Oral Answers to Questions

Debate between David Duguid and Alan Brown

Tuesday 20th June 2023 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

13. What recent assessment he has made with Cabinet colleagues of the potential effects of energy prices on the cost of living.

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

22. What fiscal steps he is taking to support households with their energy bills.

Cost of Living and Brexit

Debate between David Duguid and Alan Brown

Wednesday 14th June 2023 Commons Chamber

[Alan Brown]

The Minister does not explain why Northern Ireland has these powers and Scotland cannot have them. Of course I recognise the difficulties caused in Northern Ireland by the Democratic Unionist party, his brothers in arms. It would be good if it helped to get the Northern Ireland Executive up and running.

We might have thought that Brexiteers, who claim that Brexit is a good thing, would welcome this motion to set up a new Committee. When the Committee looks at the impacts of Brexit, perhaps it will unearth the Brexit dividends that the Minister and the hon. Member for Banff and Buchan have not been able to explain.

We know that Labour and its Front Benchers are not in favour of the motion, hiding behind the fact that the Committee would be too big for a room in Parliament and would cost too much money—the Minister said that, too. Well, I have an idea: we could abolish the House of Lords and the Committee could sit in there. That would save money, too.

As for the omission of the Education Committee, perhaps we should accept members of the Education Committee—Labour could have tabled an amendment—because that would allow greater insight into the impact on higher education in Scotland of the Tories’ student visa rules and of not being in Horizon for two years. Having members of the Education Committee on a cost of living Committee might be quite helpful.

Labour obviously does not support the Committee because it would expose Labour’s mantra of making Brexit work without rejoining the internal market, rejoining the customs union or restoring the free movement of people. Their mantra is a vacuous statement. Their position, like the Tory position, means continuing labour shortages in the health and social care sector. It means crops continuing to be left unpicked, and it means the home-grown food stock will shrink because farmers will plant less in future. It means continuing rules of origin issues that affect manufacturing in the automotive industry. And it will mean food prices increase further, given the imminent checks that will be made on food imports.

Shane Brennan, the director of the Cold Chain Federation, has said:

“It is crazy that one week the government is holding a crisis meeting in Downing Street to discuss out-of-control food inflation and the next is willing to nod through a multimillion new import tax on EU food imports.”

Meanwhile, despite what Conservative Members have said, farmers will have to compete with Australian and New Zealand lamb imports, thanks to the deal that a former Secretary of State for Environment, Food and Rural Affairs has said was an absolutely duff deal pushed through by the former Prime Minister.

The biggest issue created by Brexit and Tory Government policy is the cost of living crisis, which has too many aspects to quantify and discuss. That is why a cross-party Select Committee would be kept meaningfully busy.

Another great Brexit lie is that energy bills would be cheaper if we left the EU. That one has aged as well as Scotland being told in 2014 that our energy bills could only remain as they were, or be lowered, by staying in the UK. We have acknowledged that the Russian invasion of Ukraine is, of course, the main factor in soaring energy bills, but there is a quantifiable Brexit impact. By leaving the single electricity market and creating a standalone trade and co-operation agreement, the post-Brexit cost of trade in electricity is higher. Energy UK estimates that these arrangements cost more than £1 billion a year, which is added directly to our electricity bills. There is a so-called Brexit dividend: higher energy bills. We were promised that VAT on our energy bills would be cut post Brexit, which is another broken promise that has not materialised.

This is in stark contrast to the 2016 Vote Leave briefing on taking control of energy, which said:

“Because of silly EU rules”—

Vote Leave loved that phrase—

“EU energy regulation will cost the UK economy about £90 billion… Instead of spending money on patients, the NHS has to instead spend millions every year on energy costs.”

Can anybody with any credibility tell us that, post Brexit, the NHS is saving money on energy and other matters? And where is the mythical £90 billion saving we are supposed to see?

Another Brexit dividend and cost impact on both energy and wider goods comes from the drop in the value of the pound. This means higher costs on imported goods, and the fact that oil and gas are traded in dollars means another financial hit for the UK. The EU is moving much quicker to decouple gas and electricity prices, to bring down the cost of electricity, and it has also taken much stronger action to try to combat the US Inflation Reduction Act.

And what do we hear from the Energy Secretary? “Oh, everyone else is 10 years behind the UK, so we do not need to do anything because the US is playing catch-up.” The reality is that investors are looking at moving elsewhere. If the Government will not do anything about it, it will have another long-term impact on the green transition.

The Government argue that they have led the way on renewable energy, and they have been a leading light at some points in the deployment of renewable energy, but the reality is that there have been so many missed opportunities in supply chain development. We are always told that it was the EU that prevented contracts for difference auctions from incentivising UK and local content in the supply chain, which is, frankly, utter rubbish. Over the years, their narrative was always that EU procurement rules meant lowest price only. People said that other countries did not stick to the rules, unlike the good old Brits, and that that hampered us.

We are talking about the same leavers who now want to break international treaties. The reality is that tender assessments can consider wider impacts and quality. More than 20 years ago, I was procuring civil engineering contracts under EU laws, so I have always been well aware that if a robust scoring assessment system is in place, the argument that we need to go only for the lowest price is false.

The notion that the EU is forcing imports from the far east because of competition laws is also palpable nonsense, because that is where so many of the components come from. So it is high time that the procurement process for the contracts for difference auctions suitably incentivises the creation and establishment of a UK-based supply chain. What is the point of talking about energy security when so much of the renewable energy deployment and so many of the ongoing grid upgrades depend on imports and there are waiting lists of years for some of the components?

The UK Government have at least finally acknowledged the need for some change in supply chain development, but they have cut the overall CfD budget for allocation round 5 by 30%, at a time of rampant inflation. That is happening with projects already struggling to hit allocation round 4 strike prices. That is further proof of their saying one thing and doing another. Tidal stream technology needs to be backed; with 80% of its supply chain content being UK based. However, the ringfencing for that has been halved.

[David Duguid]

rose—

[Alan Brown]

I am sorry, but I am not going to give way.

If we look at Westminster energy policies over the years, we see that the biggest disgrace is the lack of a sovereign wealth fund from oil and gas. Norway has the biggest sovereign wealth fund in the world, and it only started that in the 1990s. That shows what can be done when a country looks after its assets and plans for the future. When Labour came to power in 1997, oil dropped to $12 a barrel. When Labour left office in 2010, the price was close to $100 a barrel. Why was there no creation of an oil sovereign fund then? Where is that legacy of that price increase bonanza that Labour had? It was completely frittered away. Governments of any colour down here take Scotland’s assets and resources and fritter them away, with no long-term planning.

To add insult to injury, we supply the energy, yet those who stay in the highlands and islands help pay for the gas grid, even though, in general, they are not connected to it. They see the renewable energy going south, but they pay a supplement in their electricity bill. They are also more likely to be energy poor. The situation is unbelievable.

Our hands are being tied by being part of the UK. It is time we were able to make decisions for ourselves, like any normal independent country. This Committee, if established, would expose that and the fact that independence, in the EU, is the best way forward for Scotland.

