Oral Answers to Questions

Dave Doogan Excerpts

Tuesday 4th March 2025 Commons Chamber

[Mr Speaker]

The Minister gives a very good answer to a non-question.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

We can listen to the braying of Labour MPs from Scotland or we can look at the fact that the Scottish economy grew 12% more than the UK economy in 2024. That is because of the SNP Scottish Government’s forensic focus on making Scotland the most attractive place in the UK for foreign direct investment year after year, having a progressive taxation system, rewarding our public sector workers properly and investing in our communities. What difference does the Minister think agricultural property relief and business property relief will have on the Scottish economy—positive or negative?

[Darren Jones]

Of course, when we make changes to taxes, even when that it is difficult, that results in additional funding for the hon. Member and his colleagues to spend. I am sure he is grateful that we have given a record-breaking increase in investment to the Scottish Government.

[Dave Doogan]

I’m grateful for nothing!

[Darren Jones]

He may be grateful for nothing, and he may be agitating in his place. I suggest that he goes back to the people of Scotland and explains his party’s record in government.

Finance Bill

Dave Doogan Excerpts

Report stage
Monday 3rd March 2025 Commons Chamber

[Nesil Caliskan]

The Government’s commitment on investment, whether through the wealth fund or the private sector combination of GB Energy, brings stability to the sector in the long term. The truth is there is an energy crisis that affects my constituents and people across the country. At this moment, efforts have to be taken to ensure that we do everything we can to bring down the prices people experience in their bills on a day-to-day-basis.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Will the hon. Member give way?

[Nesil Caliskan]

I will make some progress and conclude in a moment.

Politics is full of choices. The Government have to balance the books and take a decision to ensure that we close the black hole, so the choices they have made feel like the fairest ones. A long-term commitment to ensuring that we have stability in the energy markets, while ensuring that people who need help right now can benefit, is the correct approach.

I am happy to support the Government’s position on the Bill. It is a Bill that sets out the right choices, as I have said, and it is the first important step to ensure that the country is back on the road to recovery after a dark period, where people were impacted not just through an economic crash, but in their day-to-day living through a cost of living crisis.

--- Later in debate ---

It is for those parents and children that I urge the Government, at this last hour, to find a loophole for small faith schools and schools that focus on international pupils whose parents work here and know that their child needs smaller and more focused classes. For those children, I sincerely urge a rethink. The Minister could move the threshold to large schools, if that is what he is aiming for, or come up with a system that gives small faith schools a chance to survive. The Government must leave small schools and faith schools to educate children with a world view that has a nod towards parental values and moral concerns.

[Dave Doogan]

I will crack on with new clause 2, as it relates to the Government’s catastrophic management of the fiscal regime for Scotland’s oil and gas. In December, Norway’s sovereign wealth fund touched €1.7 trillion, but Scotland is no wealthier now in real terms than we were when North sea oil and gas was discovered in the 1970s. More than £400 billion has flowed from Scottish waters to the Treasury over the years, with very little coming back the other way. Rather than reverse that trend, the Labour party has chosen to accelerate it with an increase in the energy profits levy. The windfall tax was supposed to apply to the extraordinarily high profits from the high global oil price that preceded its introduction, but that level has long since gone. Through its changes to the EPL, the Labour party jeopardises investment and, in doing so, the future of our skilled offshore energy workforce and our ability to hit net zero.

Analysis from Offshore Energies UK shows that the increase to and extension of the EPL risk costing the economy £13 billion, which will in turn cost up to 35,000 jobs. The analysis also shows a reduction in viable capital investment offshore from £14.1 billion to £2.3 billion in the period 2025 to 2029 as a result of the changes that the Government are planning in the EPL. That loss of economic value impacts not only on the core sector itself but on the domestic onshore supply companies, many of which are in my constituency, and many of which will have a role to play in the just transition. That reflects a political choice by the Labour party to deprioritise investment in the decarbonisation agenda. Rather than allow a more valuable decarbonisation relief as the solitary positive by-product of its tax hike, Labour has ensured that there can be absolutely no silver lining to this policy cloud.

The simple truth is that the UK cannot meet the net zero targets or create green growth if the Labour party’s policies hack away at both investment and the domestic workforce that we need to deliver the energy transition. It is clear that the Labour party is abandoning Scotland’s existing energy sector, and putting at risk the just transition in the process. With those changes to the EPL, Labour will have created a worst-of-all-worlds scenario whereby it starves industry of investment, sacrifices the jobs that we need to deliver net zero, puts at risk our energy security, will not bring down energy bills, and harms the economy of Scotland, while failing to invest the money required to truly deliver the benefits that we all need to see from the just transition.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

Does the hon. Gentleman think that there is a real challenge in terms of the policies that the Government are encouraging? A much quicker retreat from the North sea will bring forward the decommissioning costs, which have not been taken into account by the Treasury and will add billions and billions of pounds in extra costs to the UK taxpayer.

[Dave Doogan]

The right hon. Gentleman is absolutely correct: wherever we look, the fiscal ambitions of the Labour Government on North sea oil and gas, or energy more generally, seem to be counterproductive. They are introducing a policy that anybody with a passing understanding of the industry realises will have precisely the opposite result of its stated aim, but the Government will not listen, much to my regret.

Analysis from OEUK shows that the oil and gas sector’s total tax yield will peak in 2026 under Labour’s increase in the EPL before declining, compared with the previous scenario, in which Treasury receipts continued to increase over the period. The analysis shows that while the expected tax take from UK oil and gas producers would increase in the very short term, ultimately it will result in a £12 billion net loss to tax receipts compared with the current regime. If the Labour party does not care about the jobs that the policy will cost, the harm it will do to the just transition or the damage to the economy of Scotland, surely Labour can accept that a tax increase that actually reduces the amount of tax received is, at best, counterproductive. That is why the SNP will support new clause 2 if it is pressed to a Division.

The SNP appreciates the many and varied reasons why parents choose to use private schools, but it is not fair or sustainable to treat private school fees differently from other discretionary spend for the purposes of VAT. The VAT exemption offered to private schools costs the UK taxpayer £1.6 billion annually—money that could be invested in other public services. However, the SNP also understands that for many parents whose children are enrolled in private schools the UK Government’s decision to remove that exemption will be extremely worrying.

The Scottish Government have sought to ensure that the distinctive nature of the Scottish education system is understood by the UK Government in this transition. In particular, the Scottish Government have raised concerns with the UK Government about the decision to include grant-aided special schools in the policy. In Scots law, they are not considered independent schools. In Scotland, there is a clear distinction in educational law between grant-aided special schools and independent schools, and the UK Government’s policy regrettably does not reflect that. I know the Minister studiously avoids almost everything that I say, but I hope that he heard that, and I would be very grateful if he could address it when he sums up.

On Scotch whisky, when the last Tory Government hiked whisky duty, the tax revenue raised from the industry fell by £300 million. That should have been a salutary lesson to any Government who came afterwards. The sensible option for both supporting Scotch whisky and Treasury receipts would have been to cut whisky duty. Instead, the Labour party is raising it again. On top of that, we now have a UK Government plan to grant a different definition of a single malt to English producers than that of Scottish single malts. The definition is entirely inconsistent with the global reputation of the quality of single malts, and seeks to tear up a well-established dictionary definition of a single malt while pulling the rug from underneath Scotch whisky producers. The Government must listen to warnings from the industry, the Scottish Government and those from across the political spectrum, and scrap the plans and duty hikes, which are an act of sabotage to Scotland’s world-class industry.

The industry already faces the risk of Trump tariffs, which cost over £600 million in exports the last time they were applied under his first presidential term. Rather than further damage from the UK Government, the industry needs support, starting with the reversal of the plans to hike duties still further. It is high time that Westminster finally listened to organisations such as the Scotch Whisky Association and stopped discriminating against Scotland’s national drink, which supports more than 40,000 jobs and delivers more than £7.1 billion to the London Treasury every year. The SNP will support new clause 8 if it is pressed.

