Badger Cull

Debate between Lord Soames of Fletching and Jim Shannon

Wednesday 5th June 2013 Commons Chamber

[Nicholas Soames (Mid Sussex) (Con)]

Does the hon. Gentleman agree that the Government ultimately have a duty of care to the farmers and to their stock?

[Jim Shannon]

I do accept that; it is a very key issue for us all. That is why I am speaking about the importance of looking after the farmers’ stock but also their families as well. The common key factor for all of us is the presence of badgers, which, if they carry TB, need to be controlled because the cost of farmers’ annual loss of cattle has topped £100 million. The loss of cattle has been tremendous on the UK mainland, but over in Northern Ireland as well. The right hon. Gentleman made an important point about the health of the animals, but there is also an impact on the families. Some farmers who have come to me over the years have had to have their whole herd destroyed because of TB. The impact on their financial, emotional and physical welfare is tremendous, and we cannot ignore that. Whenever we talk about the need to control badgers—not eradicate them—we must also put into the equation the impact on the farmers.

In a previous life, before I came here, I was a Member of the Northern Ireland Assembly and a member of the Department of Agriculture and Rural Development Committee. About five years ago, we carried out an investigation and report into bovine TB in Northern Ireland. We spoke to the Department of Agriculture and Rural Development in Northern Ireland, the Department for Environment, Food and Rural Affairs and representatives from the Republic of Ireland. We also spoke to bodies from across the world, including Australia and New Zealand, which the Secretary of State mentioned in his introductory comments. My hon. Friend the Member for North Antrim (Ian Paisley), who cannot be here because he has constituency duties, chaired the Committee, on which we both served and which recommended controlling badgers. It is vital for that to be put on the record.

In the Republic of Ireland, badger control measures have resulted in a decrease of TB in cattle by almost a third, as has been mentioned. That is close to the Northern Ireland border. If the Republic can do it and it works, that is a prime example not far from the land mass of the British Isles.

In New Zealand, as the Secretary of State and others have mentioned, the most comprehensive control of badgers—not just through culling, but through other measures as well—has reduced the number of herds infected from 1,700 to 70, which is a dramatic decrease. Many methods can be used to achieve this.

Some raise the issue of scientific evidence, but such evidence exists in the Republic, New Zealand, Australia and many other countries across the world. It was clearly presented to the investigation undertaken by the Northern Ireland Assembly’s Committee for Agriculture and Rural Development in my previous job before I was elected here.

There has to be proactive control of badgers in heavily infected areas. That can reduce the level of TB in cattle. My constituents are very concerned about TB. Although there are incidences of TB in England and Wales, we want to see it eradicated in Northern Ireland as well. We want Northern Ireland and the Republic to be disease free. It will help us all, given the multi-million-pound industry: agri-food is worth £4 billion to Northern Ireland’s economy. It is important to us.

North Sea Oil and Gas

Debate between Lord Soames of Fletching and Jim Shannon

Wednesday 25th January 2012 Commons Chamber

[Nicholas Soames (Mid Sussex) (Con)]

Thank you, Mr Speaker, for allowing this short Adjournment debate on North sea oil and gas taxation. It is a very serious and important matter. It is not one with which I have previously been concerned, but I think the Economic Secretary should know that I was invited to a briefing the other day, given by the oil industry, on the impact of taxation changes in the North sea and it excited my interest. I had always been aware of what a very substantial business it was but had no idea of how very important it is to the United Kingdom economy on the scale of employment and other matters, and I thought it right to bring the matter to the attention of the House. I am therefore, as I said, very grateful to you, Sir, for allowing the debate.

The United Kingdom is indeed fortunate to be endowed with significant resources of oil and gas. Over the years, hundreds of millions of pounds of hard-earned, always risky and sometimes very courageous investment and endeavour have allowed the nation to realise these resources, and for the British people to enjoy the substantial benefits of employment, sophisticated and high-level skills at all levels of the skill chain, tax revenues and balance of payments, and to develop a leading position in the global oil and gas supply chain—all of which has stood this country in good stead down the recent years.

Figures for 2011 show that around £16 billion was spent by the oil and gas industry on exploration, development and operations. This included £8 billion in new capital investment, an increase of 25% over 2010. I know that the Economic Secretary will agree that in anyone’s terms these are massive numbers, and thus once again make the oil and gas sector the single largest investor of all the industrial sectors in the United Kingdom.

The positive benefits of this remarkable industry are not confined to Scotland. They extend throughout the United Kingdom, supporting employment for more than 400,000 people, and those jobs are widely distributed throughout the whole country. Unsurprisingly, of course, a substantial proportion—45% in fact—are in Scotland, but that means that 55% of the jobs, which is the majority, directly benefit employment throughout the rest of the UK.

The taxes forecast to be raised from the industry in 2011-12 include some £6 billion in income tax, national insurance contributions and corporation tax paid by the supply chain companies, with an additional £11 billion from taxes on production itself. That amounts to 25% of all the corporation tax received by the Exchequer. The production of indigenous oil and gas improved the balance of payments by £35 billion in 2011, thus halving the trade deficit, and the supply chain added another £5 billion to £6 billion with exports of oilfield goods and services. Incidentally, that aspect of the industry is doing extremely well here and overseas, and it is flying the flag for Britain effectively.

At a time when Britain above all else needs growth and the energetic encouragement of inward investment, I regret to have to say to the Economic Secretary that all is not well in this crucial sector that is so important to our economy. Production declined by 17% from 2010 to 2011, which was the biggest fall seen by the industry in the past 40 years. As a result, future tax receipts will decrease rapidly without new investment. Receipts for 2011-12 have already suffered a £2.3 billion downgrade due to lower than expected production.

[Jim Shannon (Strangford) (DUP)]

I understand that the reduction in North sea oil production is due to many factors, but one of them is maintenance. There have been many maintenance programmes over the past 12 months. Is the fact that production is down, because maintenance is up, one reason why taxation is down?

[Nicholas Soames]

The hon. Gentleman raises an important point. I am sure that it is germane, but the decrease that I am highlighting is, in my judgment, due to the taxation regime.

The United Kingdom already imports around 10% of its oil and almost 40% of its gas, and such imports will increase rapidly without the benefit of new investment. The Government’s decision in March 2011 to increase tax rates on the industry, which increased the top tax rate to 81% and the corporation tax rate to 62%, is inevitably and regrettably having a chilling effect on the leading indicators of investment.

While total capital investment this year has increased to about £8 billion from £6 billion in 2010, that was largely due to development momentum from previous years. Worryingly, just nine new fields accounted for 40% of the total capital invested and all the development projects were well advanced prior to the tax increase.

The signs of lower investment in the future are already apparent. Indeed, my hon. Friend the Economic Secretary will see from the Department of Energy and Climate Change’s latest energy trends analysis a significant impact on drilling activity, with exploration wells down 50% in 2011.

It is from that exploration drilling that the future large capital investments will flow. The March 2011 tax increase reduced the value of future projects by 25% overnight. My hon. Friend knows that the future development of the North sea depends in large part on clever, technical solutions at the very forefront of what is manageable for marginally economic fields, but the increase in the tax rate has rendered many of those future fields uneconomic to develop. That serious matter for the country must be addressed.

I gather from the estimates of Oil & Gas UK, the industry’s trade body, that investment of at least £12 billion in more than 1 billion barrels of oil and gas resource will not occur without some stimulus. That is 60,000 jobs that will not be created and a loss of a benefit of £15 billion to £20 billion to the budget deficit as a result of the tax increase.