Scottish Independence and the Scottish Economy

Debate between David Duguid and Alan Brown

Wednesday 2nd November 2022 Commons Chamber

[David Duguid]

If the hon. Gentleman will forgive me, I will continue listing the many benefits of being in this United Kingdom for the people of Scotland and everyone else.

The household support fund, which was launched at the 2021 autumn Budget, provided £500 million from October 2021 to March 2022. It was extended by the 2022 spring statement for the period from April to October this year, and the latest extension will cover the period from October 2022 to March 2023, bringing the total amount provided to £1.5 billion since October 2021. This is a devolved area of policy, but it has generated Barnett consequentials for the Scottish Government of £41 million in the last financial year and a further £82 million in the current financial year. As hon. Members have described, it is for the Scottish Government to decide how to fund mechanisms in Scotland as they see fit.

That £1.5 billion package is in addition to the more than £22 billion of UK Government support announced previously, including the £9.1 billion energy support package announced in February 2022, which had £296 million in Barnett consequentials for the Scottish Government as a result of the council tax rebate payment and the discretionary funding for local authorities in England.

The reduction in the universal credit taper rate and the increase in the work allowance announced in the 2021 autumn Budget meant an extra £1,000 to those on the lowest incomes. An increase in the national insurance primary threshold to £12,570, making it the same as the threshold for income tax from July 2022, and a lowering of the earnings limit were also announced in the 2022 spring statement. A fuel duty freeze was announced in the 2021 autumn Budget, and a 5p cut to fuel duty was announced at this year’s spring statement.

[Alan Brown]

Do the national insurance changes not show how the Westminster Government make decisions for Scotland without consulting Scotland? After it was announced, we argued that a rise in national insurance was a regressive measure, and then the Westminster Government decided that they would reverse the rise. Scotland had no say on that. All the other measures that the hon. Gentleman mentions are not free money coming from Westminster. We pay our share in taxes, and we are paying billions in additional oil and gas revenues. Borrowing funds most UK Government spending, and Scotland is allocated a share of that debt, so it is not free money or a dividend. His lot decide what we get, and then they say, “By the way, here is what you are going to have to pay for it.”

[David Duguid]

I was going to talk about the reversal of the health and social care levy, which will save 2.3 million people in Scotland an average of £285 in 2023-24. I will return to the question of tax coming in, payments going out and the terms of the Union dividend.

I will continue with the list, which is not exhaustive. I am listing just some of the highlights of what this UK Government have provided to everyone in this United Kingdom. The national living wage has been increased by the largest-ever cash amount, meaning that 2 million full-time workers will be £1,000 a year better off. Another benefit of Scotland being in the UK is that the rest of the UK accounts for £52 billion-worth of Scotland’s exports, which is three times larger than the amount going to the EU. Half a million Scottish jobs are supported by trade with the rest of the UK.

The Union dividend, for those who are not aware, is the combined value of higher public spending and lower tax revenues in Scotland. In 2021-22, the Union dividend reached a record high of £12 billion, which works out, as the Secretary of State said, at £2,184 per person, up from £1,925 per person the previous year. This includes Scotland’s geographical share of North sea revenues, and it is comprised of £1,963 of higher expenditure per person plus £221 in lower revenues generated per person in Scotland.

Oral Answers to Questions

Debate between David Duguid and Alan Brown

Wednesday 12th October 2022 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

13. What recent discussions he has had with (a) Cabinet colleagues and (b) the Scottish Government on the cost of living crisis in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Duguid)]

The Government fully recognise that families, households and businesses are worried about rising costs. That is why we have taken decisive action to get families and businesses through this winter and next, and we are focused on growing the economy to raise living standards for everyone.

--- Later in debate ---

[David Duguid]

The hon. Lady makes excellent points. On making representations to my ministerial colleagues, having been in this post for a very short time, I have not quite got there yet, but these discussions are happening. Under the agreed fiscal framework, the Scottish Government, through the levers that they have, will receive an estimated £340 million of additional funding as a result of just the basic rate tax cut. It is for the Scottish Government to use that additional funding as they want to, including on increased spending or tax cuts.

[Alan Brown]

In the policy decisions chapter of the so-called “Growth Plan”, line 9 on page 26 shows that reversing the corporation tax increase will cost £68 billion over the next five years. Given the cost of living crisis, did the Minister and his Secretary of State argue for or against a £68 billion subsidy to the biggest, wealthiest companies in the UK?

[David Duguid]

The hon. Gentleman is probably aware that the Government have committed to reversing the planned corporation tax increase from 19%, so it is staying at 19%, which will attract businesses to Scotland and across the rest of the United Kingdom. It is often missed that the Government have delivered on top of the recently announced energy price guarantee. It means that typical households receiving means-tested benefits will receive £1,200 of support; those on disability benefits on top of that will receive £1,350; low-income pensioner households will receive £1,500 of support; and low-income pensioner households who are receiving disability benefits will receive £1,650 of support. As well as that, the energy price guarantee will mean that a typical household will pay no more than £2,500 on their energy bills.

Tackling Short-term and Long-term Cost of Living Increases

Debate between David Duguid and Alan Brown

Tuesday 17th May 2022 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I would like to say it is a pleasure to follow the Chancellor, but we have just heard 16 minutes of platitudes and no new ideas. He said that Opposition Members are causing people more worry. What is causing people more worry is not having enough money in their pockets to pay their bills. It is nothing to do with what we say here; it is what they see in reality.

The Chancellor mentioned yet again his £9 billion support package for energy bills, but he did not say that only a third of that is money from the Treasury that will not be clawed back. Two thirds of that £9 billion will be added to our energy bills and recovered through our bills, so he is making bills higher for some while providing crumbs of support to the most vulnerable. He mentioned growing the economy while ducking the fact that, after the past five years, the economy had already started to contract in March. Then, for good measure, we heard some bluster about Labour’s past record, as if to hide the issues. What that tells us is that Westminster has not been working for a very long time.

It is a dereliction of his duty as Chancellor to have no new measures and no new finances associated with the Queen’s Speech to address the Tory cost of living crisis. The stark reality is that the longer nothing is done, the more people will plunge into fuel and food poverty. The April 2022 price cap is 75% higher than just a year ago. National Energy Action estimates that up to 6.5 million households could now go into fuel poverty. That underlines why more action is needed by the Chancellor. The October increase coming could see up to 40% of households becoming fuel-poor. National Energy Action previously estimated that about 10,000 premature deaths a year arise from fuel poverty. How many more premature deaths are likely to occur with these increasing fuel costs? They have such an impact that people die early through fuel poverty. How can any Minister who claims to have compassion stand by and do nothing? Even the British Chambers of Commerce has asked for an emergency Budget. Companies such as Scottish Power are calling for £1,000 of support for energy bills, and yet the Chancellor has insisted that taking measures now would be silly. Why is he so out of touch with reality when even businesses are telling us what is required?

