Non-domestic Energy Support

Dave Doogan Excerpts

Monday 9th January 2023 Commons Chamber

[James Cartlidge]

I know that the Scottish National party struggles to understand the basic concept of fiscal prudence, but let me just explain this to the hon. Gentleman. When he talks about the £56 billion, it is not just for the energy profits levy; it also includes the energy generator levy, and we see that money as coming into the UK Treasury from across the UK to support the United Kingdom. It will support businesses in Northern Ireland, as we said earlier, as well as businesses in England, Scotland and Wales. Scotland has benefited from huge support, not just in the pandemic but through the increase in energy costs that has been seen across the United Kingdom. It has benefited from the fact that we are stronger together as a Union supporting every part of our Union.

[Dave Doogan (Angus) (SNP)]

Meanwhile, back in reality, I am sure the Minister will agree that manufacturing is the lifeblood of any economy. Many of the manufacturing successes across these islands are small and medium-sized enterprises such as ScanStone in my constituency, which manufactures outstanding potato systems. It is competing with the Germans across not just the UK market, but the EU market. The existing support that it is enjoying is not proving enough, and now it is going to get less. Can the Minister help me to understand what I should say to ScanStone in Angus about its need to navigate its way through this energy crisis? It is not an intensive user but energy is a major overhead that it is really struggling to accommodate.

[James Cartlidge]

The hon. Gentleman talks about being back in the real world, but when I made my statement about our plans for alcohol duty, the day before the House rose for the recess, he asked me if I had considered having a differential duty. We had been consulting on a differential duty for months before then. As to his particular question, I suggest that the company looks at gov.uk to see whether its sector qualifies under the energy intensive industries support scheme, because that remains very generous and significant, and I am sure it will be welcomed by many in that sector.

Oral Answers to Questions

Dave Doogan Excerpts

Tuesday 20th December 2022 Commons Chamber

[Jeremy Hunt]

I am very proud of the fact that, having inherited an economy that was bankrupted by the hon. Lady’s party, we have given it one of the strongest growth rates in the developed world.

[Dave Doogan (Angus) (SNP)]

I know that the Chancellor has invested in public health personally, but may I urge him to invest, in a fiscal sense, in beer and alcohol duty, and to create a differential between off-sales and on-sales? On-sales are where jobs and tax and employment are generated, and off-sales are where all the harmful drinking comes from.

[James Cartlidge]

In my statement yesterday I not only confirmed a six-month extension of the alcohol duty freeze, but announced that next August we will introduce an ambitious reform package which will include—this is happening for the first time ever, and is only possible because of our departure from the European Union— a duty rate differential between what is on tap, namely draught beer, cider and so on, and what is in the supermarkets. That will create a level playing field which I think is in the best interests of our pubs.

Economic Update

Dave Doogan Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

As the hon. Member knows, I am not announcing any decisions today, but it would always be my intention to give a fair deal to Northern Ireland, which is an incredibly precious part of our Union.

[Dave Doogan (Angus) (SNP)]

The new Chancellor—October’s Chancellor—said, with no small measure of smug superiority and constitutional illiteracy, that in his opinion the four members he identified of his economic advisory board, who by my count are three members of large accountancy firms and one former insider from the Treasury, were well equipped to usher in the best possible economic plan for the devolved nations. That is clearly patent nonsense, but has it occurred to the Chancellor to invite the Finance Ministers from the devolved nations to form part of his economic advisory board, or is that beneath him?

[Jeremy Hunt]

I have regular contact and will continue to have regular contact—[Interruption.] Excuse me, would you let me answer? Sorry, Madam Deputy Speaker, but I was hoping the hon. Gentleman would let me answer.

I have regular contact with my Finance Minister counterparts in the devolved nations—and, indeed, the Chief Secretary to the Treasury had such discussions today—but this economic council is something different. This is about trying to make sure that we deal effectively with the instability we have seen in the markets, which is mainly London-based, and we want to make sure that it does not happen again, so I think I have four fantastic people for that role.

Economy Update

Dave Doogan Excerpts

Thursday 26th May 2022 Commons Chamber

[Rishi Sunak]

As a former local government Minister, I am very happy to join my hon. Friend in paying tribute to our councils for the fantastic work they did during covid and continue to do to support their residents, our constituents, through the challenges ahead. I am happy to tell her that we have a new burdens formula that compensates councils, when it is triggered, with the funding they need.

[Dave Doogan (Angus) (SNP)]

I do not know if the Chancellor has been to Scotland recently, but I reassure him that we will not be taking any lectures from him on Scotland’s viability as an independent state, sitting as he is on £2.2 trillion of sovereign debt built up by him and the Labour party.

