Erasmus Plus Programme

Kirsty Blackman Excerpts

Thursday 21st June 2018 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I very much thank the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) for securing this debate and the Backbench Business Committee for granting it. It is a very useful and timely debate for us to have. It has obviously created a lot of interest. I have been contacted by the National Union of Students, the British Council and Universities Scotland, which are all lobbying for the scheme to be kept because they see its importance.

Before I get into my comments, I will briefly take issue with what the hon. Member for Bexhill and Battle (Huw Merriman) said about the doubling of the scheme’s cost. The cost of the scheme is going to increase if the number of participants doubles. That is just how it is. It is not that the costs have spiralled out of control; the scheme is looking to increase the number of participants and to widen the type of participants involved in the scheme, which is really positive.

One thing that the House of Commons and the UK Government—not just this Government, but previous Governments—do not do particularly well is evaluate schemes to see how effective they have been, before deciding whether to take them forward. The Erasmus+ scheme has been incredibly effective and made a huge difference to people’s lives. I therefore understand why people are looking to increase the number of participants, so that more people can benefit from it.

In 2017, the Erasmus+ scheme was worth €21 million to Scotland. Daniel Evans from West Lothian College said that it was “life changing” and had made a huge difference to people’s lives. The effect of the scheme on individual participants is important, and Daniel Evans made the case that the scheme makes a really positive difference, particularly for the most disadvantaged students.

[Stephen Kerr (Stirling) (Con)]

As is well known I represent the constituency of Stirling, which is home to the world-renowned University of Stirling. The university benefits enormously from Erasmus+. The hon. Lady is describing the benefit of the scheme for its participants, but one point that was put forcefully to me by the university is that the whole university community benefits from the presence on campus, and in tutorials and lecture theatres, of more than 100 international students who come to Stirling under that programme.

[Kirsty Blackman]

I thank the hon. Gentleman for that intervention, and I will come on to talk about those wider benefits. I will talk particularly about Aberdeen, but also the wider Scottish context.

In 2015, 2,098 students from Scottish higher education institutions travelled abroad—a huge number of students had that opportunity. Around 200 students a year from Aberdeen University get involved in the Erasmus+ scheme, and 350 students come to Aberdeen and become part of our university life. Aberdeen has the highest percentage of students who are EU nationals of any Scottish university, which make up a significant proportion within Scotland. Those EU nationals have shaped the university in my constituency, and made a huge difference. Indeed, 25% of people who live in Aberdeen city were not born in the UK, and a big reason for that is the number of students who come to both our universities—Aberdeen University and Robert Gordon University in the south of the city.

Scotland has much higher levels of participation in Erasmus+ than other parts of the United Kingdom, and 9.7% of students from Scottish institutions travel abroad. More than half of outward student mobility in Scotland is accounted for by the Erasmus+ scheme, so I cannot overstate how important it is. In England, fewer than 7% of students take time to travel abroad, so the scheme is particularly important for Scotland.

It is therefore important that we receive clarity. It is good that the UK Government have committed to participating in the scheme until the end of the current funding round, but universities need clarity now about whether they will be able to participate beyond that, so that they can plan for the future. Universities are looking at their courses and numbers of students who will go there in future years, and that clarity will make a huge difference.

Let me move on to the wider benefits of the scheme. Some 93% of learners agree that they see the value of different cultures after having participated in the Erasmus+ scheme, which is hugely important. If the UK Government wish to pursue a global Britain agenda—that is despite shutting us off from Europe in many ways that I would prefer they did not do—we need young people who are taking part in life in our universities to be able to travel, participate in and see the value of different cultures, and to make those links. The reality, however, will be more difficult.

[Jim Shannon]

One thing that came out of the information we all received was that 64% of employers considered an international experience important for recruitment, and that was up by 37% since 2006. If any evidence were needed to reinforce what the hon. Lady is saying, that is it.

[Kirsty Blackman]

I absolutely agree. Earlier we heard the statistics for students who are unemployed, and how low those numbers are for students who have studied abroad when compared with those who have not. That is incredibly important.

We need to make sure that we increase our links with the rest of the world, not decrease them. When our brightest and best students take part in the life of universities across Europe, they showcase the talent we have in Scotland, England, Wales and Northern Ireland. We are able to receive the brightest and best students from other places so they can study in our universities. I have discussed this with Aberdeen University. The students who come to study in Aberdeen go back to their country and continue to have links with companies in our constituencies and our cities. They keep up the links they make, which has a huge positive economic benefit. Being part of the scheme is incredibly important.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

I recently met Emma Shotter, the president-elect of the student association of the University of the West of Scotland. She spoke not only about the benefits for Scottish students using Erasmus as an opportunity to study overseas, but how it internationalises campuses, as the hon. Member for Stirling (Stephen Kerr) alluded to earlier. Not only does it enrich our campuses, but our local communities. For that reason alone, Erasmus has to continue after Brexit.

[Kirsty Blackman]

I absolutely agree. Aberdeen is an international city shaped by its two universities. They have made a really positive difference to our city.

It is very important to have this debate now, because universities need clarity as soon as possible. It is all well and good for the Government to say that European countries have an interest in us continuing in the scheme, but we need to make it clear how strong our interest is in continuing in the scheme. We need to make it clear that we absolutely want to continue to participate in it going forward. The more the Government can do to state that case, the better for our universities, our students and, as my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) said, our communities.

Oral Answers to Questions

Kirsty Blackman Excerpts

Tuesday 12th June 2018 Commons Chamber

[Andrew Griffiths]

I can assure the hon. Lady that, together with the retail industry, we are looking at business rates, their impact on businesses and our ability to ensure we have a fair taxation system.

[Kirsty Blackman (Aberdeen North) (SNP)]

The industrial strategy challenge fund round closed in April, but the Government are not expected to make a decision until the tail end of this year. Can they speed up the process please?

[Mr Gyimah]

We are determined to speed up the process, and obviously we are investing more than ever before, but it is important that we take our time to make the right investments to benefit UK industry.

National Living Wage: Under-25s

Kirsty Blackman Excerpts

Thursday 3rd May 2018 Commons Chamber

[David Linden]

My hon. Friend has made a powerful and valid point, which I shall come to later.

I hope very much that when the Minister comes to the Dispatch Box, he will not trot out the usual lines, which fall apart when subjected to any scrutiny. Let me deal with one or two of them now. For example, Ministers tell us that younger workers have less experience and should therefore receive less pay. Unfortunately, younger workers do not get a discount on their shopping, fuel or rent when it comes to paying their bills. One area in which young people do qualify for help is housing benefit, but only after a recent screeching U-turn from the Government on their abhorrent policy of excluding 18 to 21 year-olds.

The discriminatory exclusion of under-25s from the national living wage takes no account of how people actually live. For example, by the time I was 25—which was actually not that long ago—I had already been married for three years. I owned a house, and I was a father. I urge Ministers to look at the actual data rather than rehashing old arguments, and to consider the economic case for including under-25s in the national living wage.

[Kirsty Blackman (Aberdeen North) (SNP)]

The point that my hon. Friend is making about experience is very important. When I was 18 I started work in a pub on the same day as someone who was 25. Neither of us had worked in a pub before, so we had exactly the same level of experience, but the 25-year-old was eligible for the 25–year-old’s minimum wage, while I was paid the 18-year-old’s minimum wage. Does my hon. Friend agree that that was just unfair?

[David Linden]

Absolutely. That is what drives the Scottish National party’s fair work agenda. It is about fairness, and about lifting people out of poverty. I thank my hon. Friend for her powerful intervention.