Looking back to April 2020 and the onset of the covid crisis, the Government increased universal credit by £1,040 to help people to live, but back then home energy bills were 75% cheaper and petrol was 50% cheaper, and we are now dealing with food inflation and with general inflation rising to 10%. If that £20 a week uplift was required for people to live two years ago, surely the Chancellor must recognise that he needs to reinstate that uplift and do so quickly. Even Asda chairman and Tory peer Stuart Rose backs reinstating the £20 per week uplift to universal credit, so it really is time for the Chancellor to listen. People on universal credit are more likely to be on prepayment meters and are therefore further penalised with a higher energy tariff. Those people will be forced to self-disconnect this winter, as they simply will not have the funds to put in the meter. They do not have a dilemma about whether to turn the heating on; they do not have the choice.

Yesterday I was at a meeting with Ewan McCall of the Wise Group. He and others within the Wise Group deal with people who are on the frontline of fuel poverty. A survey of nearly 300 people in Glasgow found that 24% were self-disconnecting or rationing their heating. There are really heartrending individual stories behind this: people reliant on candles and using hot water bottles, reduced to living in misery. The Wise Group, like others, provides fantastic help with turnaround, but it can only do so much. Other groups such as the Trussell Trust, which does fantastic work with food banks, have confirmed that ever more people are reliant on their services.

Rather than action, we have had the bizarre admission from the BEIS Secretary that his Department’s nuclear power policy will increase our energy bills. It is economic madness—and, unfortunately, madness cheered on and encouraged by Labour. It should come as no surprise that new nuclear will add to our bills. With an upper estimate of £63 billion for the capital and finance costs for one new nuclear power station, it is crazy to proceed when the costs of renewable energy are ever falling. So-called small modular reactors are neither small nor cheap, at circa £2 billion per new station. Rolls-Royce does not want a contract for just one small modular reactor; it wants a contract for 12 to 15. The Government should be focusing on providing cheaper dispatchable energy and agreeing a minimum electricity price for the proposed pumped storage hydro scheme at Coire Glas and the proposed extension at Cruachan Dam. Those can be delivered much quicker and at a fraction of the costs of nuclear. Indeed, the £1.7 billion that the Chancellor has used to buy a stake in Sizewell C would pay for Coire Glas to be built outright.

One obvious way to reduce bills and emissions is to increase energy efficiency measures massively. The Scottish Government rightly treat that as a national infrastructure programme and spend four times more on it per capita than the UK Government. The Green Alliance estimates that retrofitting 11 million homes will reduce peak heat demand by 40%. Shamefully, instead of showing increased ambition, the UK Government have not even brought forward the regulations for ECO4, yet the programme was supposed to have started on 1 April and is part of the £9 billion package the Chancellor keeps bragging about.

This Government are trapping more children in poverty who are therefore destined to have fewer opportunities and to be less likely to have positive outcomes in life. The Child Poverty Action Group estimates that there are currently 4 million children in poverty and says that the legacy of this Queen’s Speech will be even more children going into poverty. Yet at a stroke, overnight, the Chancellor could lift 250,000 children out of poverty by scrapping the two-child limit for universal credit. When he knows that he has at his disposal the power to take 250,000 children out of poverty overnight, why does he not act and scrap the cap? Why are Tory Back Benchers not calling for the two-child limit to be scrapped altogether? Instead we hear demands for tax cuts which the Chancellor has promised are coming, but which will disproportionately help the richest and not the poor.

Another decision taken by this Government is not to uprate benefits even close to the rate of inflation. That is a conscious decision, and as others have said, blaming the IT system is a piece of nonsense. The Chancellor is hiding behind weak excuses. There is something far wrong if the Government’s IT system is so poor that they cannot press a button to provide a percentage uplift.

We have heard one new policy announcement, which is making 91,000 civil servants redundant during this crisis. It beggars belief that the Government use the slogan “Making work pay” while wanting to sack 91,000 people. Unfortunately, many who are working know that work does not pay. The number of people who are in work and in poverty is increasing, and no amount of bluster will change that statistic. The Government could help by making the minimum wage equivalent to the real living wage. At a stroke, that would take more people out of poverty, and it would not cost the Government any money, so why do they not do that?

There is talk about balancing the books, and another cohort on whom the Government have balanced the books is pensioners. Scrapping the triple lock is costing pensioners more than £500 a year during this crisis. If inflation is running at 10% when the next uprating assessment is undertaken for pensions, will the Chancellor stand by the pledge to reinstate the triple lock? Will he actually increase pensions by 10%, if that is what inflation is telling us? It would be good if he could confirm that. Okay, he is just staring into space.

The topic of pensions takes me to the Women Against State Pension Inequality Campaign and the millions of women still awaiting compensation. The recent Parliamentary and Health Service Ombudsman report has highlighted and confirmed that there was clear “maladministration” in how the Department for Work and Pensions delivered—or failed to deliver—the news of the increased pension age for millions of women. Some form of compensation would not only be at least a nod towards justice, but put money in people’s pockets at this time of need.

I met two representatives from Ayrshire WASPI on Friday, and they highlighted that fair compensation in Ayrshire will be about £150 million for 15,000 women. That money would then be spent locally on services and goods in a real form of levelling up. Even then, much of that money would return to the Government in various taxes. Sadly, by the end of this calendar year, more than 220,000 women across the UK will have died waiting for justice in the seven years since the WASPI Campaign began. Thousands more women will die waiting unless the DWP and the Treasury sit down with campaigners to agree fair, fast compensation. I put it to those on the Front Bench: how acceptable is it just to sit back and let people die, instead of providing them with justice and the compensation they deserve?

Returning to the issue of the Treasury and how to pay for support, we agree with Labour on the principle of a windfall tax. However, it should not just be a cash raid on the North sea; rather, it should be a wider pandemic profit levy. Tax Justice UK has identified that just six companies made an excess profit of £16 billion in the financial year 2020-21. A 10% additional levy on them would realise £1.6 billion for the Treasury. A much wider pandemic profit levy of 10% across the board would raise even more money.

The right hon. Member for Doncaster North (Edward Miliband) said that companies should not profit from circumstance and from just being there. On that principle, he should agree that a pandemic profit levy makes more sense, because that would affect companies that benefited from the covid situation just by virtue of being there. That levy would also target the companies that made excessive profits from personal protective equipment contracts awarded to them directly by the Government.

There is no doubt that things have moved with the oil and gas sector. As the right hon. Gentleman pointed out, the chief executive of BP has said that investment would not be at risk. If we look at the reality of it, Shell and BP combined are on course to reach £40 billion in profit this year, so there must be some loose change there for the taking. It is interesting that the Tesco chairman wants a windfall tax on oil and gas, so I am sure he would also welcome a windfall tax on Tesco and other companies that benefited during the pandemic.

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

I genuinely thank the hon. Member for giving way. It is two or three short months since I welcomed his stance against Labour’s calls for a windfall tax, but putting that aside, he quoted Bernard Looney, the chief executive of BP. Is he aware that, as well as saying that currently committed investments would not be at risk from a windfall tax, Bernard Looney has also said that future investments could be?

