Energy Bill [Lords]

Debate between John Redwood and Callum McCaig

Monday 14th March 2016 Commons Chamber

[Callum McCaig]

Speed is the operative word, I think. We have called for the re-devolution of the power and for the grace periods to be dealt with in the most appropriate manner. In its manifesto and in debates the Conservative party has professed a desire to see local control of this matter, and nobody would argue with that. However, that requires that we respect local decisions, but the grace periods as they stand do not do that. That is why the new clause and the amendments are necessary, particularly amendment 8, in the name of my hon. Friend the Member for Coatbridge, Chryston and Bellshill, which relates to planning decisions at committee that were dealt with before the closure date, but where the approval certificate was not granted, in Scotland, owing to section 75 of the Town and Country Planning (Scotland) Act 1997, on planning gain—in England, I think it is section 106 of the Town and Country Planning Act 1990. This issue is clearly about local decision making, and the Government should give their consent so that it can be included in the Bill.

We accept that the change is going to happen. Having been explicitly opposed to it, the industry now sees that it is better to have some certainty, rather than continued uncertainty. However, that certainty needs to be correct certainty—it needs to be fair certainty and it needs to be certainty that does what it is intended to do.

We should respect local decision making. Where locally elected bodies—councils in England, Scotland, Wales and Northern Ireland, although there are different stipulations there—have agreed to projects but have not been able to get their certificate to allow them access to the renewables obligation because of the technical nature of decision making around planning gain and other such issues, that is simply wrong.

[John Redwood (Wokingham) (Con)]

Will the hon. Gentleman remind the House why he wishes to burden his constituents and others with much dearer electricity from an interruptible source we cannot rely on?

[Callum McCaig]

Onshore wind has clearly been demonstrated to be one of the cheapest forms of renewable energy. If we were having a tête-à-tête, I would ask the right hon. Gentleman why he supports the obscene waste of money that will be spent on the Hinkley power plant, which will cost considerably in excess of what would be spent on onshore wind. However, as we are not having a back-and-forth, I will resist that temptation.

The issue is straightforward: we need to press ahead. The industry needs to be given certainty. The issue has been handled incredibly badly, but there is time, particularly taking cognisance of last week’s Energy and Climate Change Committee report, for the Government to make amends, to change some of the stipulations on the grace periods and to allow things to happen in the best way possible. Repenting, however late, is better than carrying on regardless.

Energy Bill [Lords]

Debate between John Redwood and Callum McCaig

Monday 18th January 2016 Commons Chamber

[John Redwood]

The UK Government are not currently collecting any special North sea tax revenues because the oil price is so depressed. I might agree with the hon. Gentleman if reforms were made in the future, but will he give us an impression of the industry’s perspective in the area around his constituency on what will happen to jobs and investment at these oil price levels?

[Callum McCaig]

The oil industry is going through a difficult period, but there is a fair degree of resilience and optimism in these difficult times. A concerted effort is being made to show that it is not a sunset industry, and that it will work through what needs to be done. As was clear in the quote that I cited, the industry is making efforts to reduce costs. We in this Chamber can do nothing about the price of oil, but we can do something about the investment climate, which I think would be significantly enhanced with changes to the fiscal regime. Aberdeen is seeing job losses on a fairly sizeable scale, but it is probably still performing above average, and I certainly hope that it continues to do so.

The issue of tax revenues is not only about the supplementary charge in corporation tax or the petroleum revenue tax, because the full range of tax revenues needs to be factored in, including income tax, national insurance and the corporation tax paid by the supply companies. This is a major sector, and if we can invest in the skills and ensure that we bridge over what everyone agrees will be a temporary downturn in the oil price—how temporary is a matter on which I shall not speculate, because that could end up with my looking daft—that support will help.

Changing the tax regime would send a very powerful message to those looking at investment. If investment is not made in the UK continental shelf, because of the nature of the business the investment will be made in west Africa, Kazakhstan, Brazil or the gulf of Mexico. It is not a zero-sum game. Precisely because very little tax is being paid—unusually so—the Treasury is not banking on North sea oil to deal with what it needs to pay for, so it can afford to make the changes. The revenue forecasts for the next few years are low, and changing the regime now would make that viable. It would also send the clear message that this is a basin that is worth investing in. If there is investment, there are jobs, the skill base is maintained, and the supply chain is supported in a way that ensures that it can invest in and develop products not only for the North sea but for the global oil and gas industry, into which the United Kingdom supply chain—particularly around Aberdeen—is making great efforts to diversify.

I am very much in favour of the OGA’s establishment as an independent regulator. I am sure that, as we enter the next stage, there will be discussions about the nuts and bolts, but we want it to happen, and happen very soon.

Let me now move on to the closure of the renewables obligation. [Interruption.] Excuse me?