[David Linden]

My hon. Friend is absolutely right. What he has said takes us back to the central point that a fair day’s work should result in a fair day’s pay.

If the Minister looks at the data, he will see that 2.5 million young people do not live with their parents. That is 2.5 million young people paying for shopping, rent and utilities. Statistics from the Office for National Statistics show that approximately 20% of mothers are under the age of 25. The discriminatory exclusion from the national living wage means that they must get by on poverty pay.

The current national minimum wage—and we should bear in mind that that legislation was passed in the last century—is not only a clear example of direct age discrimination, but an example of discrimination based on class. It flies in the face of the very concept of social mobility. How can a 22 year-old first-year apprentice on a miserable £3.70 an hour be socially mobile? That is what the law currently allows, as is stated on the UK Government’s website. That is what an employer who is thinking about employing an apprentice is encouraged to do.

A recent report by KPMG showed that one in five people are struggling to escape from low pay. For example, one in four women earns less than the real living wage. Put simply, that means skipping meals, living in debt and using payday loans just to get by. The fact is that there is a solid evidence base out there that makes the case for equal pay for under-25s.

[Kirsty Blackman]

Does my hon. Friend agree that there could be a positive impact on productivity? If people are having to work extra jobs and cannot afford to eat, they will be less productive, but if they were paid a living wage, they would do better work for their employers as a result.

[David Linden]

My hon. Friend makes a powerful point. If an employer pays someone under 25 the real living wage, that sends a message of real encouragement to the employee; there is clearly a productivity point here.

I commend and thank the Young Women’s Trust, which produced an excellent report last year entitled “Paid Less, Worth Less?” I have placed a copy of the report in the Library of the House this afternoon, and its testimonies make pretty stark reading. I will share just one today. It comes from Katie, a 19-year-old from Newcastle:

“I was a customer service apprentice in a small shop—only me, another apprentice and my manager worked there.

I had to do a lot—serve customers on the till, clean the store, display the products, update the online store, pack and post online orders and more.

I was paid £2.73 per hour, which went up to £3.30. I got paid on a Friday at the end of the month. The next week I was skint.

I remember one day I had 40p for dinner, so I got one doughnut from M&S.

My manager noticed and offered to buy me a McDonalds.

I felt so stupid.

A quarter of my monthly income was spent on bus fare getting to and from work. It was a struggle.”

It is sometimes easier for us in this House to focus on statistics rather than people, but Katie’s story succinctly and eloquently outlines the pay inequality that still exists in the UK in 2018.

Katie is not the only one. Only last week, following an oral question from me in this House, the Chancellor wrote to inform me that there are approximately 22,000 apprentices in the UK being paid just £3.70 an hour. Surely no self-respecting Minister thinks £3.70 is a decent hourly rate; I do not think any of us would be happy to turn up here and get paid just £3.70 an hour.

There are also particular sectors in the employment market where deliberate wage depression is a major issue and could have a major impact on the sustainability of business, particularly when free movement of people is restricted post Brexit. These sectors include retail and hospitality, which are often largely staffed by young people.

I would hope that the Minister would distance himself from the comments made by the Secretary of State for Digital, Culture, Media & Sport who back in January 2016 said younger workers would not get a pay rise because they are “not as productive” as older workers. It would take a particularly brave Minister to repeat that, especially on an election day.

Finally, the Minister might be worried about how businesses would react to under-25s being included in the national living wage. However, let me assure him that there is clear polling evidence from YouGov, on a sample of some 4,000 HR managers; they think that young people should be paid the same as older people for work. Some 79%—that is four in five—of employers think there should be equal pay regardless of age, as do 77% of small and medium-sized organisations. Some 80% of employers also said that young people make a bigger, or the same, contribution as older workers, and that on the whole younger workers came with a fresh perspective and injected some energy.

Most employers when asked said they would not cut back on hiring young people if the national living wage was extended to under-25s. Indeed, the New Policy Institute found in a report commissioned by Unison on the topic that, historically, raising wages for people under the age of 21 in the UK has not harmed their employment outcomes. So the evidence is clear and so is my message to the Government today.

[David Linden]

My hon. Friend is right: giving under-25s that spending power would boost the economy and could help kick-start the economy.

[Kirsty Blackman]

As an employer, I have taken on a number of young people on internships, and I have paid the real living wage, not the Government’s pretend living wage, regardless of their age. I found that they made a very valuable contribution to my office and a real positive difference. Has my hon. Friend got experience of doing similar?

[David Linden]

I am grateful to my hon. Friend for leading me down that particular path, which I had not quite thought of. She will be aware, as will my hon. Friend the Member for Glasgow South West (Chris Stephens), that I am going through the process of recruiting for the first ever John Wheatley intern—a young person will come to work in my office. I believe passionately that if we are to get more people into politics, we need to open up that process; it cannot just be the same people taking on political interns. When I started the process of advertising for that internship, I was conscious of the need to advertise it at the real national living wage. Last week, I set up seven or eight interviews, and I am sorry to have to tell the House that I got a phone call this afternoon to inform me that one of the young guys I was due to interview had sadly passed away. I want to take this opportunity to pay tribute to Scott, who is no longer with us.

The evidence is clear for equalising the national minimum wage to include the under-25s, and my message to the Government is also clear: if we want to build a country that works for everyone, we need to end this discriminatory pay inequality. The Government need to pay a real national living wage, and they need to pay it to the under-25s too.

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[Andrew Griffiths]

The Government have always listened to the expert advice. In particular, we listen to the Low Pay Commission, which is made up of employers, academics and experts in the field and trade union representatives and is specifically devoted to protecting the rights of workers, including young workers. It is the commission that says that this policy is right and that sets the lower rates after considering all the facts.

[Kirsty Blackman]

The Minister has laid the stats before us, saying that the unemployment rate is 3% for over-25s and over 10% for under-25s. Does he not agree that that shows that the system he is presiding over is broken, and that something needs to be done to fix it?

[Andrew Griffiths]

No, I think it shows two things. It shows that the hon. Lady does not understand the labour market, and it shows the difficulties that young people have in demonstrating that they have the necessary skills, in gaining the necessary experience and in convincing employers to take a risk in taking them on and giving them an opportunity.

The hon. Member for Glasgow South West talked about our record in relation to unemployment. I will just remind the House that we are seeing record levels of employment in this country, and that unemployment rates are lower than we have seen for 40 years, so I will take no lessons from him.

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[Andrew Griffiths]

I have given way plenty enough; we will move on.

The Government have increased the national minimum wage for young people to record levels. As I am sure the hon. Member for Glasgow East is aware, last month the Government gave the lowest-paid workers an above-inflation pay rise, as the national living wage and all the national minimum wage rates increased in real terms. The national living wage increased by 33p, to £7.83, meaning that a full-time worker on the national living wage will see their annual earnings rise by more than £600. Following increases to the personal allowance threshold and the minimum wage, a full-time worker earning the national living wage will be taking home over £3,800 a year more after tax. That is something this Government have delivered and are incredibly proud of.

[Kirsty Blackman]

Will the Minister give way?

[Andrew Griffiths]

I think I have given way enough.

The national living wage will rise further to reach 60% of median earnings in 2020, subject to sustained economic growth. We have awarded younger workers in receipt of the national minimum wage the biggest hourly pay rise in more than a decade. In particular, 20 to 24-year-olds saw a 33p increase in their hourly rate to £7.38, meaning a full-time worker in that age group will see their earnings rise by £600 a year, like those aged 25 and over in receipt of the national living wage. Those aged 18 to 20 saw an annual increase of 5.4% to £5.90, and those aged 16 and 17 are now entitled to a minimum of £4.20 an hour, an annual increase of 3.7%. Finally, apprentices aged under 19, or those aged 19 and over in the first year of their apprenticeship, saw an increase of 5.7%, the largest annual increase of all the hourly rates. In total, we believe that more than 2 million workers, 400,000 of whom are young workers under 25, have directly benefited from the latest increases in the national minimum wage.