On today’s announcement, what discussions has the Chancellor had with upstream oil and gas manufacturers such as Halliburton and Baker Hughes in my constituency about their future? There is a sunset clause that protects energy companies and reduces the burden when prices come down, but where is the sunset clause for ordinary households? How can they know how long their support will last?

[Rishi Sunak]

As ever, we keep all situations under review with regard to providing support to households. We know, however, that the most vulnerable are likely, subject to the review of the Secretary of State for Work and Pensions, to see a significant increase in welfare and pension payments next year, based on September’s CPI, which will be significantly in excess of the inflation forecast for that year.

Financial Statement

Dave Doogan Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

My hon. Friend makes an excellent point. She is absolutely right; the increase in debt payments is historic and it gives a glimpse of some of the risks facing us going forward. That is why it is right that we maintain headroom against our fiscal rules, and the best way to do that, in order to deliver a lower-tax economy, is to remain very disciplined on further public spending.

[Dave Doogan (Angus) (SNP)]

The Chancellor has detailed a small number of fiscal interventions and they will be a small mercy for the poorest in our society. May I ask his advice on what families with a child suffering from a life-shortening condition will receive as a result of his measures today? Children suffering from life-limiting conditions are often at home, where they need to be kept warm 24 hours a day, seven days a week, often with specialist equipment running. The Children’s Hospices Across Scotland charity is receiving alarming calls from people whose energy bill estimates are going up in the region of £268 to £720 a month. What hope for them, Chancellor?

[Rishi Sunak]

In the autumn spending review we announced record funding settlements, not just for health, but across the board. That resulted in Barnett consequentials of, if I recall it correctly, about £4.5 billion annually for the Scottish Government. Obviously, they can use that to support their local communities in the way that they feel is best. Again, there have been further Barnetts today as a result of the household support fund.

Rebated Fuel Rules: Construction Industry

Dave Doogan Excerpts

Wednesday 19th January 2022 Westminster Hall

[Dave Doogan (Angus) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Bone. I give many thanks to the hon. Member for Upper Bann (Carla Lockhart) not only for securing the debate but for articulating so clearly the important details now manifest by this deeply unfair removal of the rebate. In April, the 46.8p raise cost £1.5 billion across the construction sector. It is incumbent on the Government, having introduced such a fiscal measure, to have an idea—a passing regard, at least—of how it will affect the industry. In the event that the Minister and her Department do not have that, I can set out a couple of those effects.

However, at the heart of the concern is fairness. As other hon. Members have set out, the notion that operators of this type of vehicle will somehow go out within the next two to three months to purchase alternatives that will not be subject to this tax increase is for the birds. The alternatives are not there—the manufacturers do not have the technology beyond the prototype stage. This is therefore a tax grab, essentially. We need to call it what it is. What the Government should have done, and may have got a bit of respect for, was implement a well-advertised, well-indicated, well-consulted-upon, graduated reduction of the rebate on red diesel, to allow industry and manufacturers to appropriately and realistically adapt their fleets and their products to meet the climate change targets that we all agree on. There is no dispute about those; it is how we get there that, in this instance, is deeply unfair.

I do not hear anybody making political points in this debate. There is no political capital at stake. In that spirit, I offer the Minister an out to this situation. If she wishes, she can put it down to what has happened to the cost of living, with inflation at a 30-year high, as the right hon. Member for Orkney and Shetland (Mr Carmichael) discussed. The principal casualty of this measure is the construction industry, which also faces a chronic labour shortage, and a chronic shortage and rising prices of materials. These things have also changed relatively recently, which gives the Government that out. Eleven companies in my constituency in the mineral products sector are affected by that.

However, this affects not only quarrying but construction and material handling. It is not only Geddes quarries in Angus or Laird’s concrete products in Forfar. I had a meeting with John Lawrie Metals in Montrose, which does a tremendous service to the environment by repurposing equipment from the offshore oil and gas sector for the construction sector. It has met Liebherr in Germany to discuss the timeline for the availability of its hydrogen-powered heavy shovels, but that is a long way away—way beyond the horizon of this change.

I implore the Minister to seriously consider a reversal of this change, because it is perverse on two levels. First, it will not make an iota of difference to pollution levels, because there is no alternative; it will be diesel that does the work, whether or not the Government maintain this change to the rebate. Secondly, as the hon. Member for Upper Bann indicated, it will also displace biodiesel, so there will be a negative consequence to the environment. There is nothing to recommend this. It will harm business and public sector capital investment.