[Alan Brown]

At the end of the day, there is so much excess profit here that something needs to be done. We need to have a serious conversation about it. Interestingly, in front of the Business, Energy and Industrial Strategy Committee, the chief executive of Centrica spoke about the record profits it is making and about how it pays much more tax in Norway than here. He confirmed that a tax regime can be balanced and that he is quite happy paying more if it is a stable regime. We could have a serious debate about a tax regime that realises more money for the Treasury, especially in this time of need.

That takes us to the Treasury. The Chancellor has generated his own windfall. As our energy bills have nearly doubled, so has the VAT intake to the Treasury. As petrol prices have soared, so have the VAT returns to the Treasury. Indeed, the duty cut he was bragging about is actually a loan paid for by the extra VAT that was already getting raked in. As we have heard, there is now a real risk that that duty cut is being gouged out by greedy petrol companies and not being passed on to consumers. That is another thing on which the Chancellor needs to get a grip. Oil and gas revenues have increased by £3.5 billion in the past couple of years, and I have a funny feeling that in the autumn statement, the Chancellor will predict even greater income from oil and gas revenues. That income alone should be getting recirculated and used to support people.

The Scottish Government are doing what they can to mitigate the crisis, but we cannot make decisions a normal country can make. The Scottish Government introduced the game-changing child payment and doubled it to £20 a week, and it will increase to £25 a week later this year. That could lift 50,000 children out of relative poverty, but it cannot have the positive impact it otherwise would have had due to Tory cuts. That also demonstrates the lack of real options for Scotland within the current constitutional settlement. We cannot make decisions a normal country can make. It is not in our gift to change VAT on energy bills. Whatever the views are on a windfall tax, we cannot do that. We do not have control over fuel duty or VAT either. We have limited borrowing powers. We are locked into bad decisions by the UK Government on the race for nuclear—encouraged by Labour—on money on nuclear weapons, and on being taken out of the EU, and we are short-changed in funding from the UK Government in relation to that.

As a country, we are energy-rich, yet we have citizens living in fuel poverty. We have exported oil and gas for years, but we do not even have an oil and gas fund. It is time for a different direction. We have had 315 years of the so-called most successful Union ever, yet we have a Government whose slogan is “level up” and “we know best”. If the Union is so successful, we should not need a slogan about levelling up. It is time for independence and time we made decisions for ourselves.

Oil and Gas Producers: Windfall Tax

Debate between David Duguid and Alan Brown

Tuesday 1st February 2022 Commons Chamber

[Alan Brown]

On the energy cap, is it not the case that it is not Government money that is protecting people? Other consumers pay for it in the long run—we are all paying for it—so it is not a direct Government intervention.

[David Duguid]

The hon. Member may have some data to back up his claim, but the decision, as was voted for in this House, was to apply the energy cap.

Another scheme is the winter fuel payment, which delivers an annual tax-free payment of between £100 and £300 to help to meet heating costs. The £25 cold weather payment was also awarded to 4 million vulnerable households in England, Wales and Scotland in the last financial year.

The Opposition have proposed a cut in fuel VAT, which is already at a reduced rate of 5%. That was not included in today’s motion, although it was mentioned by the shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband). The fundamental flaw with that approach is that, unlike the measures I mentioned earlier, such a cut would disproportionately benefit wealthier people with larger houses and higher fuel costs. It is far better to focus support on the most vulnerable who need it most, which is what the Government’s measures do, such as the £500 million household support fund. That includes £41 million for the Scottish Government, which I am pleased they are passing on as the winter support fund.

As well as support for energy bills, the Government have a great record on improving support in general for those on low incomes or looking for work. The national living wage increases to £9.50 later this year. The reduction in the universal credit taper means that workers on low incomes keep 8% more of what they earn. The double lock on pension increases means that state pensions will increase by 3.1%. This morning in Treasury questions, the Chancellor reminded us that since 2010, 1 million fewer people across the UK are in poverty.

I welcome the Government’s action on reducing the reliance on hydrocarbons and on growing renewable and low-carbon sources of energy, heat and transport. Renewable energy has quadrupled since 2010 and coal is due to be phased out completely by 2024. The energy transition to net zero is already under way—it has been for a long time; I saw evidence of it when I was still working in the industry—but we are not there yet. There is still a demand for oil and in particular gas to meet our energy, heat and transport needs, and we must do what we can to ensure that as much as possible of that demand, albeit declining, is supplied from our own local sources.

Nearly three quarters of the UK’s energy currently comes from oil and gas, of which production from the UK continental shelf—UKCS—was equal to around 70% of demand in 2020. Even as we transition to a net zero future, the work of the Climate Change Committee shows that around half of the UK’s cumulative energy requirements between now and 2050 will be met by oil and gas. Almost 200,000 jobs are supported in the industry, not just in Scotland but right across the United Kingdom. Those jobs, which the motion puts at risk, are a key part of driving the energy transition, as I have mentioned previously.

British companies such as BP and Shell, as well as Total, Equinor and other international energy companies, already have access to the skills, expertise, technology and capital to help deliver net zero. The current offshore oil and gas tax system is one of the most competitive and progressive regimes globally; through it, the sector will pay an additional amount of at least £3 billion over two tax years. That is due to the automatic mechanisms that are part of the specially designed tax regime by which the oil and gas sector already pays a total of 40%, made up of 30% in corporation tax and an additional supplementary charge of 10%.

The current tax regime was developed as a result of lessons learned from three previous significant increases in UKCS corporation tax. After each increase, as has already been mentioned, a range of incentives was needed to win back investment into the UKCS that had been lost as a result of the increase. Windfall taxes such as the one proposed today have been tried before; although they were intended to increase returns to the Treasury, tax revenues actually fell.

As I said earlier, the oil and gas industry already plays a key part in efforts to deliver the UK’s climate change objectives; it was actually one of the first sectors to come out in support of those goals. The industry’s own “Roadmap 2035” is underpinned by the groundbreaking North sea transition deal between the sector and the UK Government. I know from my background in the industry and my ongoing engagement with stakeholders that they remain committed to providing that reliable home-grown source of energy for consumers, including in renewable energies such as offshore wind and in much-needed low-carbon technologies such as carbon capture and storage and hydrogen, to name a few.

A one-off windfall tax on oil and gas companies would significantly undermine the sector’s ability to sustain its investment in the oil and gas industry, make us more dependent on foreign imports of hydrocarbons—which are not just used for fuel, by the way; they are also used for manufactured products such as recycled plastics, detergents, and even medicines and personal protective equipment—and put security of supply, as well as thousands of jobs, at risk.

The main factor against this windfall tax—alongside the uncertainty that it would bring to the industry, its investors and the workers whose families have the very same cost of living worries that have been discussed in this debate—is the restrictions that it would place on the oil and gas industry’s vital contribution to driving forward the energy transition to net zero.