I have spoken consistently about what is under debate in the Bill, but the wider context cannot be ignored. Labour has no cogent plan for reforming the economy. It seeks to reduce the deficit and not raise taxes, and it wants to stimulate growth with large investments. It is impossible to do all those things at once, and it is astonishing that the Government seem to persist with this wilful ignorance. A Government may increase spending to kick-start the economy and deliver growth and public services, but that requires tax increases and/or deficit spending, both of which the Labour Government are too scared to pursue because of their short-sighted election promises to abide by fiscal rules and not increase the highest-revenue sources. We are therefore stuck in the worst of all possible worlds, with insufficient growth—especially green growth—insufficient investment, a deficit causing a rising debt burden, and no way to increase revenue meaningfully. The UK Government are bizarrely persisting with gaslighting themselves in thinking that they are “fixing the foundations” and delivering growth. They are doing nothing of the sort, and if they stick with this Bill and the Budget on which it is predicated, they never will.

Finally, is it not astonishing that when farmers push back on agricultural property relief, family businesses push back on business property relief, pensioners push back on their winter fuel allowance, the Scotch whisky industry pushes back on duty hikes, the North sea oil and gas industry pushes back on the EPL, and when the Women Against State Pension Inequality Campaign pushes back, they are all told, “No. The situation is too bad. You’ve just got to suck it up,” but when the non-doms push back, they get swept right to the heart of the Treasury and the Chancellor, and they get whatever they want? That is the Labour Government.

[Sarah Olney (Richmond Park) (LD)]

I will speak in favour of new clause 4, tabled in the name of my hon. Friend the Member for St Albans (Daisy Cooper). The amendment would require the Government to carry out an impact assessment on the changes that the legislation would introduce for small and medium-sized businesses. Small businesses are the backbone of our economy and the heart of our local communities, and they create the jobs that we all rely on. I hear time and again from the small businesses across my constituency that they are struggling to keep up with soaring energy prices, business rates and the costs of exporting. The Chancellor is absolutely right to be focused on economic growth; however, my Liberal Democrat colleagues and I are deeply concerned about the impacts of the changes in the Bill on our high streets, and particularly on those in the hospitality industry, who are very concerned about the impact that duty rises on wine, beer and cider will have.

The wellbeing of small businesses acts as an indicator of the health of the economy as a whole. As such, the new clause would be a useful tool to allow us to understand the broader implications of the legislation on our economic prosperity. More broadly, an impact assessment would look at the combined effect on small businesses, both directly and indirectly, of all policies in the Bill to ensure that SMEs remain at the heart of the Government’s economic policy. It is crucial that the necessary tough spending decisions to clear up the mess that the previous Conservative Government left behind do not hit our small local businesses, which are vital to our economy.

To encourage growth for our small businesses, the Chancellor should be looking to reduce the burden on businesses through means such as cutting Brexit red tape, securing better trade deals with Europe and entering a customs union. The combination of the cost of hiring staff, the cost of additional red tape and higher business rates will be simply too much for many SMEs to absorb, which is why I urge the Minister to support our new clause and assess the impact of the legislation on local businesses.

Inheritance Tax Relief: Farms

Dave Doogan Excerpts

Monday 10th February 2025 Westminster Hall

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Edward. I rise to speak for the 468 signatories to this petition who are residents of my constituency. I have to tell you that that is about 11 times more Angus and Perthshire Glens constituents than have signed any other petition from this place. Never in my time in this Parliament have I seen MPs perched on windowsills to be in the room for a debate. There are mass demonstrations outside, and there was a demonstration on the South Inch in Perth at the weekend.

This policy is fundamentally unjust. The Government said that they would not do it, and they have gone ahead and done it. They have applied it without any warning. There is no taper into the new regime. It gives no time for farmers to adjust their tax arrangements. It is diametrically opposed to current tax advice, which is grossly unfair. It ignores the fact that there is no actual financial enrichment; farmers simply become the custodian of an asset. It does not go after the non-farming interests that are avoiding tax. It ignores the disproportionate effect on Scotland. It ignores the fact that a quarter of Scottish farms are tenanted—it has zero provision for those—and it does not take cognisance of the 15,000 Scottish crofts that are grossly adversely affected by it.

This policy is economically incoherent. It is a tax on the production of food. It will precipitate a reduction in investment. That will mean lower yields, which will mean higher prices. That will be inflationary, which is the last thing that this economy needs. It is not just farmers who will be undone by this policy; it is the entire agricultural supply chain.

This policy undermines the reinvestment model from generation to generation. It ignores the societal benefit of agriculture to our rural communities. With BPR, it is a betrayal of the divestment drive to which farmers have so dutifully been applying themselves over the past 20 years. It risks the sell-off of family farms across places such as Angus and Perthshire Glens to faceless international corporations that will not leave anything positive behind—certainly not any profit.

This policy is anti-growth. As I suspect the Government now fully realise behind closed doors, it is a disastrous mis-step. It plays fast and loose with the mental health of farmers. Let me echo the chorus from the National Farmers Union Scotland that this policy must be paused and the industry must be properly consulted. The outcome must be the removal of this iniquitous threat to all that we hold dear in our agricultural and rural communities and economies.

On behalf of the agricultural sector in Angus and Perthshire Glens and across the whole of Scotland—in fact, the whole of the United Kingdom, to which I do not often make reference in a speech—it is not too late to do the right thing. I implore the Minister to do so.

--- Later in debate ---

[Sarah Dyke]

I thank my hon. Friend for a very well made point, and farming is indeed often multigenerational. This is putting huge stress on farming families. I myself am from a farming family. My mother is 81, and my father died about a year ago. The pressure that it is putting on her to think about whether she can survive another seven years is so distressing, and I know that she is not alone.

[Dave Doogan]

For very good reason, we do not apply tax to food. Does the hon. Lady agree that for the same good reason, we should presumably not apply tax to the production of food? Does it not amount to the same thing?

[Sarah Dyke]

I agree with the hon. Gentleman.

Levels of confidence among the farming community are at a worryingly low ebb. The National Audit Office reports that only one in three farmers are confident that DEFRA and its agencies can deliver their proposed changes to schemes and regulations. The family farm tax will only increase pressure on farmers, while burdening with extra uncertainty and anxiety farmers who are already suffering with their mental health. Today marks the beginning of Mind Your Head week. Now in its eighth year, it is a campaign that amplifies mental health awareness, run by the Farm Safety Foundation and Yellow Wellies. This year’s themes are love, positivity and resilience—three characteristics we should show to our farmers.

Recently, the Office for Budget Responsibility assigned any revenue from this tax a high uncertainty rating, stating that any

“yield from this measure is not likely to reach a steady state for at least 20 years.”

The Treasury projects that the combined changes to agricultural property relief and business property relief will raise approximately £520 million annually. Using HMRC figures on the total cost of each relief, however, the Liberal Democrats have calculated that the proportion attributed to the APR changes will be only around £115 million, confirming that this misguided tax will penalise British farmers for essentially no benefit.

In its report, the OBR reiterates that the measure will hit older farmers hardest, because they will find it difficult to quickly put in place the transitional arrangements to restructure their affairs in response to the pending changes. I recently spoke to a farmer from Martock who told me that their parents, who are in their late 80s, are horrified by this tax raid. They do not want to lose their home and their business, but the lack of time to implement the changes may make that their sad reality. They implore the Government to consult on transitional arrangements that work with them and for them.

I fear that these family farms will instead be broken up and parcels of land will be sold off at a deflated land value to already wealthy landowners, who will simply add to their large land portfolios.