UK Oil and Gas Industry

Kirsty Blackman Excerpts

Thursday 19th April 2018 Westminster Hall

[Colin Clark]

Yes, but many parts of the country feel they are underinvested in. The engine room of the Scottish economy is taxed that much more than other areas—if we do not invest in it, we risk killing the golden goose. That is the important thing. I am not saying that other areas are not deserving; I am saying that if we do not invest in the north-east of Scotland and the surrounding area, it will not be an attractive place to live, and it will be very difficult to attract people to work there.

[Kirsty Blackman (Aberdeen North) (SNP)]

Does the hon. Gentleman agree that the same concepts apply to the £330 billion of oil revenues that came to the Westminster Parliament?

[Colin Clark]

I will not disagree, save that the principle is that that £330 billion was to the UK Treasury, which invested for many years throughout the United Kingdom. As the hon. Member for Stockton North will remind me, not only the original Scottish sector has oil, but the islands, the rest of the UK east coast and now the west coast of Scotland as well.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a delight to have the opportunity to speak in this debate. It is always good to have a debate focused on oil and gas; we have not had enough of them recently. I am also delighted to be in Westminster Hall—I feel like I have not been here for some time—and I am thankful for the air conditioning, which is incredibly useful today.

I will not spend an awful lot of time disagreeing with my constituency neighbour, the hon. Member for Gordon (Colin Clark), because I agree with most of what he said, but I will start with a slight disagreement about helicopters. I agree with what the hon. Member for Stockton North (Alex Cunningham) said about people’s nervousness. We and the companies involved ask people to undertake dangerous helicopter journeys just to go to work. In conversations with Airbus and other organisations involved with the helicopters, I have said, “It is not me you have to convince that the aircraft are safe; it is the people who are asked to fly on them.” To do that, those organisations need to have as many conversations and answer as many questions as possible. That is the only way they will possibly regain the confidence of people in the industry.

[Alex Cunningham]

On that basis, does the hon. Lady support my call for a public inquiry so that we have full transparency about exactly what happened and what is being done to rebuild confidence in particular models, which are still yet to come back into service?

[Kirsty Blackman]

I appreciate the hon. Gentleman’s question. To be perfectly honest, I am not clear that an inquiry is widely called for; an awful lot of information has been published. If lots of individuals from my constituency and from the industry more widely asked me for such an inquiry, I absolutely would look at that. I am not saying no, but that is not something that people generally have asked me for. They have looked at the evidence that has been published so far and taken decisions on that basis.

I will talk first about the oil and gas industry in general, although obviously I will speak particularly from the perspective of the north-east of Scotland, as Members would expect of an Aberdonian. I will talk about where we have come from, where we are and where we will go with the industry, and about how to get to those places. As I said, some of my asks are not dissimilar to those of the hon. Member for Gordon.

We were in a situation where the industry was overspending significantly. When it was told that it could have a widget today for £400 or tomorrow for £4, it chose to have it today for £400. There was an awful lot of fat in the system. Now the industry is able to make more profit at $60 a barrel than it was at $120 a barrel, just because it has slimmed down a lot of those costs. One of the most important things for us to do is to capture that—to ensure that, whatever we do, we do not lose the gains we have made.

We have undoubtedly been through an incredibly painful period. We have had an awful lot of pain and suffering in the north-east of Scotland. I get that. A number of people have found alternative jobs—they have been supported in that by various organisations; the Scottish Government have put a lot of effort into that—but some have not. We do not want to forget that there are people who still have not got through the pain of having to go through a redundancy process. We need to remember that and ensure that, whatever we do, we do not set ourselves up for another fall like the one we had. That is really important.

We had a very competitive system, in which companies were unable to work together or point in the same direction. Local authorities were not particularly good at that, either. What really brought local authorities, the business society and civic society in all of Aberdeen city, Aberdeenshire and the north-east of Scotland together was the bidding process for the city deal. Working together on that was really important. I am pleased that we got a city deal. Anyone who has read anything I have said about the deal will know that I was unhappy about how low level it was—I would have liked significantly more money for my city, and I am not sure that many people in the north-east of Scotland would disagree—but the process was very beneficial, as was the direction that the city and the shire took. I hope that we keep hold of that.

[Colin Clark]

The hon. Lady is gracious in giving way. Does she worry that there is a perception that the north-east of Scotland is relatively wealthy and therefore will take care of itself, and that sometimes that affects investment in the region?

[Kirsty Blackman]

I certainly worry that the city deal that was signed was looked at on a different basis from some other city deals. The Scottish Government have put in significant additional funding to the city deal, particularly recognising the issues with infrastructure. I was pleased to hear the hon. Gentleman talk about looking at additional infrastructure projects and so on. The Aberdeen western peripheral route will make incredibly positive changes. No one can wait for it to come—I think we are expecting it in the autumn. It will be hugely positive and will make a big difference, and I think that it will help encourage people to come to the north-east.

Let me turn to where we are now. Companies are working together like never before. I was at the forefront of calling for changes to transferable tax history, but other parties supported them; the Conservative party was behind the call, too. I very much appreciated the Chancellor making those changes in last year’s Budget. I would have preferred them to happen more quickly, but we cannot have everything. We are looking forward to their implementation later this year. I could not be clearer about how important they are, and I am sure the Government recognise that.

Just for a bit of information, if a big company owns a number of rigs and one of them is nearing the end of its life, the company has a choice: it could put a lot of work, capacity and people into that installation to try to get the maximum recovery from it, or it could say, “Look, this is not a priority for us. We are focusing on other things.” That is completely understandable, but the transferable tax history allows a new company—a new player in the market—to take over that asset to ensure that the maximum recovery is made from it. That is really positive, and I am pleased that it has happened. That is a helpful measure in terms of maximum economic recovery, which we are fully behind.

Where are we going? I was pleased to hear the hon. Member for Gordon mention Vision 2035, because it is incredibly important and people do not talk about it enough. It is the vision for the future of the Oil and Gas Authority, which so far seems to be doing a good job. It focuses in particular on the north-east of Scotland, but also on the wider industry across the whole of the United Kingdom. Vision 2035 is about ensuring that we get maximum economic recovery, extract oil and gas from the small pools and have a supply chain that is anchored—particularly in the north-east of Scotland—so that once we get to the stage when no oil and gas is coming out of the North sea, everyone will know that the very best supply-chain companies for oil and gas are in the north-east of Scotland and parts of the wider United Kingdom. Then, rather than seeing those companies lifted and based in the US or other countries, they could continue to sell their expertise, with a tax take continuing to come in and be spent here—preferably in Scotland.

We must anchor the supply chain now for the future, and there are a few ways to do that. In relation to small businesses, all too often such businesses in oil and gas come up with a great concept, start working on it, grow the business to a point and then they are sold. I get that that is a way forward for some, but both the Scottish and UK Governments are beginning to ensure that if such companies have the potential to grow, they do not get sold and their concept lost within a bigger international company but can access the finance they need to anchor themselves and have that next step of growth, whether that is through beginning to export or ensuring that their intellectual property is turned into something real that can be sold. That is really important for the supply chain, rather than seeing companies sold on to somebody else who may not pay as much tax here because they are not a wholly owned United Kingdom company.

