Finance Bill

Debate between Mike Weir and Stewart Hosie

Wednesday 2nd July 2014 Commons Chamber

[Mr Weir]

My hon. Friend makes a very good point. Given that the Government have so recently and so enthusiastically embraced the Wood review, does he not think that it is an odd measure to introduce, as it will hit the maximisation of the recovery of our oil and gas reserves?

[Stewart Hosie]

That is an extremely good point. It is not just the International Association of Drilling Contractors that has welcomed the Government’s approach to accepting the full recommendations of the Wood review, but the overall trade body, Oil and Gas UK. Indeed, the Scottish National party thinks that it is a good thing, too. Both the industry and the SNP have also welcomed some of the field allowances that the Government were forced to introduce, particularly the ultra-high-temperature, high-pressure field allowance for mixed gas and oil fields. That kind of measure is incredibly sensible, but as my hon. Friend says, and as Oil and Gas UK points out, there is huge disappointment that the Government are continuing with the bareboat charter measure. They believe that it is ill-conceived and should have been dropped in its entirety. The backdrop to its introduction is a period in which operating costs have increased sharply. Last year’s cost increases of more than 15% led to an all-time record high of almost £9 billion in costs. I understand that new developments in the North sea are facing similar cost pressures, so it is illogical to introduce this measure at this point, especially as drilling rigs and accommodation vessels alone are included in the scope of the legislation.

We are looking at a part of the sector where the return on capital is only 8% or 9%, and the cash break-even on a drilling rig or an accommodation platform is typically 15 years. These are large investments, with investors taking substantial long-term risks, and we cannot understand why the Government want to put that at risk at this particular point.

[Mr Weir]

My hon. Friend makes a very good point. Does he also recognise that there is a shortage of rigs? By applying this measure specifically to drilling rigs, we are adding another disincentive for investment in the North sea that would maximise our oil and gas recovery.

[Stewart Hosie]

Indeed; I recognise all those points, and the pressures that are being applied to finite and very mobile resources, such as rigs and accommodation vessels, but I will come back to some of that later.

This measure not only penalises the drilling and accommodation vessel sector, but potentially impacts on the entire £35 billion upstream oil and gas supply chain. Derek Henderson from Deloitte UK said:

“While it doesn’t affect operators directly, many expect that the costs will be passed on to them and could discourage drilling.”

That would impact on the entire support and supply chain that is dependent on drilling activities.

Fuel Costs

Debate between Mike Weir and Stewart Hosie

Monday 7th February 2011 Commons Chamber

[Mr Mike Weir (Angus) (SNP)]

I very much agree with my hon. Friend. However, is not the position even worse, given that people in many rural areas and constituencies such as mine have no alternative but to move goods by road? There is simply no other way of getting goods to our towns, which are not served, apart from the coast, by the railway line.

[Stewart Hosie]

My hon. Friend is absolutely right. In many parts of his constituency, goods must be moved by road. The days of rail terminals in Brechin or Forfar that would take freight are sadly long gone.

[Mr Weir]

I also point out that the idea that the goods can be moved by rail is flawed in any event because although, as my hon. Friend knows, a rail line goes through the coastal part of my constituency, there is no longer a goods terminal in Arbroath or Montrose, the two stations there. There is no alternative to road transport.

[Stewart Hosie]

My hon. Friend is right, and I am sure that hon. Members throughout the House will have examples of infrastructure that used to exist, but is no longer there, with the result that 100% dependence on roads is now the case.

--- Later in debate ---

[Stewart Hosie]

My hon. Friend makes his point in his own inimitable way. I have to say that I cannot remember a time when the House was ever full of Liberal Democrats, but I think I know what he means.

I want to raise three specific issues in relation to the vital importance of the rural fuel derogation. In urban, built-up areas, 95% of people live within 13 minutes of a bus stop with a service more than once an hour. That compares with less than half of residents in villages and hamlets. Before any Member gets up to make a point about that, let me say that I know that there are parts of every constituency in which there are no bus stops, no bus services and no choice but to use a car.

[Mr Weir]

I am following with interest what my hon. Friend is saying. Did he read the report in The Guardian this morning which suggested that many English local authorities were slashing their subsidies on bus routes, which will lead to the closure of those routes in many rural areas? Does he agree that that would make the situation very much worse in rural areas of England as well?

[Stewart Hosie]

I have not seen that report, but those developments will clearly make things difficult in areas that depend on those subsidies. I hope, in the light of the price of fuel, that local authorities and the Government will try to ensure that as many bus services as possible, particularly lifeline services, are maintained. The key point about living in remote and rural areas is that there are fewer alternatives available, and in some cases, no alternatives at all. The use of a car in those areas is vital.

Scotland Bill

Debate between Mike Weir and Stewart Hosie

Thursday 27th January 2011 Commons Chamber

[Mr Weir]

The right hon. Gentleman has just made an outrageous attack on the subject of rail. He should ask the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) about the reopening of Laurencekirk station, for example. What about the Bathgate rail line? What about the Alloa-Stirling line stations? All those things happened under the SNP Government. What he said is simply incorrect.

[Stewart Hosie]

Withdraw! You said “no new stations”. Withdraw now!

Finance Bill

Debate between Mike Weir and Stewart Hosie

Thursday 15th July 2010 Commons Chamber

[Stewart Hosie]

I do not intend to delay the Committee. By and large, I am very supportive of clause 6. The two-year extension for people reaching the age of 75 in order to allow them to buy an annuity when it is most effective for them is a good thing to do. The clause seems to be pretty well drafted and the description of it is extremely good. I am pleased about the protection in paragraph 8(2) of schedule 3, which provides that if a member dies before a year has passed since their 75th birthday, and at the date of death there are still funds held for the purposes of the arrangement that have not been designated as available to pay an unsecured pension, not paid as a lump sum, and not applied towards the provision of a scheme pension or a dependent’s scheme pension, those funds are treated as though they had been designated as available for the payment of an unsecured pension and will then be taxed on death at a rate of only 35%. That makes sense.

However, I am aware, through a constituent of my hon. Friend the Member for Angus (Mr Weir), that there are a small number of individuals who have already reached 75, or will hit 75 before 22 June, and who did not buy an annuity because it was not worth it or not effective. I want to describe the position of that person and then see what help the Minister might be able to provide, or hear her explanation of how the clause might assist.

As the rates for annuities were very low, this gentleman did not take up one on reaching 75 in 2007. Instead, he chose a scheme pension that allowed him, subject to pension regulation supervision—a specialist firm did that for him—to continue to manage his pension fund for a period of 10 years and take the actuarially calculated levels of income from it. That was very sensible and prudent. However, the downside is that on his death, if any of that fund is left, it will be subject to inheritance tax at a rate of 80% before it passes to a family member of his choice.

[Mr Mike Weir (Angus) (SNP)]

Indeed it was a constituent of mine who brought the matter to our attention. Does my hon. Friend think that a way round might have been for the clause to allow anyone to take the extra two years if they were to reach age 75 or were already in that position? I cannot imagine that the numbers affected would be huge, but it would have got round this particular problem.