--- Later in debate ---

[Robbie Moore]

My hon. Friend makes the point powerfully: collectively, all industry bodies and professionals in the sector are united. The NFU, the CLA, the CAAV—of which I put it on record that I am a fellow, having previously practised as a rural practice surveyor, so I understand the implications on the value of farmland—and Savills, as a key land agent, are all saying exactly the same thing: that this Government’s policy will have catastrophic consequences. My understanding is that the Chancellor has not yet even bothered to reach out to any of those professional organisations to sit round a table and try to understand their concerns. That point was made very eloquently by my hon. Friend the Member for Bridlington and The Wolds (Charlie Dewhirst).

[Dave Doogan]

The shadow Minister is articulating the substance of the issue with great passion. Does he agree that at the heart of this fiscal misadventure is classic Treasury dogma, whereby the principal objective is to quantify the price of something and take no cognisance of its value? APR and BPR will unravel for this Government. Does he agree that it would be far better for them to take steps to row back on this policy now, rather than waiting for it to go absolutely pear-shaped?

[Robbie Moore]

The hon. Member makes a very powerful point: this is about the choices that the Labour Government are imposing on many of our family farming businesses. Those families are now having to make difficult decisions about whether to look at disposing of land, plant and machinery or livestock to fit an IHT liability that may come down the line. All of that is reducing their productivity, which will have an impact not only on those family farming businesses, but on UK food production and UK food security. That is why I join all Opposition Members in calling on the Government to change course immediately.

Farmers are not multimillionaires. Many struggle to break even. As my right hon. Friends the Members for Beverley and Holderness and for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) have said, the vast majority of returns for our farming businesses are less than 1%, yet in most cases the value of the land on which they sit will be severely affected by the IHT changes, because the threshold that the Government are bringing out is £1 million. When the average size of a farm in England is 200 acres, and we take into account the farmland, the cottage that might exist on the farm, the plant and machinery, the livestock and the growing crops or stocks that may be in store, the value will be significantly higher than £1 million. That is why the Government need to listen to the NFU and its statistics.

--- Later in debate ---

[James Murray]

I thank my hon. Friend for her intervention. She is absolutely right about the importance of repairing the public finances and supporting public services, for her constituents in North Warwickshire and Bedworth and indeed for all of our constituents across the country.

I noted that, in her contribution earlier, my hon. Friend made a point about what this Government are doing to support the profitability of the farming sector. She may have seen that, at the Oxford farming conference in January, the Secretary of State for Environment, Food and Rural Affairs set out the Government’s long-term vision. That includes reforms to use the Government’s own purchasing power to make sure that we are buying more British food, planning reforms to speed up the delivery of infrastructure, and work to ensure supply chain fairness, which will help people involved in the farming industry and more widely, across her constituency and those of other Members here today.

As I said, the decision that we took to reform agricultural property relief and business property relief was one of the difficult but necessary decisions that we needed to take on tax, welfare and spending to restore economic stability, to fix the public finances and to support public services, including an NHS in crisis. We have taken those decisions in a way that makes the tax system fairer and more sustainable.

The reforms to agricultural property relief and business property relief mean that, despite the tough fiscal context, the Government will still maintain significant levels of relief from inheritance tax beyond what is available to others. The Government recognise the role that these reliefs play, particularly in supporting small farms and businesses, and, under our reforms, they will continue to play that role.

The case for reform is underlined by the fact that the full, unlimited exemption, as introduced in 1992, has become unsustainable. Under the current system, the benefit of the 100% relief on business and agricultural assets is heavily skewed towards the wealthiest estates. According to the latest data from HMRC, and as hon. Members have mentioned, 40% of agricultural property relief benefits the top 7% of estates making claims—that is 117 estates claiming £219 million-worth of relief.

[Dave Doogan]

On the point the Minister just made about the notional value of estates, I think I can help him, because that is where he is going wrong, and where he has taken his Government up an agricultural cul-de-sac. When it comes to agriculture, what is important is not the notional value of the estate, but how someone came by that estate—whether they used billions of pounds of money on which they should have been paying tax in order not to pay tax, or whether they inherited the family farm from the generation that went before. That is the differentiation that the Treasury should be making. The value is irrelevant; the Minister should focus on the nature of the inheritance or acquisition.

[James Murray]

What has driven the Government in making the decision to reform agricultural and business property relief is the overwhelming priority of fixing the public finances in a fair and sustainable way. That is why the statistics to which I just referred, about how agricultural and business property relief have come to be used in recent years, are important for understanding the context in which we decided that the time for reform was now.

Growing the UK Economy

Dave Doogan Excerpts

Wednesday 29th January 2025 Commons Chamber

[Darren Jones]

As I have confirmed to the House, we are inviting applications from Heathrow, which will be considered in the normal way. When those applications have been received and due diligence has been undertaken, we will be able to report the details that will answer the right hon. Member’s questions.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It says on the cover that this is about growing the UK economy, but the statement’s substance is much more about growing the English economy. It has a passing reference to Wrexham and a nebulous acknowledgement that the Government will “build a pipeline of investable propositions…starting with strategic partnerships in the Glasgow city region”. Will the Chief Secretary perhaps flesh out what that means and, at the same time, explain why he did not allocate any funding to reimbursing Edinburgh University for the supercomputer, invest in SAF in Grangemouth, or invest in the Acorn project in the north-east?

[Darren Jones]

Scotland is an important part of our United Kingdom economy. We will continue to invest in the country, as we did at the recent Budget, with the largest real-terms increase in spending since devolution. I am always ears-open to opportunities for growth, but the hon. Member might want to speak to his SNP colleagues in the Scottish Government and try to stimulate some investment there as well.

Agricultural and Business Property Reliefs: OBR Costing

Dave Doogan Excerpts

Thursday 23rd January 2025 Commons Chamber

[James Murray]

Supporting the rural economy, public services and investment right across the country is part of Labour’s national mission to get the economy growing, but the prerequisite for that investment and economic growth is stable public finances. Without economic stability, we cannot proceed to the investment and growth that we all so desperately need. That is why the decision to target agricultural property relief and business property relief was taken, alongside all the other difficult decisions that we took in the Budget.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

This measure is now revealed to be spectacularly ill-considered, leaving aside the fact that it is also a breathtaking betrayal of farmers, who were promised before the election that this would not happen. The measure groups intergenerational farmers with speculative millionaires seeking to dodge tax by getting involved in farming. It has put an immediate brake on investment in farming, which threatens to lower yields and drive up food prices. That then threatens to put inflationary pressures on the UK economy, which is already in a perilous state. This Government cannot just agree with the OBR when it suits them. They must agree with the OBR regardless of what it says. Will the Minister please respectfully pause the measure, take some time to think about this, and come up with something that will actually deliver for the Treasury but not push our family farming sector under.

[James Murray]

There still seems to be confusion among Opposition Members about what the OBR publication set out. It reiterates the costings that were published at the time of the Budget, on 30 October. It explains how those costings were arrived at, so that people can understand the calculations behind them, but the costings are the same as those published at the time of the Budget.

Oral Answers to Questions

Dave Doogan Excerpts

Tuesday 21st January 2025 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for that question, and for the work she does to support and promote businesses in Dudley. Through our modern industrial strategy, and the targeting of eight sectors in which there is huge potential for growth, we will work with businesses right across the country on, for example, reform of the planning system to make it easier for them to build, and reform of the pension system to get funding for businesses, including those in Dudley, that are looking to grow and expand.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Neither the US Federal Reserve nor the EU Central Bank are engaged in active quantitative tightening, but the Bank of England is. The Bank of England is costing the public finances in the region of £13 billion a year as a result of a fire sale of UK Government bonds. Last time I spoke to the Chancellor about that, she said that that was because of the Bank of England’s operational independence, which we all value, but that is not a licence for impunity. What discussions will she have with the Bank of England about releasing UK Government debt in a way that benefits everybody in the UK?

