excise in the upcoming Budget?

[Damian Hinds]

My right hon. Friend the Chancellor is always very alive to representations from the Scotch whisky industry. Of course, that product accounts for some 25% of UK food and drink exports. Japan has been a strong export market for the sector, but others have not worked out so well. We continue to listen to what that important sector has to say.

[Alex Chalk (Cheltenham) (Con)]

8. What assessment he has made of recent trends in the level of employment.