North Sea Oil and Gas Producers: Investment Allowances

Lindsay Hoyle Excerpts

Monday 6th June 2022 Commons Chamber

[Lucy Frazer]

My right hon. Friend makes an important point, and that is one reason why we set out the Prime Minister’s energy security strategy recently. My right hon. Friend also makes the important point that our package is more generous to those who are vulnerable. Under our package, the lowest-income households will receive double what Labour was proposing—£1,200, compared with £600. Hard-working families will receive £550 under our proposal compared with the £200 that they would have received under Labour’s proposal.

[Mr Speaker]

I call the Scottish National party spokesperson, Peter Grant.

[Peter Grant (Glenrothes) (SNP)]

I welcome the acknowledgement from the Government yet again of the vast wealth that currently lies under the waters of Scotland. Oddly enough, in 2014, it had run out, but there still seems to be an awful lot of wealth to be got from the North sea just now.

Will the Minister explain why the windfall tax was only ever applied to the energy producers? Why was it not applied to other companies that, just through good luck, became mega-rich almost overnight? I am talking about the big multinational tech firms, online retailers and the importers of shoddy, useless personal protective equipment that cost the public billions of pounds. Why are they not facing a windfall tax, at the very least?

If an investment allowance is appropriate, why is it not being restricted to investments in technologies that will reduce the carbon footprint of the North sea? Why is it not being restricted to helping to transform Scotland’s and the UK’s oil production away from carbon-based fuels to other methods? Why is it being used effectively to give an incentive to continue the exploitation of our carbon resources?

The Minister said that the Government expect to get £5 billion from the windfall tax. What would the amount have been if they had not applied the investment allowance? How much are the oil companies saving as a result? The National Audit Office and the Public Accounts Committee have expressed concerns about the lack of reliable detail to show that tax reliefs have had the result intended. How will the Government know that they have? What steps will they take to prevent fraudulent claims?

--- Later in debate ---

[Mr Speaker]

Hang on a minute. I think I will decide. Carry on, Clive. Come on! You look like a person who never heckles himself.

[Clive Efford (Eltham) (Lab)]

I am the soul of discretion, Mr Speaker. I feel wounded—deeply wounded!

As I was saying, the Government have had to be dragged kicking and screaming to accept a policy that they previously described as unnecessary and undeliverable. However, I fail to see how it is an efficient use of taxpayers’ money, given that it will incentivise the companies to offset the tax. Would it not have been better to invest the money in insulating homes and ensuring that people’s bills were brought down on a more permanent basis? Would that not have been a much more effective policy?