[The Economic Secretary to the Treasury (Emma Reynolds)]

It is our view that it is absolutely right that the Bank of England has operational independence. That is in line with international standards and what is happening in jurisdictions around the world, including in the United States and the eurozone.

Agricultural and Business Property Relief

Dave Doogan Excerpts

Tuesday 14th January 2025 Westminster Hall

[Graham Stuart]

My right hon. Friend is right. That is why I appeal to the Minister: if the Government do not care at all—in fact, if the Government see farmers as some sort of class enemy—it still does not make sense to do this, because it will weaken our food security. Go and talk to farmers—as I do in my area all the time—and it is obvious that their personal commitment to things like flood protection, understanding of the land, and thinking in the long term, is not just words.

People think in the long term when there is no thought in their minds of selling. Why would anyone not put their money back in? Farmers put all their money back in because they are happy to do so, and they have a lifestyle as part of that. All that is put under threat if the investment in a piece of machinery or infrastructure that could help them to green their land will be subject to a 20% tax. Suddenly the economics do not add up and the bank will not want to lend.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The right hon. Gentleman will know, as all of us in this room do, that in GB we enjoy some of the most competitively priced fresh produce available anywhere in Europe and that is precisely because of the investments in production technology that family farms have made over generations. Is he concerned that at a stroke this Government, myopic about the workings of agriculture, have made them immediately—overnight—stop that investment, and consumers will feel that in food prices?

[Graham Stuart]

The hon. Gentleman makes an important point that has not been made so far: we have among the lowest food costs in the world. In fact, all my local farmers are forever moaning at me about how outrageous it is that food is so low in price. As I say to them, the system has allowed them to continue farming, providing first-class food at a very low cost to consumers. It is that carefully balanced ecosystem that will be impacted by this juggernaut creation of the Government, which will raise, if it raises anything at all, very little. That is why it is great to have someone as thoughtful, insightful and empathetic as the Minister on the Government Bench, because we have time to change path away from this ridiculous policy.

UK-China Economic and Financial Dialogue

Dave Doogan Excerpts

Tuesday 14th January 2025 Commons Chamber

[Rachel Reeves]

My hon. Friend is exactly right. We managed to secure tangible benefits for the UK economy and British exporters. At the same time, we were able to raise difficult issues that we would not have been able to raise if we were not engaged. That is the benefit of engagement: we get the economic gains and we can raise those tricky issues.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It is beyond parody that His Majesty’s Chancellor would throw herself at the mercy of the Chinese Government and come back with £600 million in revenue over five years. Is she aware that £600 million in revenue is less than one ninetieth of HSBC’s annual profit? This is what she is holding up as a major achievement of the Treasury’s trade mission. My right hon. Friend the Member for Aberdeen South (Stephen Flynn) very reasonably asked what the Chancellor will do when, not if, her fiscal rules are breached. Will she increase borrowing, raise taxes or cut spending, not over five years but this year?

[Rachel Reeves]

I am sure the hon. Gentleman is an expert in HSBC, but I would rather take the word of the chairman of HSBC, who welcomed the tangible investments and, indeed, led the financial forum that we held in China last week. I have been really clear that we will meet the fiscal rules that I set out in the Budget, and we will do that at all times. That is the commitment I made, and it is the commitment I continue to make.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Dave Doogan Excerpts

Committee of the whole House & 3rd reading
Tuesday 17th December 2024 Commons Chamber

[Pippa Heylings]

I agree with the hon. Member. I will give one example: the Arthur Rank hospice, which serves all of Cambridgeshire. I had a tour there and saw the work being done by its dedicated professionals. I was informed by its senior leadership that these hikes in national insurance contributions for employers will be the equivalent of £230,000 in additional payroll costs on top of the fundraising that it already has to do. That is money that it does not have. We know from the debate on assisted dying, assisted suicide and the terminally ill how critical palliative care and end-of-life care is. That is one hospice that will struggle severely to deal with these charges.

Hon. Members have spoken about the GP crisis. According to the British Medical Association, 1,387 GP practices have closed since 2015 and the NHS has lost the equivalent of 1,333 full-time, fully qualified GPs. Each GP is responsible for an average of 2,294 patients, and about 3 million people have been directly affected in the last decade by shrinking GP numbers. At a time when we desperately need more GPs, we are introducing a tax that risks driving even more practices out of business. It is not just me saying that; I am sure that hon. Members across the House will have heard from GPs in their constituencies.

In my constituency of South Cambridgeshire, I have heard from the Harston, Comberton, Queen Edith, Eversden and Melbourn practices. I have spoken in particular to Dr Gee of Harston surgery, who has told me that his practice with 7,600 patients faces a £20,000 bill from April just to maintain its current services—just to stand still.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The hon. Lady is making a tremendously informed speech and demonstrating a level of understanding of primary care and the care sector that we could only dream of from the Government. Is it her concern that many charities, voluntary sector organisations and GP surgeries are already operating on the thinnest margins of financial sustainability and that this measure will torpedo the very organisations that protect our communities from absolute chaos? Secondary care cannot do it alone; it is upheld by primary care and the care sector. Is she as concerned as many other hon. Members that this will cause absolute chaos?

[Pippa Heylings]

I agree with the hon. Member. I know that the Government are in conversation with GPs, but GPs are writing to us saying that they are seriously concerned.

The GP in Harston said:

“GPs cannot raise prices or operate at a loss.”

They have not had clarification or confirmation from the Government about how funding that is to be given to others in the public sector will be available to them. Just at the critical time when GPs are coming to their annual spending reviews and budgeting, the Government are bringing them this uncertainty. GPs do not feel that they are getting the right messaging or any kind of clarity that will save people’s jobs.

--- Later in debate ---

[Dave Doogan]

The hon. Member is very kind to give way. Twice in the past couple of minutes, he has used the word “ultimately”—“Ultimately we will have to do this, and ultimately we will have to do that.” It is “actually” that he should be saying. You actually have to make sure that there is funding, not ultimately—that can wait for another day. Actually is what will happen as soon as this legislation comes to pass—you will be in an absolute quagmire.

[The Second Deputy Chairman]

Mr Doogan, I will not be in a quagmire.

--- Later in debate ---

[Dr Sandher]

I direct the hon. Gentleman to today’s labour market statistics. Employment is still high; unemployment is about the same as it was; and I think inactivity is falling. In the official statistics, the picture looks good.

More broadly, vacancies are not the measure that we want to look at. Instead, we want to look at the number of people in jobs. The revenue that we are raising today will be invested in actions that directly create those good jobs. The warm homes plan will upgrade 300,000 homes, which is tens of thousands of good jobs. The expansion of early years childcare is tens of thousands of good jobs. Businesses need to know that they have the healthy workforce that they need, and more people who are available to work. This is a Budget for growth and for jobs.

[Dave Doogan]

The hon. Gentleman talks about the expansion of early years childcare, but that will not be of much use if nurseries shut down because they cannot pay their national insurance. Does he understand that dynamic?

[Dr Sandher]

I absolutely understand the benefits of early years childcare, which is why we are so proud that it is a key part of this Government’s opportunity mission and is one of our milestones. We know that money invested today will pay dividends in the future. Labour Members we are absolutely committed to expanding and investing in early years childcare.

More broadly, this measure is also about investing in our young people. One in three young people is experiencing mental health problems, and one in 20 is too sick to work. That number is only rising. There has been a threefold increase in health problems that make it too difficult to do day-to-day activities. This generation of mine is without hope and without health. For those who have been struck down by hopelessness, and who are now too sick to work, our “Get Britain Working” programme, combining health, skills and employment support, is rebuilding confidence. It is helping people into good jobs, and is restoring dignity, purpose and sense of community to every person and place in our nation.