It is okay for the UK Government—they will receive the tax from the change, so that will offset the increase in their capital expenditure to some extent—but what about the Governments of the devolved nations? Who is going to offset their increased costs for building new schools and hospitals? The construction sector will pass this on. It is bad for the environment and for the covid recovery, so I urge the Minister and the Department to think again.

--- Later in debate ---

[Peter Grant]

I am not familiar with the details of the example that the right hon. Gentleman gives, but I have no reason to doubt that he has researched it as thoroughly as he researches everything else he says, either here or in the Chamber. There will be unintended consequences that the Government have not identified yet.

I have the privilege to serve on the Public Accounts Committee. One of our reports, a year or two ago, looked at what are termed environmental taxes. We raised concerns about how it is often difficult to see where the environmental impact of environmental taxes is being measured or monitored, or whether there is even any target impact when they are introduced. A lot of environmental taxes might be well intentioned to begin with, but they quickly become just another money-making scheme for the Treasury.

It appears quite clear to me that that is what this proposal is set out to be from the beginning. If it is not about making money, but about reducing fuel use and pollution from fuel, why does the policy paper tell us how much more money the Treasury will get out of it, but not the expected reduction over the next four years as a result of the tax? In answering, can the Minister tell us by how much the Government expect the use of diesel fuel to be reduced as a result of this measure? If he cannot give that answer, he should ditch this plan and bring it back for parliamentary approval when he can tell us what the environmental impacts are likely to be. The right hon. Member for Orkney and Shetland (Mr Carmichael) referred to a case where the proposal could actually increase fossil fuel use.

The hon. Member for Upper Bann pointed out that some of the Government’s own guidance tells us that, as a consequence of a fuel reduction scheme, people are supposed to flush more fuel down the drain than they were before. Every time they change from one use to another, they are supposed to flush out the fuel from the tank. A supplier who wants to switch from using white diesel to using red diesel instead is told to flush every trace of white diesel out of the tanks. What a waste of fuel from a system that is supposed to be about reducing fuel usage.

[Dave Doogan]

Does my hon. Friend agree that, because of the traces of red diesel that will still be intact, the construction sector should be genuinely concerned about the pragmatic approach of Her Majesty’s Revenue and Customs in enforcing the excise situation? Should we not have something that is much less opaque and more defined?

[Peter Grant]

My hon. Friend makes a valid point. We have seen other examples of proportionate, pragmatic and reasonable enforcement from HMRC. Certainly, the experience of my constituents in a lot of tax enforcement is that those terms tend not to come up in conversations very often.

We should be clear that this is not an example of the Government closing a tax loophole that is being exploited at our expense by rogues, villains and scallywags. Those companies have done everything legally, and quite often put themselves at significant difficulty to separate the red and white diesel that they use for different purposes.

We are talking about criminalising on 1 April something that was perfectly legal on 31 March. If the Government suddenly decide to criminalise what those companies are doing, surely it is reasonable to use some of the £5.5 billion that the Government will make over four years from the changes to support businesses that will need it to comply with the new regulations.

The Government have said that the measure will have no macroeconomic impact. I do not know how macro something has to be to be considered macro, but I suggest that taking £5.5 billion out of the economy over the space of four years will have a macroeconomic impact on a lot of businesses. If someone’s business closes, that has a macroeconomic impact on their family’s finances. It is not even as if we are adding this tax to a low tax burden for businesses and individuals. The UK tax burden is already close to the highest it has been since my mammy was at school—I have a free bus pass, so Members can do the arithmetic for themselves.

Some of the indirect impacts of the measure have already been mentioned, including on the cost of construction. It will no longer be viable for self-employed people in the construction businesses to continue trading. Construction businesses will close down, and construction projects will stop mid-stream—or might never be completed—when the main contractor goes bust without warning. That kind of thing already happens all too often.

Affordable house building will become less affordable because the builders will not be able to continue to build at the prices they had given previously. There is only one place those additional costs will go: to the people buying the houses at the end of the construction. If that purchaser is a council, a housing association or another social landlord, the additional costs will go to tenants or will lead to the cancellation of the project because it is no longer affordable.

As has been mentioned, there is extreme volatility in the prices of raw materials that construction firms rely on. I have spoken to construction supply firms that find that the price of raw materials can increase by 100% and then drop back down again in a matter of weeks, making it difficult for them to price jobs and to rely on affordable pricing from which they can make a profit without pricing themselves out of the market.

If there were clearly demonstrated environmental and pollution-reduction benefits to the tax, there might be a price worth paying by us all, but there are none whatsoever. The impact is targeted at far too small a portion of the economy, and in a part of the economy that was already on its knees because of the combined impact of Brexit and the coronavirus pandemic.