Household Energy Bills: VAT

Debate between David Duguid and Alan Brown

Tuesday 11th January 2022 Commons Chamber

[Alan Brown]

I will make it clear for the hon. Gentleman: yes, our ambition is to be an independent country and yes, we want to join the EU. The vote today is about a temporary VAT holiday. The argument could be made that that could not happen under the EU, but energy policy would be reserved to Scotland so we would have much fairer policies. We would be able to do more and make other decisions, which would not rely on us having to back a 5% VAT holiday in Westminster. We would be able to do a lot more as an independent country, even in the EU.

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

I am interested in the hon. Gentleman’s point about an independent Scotland being able to make its own decisions. Within their devolved responsibilities, the SNP Scottish Government announced the £500 million north-east just transition fund. Is he aware of any announcement yet from the Scottish Government of precisely what the money will be spent on?

[Alan Brown]

That will come out. There have been some initial announcements. I presume from that intervention that the hon. Gentleman does not welcome the development of a £500 million fund that will serve his area and that he does not support any calls for the UK Government to add to that. Does he not welcome it?

[David Duguid]

I want to know what it will be spent on.

[Alan Brown]

I take that to mean that the hon. Gentleman does not welcome it.

[David Duguid]

I welcome any funding in support of the energy transition. Much of it comes from the oil and gas companies themselves. In that respect, I welcome the stance of the hon. Gentleman and the SNP against Labour’s calls for a windfall tax on the oil and gas industry. I believe that is what he said, so I welcome that. The specific question that I am asking of the Scottish Government via SNP Members of this House is what precisely that nice-sounding £500 million will be spent on. It is not that I do not welcome it.

[Alan Brown]

I am not responsible for the administration of the £500 million fund, but the hon. Gentleman should just be grateful that it is there. It is for a 10-year investment period, so clearly it is for long-term planning.

Carbon Capture and Storage

Debate between David Duguid and Alan Brown

Wednesday 20th October 2021 Westminster Hall

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

rose—

[Alan Brown]

It is illogical not to progress the Scottish cluster at this stage. The shipping and infrastructure proposals for Peterhead port, for example, were intended to facilitate the importing of carbon dioxide from outside Scotland, so the Scottish cluster can actually help other areas of the UK to decarbonise. Will the Minister advise why that aspect alone did not ensure that the Scottish cluster was given priority status?

Is the Minister aware that the Scottish cluster also includes Project Cavendish, which allows for hydrogen production in the south-east of England, not far from London? That London connection should be enough to make this UK Government think again on that decision. It is obvious, looking at what the Scottish cluster will achieve, that it should be given support now. Scotland has a world-leading target of net zero by 2020 and of cutting cut emissions by 75% by 2030. That interim target is now at risk because of the UK Government’s decision.

For the avoidance of doubt, the Scottish cluster will, if progressed, do the following. It will capture 25 megatonnes of carbon dioxide by 2030. It will tackle Scotland’s biggest two carbon dioxide emitters—Ineos at Grangemouth and the Peterhead gas station. And it will facilitate the production of blue hydrogen, as part of the clear pathway to green hydrogen. The UK Government talk glibly of leading the world on hydrogen, but they are quickly falling behind. If given the go-ahead, the Scottish cluster could deliver 1.3GW of hydrogen by 2030, which is more than a quarter of the UK and Scottish Governments’ 5GW production target.

The Scottish cluster also incorporates Storegga’s direct air capture proposals—technology that the UK could lead the world on and use as an effective offsetting methodology. The Scottish cluster also unlocks—again, on its own—30% of the UK’s carbon dioxide storage resource. That statistic should be sufficient for the cluster to be a No. 1 priority. Of course, it also best placed because it utilises existing oil and gas infrastructure. It could create more than 20,000 jobs by 2030—jobs that will facilitate a just transition and utilise the expertise built up in the north-east of Scotland.

When those factors are considered, it is obvious that the UK Government should be prioritising and backing the Scottish cluster now. Can the Minister explain if the decision was made solely by the Department for Business, Energy and Industrial Strategy, and if so, why is it not proceeding as a track 1 project? Or is this like the 2015 decision, when the Treasury intervened and pulled the plug in Peterhead? Bizarrely, yesterday, the Minister kept bragging about having visited Aberdeen last week and being well received. Has he spoken to industry following yesterday’s decision, and if so, what was their feedback, and did he apologise to them for not progressing Acorn?

As we have heard, the Committee on Climate Change and the International Energy Agency both state that carbon capture, utilisation and storage is practical for achieving net zero. The Committee on Climate Change says that progress in the UK will help lead the way elsewhere. That is why multiple projects need to be progressed in the here and now. It is the only way the Government can get on track for net zero and decarbonisation in the electricity system by 2035.

On net zero, the Minister needs to listen to the calls for a ring-fenced pot of money for the contracts for difference auction round 4 for wave and tidal to allow this industry to scale up and continue leading the world. I conclude by saying that the Scottish north-east Tories should hang their heads in shame at the Scottish cluster being overlooked. The Minister should apologise. I look forward to him hopefully admitting that he will reverse the decision and progress the Scottish cluster as a priority.

Oral Answers to Questions

Debate between David Duguid and Alan Brown

Wednesday 8th September 2021 Commons Chamber

[David Duguid]

On that final point, I could not agree more. It is hugely welcome to see the removal of the 5% tariff on Scotch whisky in the agreement in principle between the UK and Australia. That will help Scottish whisky distillers to continue to expand exports to Australia, which have almost doubled over the last decade, making Australia our eighth largest market by value.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

With all these free trade deals, I wonder whether the Minister can detail what the losses are to the seafood industry through Brexit, and what compensation it has received through the UK Government. What are the current losses to the hospitality industry because it cannot access EU labour, and what are the total losses to the Scottish Food and Drink Federation because of shortages caused by the HGV lorry driver crisis?

[David Duguid]

I did not quite catch all of that, but I did catch the words “fishing” and “HGV drivers”. On fishing, I would not be surprised if I talk to many more people in the fishing industry than the hon. Gentleman does, and I will take my advice on the situation in the fishing industry from them, rather than from Opposition Members, or indeed Twitter and the rest of social media. On HGV drivers, as my right hon. Friend the Secretary of State has already said, we recognise this issue. This is not a Brexit issue, otherwise we would not be seeing the exact same problem right across Europe, and in fact right across the world. The UK Government have already put measures in place to help increase, improve and speed up the recruitment of HGV drivers in this country.

Oral Answers to Questions

Debate between David Duguid and Alan Brown

Wednesday 28th April 2021 Commons Chamber

[David Duguid]

I completely agree with my hon. Friend. Our proposed world-leading target marks a decisive step towards net zero by 2050 and would reduce greenhouse gas emissions by 78% by 2035, compared with 1990 levels. Through this year’s COP26 summit, we will urge countries and companies around the world to join us in delivering net zero globally. We continue to work together throughout all parts of the UK to achieve our net zero ambitions and a green recovery from the covid-19 pandemic.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The Minister should be embarrassed that renewables generators in Scotland face the highest locational grid charges in the whole of Europe. Ahead of COP26, we need to see a route to market for pumped-storage hydro and for wave and tidal, the go-ahead given for Acorn carbon capture and storage and a contract for difference for hydrogen. What capability does the Scottish Office, working with Cabinet colleagues, have to get those matters resolved?