This Bill speaks to our governing philosophy, which is that those with the broadest shoulders should carry the heaviest load. As we have seen, we are changing our nation and rebuilding hope in our communities, our country, and indeed our democracy. We are building a country that gets better, rather than worse; where every person can get a good job; where every person can afford a decent home; and where every person can get the skills that they need, so that we can all live once again in a country where working hard means a decent life. That is what we are investing in, and that is why we are proud to raise revenue through the measure that we are debating today.

--- Later in debate ---

[Ms Creasy]

I have worked with the hon. Lady on various issues, and I hope she will give me the latitude to expand my argument and set out my proposals, which we could move forward on together as a House. I do not doubt her sincerity, but I also recognise the fiscal destruction of the previous Government that we need to deal with, which means we need to tell the British public the truth about what needs to happen. Making unfunded promises is as bad as not promising to act.

Parent surveys show that a real difference is made when 30 hours of childcare is offered. That amount of childcare enables families to make choices about getting back into work. If we want to get to 30 hours by September next year, we need 60,000 additional childcare places and 29,000 extra members of staff. If we do not have fundamental root and branch reform of how we fund the provision of childcare, that will cost about £72 million extra a year on hiring staff alone. That is the challenge we face if we want to get this right.

I know how hard the Minister is working to get the economy growing again. I know he is going to hear pleas from every single sector about the impact of the national insurance changes; nobody should be under any illusion that they are not difficult changes. I make a plea for the childcare sector because I believe that in the end, it will pay for itself. If we are able to get more people back to work, especially mums, who all too often end up bearing the burden of childcare, we will be able to raise more taxes and there will be more investment as a result.

That is particularly true of the childcare sector because it is a people-intensive industry. Staffing costs make up 75% of a nursery’s running costs, compared with 30% for the average restaurant. Because the previous Government systemically failed to invest in childcare, the majority of childcare has been provided by the private sector. Some 85% of places are delivered outside the state sector. There is little flexibility on numbers in the sector, because ratios—the number of people looking after little people—matter. These are not businesses with small numbers of staff; an average nursery has 14 members of staff, which means the additional costs will be about £36,000 to £39,000 a year. Around £14,000 of that will be national insurance.

Many Members agree that we need to invest in that childcare and will be pleased to see this Government trying to address the balance. The damage done under the previous Government meant that 83% of nursery providers said the funding they received did not cover their costs. That is why closures increased by 50% in the last couple of years. This Government have already increased the funding for our nurseries, but while that takes account of increases in wages costs, it does not take account of the increases in national insurance.

I tabled new clause 4, which is about having a review of one element of all that, to ensure that we do not cut off our nose to spite our face when trying to get more people into work. We recognise that extra national insurance costs may have consequences, be they recruitment freezes, reduced staff training or even closures, at a time when we want the sector to expand. Indeed, the majority of nurseries have staff vacancies, so they need extra people already.

[Dave Doogan]

The hon. Lady is making a compelling case of logic as it applies to early years provision, and I do not think anybody in this place could argue with the logic she advances. Is it not so robust, however, that it also applies to primary care, hospices and charities, if it applies to nurseries?

[Ms Creasy]

I hope the hon. Gentleman recognises that I am talking about a specific function of the way in which the childcare sector operates and the fact that it generates public Exchequer funding when we get people back into work. My argument here is that we invest to save. This is specifically about childcare. I am sure the hon. Member has read new clause 4 in depth, by the look on his face.

[Dave Doogan]

indicated assent.

--- Later in debate ---

[Chris Vince (Harlow) (Lab/Co-op)]

I start by thanking the Exchequer Secretary to the Treasury for all his work on the Bill.

The burden of tax has fallen disproportionately on the shoulders of working people for too long. Families across the country and in my constituency, who are already battling the cost of living crisis, have been left to carry the weight, while larger businesses and the wealthiest have been let off far too lightly. That cannot continue. This Labour Government believe in a fairer tax system, where larger businesses and the richest pay a little more in tax to help fund our NHS and our public services, which working people rely on. That is the right and fair choice.

The Tory record on investment in our NHS is terrible. I can see that in my constituency. Although Princess Alexandra hospital was on the list of 40 new hospitals proposed by the previous Government, when we came to power it turned out that the money for it was not there. I thank the Secretary of State for Health and Social Care for allowing me to constantly follow him around the Palace and lobby him on that point.

The decision on employer national insurance is difficult, but it is the right choice. Waking up on 5 July, we knew that we would have to take these difficult decisions, but in the long run we really will see the difference. Being tough now can bring about real change in the future.

It has not gone unnoticed that the small businesses and charities that form the backbone of our local economy need to be protected and valued. Here are a few things the Labour Government are doing to achieve just that. We have increased the employment allowance to £10,500 and expanded it to all eligible employers. As a result, we will see two remarkable things: the OBR expects 250,000 employers to benefit from these changes and an additional 820,000 employers to see no change at all. We are seeking to strike a balance.

My hon. Friend the Member for Earley and Woodley (Yuan Yang) mentioned Small Business Saturday. I recently visited a wonderful local charity called Stort Valley Gifting, a brilliant local business that sources local produce and makes up hampers. I have to declare an interest at this point, because that is where I am doing my Christmas shopping this year, but I would add that my predecessor, Robert Halfon, did the same thing.

Labour also recognises the vital role played by public sector employees in our schools, hospitals and councils. That is why we have committed to providing support for additional employer NIC costs, ensuring that our public services remain resilient and well-resourced not just for today, but for future generations. We can protect working people while making the wealthiest contribute their fair share, so that we all contribute our fair share. Everyone from every walk of life is included as these decisions are being debated and made. We can choose to invest in our NHS and our public services; we can choose growth and fairness; we can choose to rebuild the future for generations to come, instead of the instability that has held our country back for too long. If we want the benefits of this Budget, we must make the hard decisions to get there.

[Dave Doogan]

I rise to speak to defend Scotland’s NHS, including our GPs, hospices, care homes and nurseries, from this Labour Government’s national insurance tax hike, as well as to protect the charity and higher education sectors. I am proud of the amendments the SNP has tabled to the Bill to protect these vital services from the increase in national insurance contributions put forward by the Government. The fears are genuine and escalating over the job cuts and service reductions that will be the inevitable and plain and simple consequence of this fiscal madness.

We in the SNP have consistently highlighted the brutal impact that Labour’s tax rises will have on GPs, charities, care homes and other sectors, with organisations warning that deep cuts will be made to the services they provide—vital services that are no less essential to communities and individuals than secondary care services just because they are received in the community or from a charity. That is why we have tabled amendments 4, 5, 6 and 26 in my name and the names of SNP colleagues.

On higher education, the University of Edinburgh was last month reported to have opened a redundancy process for staff as a result of Labour’s tax hike, and Universities Scotland is warning of a potential £45 million tax burden for Scottish universities. Yet again, we see key sectors of the Scottish economy hammered by a London Treasury out of touch, out of ideas and, if this goes through, demonstrably out of control. Higher education, agriculture, and oil and gas are all demonstrably larger elements of the Scottish economy than they are of the English or UK economy. This Government, with NICs and other specific tax increases or allowance removals, are hammering particularly important elements of the Scottish economy. As usual, what England wants Scotland gets.

The Labour Government’s national insurance increase will be a disaster for Scotland’s healthcare providers, voluntary organisations, nurseries, universities and colleges, but who on the Labour Benches has come along to speak up for those organisations in Scotland? Nobody. Not one Labour Scottish MP made a speech to protect Scotland’s interests. But Labour MPs from Scotland were there to nod through and vote through the cut to the winter fuel payment, freezing Scotland’s pensioners; Labour’s bedroom tax, entrenching poverty in Scotland; Labour’s two-child limit, punishing the poorest in Scotland; taxing Scotland’s oil and gas sector to the brink of extinction; attacking Scottish agriculture; and gouging Scotch whisky. They were all here to make sure that that happened and to speak to that, so I will leave the people of Scotland to draw their own conclusions about this particular lack of activity from Scottish Labour MPs.