The construction sector and the construction materials sector should be getting Government support; they should not be getting kicked while they are down. If the Government are not prepared to give up on this plan entirely, I ask them to delay it or, at least, to phase it in over a longer time, to give our hard-pressed industries a chance to survive.

--- Later in debate ---

[Helen Whately]

As we have heard from those who are trying to develop alternatives, one of the barriers to developing those alternatives—one of the things that reduces the incentives to do so—is the relatively low cost of red diesel. It is only by addressing the fact that there is such a low tax rate on red diesel that we incentivise the development of alternatives—and we are seeing the development of alternatives.

[Dave Doogan]

Will the Minister give way?

[Helen Whately]

I will make some more progress. JCB developing its hydrogen-fuelled digger is one example, and Volvo is another example. So we are seeing the development of alternatives. This proposal is a really important part of ensuring that the incentives are there for these things to happen.

I will pick up on a few other points that hon. Members have made. The hon. Member for Upper Bann talked about the impact of covid on the construction sector. I heard the phrase “a perfect storm” from the right hon. Member for Orkney and Shetland (Mr Carmichael). I will say a couple of things. First, we looked at the cost implications, and that is why there have been some exemptions in very specific areas where we thought the taxation change might have a material impact on household costs. However, for the areas where the change is being introduced, the Government do not believe there is a material change in the ultimate prices to households. The cost of fuel is relatively small for most businesses—I recognise that that is not the case for all businesses.

The other issue, in the context of covid, and taking a step back, is that we have put in a £400 billion package of support for the economy throughout this pandemic. We have already provided £250 million to local authorities in England and recently provided an extra £100 million that local authorities will distribute to businesses affected by covid to support them through the difficult times that we recognise they are going through. The Barnett equivalents of those amounts will go to the devolved nations. So we are giving a huge amount of support to businesses throughout this pandemic—we are absolutely mindful of that. Given that that support is in place, that particular issue is not a reason not to continue with the very important commitments that we have made—and that other parties have supported—to transition to a greener economy.

--- Later in debate ---

[Helen Whately]

That is not a figure that I have seen, but I can double-check that. I was asked specifically whether there has been an economic impact assessment. We consulted on the proposal and assessed the expected impact. As usual, a tax information and impact note was produced and published, as hon. Members would expect.

For those who said that the change will not make a difference to the environment, or will backfire, as I mentioned it is about incentivising the development of alternatives. Alternatives are already being developed. Specifically to support that, the Government have doubled the funding for energy innovation through the £1 billion net zero innovation portfolio. The Department for Business, Energy and Industrial Strategy recently announced £40 million of funding for the red diesel replacement competition, which is part of that portfolio, to specifically grant funding to projects that will develop and demonstrate lower-carbon, lower-cost alternatives to red diesel for the construction and mining and quarrying sectors.

[Dave Doogan]

Will the Minister give way?

[Mr Peter Bone (in the Chair)]

Order. Before the Minister decides whether to take that intervention, she should know that she is well over her allocated time. We have to allow two minutes for the proposer to wind up. The Minister has 20 seconds.

Covid-19: Government Support for Business

Dave Doogan Excerpts

Thursday 16th December 2021 Commons Chamber

[John Glen]

Today we are having meetings to discern exactly what the data is showing and what interventions we need to make going forward.

[Dave Doogan (Angus) (SNP)]

I think I am now the sixth Member to mention the coach sector, and I hope the Treasury is listening to hon. and right hon. Members in that regard. Robert Black’s of Brechin has contacted me to say that bookings have been disappearing like snow off a dyke since the omicron situation developed. I have also been contacted by The Townhouse in Arbroath, The Stag in Forfar and many others, and I am not taking my staff out on Friday because I am following advice. There are booking cancellations right across the board. It is an omicron support package that we need—where is it coming from?

[John Glen]

As I have said repeatedly, the Government are engaging across sectors. I recognise the depth and breadth of the impact of this variant, and we will look very carefully at what we need to do.

Conduct of the Right Hon. Member for Uxbridge and South Ruislip

Dave Doogan Excerpts

Tuesday 30th November 2021 Commons Chamber

[Michael Ellis]

The feeling is mutual but I am defending the conduct of the Prime Minister, and the right hon. Gentleman knows that he has no answer to this large litany of achievement.

[Dave Doogan (Angus) (SNP)]

The Minister accuses SNP Members of not having an answer. It is very interesting that the Minister is going through the Conservatives’ programme for Government and manifesto and is making some fairly ambitious claims about what has been achieved, but we are not debating that: we are debating the character of the Prime Minister. Will the Minister focus his remarks on that please?