On maximising economic recovery and exploration, even though we have a super-mature basin we should still be doing exploration; there is more that we can do. I think someone from Statoil said to me, “You’re most likely to find oil and gas somewhere you have already found oil and gas.” We should do exploration in those areas. We have better ways of surveying now than ever before, and of trawling through and understanding the data from that surveying, which will be important going forward. Anything the UK Government can do to ensure that exploration continues, even in a super-mature basin, would be welcome.

[Claire Perry]

I am really enjoying hearing another perspective from the hon. Lady’s fine city. Could I put on record that I am a little mystified about the Scottish Government’s decision to refuse to allow exploration for gas onshore when we know it is there because it is a geologically identical strata? Ultimately, the same operators would be looking to extract it. We can do it safely and in an environmentally secure manner, because that is what we do in Britain, as we have done demonstrably in the North sea basin. I find that an ideological rather than a practical decision.

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[Kirsty Blackman]

What Governments do in any decision is look for best value—the good things and bad things that would come out of it. The Scottish Government and Scottish Parliament decided that fracking will not happen onshore in Scotland, and it is within that Parliament’s rights to take that decision.

[Claire Perry]

Will the hon. Lady give way?

[Kirsty Blackman]

In a moment.

[Mr Virendra Sharma (in the Chair)]

Order. The Minister will get a chance to respond to the debate, and I would appreciate it if she would—

[Mr Virendra Sharma (in the Chair)]

I will send you another bottle of water.

[Kirsty Blackman]

Thank you, Mr Sharma. In terms of ideological decisions, the onshore wind decision, taken on a blanket basis across the whole United Kingdom, could be applied flexibly to Scotland, and we would very much like that. There would still need to be a planning process, but it would be great if the blanket ban was not there.

[Colin Clark]

Almost 50% of turbine applications called into Holyrood to the reporter are then given permission. The hon. Lady just said that the Scottish Government have decided not to allow fracking—as I said in my speech, I think it is nimbyism, frankly, but fair enough, because that is their right—but if local communities and local councils say—

[Colin Clark]

Thank you, Mr Sharma. I will keep my question to the hon. Lady. Does she agree that there is a contrast between the two positions? Can one give permission for turbines that people do not necessarily want in their local community when one may not believe in having fracking in Scotland? Perhaps she does believe in having fracking onshore.

[Kirsty Blackman]

I do not believe in having fracking onshore in Scotland, and I am sure the hon. Gentleman would not expect that. The benefits of fracking are not as big as they are made out to be. Were it to be allowed, it would bring very little in the way of jobs or tax take, and the loss to our communities and the upheaval caused in them would be so significant that it would not balance out those jobs and tax take.

I am incredibly pleased to hear the Minister talk so positively about carbon capture and storage. What happened previously in relation to that was a train wreck—it was horrendous. It was awful how the rug was pulled from under it; I could not be clearer in my condemnation. I recognise that it was not the Minister’s responsibility at the time and I do not blame her in any way for that. I am pleased that she is being so positive.

We need to ensure that, whatever we do on decommissioning decisions and changes to allowances made by the OGA, we do not prejudice future carbon capture and storage opportunities. For example, we should not prematurely decommission a pipeline that could be useful for carbon capture and storage. As we do not yet have a full grasp of what carbon capture and storage technology will look like, it is very difficult for such decisions to be made. However, I ask that whatever is looked at is considered carefully in those terms and that carbon capture and storage is considered when any decommissioning decision is made. Any decision on any of that needs to be made very carefully.

I am also of the opinion that decommissioning, if done right, can bring some jobs and some revenue. However, I do not think it will be the biggest windfall in the entire world. I appreciate the action that the UK Government have taken on decommissioning through the OGA, and I also appreciate what the Scottish Government are doing through the decommissioning challenge fund. All those things are positive.

When I spoke to the Oil and Gas Technology Centre, which I will move on to in a moment, it said something interesting about decommissioning. On some rigs, there is an ability to do enhanced extraction techniques, but it is not possible to do them because of all the stuff on the rig that is doing the current extraction techniques. There is a need for a level of enabling decommissioning; taking off some of the widgets currently on the platform in order to put on new widgets so that the platform can be used to do things, but with different technology on it. There are smart things we can do on decommissioning that will ensure that we have jobs, but also that we have a positive way forward and get the maximum economic recovery out of the North sea.

The issue of STEM, which the hon. Member for Gordon mentioned, is important. I have been concerned as an Aberdonian, feeling the pain and seeing the changes and the negative atmosphere in the city, that we would have a situation in which young people would come through school saying, “No, I don’t want to go into oil and gas,” exactly as he said. The Oil and Gas Technology Centre is encouraging young people to get into STEM. Aberdeen Science Centre is doing similarly cool things to encourage STEM, and so is TechFest, which takes place every autumn. Those are all positive things that are supporting young people into STEM.

We do not have the same problems with the numbers of engineers that the north-east of England does—I have previously been told that it is much more difficult in the north-east of England to find some of the engineering skills that are required, but I could be wrong. That is something we could probably work together on quite positively, sharing the information and the positive things we have been doing on that, to ensure that best practice is shared and lots of people are encouraged into engineering.

As the hon. Member for Gordon said, some of the digitisation skills are important. One of the things I talked about with the Oil and Gas Technology Centre was the transferable skills that people get from studying something such as gaming, with the advanced interfaces they use, and how the virtual reality that can be created from that is incredibly positive and useful.

I have a couple more things to say—I am probably beginning to try your patience, Mr Sharma—and a couple of specific asks for the Minister. First, there is the oil and gas sector deal. I know that she is probably being heavily lobbied on that, but it could not be more important for the industry. We recognise that the Government have been working with the industry on that, and we look forward to that coming through.

Secondly, on the industrial strategy challenge fund, I understand that the bids for wave 3 closed at some point this week. Concern has been raised with me about the length of time the decision-making process will take. That is not so much the time in which funding will come through, but the decision-making process. If no shortlist is created until November, and we are looking at having a shortlist at some point late this year, no decision will be taken until a bit later than that. In reality, the chance that people can employ people and get up and running at the beginning of April next year becomes slimmer and slimmer. The quicker the decision can be taken—not necessarily the quicker the funding can come through—the better for projects being ready to go as soon as possible.

There are a couple more challenges. It is the case that Brexit is a challenge for the industry and that varying suggestions have come out about how much Brexit could cost the industry. I am still concerned about how visas are operating. I do not think the current situation works particularly well. I make a plea for post-study work visas to be brought back for the University of Aberdeen and Robert Gordon University. That would be a huge positive change for us. I know that the pilot took place in three universities in England and has been broadened out slightly, but it still has not come to the two universities in my city, and it would be incredibly positive for our industry.

On another specific offshore industry-type issue, I had a constituent come to me recently who is an EU citizen, but is not eligible to apply for the right to remain because he has spent so much time out of the country working for his oil and gas job that he cannot fulfil the residence requirements. He is a high earner, he pays tax and he is a good contributor to our city, and I am concerned that in these individual cases the Home Office’s policies are obstructive to ensuring that those highly skilled people are able to stay in our city. That is a specific plea.

I have one last specific plea for the oil and gas industry. I have requested a meeting with the Financial Secretary of the Treasury and I hope that will happen in the near future. There is a major issue brewing around customs, because there is something called the shipwork end-use relief that is heavily used by oil and gas operators. Basically, it is a customs relief that occurs for stuff that is going offshore; the stuff is not eligible for the same customs fees that it currently would be, because it is going offshore. I received reassurance from the Financial Secretary that that would continue to be applied post-Brexit, but the action that Her Majesty’s Revenue and Customs is taking contradicts that.