[David Duguid]

I thank the hon. Gentleman for his question. I share his enthusiasm for all things related to energy renewables, but he will know as well as I do that, by law, transmission charging is a matter for Ofgem as the independent regulator. I imagine that he will also be aware that Ofgem is currently considering some aspects of transmission charging arrangements through its access and forward-looking charges review.

Fisheries Bill (Tenth sitting)

Debate between David Duguid and Alan Brown

Monday 17th December 2018 Public Bill Committees

[David Duguid]

It is a pleasure to serve under your chairmanship, Mr Hanson. Amendment 1 is a probing amendment relating to a concern raised by several hon. Members—[Interruption.] Give me a second to finish my first paragraph, and then I will give way to the hon. Member for Kilmarnock and Loudoun.

The concern has been raised by hon. Members including those who tabled the amendment—my hon. Friends the Members for South East Cornwall (Mrs Murray) and for North Cornwall (Scott Mann)—the right hon. Member for Orkney and Shetland and the shadow Minister. I do not know whether this will reassure Opposition Members. I am sure the Minister will forgive me for reiterating this concern, which I have raised relentlessly, not just with him but with Ministers and Cabinet members above his pay grade, and I will continue to do so.

[Alan Brown]

I was just chuntering from the sidelines. The hon. Gentleman said that this is a probing amendment. Does that mean that he is not deadly serious about it and is not willing to press it to a vote?

[David Duguid]

I have heard comments from the Minister that reassure me to some extent, but as the hon. Gentleman knows other things are afoot that make it very difficult to pass this amendment right now. I will comment further on Report.

This concern is shared not just by hon. Members but by the industry as a whole through representations from organisations including, but not limited to, the Scottish Fishermen’s Federation and the Scottish White Fish Producers Association. The amendment addresses the timing of when we extricate ourselves from the influence of the common fisheries policy. Of course, we actually leave the common fisheries policy when we leave the EU. That is always what was promised, but because of the implementation period we will find ourselves under the influence of the CFP.

The Minister will be aware that, along with hon. Members from other coastal constituencies, I made representations, initially proposed by the Scottish Fishermen’s Federation, at the start of the year that the impact of any transition period on fisheries should extend only nine months from Brexit date—to the end of 2019. In March this year, the intention to have a 21-month implementation period was announced. Given that this was an additional 12 months over what was proposed as a compromise, it was greeted with disappointment in fishing communities. However, it has been understood and broadly accepted on the basis that the final prize of being out of the CFP and being an independent coastal state was still very much in play, and that the EU itself would not accept fisheries being cherry-picked out of the implementation period. I leave aside for the purpose of this discussion the EU’s subsequent attempts to do that very thing—to cherry-pick fisheries and other aspects of the withdrawal agreement and the political declaration. That is for another discussion.

The industry was encouraged by and supportive of the White Paper, in no small part due to the repeated mentions of December 2020 as the moment we would take our place as an independent coastal state. However, that date is not reflected in the Bill. Amendment 1 seeks to put that date in the Bill, or at least to secure an assurance, which I invite the Minister to provide, that our exit from the influence of the CFP will be time-limited.

[Alan Brown]

The hon. Gentleman said that amendment 1 was a probing amendment and that this was not quite the right time to put the date in statute. When will be the right time? What will have changed by the time we get to Report to make such an amendment the right one?

[David Duguid]

I am looking forward to the Minister’s response to the amendment. As the hon. Gentleman and the rest of the Committee know, a lot is happening—or not happening—at the moment, so we need to see what comes out of the next few weeks. I would be grateful if the Minister provided whatever assurance he can at this stage about how the Government will ensure that the CFP no longer applies to our fishermen beyond December 2020.

Fisheries Bill (Tenth_PART2 sitting)

Debate between David Duguid and Alan Brown

Committee Debate: 10th sitting (part 2): House of Commons
Monday 17th December 2018 Public Bill Committees

[Alan Brown]

The Minister is optimistic about the future prospects and in thinking that I will withdraw the new clause. I thank the right hon. Member for Orkney and Shetland and the hon. Member for Glasgow North East for their contributions.

I think the hon. Member for Stafford actually made the point for me when he expressed his concerns, and looked for reassurances from the Minister, that the money will go to the Treasury. Frankly, I do not trust the Treasury. I say to the hon. Member for Banff and Buchan that at one point there was a £1 billion fund for carbon capture and storage that looked like it was going to go to Peterhead, but the Treasury overrode the Department for Business, Energy and Industrial Strategy and withdrew the funding. That is the problem with funding reviews by the Treasury: it can put a red pen through the funding at any time it likes. The Treasury holds the purse strings.

[David Duguid]

The general point that I think the hon. Gentleman is trying to make is that, while we are in the EU, we get the EMFF. However, does he accept that there is no guarantee of that same level of EMFF funding for member states in the future?

Fisheries Bill (Fourth sitting)

Debate between David Duguid and Alan Brown

Thursday 6th December 2018 Public Bill Committees

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Q Sticking to the quota theme, you have already touched on the debate between this being enabling legislation and how much detail needs to be in the Bill. Do you think there needs to be more on how the quota allocation will work in future? You also mentioned potential quota reserves for new entrants—small-scale recreational anglers have also been mentioned—so is it your view that there should be more in the Bill?

Griffin Carpenter: I think that is a political question. I understand the idea that it is enabling legislation and that for most fisheries legislation all the detail will come in secondary legislation, but if you have some priorities that you absolutely want to ensure are in future UK fisheries, here is an opportunity to introduce them. I understand that some of the ideas we are discussing might be incongruous with the tone, at least, of the rest of the Bill, but here is an opportunity where we can say, “Starting now, we are only in 2018 and we are already thinking about this issue. We are guaranteeing it is in the fisheries legislation, first and foremost.” From a political perspective, that is valid.

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

On the redistribution of quota, obviously, if you are a larger owner of quota versus a smaller owner of quota, or an owner of no quota, you will certainly feel that you are going to be worse off in this situation. How do you cater for the fact that a lot of the smaller vessel owners perhaps previously owned quota that they sold, benefiting greatly financially, and then moved into smaller vessels for which they did not need quota? How would you avoid that kind of gaming happening again in the future?

Griffin Carpenter: That is a good question. The line that has always been used on quota allocation in the past was, “You’re robbing Peter to pay Paul, and we don’t want that in the industry.” Now we have the idea of a Brexit dividend of extra quota, we are robbing Pierre to pay Paul, so that is fine. We are fine as long as Peter is protected.

The idea of quota shares is actually a bit confusing because they are percentages rather than tonnage. Now that stocks are recovering, and the quota increases each year, you can have a situation, even if you are taking from Peter and giving to Paul, where everybody is better off. You can have this as a conditional reallocation. Let us say you get a certain share in the large-scale fleet—you have a large-scale vessel—and you are guaranteed 1,000 tonnes every year. If the quota is going up, some of the surplus quota of that year can be reallocated to the small-scale fleet in a pool or through whatever system you do that. There is a bit of a difference between tonnage, which is what actually affects your bottom line, and the percentage. I suggest that we can have these thresholds in place.