[Graham Stuart]

I am grateful to the hon. Gentleman for giving way. When did the SNP do an about-turn on Scottish oil and gas? As far as I can tell, it seemed as opposed to its continuation as the Labour party is now in government.

[Dave Doogan]

I thank the right hon. Gentleman for his intervention. I refer him to Hansard from the previous Parliament. The comments I have just made are entirely consistent with the comments I made in the last parliamentary term.

With each day that passes, we learn more about the damage Labour’s Budget will inflict on household bills, businesses and charities, yet despite those warnings the Labour Government are determined not to listen and are ploughing ahead with this devastating proposal. The SNP will always stand up and protect Scottish jobs, Scottish services and Scotland’s people. That is reflected in John Swinney’s budget—a balanced budget in the interests of the people of Scotland and the businesses of Scotland. That is the SNP way. We have done it this year and we have done it in every one of the 17 previous years we have been in the Scottish Government.

Do the UK Government understand how commissioned services work? We have heard that quite a lot this afternoon and it is becoming increasingly clear that, at best, they have a sketchy understanding of why vital services are provided by non-statutory service providers. What is going to happen when this measure unwinds into the real economy is that charities, GP surgeries, hospices and other vital elements of healthcare provision will not have reserves. They are already operating at the very margins of financial sustainability, so when the sums do not add up, they will have two choices. They will approach the commissioning authority that has commissioned their services to ask for an uplift in their fees. The answer will be no, because the money is not there. Alternatively, they will withdraw their services or draw down their services. Either way, it will be enormously challenging and extremely damaging for some of the most vulnerable in our society.

[Carla Lockhart (Upper Bann) (DUP)]

The hon. Gentleman is making a powerful speech. The Labour party has said in the main that it is the right choice to increase NICs. Like Scotland, Northern Ireland’s health and social care will be hardest hit. The Northern Ireland children’s hospice estimates that half a million pounds will be needed to cope with the NICs increase. This is a hospice that provides care for the most vulnerable in our society: children with cancer and children with life-limiting conditions. Does he agree that the measure will see the end of these excellent services, which are much needed in our communities?

[Dave Doogan]

I agree entirely with the hon. Member. There is no road back from that. The difficulty that I implore the Government to pay attention to is that when the damage that will be inflicted by this measure is inflicted by this measure, they cannot just say, “Oops, we got that wrong. If you wouldn’t mind all coming back and start delivering these commissioned services, we’ll admit we got it wrong.” When it’s gone, it’s gone. It is not acceptable that the Government are playing fast and loose with the safety net that exists in our communities and our society to catch the most vulnerable people and prevent absolute chaos. That is exactly what the Government are doing.

However, the Government should not take the hon. Lady’s word for it, or mine. We can listen to people who are at the coalface. This is primary evidence from the Scottish Huntington’s Association:

“The entire charity sector is increasingly burdened by climbing costs, funding issues, recruitment and retention challenges and an increased demand for services.

All too many have had to close their doors, with more expected to follow. Additional burdens being imposed by government at this juncture”,

the association says, are deeply unhelpful.

“Coming just weeks after the prime minister announced a ‘new partnership that can harness civil society’s full potential’ this must surely be an unfortunate oversight, and one that simply cannot be allowed to stand given the scale of its implications for the not-for-profit sector and the many thousands of people who depend upon it in the absence of alternative statutory services.”

It is not just the association that takes that view. Turning Point Scotland has advised that this measure alone will add £1.1 million to its costs overnight, and it comes at a time of a pressured environment, when many of its services are already running at a deficit. That is true of the voluntary sector, but also of the nursery and college sectors.

On healthcare, I wonder whether the Government understand the concept of whole-system costs. As I and many Members have said, when charities fold, as many of them will, the services that they were providing will no longer be there. Who will then provide that care? It will be the provider of last resort, secondary care. People will present themselves at hospitals, where there will be no room. It will be chaotic, but in a purely Treasury and fiscal sense, it will be an extremely expensive form of chaos, for which the Government, through the whole-system paradigm, will need to pick up the costs. I am not certain that the Minister has been properly briefed by his Treasury officials on what the risk assessment actually says about the human and financial costs of the change when this heads south. This is what happens when the Chancellor treats the real economy as her own personal political piggy-bank. It will not be possible to fix this once it has been broken.

I have some sympathy for the Minister in one respect. We have heard, and I will not repeat, the headline figure—the gross quantum that the Government expect to generate by lowering the threshold and increasing the rates of employer national insurance. By the time everyone who is in a position to adjust their business and employment characteristics to accommodate it has done so, by the time the Government have compensated elements of the public sector and by the time the economy has contracted to accommodate that, we are already down from £25-something billion to £10 billion-odd. That is a lot of pain to accept to gain £10 billion.

If the Government were to exclude or make provision for hospices, nurseries, the voluntary sector more generally and universities, that £10 billion would be reduced to an embarrassingly small figure, so they are stuck between a rock and a hard place. I nevertheless encourage them to have the courage of their convictions and put the interests of the people of these islands first, rather than the political expediency of careering headlong towards a cliff edge that is as plain as the nose on the end of your face and jumping over it anyway in order to save face—because the Government will not save face. There is no escape from the corner they have painted themselves into. They can either U-turn and incur the political costs, which I would recommend, given that they have just come through the door—they should be at the height of their political powers, but if this is the height of their political powers, goodness me!—or they can carry on regardless, and pick up the pieces of all the chaos that will be wreaked across the sector.

This incompetence, for it is incompetence, did not start when the Government walked through the doors of Nos. 10 and 11 Downing Street. It started back in the election campaign, when they proscribed the use of the single biggest lever in the Treasury’s toolkit to get additional funding. They said that they would not increase income tax on ordinary working people, although with these measures they will take away financial opportunities and, actually, people’s money through payroll changes anyway. It is smoke and mirrors. However, by painting themselves into that corner on income tax, they have created a situation in which they have to make the most damaging tax intervention possible, which is entirely contrary to their stated ambition of generating growth.

Quite a lot of Labour Members have said, “It’s all very well listening to the Opposition, but what would you do?” I will give them two really easy things that the Government could have done. If they had mirrored the income tax thresholds that the Scottish Government have introduced, they would have generated £19 billion. That would not have had a single impediment on the real economy, would not have choked off growth and would not have put primary care on the precipice. They could have done that. Or, if they had thought that they could get by on less than £19 billion—they will have to, because they will raise less than £10 billion from this measure—they could have just reversed the previous Government’s two cuts to employee’s national insurance. Judging by the arithmetic in this place, the Conservatives did not exactly get a brilliant political return on cutting employee’s national insurance twice in two quarters of one financial year. The Government could have reversed those cuts, which would have netted £10 billion—roughly where they are now, on aggregate—but no, they did not want to do that and they refuse to do so.

Finance Bill

Dave Doogan Excerpts

Committee of the whole House
Tuesday 10th December 2024 Commons Chamber

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

We in the SNP and the Scottish Government believe in progressive taxation. I think that is evident from the changes we have made to income tax since those matters were devolved. We would like a more progressive influence in the changes before us, rather than simply clawing at allowances and increasing the rate. Nothing in clauses 7 to 12 is designed to make matters better in Scotland, but at least the Labour party is consistent on that.

Inheritance tax and capital gains tax are increasingly out of step with modern activity in the UK economy. As the IPPR points out, since the 1980s, household wealth in the UK has risen from three times the national income to more than seven times, yet over the same timeframe wealth taxes have not risen at all as a share of that income. Taxing unearned wealth more fairly and efficiently is a legitimate long-term ambition in a state where the economy is on life support. Taxpayers are left wondering from this Budget whether more tax rises are on the way, after a substantial lack of clarity from the Chancellor, who said a week or so ago that the Government would not come back for more tax rises, or indeed more borrowing, but has since refused to echo those rather injudicious remarks. If she does not have the confidence to stand by her own statements, it is hard to imagine the effect on business and investor confidence across the UK.