There is a similar issue on manifests. Currently, paper manifests are okay for making a customs declaration, but we are looking at moving to a situation where electronic manifests are required. I understand that is because of changes in EU rules, but post-Brexit, the Taxation (Cross-Border Trade) Bill is not the same as the EU customs code, so they will possibly be able to revert to paper manifests, but we are not clear. There is an awful lack of clarity around that, and I am concerned that what the Financial Secretary is saying and what HMRC is saying are not the same.

That is becoming really important, because the changes have to be made in the early summer of this year. Companies are gearing up to make changes on the basis of HMRC guidance that is being contradicted by the Financial Secretary. Any assistance that can be given to ensure that those meetings take place and that clarity is given to companies would be incredibly useful.

The industry is in a good place, which is surprising after everything it has been through. There is a positive future. One of the amazing things it is doing is focusing on decarbonisation. That seems a bizarre thing for the oil and gas industry to do, but it has more of a need to do it, and more of a responsibility to do it, because it is the oil and gas industry. I am pleased that that has been written into what the Oil and Gas Technology Centre is doing, and that all the oil and gas companies, working together in ways they never have before, are positive about looking toward decarbonisation.

There is a positive future for the oil and gas industry. We must get it right. We must continue to encourage companies, we must continue to support and work with organisations such as the Oil and Gas Technology Centre and, when industry bodies and companies come to us and say, “This specific issue is a blockage,” we must look at those specific blockages and ensure that we do what we can to get rid of them, listen to industry and make the changes that are required.

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate my hon. Friend the Member for Gordon (Colin Clark) on securing the debate, and it is an honour and a privilege to follow the hon. Member for Aberdeen North (Kirsty Blackman).

In the last four years, the oil and gas industry in the North sea has come under considerable pressure, and tens of thousands of jobs have been lost. The industry has adapted and, while challenges remain, it continues to be a vital component part of the UK’s economic base. It still supports hundreds of thousands of jobs and delivers more than half the nation’s oil and gas. There are up to 20 billion barrels of oil and gas still to recover, and the UK supply chain continues to be a world leader, with unrivalled experience in maximising economic recovery from a mature base. The industry makes a consistent contribution of around £1 billion per annum in tax revenues, and the wider tax contribution from across the supply chain is immense.

The Vision 2035 document confirms that the extraction of oil and gas on the UKCS is not a sunset industry. It has a vital role to play in adding to the UK’s energy security, ensuring a smooth transition to a low-carbon economy and creating highly skilled jobs that we can take around the world.

I will first provide a short overview on the national outlook, its successes in the face of adversity and the immediate challenges that need to be addressed. I shall then focus on the southern North sea off the East Anglian coast, where there are specific and exciting opportunities, although work is required if their potential is to be fully realised for the benefit of both the local and national economies.

I am mindful that, in the southern North sea, different energy sectors operate side by side, cheek by jowl—particularly gas, offshore wind and electricity transmission. I pose the question: should they come together and work as one? I am perhaps running before I can walk in saying that, but I will outline a scenario for how those sectors can work more collaboratively for the benefit of industry, people and the places from which those people come.

Notwithstanding the considerable pressures that the industry has faced in recent years, and while in many respects it is still battered and bruised, it is generally in a good place and there is exciting potential ahead of us. In 2017, UK upstream deals exceeded £8 billion. The UKCS production remains stable, despite some start-up delays and unplanned outages. Average unit operating costs have halved, from around $30 per barrel equivalent in 2014 to $15 in 2017. There were at least five exploration successes last year, with a combined discovery of 350 billion barrels equivalent. Around £5.5 billion of post-tax cash flow was generated on the UKCS—more than in any other year since 2011.

There is considerable potential to build on those successes this year, with at least 12 new developments, worth around £5 billion of capital investment, expected to be sanctioned, and with production forecast to increase by 5%. Set against that backdrop, 62% of supply chain companies surveyed by Oil and Gas UK have a positive outlook for 2018. That said, considerable challenges must be addressed if that potential is to be realised. Just 94 wells were opened up on the UKCS in 2017—the smallest number since 1973. Development drilling has fallen by around 45% in the past two years, with supply chain revenues falling by more than £10 billion from 2014. Despite the cost improvements for the supply chain, average EBITDA—earnings before interest, taxes, depreciation and amortisation—fell by £1.7 billion from 2014-16. Moreover, cash flow continues to be a major concern.

Even if all the fields discovered last year were developed, the reserve replacement ratio of 0.6 is not enough to sustain production. The fall in investment from 2014-17 means that production decline is likely to increase in the early 2020s. Sustaining efficiency gains is vital if the basin is to continue to attract investment. Moreover, it is important to improve exploration success and the commercial viability of existing discoveries.

A particular challenge that the industry faces, which we have heard about quite a lot today, is to reinvigorate the supply chain and to make it more resilient. It is important that we tackle this task; not to do so would be irresponsible. A strong supply chain will help sustain the industry and will open up significant export opportunities. Operators need to work more collaboratively with their supply chain businesses—sharing information, encouraging innovation and looking at new working practices. Addressing this challenge should be part of the sector deal, and the Oil and Gas Authority and the Government should work with the industry to help promote a new approach to collaborative supply chain working. Much can be learned from other industries, such as car manufacturing in the north-east and the west midlands.

Since 2012, the Government have generally worked well and closely with the sector, improving the fiscal regime and thereby helping to attract inward investment. That will continue as the driving investment programme is delivered. However, while Government policy is supportive, a number of decisions by HMRC—as the hon. Member for Aberdeen North touched on—have been taken without full and proper consideration of the impact on the oil and gas industry.

A particular example, as the hon. Lady mentioned, is HMRC’s decision in January to end long-standing exemptions for shipwork end-use relief from July of this year. For the oil and gas sector, this exemption—known as CIP33—provides relief from customs duties for equipment that is destined to be used in offshore installations, such as spare parts. The decision was taken at short notice, with no consultation with the industry.

[Kirsty Blackman]

The other thing that particularly concerned me about this was that I received a letter from the Financial Secretary to the Treasury that directly contradicts the decision taken by HMRC, which confused the issue further. The two appear to be giving totally different guidelines on this. It would be great to have clarity.

[Peter Aldous]

I thank the hon. Lady for reinforcing that point. It is difficult to attract investment, and the Government have worked very hard to make this basin one of the most attractive in the world to invest in, but these sort of noises coming out of HMRC reverberate around the world. A solution needs to be found very quickly.

While much of the industry’s focus in recent decades has been on Scotland, when exploration started on the UKCS in 1960s it did so in the southern North sea. That area is now on the verge of a renaissance, with the opportunity of reinventing itself as an all-energy basin, which, with the right policies in place, can play a significant role in the UK’s future energy strategy.

The southern North sea is at a critical juncture. For more than 50 years, the basin has developed and delivered strong gas production through a diverse network of offshore platforms, pipelines and onshore terminals. The basin has been well exploited, and the opportunity to identify and develop large, landmark discoveries is increasingly limited. There is potential with both marginal pools and tight gas, but they are increasingly expensive and complex to access, the technical and commercial risks are high and opportunities can often be quickly disregarded as uneconomic.

The challenge for the southern North sea is now to search for innovative business and technical solutions. This challenge is made more difficult by depressed commodity prices, aging infrastructure and increasing unit transportation costs, as production from existing developments continues to decline. The selection of projects is based on their ability to have a big impact, their prospect of success and the potential to achieve it within a reasonable timescale.

