Finance Bill

Debate between Harriet Cross and Wera Hobhouse

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

[Harriet Cross]

Absolutely; sometimes there is a complete disconnect in this place between how much we can tax and squeeze something dry and what that does to investment. These companies, especially the global ones, do not have to invest in the UK—they can invest across the world. They are choosing to invest here at the moment, and therefore we get jobs, opportunities and employment. That investment can go abroad, and if it does, it will take jobs with it, to the detriment of all of us, but particularly us in north-east Scotland.

[Wera Hobhouse]

Does the hon. Lady not recognise that we are in a transition period, which we need in order to get to net zero? Of course, we need to protect jobs, but the transition to net zero is essential.

--- Later in debate ---

[Wera Hobhouse]

I rise to speak briefly in support of new clause 2. I welcome the Government finally scrapping the unfair investment allowance loophole for the oil and gas giants, which the Liberal Democrats have advocated for and called for since the previous Government introduced the levy—too late, and half-heartedly—in May 2022. Oil and gas companies made eye-watering profits off the back of Russia’s invasion of Ukraine and global supply chain problems that caused energy prices to soar. While the oil and gas giants saw record profits, my constituents in Bath and others across the country faced a cost of living crisis.

The previous Government have a lot to answer for. They sat and watched as the oil and gas giants lined their pockets off the back of people struggling with their bills. It did not have to be that way. [Interruption.] Conservative Members do not want to hear it, but it did not have to be that way. Those were the political choices the previous Government made.

The measures announced by the Government in this Bill are welcome, in particular the removal of the 29% investment allowance except for investments on decarbonisation. This has been a Liberal Democrat policy, and I am pleased the Government have picked up on it and that it will now become a reality.

We Liberal Democrats were the first to call for a tax on oil and gas windfall profits back in October 2021. While the previous Government did eventually introduce the energy profits levy, they did so half-heartedly and woefully late in May 2022. It matters that we repeat that again and again: it is something that the previous Government failed to do. That Government let the oil and gas giants off the hook by putting in place a massive loophole in the form of the investment allowance. It was thanks to that allowance that in 2022, Shell admitted it had paid zero windfall tax, despite making the largest global profits in its 150-year history of £31 billion. That cannot be right while our constituents have been struggling to pay their bills.

My hon. Friend the Member for St Albans (Daisy Cooper) has tabled new clause 2, which would require the Government, as we have already heard, to produce a report about the fiscal impact of the Bill’s changes to the EPL and relief for investment expenditure. We cannot lose sight of the bigger picture. To avoid a repeat of the energy crisis, we must end our reliance on oil and gas. Investing in renewables would mean cheaper energy across the country. We would no longer be reliant on dictators such as Vladimir Putin who use natural gas as a weapon. As well as being more affordable, renewables are the best route to energy security. It is very disappointing to hear Conservative Members advocate for business as usual. We need to transition away from oil and gas.

[Harriet Cross]

I thank the hon. Lady for giving way. At what point does she believe we will be fully reliant on renewables?

[Wera Hobhouse]

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