The Chancellor should have worked with economic experts, such as those at the IFS, to create a fairer and more growth-friendly capital gains tax, but instead she has been captured by the same old Treasury dogma that has served the UK so badly over recent decades. Capital gains tax raises a growing amount of revenue—about £15 billion last year—partly reflecting the increased role of wealth accumulation in the UK, but it is still less than 2% of all tax take, and although CGT is paid by about 350,000 people each year, two thirds of receipts are from just 12,000 people with an average gain of £4 million.

CGT rates vary significantly across assets, and are almost always significantly lower than income tax rates. That rate differential is unfair and creates undesirable distortions, including to what people invest in and how long they choose to work. The IFS has criticised the Chancellor for choosing simply to increase CGT rates with no effort to carry out what it describes as much-needed reform. It also describes the whole design of CGT as “flawed”, adding:

“There are steps the government could and should take to make the tax fairer and less harmful to economic growth and well-being.”

Moreover, the Centre for the Analysis of Taxation proposes further changes to CGT, including aligning capital gains tax rates with income tax rates, introducing allowances to incentivise investment, taxing the increase in an asset’s value when it is inherited, and implementing an exit tax to prevent individuals from dodging UK taxes on gains made while residing in the UK. It estimates that that package would generate £14 billion, but none of those measures is in the Bill.

The IFS says that if the Chancellor chose to raise CGT rates while leaving the flawed tax base unchanged, she would be choosing to raise some limited revenue at the expense of weakening savings and investment incentives, and of further distorting which assets people buy and how long they hold on to them. The IFS says that that would not be the decision of a Chancellor who is serious about growth. Well, what a portent that turned out to be. She did not reform CGT, and look what happened to growth: forecasts were down immediately after first contact with this inverse Midas-touch Chancellor. It is clear that, in preparing for the Budget, she could have done with a full hour or more with the IFS, but I doubt that she would have listened.

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

We come to the final Back-Bench contribution, and have saved the best until last. I call Bobby Dean.

--- Later in debate ---

[Dave Doogan]

Certainty is only good if it relates to a positive outlook, not a negative outlook. The hon. Member for Gordon and Buchan (Harriet Cross) asked a clear question about the duration. It was not about whether the sector pays fair taxes; we all believe that people should pay fair taxes. Does the Minister still believe that the industry is making extraordinary profits?

[James Murray]

I would like to explain to the hon. Gentleman how the energy security investment mechanism works, because that, to be fair, was put in place by the previous Government, and we are maintaining it. It says that if prices drop below a certain threshold for six months, the energy profits levy ceases early. That gives some certainty and predictability to the oil and gas sector. If prices go below that level, the sector can have confidence that the energy security investment mechanism will end the levy early. If that does not happen, the levy will continue, as we have said, until March 2030.

I am keen—I will set out a few more details later—to engage with the oil and gas sector on the regime post the energy profits levy, because it is important for oil and gas companies making decisions about investment to have certainty about what will happen up until March 2030, and to understand what the regime might be like thereafter. That is why I am looking forward to my conversations with the sector on what the post energy profits levy regime will look like.

Long-term certainty and confidence is being provided to the oil and gas sector by our retention of the levy’s price floor, the energy security investment mechanism, which I was explaining to the hon. Member for Angus and Perthshire Glens (Dave Doogan). It means that the levy will cease permanently if oil and gas prices fall below a set level for a sustained period. Furthermore, as I also just said, to provide stability for the long term, the Government will publish a consultation in early 2025 on how the tax regime will respond to price shocks once the energy profits levy comes to an end. That will give oil and gas producers and their investors predictability and certainty on the future of the fiscal regime, which will support their ability to continue investing, while also ensuring that the nation receives a fair return at a time of exceptional crisis.

--- Later in debate ---

[Harriet Cross]

I will speak to clauses 15 to 18 briefly, but mainly to new clause 3 in the name of my right hon. Friend the Member for Central Devon (Mel Stride). It would require the Chancellor to publish within three months a review of the expected changes introduced by the Bill on employment, capital expenditure, production, demand and the economy. It is inherently sensible, and considers the importance of the oil and gas sector to regional and national employment and economic growth in the UK.

On the need to review the impact on employment, 82% of direct jobs in the oil and gas sector are located in Scotland. My Gordon and Buchan constituency is at the heart of that. New clause 3 would review the impact of the changes to employment across the country, as it is not just direct jobs that are on the line but supply chain and other indirect jobs. Of those, 90,000 are in Scotland and 200,00 are across the UK.

[Dave Doogan]

The hon. Member highlights the economic consequences of this heading south on jobs in Scotland. Is she surprised and disappointed, as I am, that not a single Scottish Labour MP has turned up to take part in this vital debate?

[Harriet Cross]

We were saying a moment ago how extraordinary it is that they are not here to stand up for their main industry. That shows how much they value or care about jobs across Scotland.

We are seeing warning signs already of the impact of these measures. Just a week after the Budget, Apache confirmed that it would cease operations in the North sea, saying:

“The onerous financial impact of the EPL, combined with the substantial investment that will be necessary to comply with regulatory requirements, makes production of hydrocarbons beyond 2029 uneconomic.”

According to the Aberdeen and Grampian Chamber of Commerce, 100,000 jobs may be at risk across the UK because of the changes. Offshore Energies UK says that 35,000 jobs directly related to projects that may not now go ahead are at risk. New clause 3, which would allow the Government the opportunity to assess and account for the impact of the Bill’s changes on jobs relating to the oil and gas sector, the supply chain and the wider economy, should be welcomed across the Committee.

--- Later in debate ---

[Madam Deputy Speaker]

Before I call Dave Doogan, I remind Members that if they wish to speak, they need to be bobbing consistently—I cannot read people’s minds to put together a speaking list.

[Dave Doogan]

The changes to the EPL, particularly those set out in clauses 15 and 17, will have a hugely damaging effect on jobs and the Scottish economy. This is also an inauspicious day for Scotland in this so-called United Kingdom as Norway’s sovereign wealth fund records a €1.7 trillion breakthrough, while Scotland’s oil wealth has been squandered by successive Westminster Governments. Norway gets financial security in perpetuity; Scotland gets Labour’s bedroom tax, cuts to winter fuel payments for our elderly and the highest energy prices in the G20—that is the Union dividend wrapped up and served on a plate right there. More than £400 billion has flowed from our waters to the Treasury over the years, with very little coming back in the other direction. Rather than reverse the train, the Labour Government have, with this increase to the EPL, chosen to accelerate it.

The cumulative effect of clauses 15 to 18 will sound the death knell for Scotland’s hydrocarbon production in advance, crucially, of the transition—economically illiterate, fiscally incompetent and with industrial suicide as the result. A windfall tax is supposed to be a tax on extraordinary profits, yet the extraordinarily high global oil and gas prices that preceded the introduction of the tax have long since abated. Through these changes, the Labour party jeopardises investment in Scotland’s offshore energies and risks the future of our skilled workforce and our ability to hit net zero while employing those workers. Analysis from Offshore Energies UK shows that the increase and extension of the EPL risks costing the economy £13 billion and putting 35,000 jobs at risk.

The analysis from OEUK also shows a collapse in viable capital investment offshore under these changes from £14.1 billion to £2.3 billion in the period ’25-29. It is increasingly apparent that the Government do not really understand how investment horizons work offshore. They are not on a month-to-month basis; they take years to work up. This loss of economic value impacts on not only the core sector, but domestic supply chain companies, many of whom exist in my constituency, which have an essential role to play in the just transition.