There are currently five priorities in the southern North sea. The first is to realise the full potential of decommissioning opportunities for the benefit of the East Anglian region, which I will come on to in more detail in a moment. The second is to unlock potential tight gas developments. The third is to realise the full potential of the synergies between renewables and oil and gas. The fourth, in the light of Brexit, is to find the best way to work across borders with the Dutch sector. The final one is to minimise production losses due to salting.

It is estimated that 40 platforms in the southern North sea are to be decommissioned by 2022; as I said, it is the oldest part of the basin. That business is worth several billion pounds, with significant job safeguarding and enormous earnings potential for the East Anglian region. However, there is a real and present danger that we will lose much of that work to our European neighbours, where port infrastructures have received investment from their Governments.

East Anglia does not have a level playing field on which to compete with our main competitors in the southern North sea—as I said, on the other side of the sea. Locally, the councils, the New Anglia local enterprise partnership and other supporting agencies, such as the East of England Energy Group, stand ready to support the industry, but there is a need for central Government to get involved and back them if we are to realise for the region the full potential of that significant opportunity.

We need a decommissioning challenge fund similar to that in Scotland, to help to establish a cluster of expertise, as is happening in Dundee with the Tay cities deal. We need to have an aspirational UK local content policy, as already happens with offshore wind. That would help to ensure a return to UK plc, as the Government are already funding between 50% and 75% of UK decommissioning. It would focus operators’ attention on using the local supply chain and would help to support the supply chain action plans that have recently been introduced for decommissioning projects. As I said, EEEGR is willing—it is indeed eager—to lead and to host a taskforce to spearhead that initiative. It would be match-funded by other local agencies, although it would need funding from central Government to establish and then help to maintain it.

The other opportunity in the southern North sea with exciting potential is closer collaboration and working between the oil and gas, offshore wind and offshore transmission sectors. If that can be achieved, a significant contribution can be made to addressing the UK’s ongoing energy trilemma of keeping costs to consumers affordable, ensuring security of supply and smoothing the transition to a low-carbon economy. We need to integrate energy production activities—for example, in respect of oil, gas and electricity—and share common infrastructure for distributing energy. Doing that will achieve significant economic benefits. The co-location of gas-powered electricity generation with gas production hubs would help to maximise the economic recovery from gas fields. The better utilisation of common infrastructure would improve the economic value of both the associated renewable and the hydrocarbon production assets. Collaboration between those sectors is slowly improving and could be accelerated by facilitating and enabling Government policies.

Two main issues are inhibiting more effective collaboration between the sectors. First, the regulatory regimes are quite separate; some of the regulators are not used to working together and they have different policy objectives. Secondly, cross-sector collaboration is not incentivised, as Government policy is highly sectorised.

A possible starting point for improving the situation and promoting cross-sector collaboration would be consideration of the UKCS as an energy basin, rather than a series of separate energy sectors. That integration could be the specific responsibility of the Department for Business, Energy and Industrial Strategy, albeit delivered through parties such as the OGA, National Grid, Ofgem and the Planning Inspectorate.

The three sectors would also benefit from incentives to work more collaboratively. Sector deals provide an opportunity to make it more attractive for the different sectors to work together, at both the developmental and the operational stages. That could include financial support for cross-sector innovation, improved regulatory cohesion, facilitating the movement of workforce skills between the sectors, and research and development. It may well be that a pilot could be set up for such innovative cross-sector working in the North sea. I would welcome the opportunity to discuss that with my right hon. Friend the Minister, along with industry representatives.

During the past 50 years, oil and gas extraction on the UKCS has brought enormous benefits to the UK. It has created hundreds of thousands of well-paid, highly skilled jobs, attracted significant inward investment from all over the globe and provided a huge annual dividend to the Exchequer. The past four years have probably been the most difficult in the basin’s life, yet notwithstanding a great deal of pain and personal anguish, it has come through this tough period in better shape than could reasonably have been hoped for and is ready to continue to play a full and leading role in the post-Brexit economy.

Since 2012, the Government have given the industry a very fair hearing and backed it, both fiscally and with the creation of the Oil and Gas Authority. Exciting opportunities lie ahead. It is important that the spirit of co-operation in the oil and gas supply chain continues, improves and, as I have outlined, extends to cross-sector working. It is said that if you go to any oil and gas basin around the world, you will hear Scottish, Geordie, Suffolk and Norfolk accents. We must ensure that that continues for at least 50 or—dare I say it?—100 more years.

Oral Answers to Questions

Kirsty Blackman Excerpts

Tuesday 27th June 2017 Commons Chamber

The Secretary of State was asked—

[Kirsty Blackman (Aberdeen North) (SNP)]

1. What recent discussions he has had with trade bodies and companies involved in extracting oil and gas from the North sea.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

My Department is in regular contact with the oil and gas industry. As hon. Members will be aware, my predecessor, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), met industry representatives regularly, both in London and in Aberdeen. On 23 March the Oil and Gas Authority awarded licences for 111 blocks to enable exploration and production across frontier areas—the first licensing round to focus on frontier areas in two decades. I look forward to continuing this relationship, which is very important for jobs and the wider economy. Indeed, in my first week in post I attended a reception at Imperial College London and met several companies and trade bodies in the field.

[Kirsty Blackman]

I thank the Minister for that answer and warmly welcome him to his new post. In 2016 the Chancellor announced that action would be taken to improve the tax regime for late-life asset transfers. In the 2017 Budget he re-announced the same policy, but now an expert panel is to be set up. Can the Minister let me know how many times the expert panel has met so far, and when we can expect the outcomes of its deliberations to be made public, as it says they will be on the gov.uk website?

[Richard Harrington]

I thank the hon. Lady for that question. She and I have worked together in previous roles, and I look forward to visiting Aberdeen, where hopefully she will be able to explain this further. As far as late-life assets are concerned, we realise how important it is to get this right, and not just for the jobs and tax revenue, but for generating further investment. The discussion paper and the panel of experts are considering this. We look forward to hearing a wide range of views and will report our findings at the autumn Budget.

--- Later in debate ---

[Margot James]

Market towns, such as the ones in my hon. Friend’s constituency, will have all the support we are giving to the retail sector and high streets so that they can flourish.

[Kirsty Blackman (Aberdeen North) (SNP)]

T4. The National Audit Office recently published a report on Hinkley Point C that is nothing short of damning, describing it as “risky and expensive”. When will the Government listen to the experts and scrap this costly expenditure, and when will they invest instead in carbon capture and storage?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

If ever you decided not to be Mr Speaker, a career as chairman of the BBC Radio 4 programme “Just a Minute” would be appropriate. In answering the hon. Lady’s question, I will try to keep to your one sentence rule.

The Hinkley Point contract is entirely designed so as not to get the Government involved in expensive capital expenditure, and the nuclear power produced by Hinkley Point will be an excellent part of a mix of power for decades to come.

Oral Answers to Questions

Kirsty Blackman Excerpts

Tuesday 14th March 2017 Commons Chamber

[Mr Speaker]

I call Martin Docherty-Hughes. I am sad to note the rather uncharacteristic absence of the hon. Gentleman. We will do our best to bear up with such fortitude as we can muster.

[Kirsty Blackman (Aberdeen North) (SNP)]

A number of small businesses in the oil and gas sector supply chain have been hit disproportionately by the oil price reduction. My hon. Friend the Member for Aberdeen South (Callum McCaig) and I held a meeting last week to encourage young businesses to access different methods of capital financing so that they can grow. What are the UK Government doing to encourage such businesses to access capital finance?

[Margot James]

Although support for businesses in Scotland is largely devolved, the British Business Bank funds a vast number of companies in Scotland. It has provided £415 million of finance for Scottish companies, including through start-up loans. In addition, more than 1,600 companies in Scotland benefit from the enterprise finance guarantee scheme.