The other thing is that, with additional fishing opportunities potentially coming in, hopefully, we can do a reallocation all at once so, again, the large-scale fleet will not necessarily be worse off. They might have a smaller percentage of haddock, let us say, or some demersal stock that the small-scale fleet really wants, but they are getting all the extra herring and other species from the North sea from our EU colleagues. There is the potential for doing all this at once: revisiting the allocation system and making everyone better off.

Fisheries Bill (First sitting)

Debate between David Duguid and Alan Brown

Committee Debate: 1st sitting: House of Commons
Tuesday 4th December 2018 Public Bill Committees

[Alan Brown]

Q I accept your guidance, Mr Gray, but clearly there is the suggestion of the clear date versus how that would fit into the bigger picture. It is the same thing when we talk about future quota allocations and how that will work. Mr Armstrong mentioned the issue of tariffs in his answer. In yesterday’s questions to the Attorney General he said that the backstop arrangements meant that Northern Ireland would have tariff-free access to the EU and tariff-free access to Great Britain, whereas no other market will have that. Is that a concern, and how could that be addressed in this Bill?

Bertie Armstrong: To be honest, that is not where our focus lies at this point in time; it is on making sure that the Bill as an enabler of—I will use the phrase “the sea of opportunity”—makes it on to the statute book, rather than on the details of what does and does not happen to Northern Ireland in the event of a backstop.

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

Going back to Mr Pollard’s question about UK vessels landing elsewhere, for example Norway, can you say a little about what motivates fishermen to land elsewhere? What changes are required in our ports or onshore infrastructure to make landing in the UK more attractive, and is that covered by the Bill?

Barrie Deas: Money. That’s it, really. [Laughter] I had better say a bit more. Over the last 20 years, markets for fish have developed and diversified. Peterhead has become the pre-eminent white fish port in Europe. Flat fish tends to go to Urk in the Netherlands. South-west ports are sending prime, high-value fish to the continent, and then there is the shellfish market. From time to time there will be price differentials. Also, it can reflect where the vessel is fishing: for example, it might make sense to go to Denmark and land for one trip and then land back into Peterhead for the next, or to land into France. Fishermen are commercial animals. They are very much driven by catching fish but also by marketing fish, and price is key.

Bertie Armstrong: I would reinforce that. At the slight risk of crossing the red line again, and as I keep saying, the elevation of the UK to the world stage would mean that, in the simple arithmetic of volume and value, we would overtake Iceland. It would allow us the sort of conditions that our own processing industry would want to entice not only all our own landings but perhaps some from others as well. However, it is a matter of commerce and business, generally.

Fisheries Bill

Debate between David Duguid and Alan Brown

2nd reading: House of Commons & Money resolution: House of Commons & Ways and Means resolution: House of Commons
Wednesday 21st November 2018 Commons Chamber

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

Thank you very much, Madam Deputy Speaker; I appreciate that, as I had already tried to pare down my speech to the 10 minutes suggested earlier.

It is a pleasure to follow the hon. Member for Na h -Eileanan an Iar (Angus Brendan MacNeil). As he mentioned, he, the right hon. Member for Orkney and Shetland (Mr Carmichael), the hon. Member for Strangford (Jim Shannon), who unusually is not in the Chamber, and I have the same consistent issue of access not to EU labour—this is not a Brexit issue—but to the non-EEA labour on which the fishing industry has become dependent over the years.

I welcome this opportunity to speak about the Bill, and I welcome the Secretary of State’s opening speech. The fisheries sector is hugely significant in my constituency of Banff and Buchan. Peterhead is the largest white fish port in Europe, and a little further up the coast is the port of Fraserburgh. They are the two largest towns in my constituency. A little further around the coast is the smaller—but no less significant to its local community—port of Macduff. In terms of tonnage, almost half the fish landed by UK-registered boats is landed in my constituency.

Not just fishermen, but the wider communities around the coast of my constituency and of the UK have lost a great deal over the decades we have been in the common fisheries policy. There has been not only a loss of livelihood, the scrapping of boats and the closure of businesses, but fundamentally a loss of what identifies these coastal communities and the people who live there, who remember what once was. Quite rightly, the people in these communities look forward to making the most of the sea of opportunity presented by our leaving the EU and the CFP.

Everyone who speaks in this debate, and those watching in fishing communities around the UK, are keenly aware that Parliament will soon review the proposed EU withdrawal agreement, the impact on fisheries of which is not insignificant. It is therefore difficult to discuss the Bill without referring to the withdrawal agreement, the outline political declaration, or any new future fisheries agreement. I am very much aware of concerns expressed by fishing interests in my constituency and beyond. I have been reviewing the text of the agreement, as well as taking on board input from members of the fishing community, industry representatives and trade bodies, among a host of various stakeholders. My Scottish Conservative colleagues and I have made our position clear to the Government, and we look forward to working with Ministers to find a resolution to the range of concerns raised.

The variety of concerns can be summed up in two words: timings and leverage. On timings, we will leave the EU in March 2019, and when we do so, we leave the common fisheries policy. That is not a political decision, but a matter of legality—we cannot be in the CFP if we are not in the EU. Likewise, we cannot be in the EU, which would be the position of Opposition Members, and not in the CFP.

The agreement states that we enter an implementation period at that point, with that period ending on 31 December 2020. As others have mentioned, it would be welcome if clause 42 included the phrase “no later than December 2020”, because by that time, we must be in a position in which we have completed our first negotiations as an independent coastal state in time for our beginning to realise the opportunities that that presents for the calendar year 2021.

When we first enter negotiations in December 2020, we must have the maximum possible leverage. We have seen in recent media reports from the continent that EU fishing interests are far from pleased that the text of the agreement makes no mention of retaining guaranteed automatic access to UK waters post Brexit. If we are to have the maximum possible leverage in annual coastal state negotiations from December 2020, we must resist the EU’s demands for any continued automatic access to our waters. As the Prime Minister confirmed in her response to my question on this subject last week, we must not accept the EU’s attempts to link future trade agreements with automatic access to UK waters.

[Alan Brown]

I assume that the hon. Gentleman understands that the trade agreement is equally important. Clearly, it is important that we are able to get products to markets. We talk about everything being in isolation, but we must look at this in the mix, because that helps the whole sector.

[David Duguid]

I thank the hon. Gentleman for his comments. I will get to that point a little later.

The Fisheries Bill itself, and the White Paper before it, has been welcomed by organisations across the industry, including the Scottish Fishermen’s Federation. This vital legislation lays the groundwork for the revival of our fishing industry outside the common fisheries policy. It is important to note that, in the event of no deal, the Bill will ensure that all UK vessels can legally continue to fish in our own waters. For example, clause 7 revokes the CFP regulation that allows EU vessels unfettered access to our waters. Clause 8 introduces the common-sense principle that any foreign vessel that wants to fish in our waters must do so on our terms. This is taking back control of our waters, and it is the basis of the British fisheries sector’s revival. Clause 9 covers those UK fishing boats that are required to be licensed, as well as stating those for which licensing will not apply.