The Labour party promised that there would be no cliff edge, yet it has concocted one for the 35,000 workers whose jobs this EPL change puts at risk. Labour had claimed that these changes would keep the UK in line with Norway, but the regime after Labour’s changes cannot be compared to that of Norway, which allows companies a maximum £78 of relief per £100 expenditure —in the UK, this relief would be £46.25. After these past couple of weeks, I am given to wondering if those on the Treasury Front Bench can actually count.

Changes to the EPL will hinder the just transition. The Government argue that the reduction in the rate of the decarbonisation investment allowance to 66% will maintain the overall cumulative value of relief for investment expenditure following the rate increase, reflecting the fact that this relief will increase in value against a higher levy rate. However, the policy still reflects a political choice by Labour to deprioritise investment in decarbonisation. Rather than allowing more valuable decarbonisation relief as the solitary positive by-product of its tax hike, Labour has striven to ensure that there is absolutely no silver lining to this fiscal attack cloud on Scotland’s energy industry.

[Mr Snowden]

At the heart of this, when we have comparisons to Norway, is a sheer focus on trying to squeeze as much taxation out of the industry as possible, without a focus on how to become more competitive. Does the hon. Gentleman agree that what we need for jobs and for energy security in the UK is to compare ourselves to the most competitive oil and gas economies in the world, and not those that squeeze and tax the most out of the industry and kill jobs?

[Dave Doogan]

Exactly. The hon. Gentleman raises the question of jobs, and the Government are playing fast and loose with jobs in the oil and gas sector. They are playing Russian roulette. They do not seem to understand that when what they have got wrong comes home to roost, they cannot just say, “Sorry, we got that wrong.” When it is gone, it is gone—they cannot bring it back. This is 2024, not 1972. We are already in the closing chapter of the sector; it will not be coming back. This Government seem to completely misunderstand that.

The simple truth is that the UK state cannot meet net zero or create green growth if Labour’s policies to hack away at investment in both the domestic workforce and the sector are allowed to progress. It is clear that the Labour party is abandoning Scotland’s existing energy sector, and putting at risk the just transition into the bargain. With these changes to the EPL, Labour will be creating the worst of all worlds: it will starve industry of investment, sacrifice the jobs of those who can deliver net zero, threaten energy security, keep energy bills high and harm the economy of Scotland, while at the very same time failing to invest the money required to truly deliver against a green transition.

--- Later in debate ---

[Wera Hobhouse]

I thank the hon. Lady for her intervention. It is absolutely by putting in place the measures for transition that we will meet net zero. If we continue with business as usual and continue to listen to people who ultimately do not understand that unless we get to net zero our whole economy will suffer, then people will suffer. We will also have big, big problems with issues such as huge migration if climate change can rule unchallenged. This is why the Liberal Democrats believe the transition to net zero is important and why we need to put measures in place to make that happen. It is disappointing that the Conservatives, as the previous Government and now the Opposition, still do not understand how urgently we require climate action.

[Dave Doogan]

I am very grateful to the hon. Lady for giving way. What is her understanding of what will happen to domestic consumption of oil and gas products in the United Kingdom if the domestic industry atrophies but domestic demand still exists? What will happen in that scenario? Where will the oil and gas come from, or will we just give it up overnight?

[Wera Hobhouse]

I thank the hon. Gentleman for that intervention. The whole argument is that we will continue to rely on oil and gas for the time being, but unless we start to change something, on the current projection we will not get to net zero as urgently as we need to. Progress has been too slow, so the longer we hesitate the more difficult it will become. The new Government have understood that urgency, and the Liberal Democrats support them in dealing with this issue with more urgency than we saw from the previous Government. I therefore repeat that we support the measures, but we would like the Government to support our new clause 2. As I said, it will show what we can raise by closing the loophole. It would by extension, as my hon. Friend the Member for St Albans clarified, show what has been squandered by the previous Government—money that could have been invested.

--- Later in debate ---

[Sammy Wilson]

Only a fool would say that climate change is not happening. Climate change has occurred in all the time that the earth has been in existence. Of course it happens, and of course it is happening. The hon. Lady asks me a question to which I think anybody could give an easy answer. Yes, climate change is happening, but does that mean that we have identified all the sources of the change in our climate? Does it also mean that we should distort our economy, in such a way as she would suggest, to try to make changes to the world’s climate, especially given that other countries are not making any changes to their economy and are not following our lead? They are simply ignoring us and doing what they believe is best for their own economies.

The second point I want to make is that we are leaving ourselves open to a situation in which companies that we need to invest in energy production will not do so. The OBR has made that quite clear, but even if it had not made its predictions, economic logic should make us understand that if we take investment allowances away from people and tax them, they will have less money to invest.

The Minister makes a great point: by putting all these measures on the statute book, he creates certainty for the industry. He does create certainty, because anybody looking at the Bill knows for certain what the future entails: they are going to be taxed until the pips squeak, so they will look for other places to go and make their investment. He argues that putting out a tax plan somehow gives assurance to companies, but sometimes it confirms their prejudice that Britain will not be a place where they have a future, or where they wish to invest.

I turn to the third impact of these measures, building on a point made by the hon. Member for Earley and Woodley. The Government’s whole approach is to tax oil and gas companies, get money, and help working people by putting it into schools and so on. But the predictions are that we will not get more revenue, because if there is less production, there is less tax to be paid. If there is less tax to be paid, the Government have less revenue to invest in the things that hon. Members on both sides of the House would wish them to invest in. Where does that tax go? It will go to foreign countries, because that is where production will take place and where the oil companies will be taxed. They will get taxed where they make their profits. If they are not making any profits in the United Kingdom, they will not pay any revenue in the United Kingdom. They will take their production and tax revenue elsewhere.

There does not appear to be any economic logic to this proposal, other than that the oil companies are seen as bad so the Government have to tax them, even though they are taxed heavily already, and that the Government want to ensure that we have this transition to net zero, even though we know that we will still need the product that the oil companies produce for many decades into the future and we will be turning our back on that production in the United Kingdom.

If the Government are so sure that this cunning plan is going to work—I think Baldrick would have been embarrassed by this cunning plan, I have to say—they should not fear any examination of it. They should welcome it. In fact, maybe once the assessment is done, they will be able to point to red faces on the Opposition side of the House. If I were as certain as the Minister is that his plan was going to work, I would be saying, “Right, we’ll do the assessment and we’ll make you eat your words.” I suspect that the reason that new clause 2 will be rejected today is that the red faces and the eating of words are going to be on the Government’s side of the House. Unfortunately, the people who will suffer will be the hundreds of thousands of people facing rising fuel bills, the 100,000 workers who will face redundancies and an industry that we very much need in this country going into decline.

[Dave Doogan]

On a point of order, Madam Chair. The last but one speaker, the hon. Member for Earley and Woodley (Yuan Yang), called me out regarding my perfectly legitimate comment that there was not a single Scottish Labour MP in here. I chose my words carefully, taking part in this debate. I appreciate that there is a Labour Member here who, unless I am very much mistaken, is fulfilling the role of a Parliamentary Private Secretary and therefore will not be taking part in the debate. I ask your guidance, Madam Chair, on whether it is legitimate to call somebody out in a debate and not give them an opportunity to respond. I tried to intervene on the hon. Member for Earley and Woodley to correct the record, but she refused to give way. How can we correct the record to underline the fact that there is not a single Scottish Labour MP in here taking part in this debate on Scotland’s energy?

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

The hon. Gentleman will be aware that that is not a matter for the Chair, and therefore I cannot provide advice as to how he can put that on the record. He will know as well as other hon. Members do that it is entirely at the discretion of the individual contributing at that time whether or not they take an intervention, but he has done good work in putting his point on the record via the mechanism of a point of order.