The Government’s Productivity Plan

Kirsty Blackman Excerpts

Tuesday 28th February 2017 Commons Chamber

[Roger Mullin]

The best thing I can do is leave that to my hon. Friend the Member for Aberdeen South (Callum McCaig), who is an expert in these matters. He will be summing up for our party and is from that part of the country. I am aware that the Scottish Government have been undertaking considerable work on this matter. Our growth commission is under way, and part of its work deals with looking at precisely the matter the right hon. Gentleman raises. The commission is yet to report.

[Kirsty Blackman (Aberdeen North) (SNP)]

My hon. Friend would agree that the Scottish National party is doing a lot on this issue. In Aberdeen, we are holding a meeting next week with the London Stock Exchange Group so that supply chain companies can learn about alternative methods of capital financing, meaning that we can secure those industries in our city and ensure that they can continue exporting way into the future.

[Roger Mullin]

I thank my hon. Friend for that intervention.

I wish to move on to another area that has been addressed. I believe it was the hon. Member for Horsham (Jeremy Quin) who mentioned the importance in our society of universities, the production of higher levels of knowledge and our research capability, and how that was a tremendous attraction if we are to drive up levels of productivity. I agree entirely with him, but there is a problem that we must be willing to face. The universities are under a type of strain that they have never faced before: the threat to the research community created by the Government’s attitude towards EU nationals. I can take Members to universities in Scotland and show them people who are leaving, or planning to leave, the university and the research community because of the uncertainty created by this Government. If there is one thing the Government could do, either today or very soon after, to secure our research community, it would be to give these people absolute guarantees that they are welcome and will carry all their rights with them into the future.

Scotland has different productivity needs, one of which relates to our attitude towards immigration. I would argue that we need more immigration, of the right type. Many blockages to enhancing that immigration can be found in the Government’s policies, and I wish to give hon. Members one example. A few years ago, for the tier 1 investor visa, the Government increased the sum that people would have to have to bring into the economy to invest in British business to a minimum of £2 million. I would be very happy for Scotland to attract people with a wee bit less than that to invest in Scottish business, because they could still do a tremendous amount of good.

As the Minister knows—we have discussed this in the past—another tier 1 visa is the entrepreneur visa. Residents and citizens of England or Scotland do not need bags of cash to become an entrepreneur. Indeed, some of our most wonderful entrepreneurs started with very little but an idea. What do we say to people who want to come here as entrepreneurs? At the moment we are saying, “You have to produce, in advance, a detailed business plan to be assessed.” It is doubtless to be assessed by the Home Office. They have to produce a business plan of how they will start a business in the UK, even though they are not in the UK. That strikes me as a wee problem to begin with. Secondly, they need a minimum of £50,000 in their back pocket to bring in with them to invest here, along with the business plan. We would never ask that of people who live here domestically. There are therefore things that could be done to sort out a number of the supply-side blockages that prevent us from attracting some of the investors and entrepreneurs who could do so much to help to build capacity and improve productivity in our society in the longer run.

Finally I wish to touch on skills, which has also been mentioned. Many years ago—it was 1990 or 1991—in the early days of “competence-based qualifications”, we had a body called the National Council for Vocational Qualifications, which was based in London. The people there had seen me on a television programme, so they called me to ask whether I would come down to give it some advice. Because they waved a cheque in front of me, and being a Scotsman, I readily agreed. They said to me, “We have a problem with competence-based assessment. We are unsure that it is actually delivering and accrediting people for their competence.” I did a piece of work that they subsequently published, which I have never seen refuted, in which I said that the method of competence-based assessment operating in the UK would generate a vast number of false positives—that is, a large number of people who receive qualifications but are not actually competent. That might be a contributing factor to the fact there is no evidence at all that those who come into the labour market with competence-based qualifications are doing anything to enhance productivity in our society. There is therefore a long way to go, but it has been a privilege to take part in the debate.

--- Later in debate ---

[Michelle Thomson]

I am aware of that, and I have had conversations with the Minister, Macquarie and the Green Investment Bank. The fundamental concern is that, potentially, Scotland risks losing an asset in terms of the headquarters in Edinburgh. Despite the assurances of the preferred bidder—let us call it Macquarie—I will be watching this matter very carefully, because there is a risk that we will lose head office functions and the board. Going back to my hon. Friend’s point, it is building an infrastructure that enables productivity and these kind of things to succeed. If we put in public capital investment and we then do not get the value from it, that seems to me to be short-sighted and misguided. Equally, without the firm commitment to maintaining jobs in Scotland, all the productivity plans and industrial strategies in the world will not address the regional disparities that we see in Scotland, especially if we promptly roll away all these things.

On carbon capture and storage, we have spent £100 million on two competitions to try to kick start this new technology. We heard yesterday on a BEIS Committee day trip to Edinburgh that that is very difficult, and I accept that. As my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) commented, we must be prepared to take risks to drive things forward for future gain. We accept that £100 million has been spent, but if we do not press ahead with some of these proposed projects, our country could once again lose its competitive advantage, and we cannot rule that out and forget about it.

I am most concerned by some of the narrow-minded views that have been exhibited in some of the debates around Brexit. They have a pervasive narrative that sounds isolationist and deeply disappointing when it comes to the wealth of opportunities of renewable energy. For example, a new interconnector between Scotland and Norway will soon allow the transfer of wind power and hydro power between the two nations, allowing them both to cut their emissions. This is not the time for retrenching and retreating. Construction has also started on a new 1 GW interconnector to France, further demonstrating our inter-dependence with our European neighbours.

Let me move away from energy and quickly dwell on some of the other issues that have been most affected by Brexit in the productivity plan. The first is the issue of international students. In the BEIS report on the productivity plan we said:

“We recommend the Government does not allow migration pressures to influence student or post-study visa decisions. It is illogical to educate foreign students to one of the highest standards in the world only for them to leave before they have had an opportunity to contribute to the UK economy.”

I have a story from my constituency of Edinburgh West. A remarkable young man, Mr Olubenga Ibikunle, won a substantial sum of money to do a PhD in civil and coastal engineering. As soon as he completed his course, he was turfed out. The level of his ground-breaking research, commitment and dedication to self-improvement means that he is exactly the sort of person that we would like to keep in Scotland.

The Prime Minister refused to consider removing students from net migration targets when she was in front of the Liaison Committee. I hope that she will reconsider her position, because international student numbers are already beginning to fall as evidenced by the latest immigration statistics. We cannot allow our position as a world leader for international students to be eroded by a dogmatic fixation on an arbitrary target of tens of thousands of migrants.

[Kirsty Blackman]

Obviously, Scotland’s higher education sector is a huge success story and does fabulous work. The Smith Commission explicitly mentioned that we should be looking at the possibility of a post-study work visa in future for Scotland. The UK Government have announced that they might consider that for some universities in the south of England, but that does not help universities in my constituency, or in the constituency of my hon. Friend.

[Michelle Thomson]

I absolutely agree with my hon. Friend. Part of the problem could be solved by devolving those powers to Scotland so that we can protect our own higher education sector.

We have also heard this month from the chief executive of Innovate Finance, Lawrence Wintermeyer, who told the BBC that

“Brexit has had a chilling impact on investment.”

Investment is vital to industrial strategy and productivity. Wintermeyer backed up his statement with figures that show venture capital investment in FinTech firms, which is vital for my city of Edinburgh, has dropped in the UK from £970 million in 2015 to £632 million in 2016. In objective 12 of the productivity plan, the Government used Innovate Finance’s investment figures as a measure of success.