Clause 1 defines the fisheries objectives, as many Members have said, and chief among them is the sustainability objective, which ensures that fishing and aquaculture is environmentally sustainable in the long term and managed in a way that is consistent with contributing to the economy and to food supplies. I was going to go through all the other objectives, but as I am pushed for time, I will skip them.

Clauses 9 to 17 set out rules for the licensing of UK and foreign fishing boats—I just want to cover that briefly. Although the devolved Administrations are responsible for licensing boats in Scotland, Wales and Northern Ireland, licences issued by any UK fisheries administration will be valid across UK waters. The UK Government will agree access arrangements internationally and, although each of the devolved Administrations is responsible for issuing licences to foreign vessels in its zone, it is encouraging to know that the UK Government will administer the system, having already been provided with consent by the devolved Administrations.

Clauses 18 to 22 cover the allocation of fishing opportunities, an area on which I would like specific clarification from the Minister. Clause 18 deals with the Secretary of State’s power to determine fishing opportunities. I would appreciate it if Ministers commented on the appropriateness of the Secretary of State setting quotas for lobster or brown crab in Scotland which, I believe, are subject to international agreement. Clause 22 is about the sale of English fishing opportunities. Given that English-registered vessels operate in Scottish producer organisations and vice versa, will the Minister please provide clarification on whether these would be available for all UK vessels?

Finally, let me say something about the future of the fishing industry in my constituency and of fishing communities around the UK. After decades of deterioration within the CFP, we will not see a full recovery overnight. Government support will be required, and this House has previously been assured of that support by the Prime Minister and others

“to secure a sustainable and profitable fishing industry that will regenerate coastal communities and support future generations of UK fishermen.”

I conclude by reassuring the Minister that after we leave the CFP and become an independent coastal state, with all the powers and control that that entails, I will look forward to continuing to work with the Government to deliver that ambition to regenerate not only the fishing industry, but the wider communities and economy for which the “sea of opportunity” will deliver.

UK Oil and Gas Industry

Debate between David Duguid and Alan Brown

Thursday 19th April 2018 Westminster Hall

[Alan Brown]

I will come to the management of the downturn, but I think the hon. Gentleman has helped to make the case for an independent Scotland, so I thank him for that. I was not going there; I would not have touched on an independent Scotland, but I thank him. I still stand by the fact that, in my opinion, the money was going to the UK Treasury and was not distributed to the areas that were generating the wealth.

Interestingly, when it comes to fracking, in 2015 the UK Government promised a shale wealth fund of up to £1 billion for the north of England where fracking is proposed. Perhaps that is a lesson learned. It reinforces the omission of not setting up an oil fund for the benefit particularly of Scotland and other areas of the UK that extract oil and gas.

In Scotland we became used over the years to the scare stories about oil running out before yet again we discovered new oilfields. If we want to talk about not seeing it as a stopgap measure, we obviously need to watch how politicians talk about oil reserves. I certainly appreciate that everyone in this room has been very positive about the reserves that are there, the amount that could still be extracted and the future of the industry. However, other politicians sometimes try to exploit the concept that oil is running out, and we need to be careful about that.

[David Duguid]

It should be recognised, as I tried to point out in my speech, that it is fair to say that the easiest oil and gas low-hanging fruit to get has been got. There is a future for oil and gas, but, as I said, we cannot use the same behaviours and technologies as before, which is why it is important for Governments and industry to pursue the developments in technology and changes in behaviour required in future to exploit what is left, which is not so easy to get as what came before.

[Alan Brown]

I do not disagree. Clearly, the industry has shown a lot of innovation over the years and will continue to do so, and obviously it needs to do so to get additional extraction. My hon. Friend the Member for Aberdeen North gave the example of partial decommissioning to allow the technology to be input for enhanced extraction. That is something that industry is looking at now, and I am sure it will continue to innovate.

We know that prices can be volatile; we have had to deal with that over the years. Oil bottomed out at just under $12 a barrel in 1997 before rising rapidly to $91 a barrel by 2008. That was under a UK Labour Government. If I go back to legacy issues, I wonder what happened with that money, because there was no way oil projections at that time were going to be based on the oil price increasing dramatically. It was such a windfall with that massive increase in price, but I do not think we have seen the benefits of that, either.

On the point made by the hon. Member for Banff and Buchan about managing the downturn, we have been consistently told that we need the broad shoulders of the UK, but if we look at the support that the UK Government have implemented in the past few years, the spring 2016 Budget reduced the supplementary charge back to 10%, which was a welcome measure. The Red Book predicted that that would cost £1 billion, and yet nearly three times that was given away in inheritance tax to millionaires. That shows skewed priorities.

In the spring 2017 Budget, there was nothing specific for the oil and gas industry, except one paragraph promising another discussion paper. However, it did confirm the lowering of corporation tax. Despite what everybody says about how it grows the economy and creates more tax, the Red Book predicted that that would cost the Treasury £24 billion over the lifetime of this Parliament. That was the Government’s Treasury prediction. Let us think what could be done with that £24 billion in terms of infrastructure investment or additional support for the oil and gas industry. In my opinion, it was a lost opportunity.

In the November 2017 Budget, a measure was introduced: transferable tax history. As my hon. Friend the Member for Aberdeen North said, that was genuinely welcome. It is predicted to bring an additional £70 million in revenue to the Treasury, so it was not a difficult decision. That decision supports industry, but it helps the Treasury, so it should have been taken long before. We are still awaiting the appointment of the oil and gas ambassador first promised by David Cameron in January 2016, so the Government really need to provide additional support for the industry.

Yesterday I raised this matter in the debate on industrial strategy. The oil and gas sector deal has been supported by every colleague here today, but I was disappointed that the ministerial response from the Despatch Box yesterday never mentioned the oil and gas industry or Scotland and did not pick up on the point that I had made, along with my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). I hope today’s Minister will respond. I am sure she is working on the oil and gas sector deal and is positive about it, but it would be good to have that confirmation.

I must repeat my disappointment about the pulling of the CCS fund. That must be a lesson for the Government going forward because it scared the industry and scares away other people trying to make private investment. Again, the Minister has spoken positively about the future of CCS, so it would be good to hear her reinforce that when she sums up.

I appreciate time is moving on, Mr Sharma, so I will try to hurry up, but I want to mention another renewable energy project that has been developed at Grangemouth and would support the Grangemouth refinery: the Grangemouth renewable energy project, which has been successful in the CfD auction. Because it contains biomass, the whole premise of the project is based on securing renewable heat incentive funding as well. The UK Government are looking at retrospectively capping the amount of RHI funding available to projects to 250GWh. That would put the Grangemouth renewable energy project at risk, so I urge the Minister to reconsider, because the project is so innovative. It is a world leader, it would support the Grangemouth refinery, and it could develop industry for export and help grow the UK economy.

We have heard some impressive contributions. All have concluded that the oil and gas industry has a bright future, and I certainly echo that. I look forward to hearing the Government’s response.