Energy (Oil and Gas) Profits Levy Bill

David Duguid Excerpts

Committee stage
Monday 11th July 2022 Commons Chamber

[Craig Mackinlay]

I am saying very clearly that big companies can make investments anywhere they please in the world, perhaps with tax regimes that are more suitable to them and where they are not being taxed at 65%. I would rather that they were investing here and staying here than going abroad to invest, with all the potential consequential impacts on the environment and employment. It seems that the hon. Gentleman agrees with me.

[David Duguid (Banff and Buchan) (Con)]

I rise in response to the hon. Member for Kilmarnock and Loudoun (Alan Brown). I declare an interest: I used to work for BP. I worked in the oil and gas industry for 25 years. I worked for BP in the North sea in this country, and in Angola, Venezuela and a range of different places. I worked for other companies in other countries as well. It is true that these companies have made their bread and butter in this country, and cut their teeth in the North sea, particularly from a safety point of view. The hon. Member for Aberdeen South (Stephen Flynn) mentioned Piper Alpha, which led to our having one of the highest regulatory regimes on the planet. It is not true to say that companies abandon that when they work elsewhere; it does make it a lot more difficult for them to work in those environments, but it does not stop them.

May I take the opportunity to totally agree with what my hon. Friend was saying before? This legislation, for all its flaws, compared with what Labour is proposing—

[Stephen Flynn]

Will the hon. Member give way?

--- Later in debate ---

[Stephen Flynn]

Repetition is of course a convention of this House, but I am not much for many of the conventions of this House, so I do not intend to say much more than I did earlier about the Bill in general. I will just reflect very briefly on the amendments in my name and the names of my hon. Friends.

Amendment 9 relates directly to the electrification of North sea assets. We have heard comforting words about that from two Ministers now. I am sure the Minister for Energy, Clean Growth and Climate Change, now sitting beside the Financial Secretary to the Treasury, would agree that it will be in guidance that the electrification of assets will be able to get the taxation incentives. We cannot escape the fact that Ministers come and go, as we have seen so clearly in this place over the course of recent times, but what industry needs in relation to this issue is certainty. The best way—the only way—to provide certainty on the electrification of grids is to put that on the face of the Bill.

I agree with the hon. Member for South Thanet (Craig Mackinlay) on one point he made: it is deeply disappointing that there is not additional scope for the wider renewable sector to get these incentives. If the Government were serious about combating climate change and reaching their net zero ambitions, they would have extended those incentives to that industry.

That takes me on to new clause 6, again in my name and those of my hon. Friends, which aptly relates to net zero. The Government have rightly promoted, and will continue to promote, climate compatibility checks. I think we all in this place agree about those. What we need to be clear about, however, is the implications of this Bill for reaching net zero. The easiest, indeed the obvious, way to do that is to ensure that those climate compatibility environmental checks take place in relation to any investments. I thought that would be a very straightforward thing for the Government to agree with, and I hope they will do so.

Finally, in relation to new clause 7, I have teased this argument out on a couple of occasions in exchanges with Ministers: we know there is going to be a sunset clause on this levy, to end it in a couple of years’ time. However, the phrase “normal oil and gas prices” keeps being used again and again. We heard inferences from the former Chancellor that somewhere around $60 to $70 a barrel was normal. I just did a very quick calculation of prices. Between 2015 and 2021 the price was $56 a barrel, but between 2010 and 2015 it was double that, at $101.4 a barrel. I again ask the Minister—[Interruption.] Indeed, oil and gas is a good argument for independence.

[David Duguid]

Will the hon. Gentleman give way?

[Stephen Flynn]

I will not give way to the hon. Gentleman. That has nothing to do with this Committee stage, and I would hate to get diverted, as some others did earlier.

What we and the industry need to be clear about is what price the Government regard as normal. If we are to have serious legislation, we need serious answers to the most basic of questions.