Finally, the productivity plan wanted to

“help deliver a Europe that is more dynamic and outward focused...by accelerating the integration of the single market, completing trade agreements, and improving the quality of regulation.”

Industrial Strategy

Kirsty Blackman Excerpts

Thursday 20th October 2016 Commons Chamber

[Hannah Bardell]

If only it were as simple as that; the arrangement might be somewhat more complex.

The steel sector in England and Wales has been crying out for support, yet the Government were flat-footed in their response. In contrast, the SNP-led Scottish Government worked tirelessly to find a new operator for the Dalzell and Clydebridge plants. Our First Minister said she would leave no stone unturned and that is exactly what she, her Government and the Scottish steel taskforce did.

What next for industrial strategy? We are all wondering and waiting with bated breath. When the Prime Minister created the new Department for Business, Energy and Industrial Strategy she brought together two of the most significant Government Departments. It is good to see a sharper focus on industrial strategy, even if only in name. As we all know, this Government are expert in meaningless rebranding. Of course, there are two areas missing from the departmental name—innovation and skills. The Minister touched on those aspects and it is vital that we continue to focus on them.

We see as key to a successful strategy sustainable and inclusive growth which closes the gender gap and ensures that women and people of all backgrounds across our society are welcomed and included in our workforce. We need to be seriously more ambitious about a diverse workforce. In March this year the Equality and Human Rights Commission published a damning report which said that women were being held back by the old boys’ network. It stated, as the BBC reported, that

“nearly a third of the UK’s biggest companies largely rely on personal networks to identify new board members”,

and that

“most roles are not advertised”.

An EHRC commissioner was quoted as saying:

“‘Our top boards still remain blatantly male and white’”.

The study, which looked at appointment practices in the UK’s largest 350 firms, which make up the FTSE 100 and FTSE 250, found that more than 60% had not met a voluntary target of 25% female board members.

[Kirsty Blackman (Aberdeen North) (SNP)]

On that point, does my hon. Friend agree that the studies that came out recently about the motherhood penalty are particularly concerning, and something the Government need to tackle as soon as possible?

[Hannah Bardell]

I absolutely agree with my hon. Friend. These issues transcend party politics, and I know the Conservatives are doing their best, but, unfortunately, it is just not good enough, because in 2012-13 and 2013-14—the period of the study—fewer than half of the companies increased their female board representation. The Equality and Human Rights Commission said the problem was particularly acute with executive roles, where nearly three quarters of FTSE 100 companies, and 90% of FTSE 250 companies, had no female executives at all on their boards during the time covered by the study. Despite the fact that there are no longer any all-male boards in the UK’s FTSE 100 companies, the Equality and Human Rights Commission said very clearly that the “headline progress” of Britain’s biggest companies was “masking the reality”. Closing the gender pay gap, at which Scotland is already outperforming the UK, should also be a key priority.

Skills and innovation must be at the heart of the UK Government’s approach to industrial strategy. A statement released by the Prime Minister on 18 July outlined that apprenticeships and skills will now be under the jurisdiction of the Department for Education. The new Department for Business, Energy and Industrial Strategy deals with business, industrial strategy, science, innovation, energy and climate change. I and others fear that removing apprenticeships and skills from matters of industrial strategy as part of that shift may lead the Government to lose focus on the skills agenda. We look for certainty that that will not happen.

We have seen a strong focus on those areas in Scotland as a result of the Scottish Government’s labour market strategy, which will provide up to half a million pounds to support the fair work convention; double the number of accredited living wage employers from 500 to 1,000 by next autumn; and provide £200,000 to Business in the Community. The strategy also encourages innovative ideas about how to bring business and Government together to form a fairer, more inclusive society.

On the subject of employee participation in industry, I welcome the remarks the Prime Minister made when launching her campaign to be Conservative party leader about putting employees on company boards. I hope she honours that commitment. I am a big supporter of employee contributions to company decisions, and particularly of co-operatives. Having spoken previously about the benefits of co-operatives not just to their businesses but to the engagement and success of employees themselves, I hope the Minister intends to follow through on that promise. Will he also look specifically at the apprenticeship levy and its application to co-operative companies? I have spoken to a number of companies, including companies such as John Lewis, that are concerned they are being treated unfairly under the apprenticeship levy.

At this early stage, while the strategy is still being formed, let us remember what truly drives a fair and productive industry: investing in a diverse, skilled workforce, from apprenticeship to pension; working together with business, local and international; and encouraging innovation from the bottom of the workforce to the top executives. The Government need to get a grip.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

I have spent a lot of the past two days in the Chamber, and it has been pretty instructive. Yesterday I learned the word “contemporaneous” and today the word “oligopoly”, which I had not heard before, so I feel as though I am learning things. The thing that I have not yet learned is what an industrial strategy is, because everybody in the entire Chamber has come up with a different idea of what they think it is and what it should be. I am not going to break with that; I am going to say what I think an industrial strategy should be.

As Members would expect me to say, oil and gas should be top, front and centre of the UK Government’s industrial strategy. It is, without question, the most important industry in the UK. Over the five years from 2008 to 2013, the average annual tax revenue from the oil and gas industry was £9.4 billion. That figure represents direct production taxes; it does not include all of the economic benefits to wider economic areas that the UK Government have also seen.

The industry is not having the best of times: the oil price is low and we are struggling and losing jobs. Things are not all that much fun in Aberdeen and the north-east, which is why it is even more important that this Government commit to ensuring that the oil and gas industry is right up there in the industrial strategy. The oil and gas industry has a bright future, but we need to ensure that Members in this place in particular understand what is happening in the industry and take positive action to secure its long-term future.

Aberdeen city, Aberdeenshire and, indeed, the UK as a whole are the absolute gold standard for the oil industry across the world. If a technology is being used on the UK continental shelf, companies know that it will be accepted anywhere across the world and they will say, “That’s brilliant. It’s the gold standard and we should do that.” The Government need to ensure that that continues.

There is no doubt that we will be taking oil out of the North sea for a long time yet. People can have a discussion about exactly how many billion barrels of oil are left, but everybody agrees that there are billions left. We need to ensure that we maximise the amount of oil that we extract from the North sea, and that our supply chain companies are supported to continue to do the brilliant work that they do on the UKCS and in exporting. It is an export industry. In 2013, Aberdeen had the fourth highest number of patents per head of population of any city in the UK. It was not quite the highest, but we have done an amazing amount of innovation in our city, and we are acknowledged to be a centre of excellence. It is impossible to overstate how valuable that has been to the UK Treasury. We have paid taxes to it for years and we will continue to do so.

[Patrick Grady (Glasgow North) (SNP)]

Until we are independent.

[Kirsty Blackman]

Absolutely. We need to ensure that we get UK Government support now and that companies are incentivised to invest. If they stop investing, the industry will not have a bright future. Some companies are struggling with cash-flow issues. The UK Government need to inspire confidence in the industry by ensuring that private equity people invest and that banks continue to do so. The industrial strategy must express the UK Government’s confidence in the future of the oil and gas industry. That is really important for Aberdeen, the north-east and the wider UK. So many jobs are indirectly linked to oil and gas, and we need to keep them.

I want to address a couple of the things that were mentioned earlier. On apprenticeships and the young work force, Aberdeen has an initiative called “Developing the Young Workforce North East”, which is a brilliant piece of work linking industry with schools. It resulted from Ian Wood’s 2014 report, “Developing the Young Workforce”, which was presented to the Scottish Government. We are making really positive moves and it is being widely welcomed and recognised. The UK Government should consider incorporating it into the industrial strategy.

I thank the Minister for listening and ask him please to make sure that the oil and gas industry is at the top of the industrial strategy.