Finance Bill

Debate between Harriet Cross and Nusrat Ghani

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

[Harriet Cross]

Exactly. There must be a balance between production and demand—I will come to demand later. There is no point reducing our domestic production while our demand stays the same, because we will only fill the gap with oil and gas from abroad, which is produced with a higher carbon intensity in poorer working environments, where overseas jobs and investment will take precedence over investment at home. It makes no sense that while we are using oil and gas—the Minister himself confirmed that we will be for a while—we do not prioritise taking it from our own North sea domestic basins.

New clause 3 also asks for a review on capital expenditure and investment in the UK. In Scotland alone, oil and gas contributed £19 billion of gross standard volume. In the UK, it contributed £27 billion. A 2022 report by Experian showed that for every £1 million of investment by the oil and gas industry, 14 jobs and £2.1 million of GVA are added. This industry is blatantly a net benefit to the UK and the Exchequer, and one in which we should encourage investment and capital expenditure, not an environment where the returns do not justify the risk of investment.

As my hon. Friend the Member for Grantham and Bourne (Gareth Davies) said, the OBR’s own figures show that capital expenditure will fall by 26%, and therefore production of oil by 6.3% and gas by 9.2%, because of these changes. We must ask, can the UK afford this? Maybe those were the parameters that the Exchequer and the Treasury are looking for, if they see them as allowable. But if that is the case, what assessment has been made of the impact on the economy and jobs across the UK?

The OEUK has put the projected drop in production down to a rapid decline due to underinvestment over the decade. Under new clause 3, we can assess the impact of the changes to the EPL and head this off to begin with because, as I said, it is important that while we have demand, we have production. It has been confirmed that we will need oil and gas in the UK for years to come, but through the changes to the EPL in the Bill, in particular clauses 15 and 16, which increase the EPL by 3% and remove the investment allowances, the Government are choosing to make our homegrown domestic energy sector so uncompetitive that current investment falls away and future investment is no longer on the cards.

We cannot afford to lose investment because, as I said, it will drive the transition. It is so important that it is protected now, to help us bring the transition forward quickly and efficiently into the future. Clauses 15 to 18 were introduced without adequate consultation on the impact assessment. New clause 3 simply asks for proper scrutiny of their impact. If the Government are confident in their approach, why resist a responsible request for transparency? My Gordon and Buchan constituents, and people in Scotland working in the oil and gas sector and across the UK, deserve to understand how these changes will impact their livelihoods.

[Madam Deputy Speaker]

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

Great British Energy Bill

Debate between Harriet Cross and Nusrat Ghani

Report stage
Tuesday 29th October 2024 Commons Chamber

[Harriet Cross]

I certainly hope that we will have the opportunity to do so, but as I am setting out, the Government’s proposals for the North sea in respect of taxation and cutting down on licences do not guarantee that. As much as I and the hon. Member want and need for that to be the case for our constituents, we cannot guarantee it. That is why it is so important that we get the transition right.

The Bill must include consideration of the impact on the public. Communities such as Leylodge and Kintore in my constituency face unprecedented infrastructure pressures. Those communities have seen a 3 GW hydrogen plant, an expanded substation, multiple battery facilities and new pylons. What are their statutory protections? What assurances are there in the Bill that certain communities will not be over-saturated with an unsustainable amount of infrastructure?

Before the election, the Labour party claimed that GB Energy would reduce household bills by £300. Since then, Ministers have not repeated the promise and have not explained when or how it will be achieved. I am sure that the Labour Government would not want us to think that that promise was simply a headline-grabbing figure before an election, so I look forward to their clarifying that commitment and voting for our amendments on that figure.

Let me move on to the jobs of today and the jobs of tomorrow. We hear that GB Energy will create 650,000 jobs—apparently, 69,000 of them will be in Scotland, which, if delivered, would be welcome—but as is the running theme in this Bill, we do not have sufficient detail to offer even a grain of certainty to comfort those whose jobs are on the line now. Existing oil and gas and supply chain businesses in Aberdeen, Aberdeenshire and the north-east need a timeline so that they can plan their business and workforce. How, when and where will jobs be created? What kind of jobs and skills will be required?

Of course, we now have certainty that one job will not be coming to Scotland, as we hear that the CEO will be based in Manchester. Is Aberdeen a headquarters in name but not in nature? We already know that there will be satellite sites in Edinburgh and Glasgow. Which other executive management jobs will not be based in Aberdeen? We in north-east Scotland are not buttoned up the back, so will the Minister confirm today that Aberdeen is still the headquarters for GB Energy—and I mean that in no other way than the meaning that the general public would understand?

The funding may not be sufficient, the overall energy strategy is incoherent and there is no clarity on the delivery of jobs or any mention of £300 energy bill savings, but surely the Bill offers certainty to the very industry that will deliver the energy transition. That brings me to the strategic statement. One thing that we know for sure is that we do not know all we need to know about what GB Energy will do. As a result, the uncertainty will continue. For communities such as mine in Gordon and Buchan, and for businesses, supply chains and those working in the existing energy industry, that is profound. We need to know how those communities will be brought with us in the transition—if it is, indeed, to be a just transition.

GB Energy will not generate energy, but it cannot instead generate mass redundancies across north-east Scotland. As has been mentioned, the Bill gives the Secretary of State extensive power to dictate what is in the strategic statement, and he has given himself the huge responsibility of ensuring that GB Energy delivers its aims. The work of the existing energy industry, and of communities such as Gordon and Buchan, must be taken into account. If it is not, the transition to cleaner, greener energies will be less efficient, less affordable and less possible. As such, I sincerely ask that the Secretary of State prepares the strategic priorities in a timely manner, taking account of stakeholders in the industry, the impacted communities, the current jobs and skills, and the existing businesses that are the bedrock of our future energy generation.

Because the Bill gives us all but no clarity on what is going to happen, the strategic statement—which we are all waiting for—is going to be the key document in dictating whether it will or will not be a success. As I said at the start of my speech, I want it to be a success; I want the UK to be a clean energy superpower, just as we are, and always were, an oil and gas superpower. If we get this right, that superpower status will drive the economy and jobs of the future. We cannot allow investment to be lost, because that means that investment in new technologies will be lost.

If we lose the expertise, the supply chains and the private investment because of the way this Bill is handled and how GB Energy is handled—there is no guarantee that private investment will stay in the UK just because GB Energy has been created—we will look back at this time and wish we had done things differently. I really do not want to be in that situation, because it is my communities in Gordon and Buchan and in north-east Scotland who will suffer the most.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

In a debate like this, it is important for Members to ensure that they link their contributions to the amendments we are addressing. I call Polly Billington.