[Michael Ellis]

The conduct of the Prime Minister is the subject of the debate, and the conduct of the Prime Minister is the maintenance and running of this Government and that is what he has been achieving.

Going back to the point on immigration, we have seen the tragic consequences in the recent incident off Calais and our thoughts are of course with the families and loved ones.

Government's Management of the Economy

Dave Doogan Excerpts

Tuesday 23rd February 2021 Commons Chamber

[Dave Doogan (Angus) (SNP) [V]]

Tory economic incompetence is a rich seam to mine and it is a challenge to do justice to the millions of marginalised workers and families up and down these islands who pay the price of Tory policies. The Chancellor borrowed £55.2 billion in May 2020, nine times more than in the previous May, and the highest monthly borrowing since records began. Indeed, we need to go back 50 years to find UK gross borrowing exceeding the size of the whole UK economy as it now does—and this is a Government who are trying to tell us that they have this under control? National debt of £2.1 trillion might not worry the millionaires in the Tory Cabinet, but the rest of us are horrified.

The Chancellor said last June that the best way to restore public finances is to open the economy and get people back to work. Well, we now know what an ill-fated risk calculation that was, to the UK’s great public health and economic cost, brought to bear on the population by a Chancellor seemingly more invested in his personal brand than judicious ministerial responsibility.

The Labour party will need to be careful with its criticisms, though. It inherited falling debt and a surplus in ’97, and took only two years to revert that into rising debt. The current tenant of No. 11 Downing Street is the latest in a long line from both UK parties seemingly more chancer than Chancellor. And let us not forget that, in 2010, Labour was planning devastating austerity cuts that it was very clear were going to be tougher and deeper than Margaret Thatcher’s in the 1980s. In this, UK politics is revealed as the worst ever Hobson’s choice.

Today’s Chancellor, mirroring Alistair Darling when he shored up the banks, presents himself as something of a benevolent genius for wheeling out the furlough scheme, conveniently forgetting that it represents a very standard fiscal intervention by any Government in a developed economy in times of crisis, and of course it is future generations, not he, who will be paying down the bill. The UK Chancellor, like most before him in my 48 years, is neither genius nor generous, and there are 3 million excluded who will testify to that, not to mention our pensioners, who, by 2016 figures, endure the worst state pensions in the developed world.

We must then consider the shameful UK economic growth of 2% over the last 10 years of this Government, which compares with figures of 6% in the US, 9% in the EU and Japan, and 7% in the G7. We see clearly the chickens of historical UK underinvestment in science, engineering and manufacturing coming home to roost—the legacy of Thatcher alive and well—and that is before the long-term negative effects of Brexit flow through. Since devolution, the UK’s growth in output languishes at 23.8%, while Scotland’s has risen by 33.7%, outpacing the outmoded UK and doing so despite the dead hand of the UK Treasury holding us back. It will not do so for much longer, for at independence, Scotland will retake our place on the international global stage and forge ahead with our independent, progressive and inclusive economic future.

[Mr Deputy Speaker (Mr Nigel Evans)]

Before I call Ben Everitt, may I just ask the remaining MPs participating remotely to look at the clock on the left or right hand side of their monitors, wherever it may be? If they cannot see that, please could they use an alternative device, because they will be cut off after three minutes.

Covid-19: Economy Update

Dave Doogan Excerpts

Thursday 22nd October 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right. It is important that we can look through this crisis to our economic recovery. I know that his area will play a starring role in helping to drive that recovery, whether that is through Grimsby or a free port in Immingham. I am pleased to say that we are making good progress on the free port process. I hope to announce the bidding process very soon, and look forward to receiving his local area’s application when the time is right.

[Dave Doogan (Angus) (SNP)]

The nature of the Government’s interventions in this crisis are reactionary and there are significant gaps in the support. A principal casualty of those gaps are the 3 million excluded, who have had a devastating summer. The Chancellor has used the word “generous” over 20 times in this statement, so I urge him to advise me what support he will now give to the 3 million excluded. Will he do them the service not of telling us how he has supported other people, but of telling us what he will do for them?

[Rishi Sunak]

The circumstances of everyone who is self-employed will be different. It may well be that they own a business premises, which will benefit from business rates relief or a cash grant. It may well be that they have used the bounce back loan scheme, as over a million small businesses have. It may be that they are benefiting from the enhanced welfare system and the improvements to universal credit and the local housing allowance. Or it may be that they are the self-employed people who today will benefit from a doubling of the grant that I have announced, which will be up to over £3,700 this Christmas. This remains one of the most comprehensive packages of support for those who are self-employed anywhere in the world.