Offshore Petroleum Licensing Bill

Neale Hanvey Excerpts

Committee of the whole House
Tuesday 20th February 2024 Commons Chamber

[Caroline Lucas]

The hon. Member makes a characteristically wise and useful point. That figure of 67% is startling and deeply worrying.

Thirdly, I support amendments 22 and 24, tabled by the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle)—I hope I can call him an hon. Friend—setting out a home energy efficiency test. As we all know by now, that is the most effective way of delivering real energy security for households that are struggling so much to pay their bills.

Fourthly, I support amendments 23 and 25, again tabled by the hon. Member for Brighton, Kemptown, requiring the UK to have made arrangements to withdraw from the energy charter treaty before new licences can be awarded. It is totally unacceptable that the Government are mandating annual licensing rounds without having withdrawn from a treaty that allows companies to sue for lost profits. The Government previously committed to reviewing the UK’s membership of the ECT, including consideration of withdrawal from the treaty if proposed modernisation reforms were not agreed at November’s energy charter conference. As I understand it, those proposals were not even discussed at the conference, so may I ask the Minister, when he sums up, to say what is holding up their withdrawing from that treaty, given that they acknowledge that

“there is now no clear route for modernisation to progress.”

Finally, last week it was reported that British Gas profits soared tenfold last year following the changes Ofgem had made to the price cap. In the same week Government figures showed that almost 9 million households—well over a third—spent more than 10% of their income after housing costs on domestic energy bills, and it was also revealed that not a single new proposal for public onshore wind was made in England last year despite the Government’s policy changes. Those three examples are all from just one single week; this week and next week there will be more, and together they demonstrate the utter failure of this Government to make decisions that would benefit people and planet and to unleash our abundant renewables, massively upscale energy efficiency installations and work to get us off expensive and volatile gas altogether. Instead, each week we see yet more evidence that this tired and divisive Government are prioritising increasingly desperate attempts to save their own skin over measures that would improve all our lives by ensuring that everyone has a warm and comfortable home to live in, communities have been supported to make the most of the green transition and our one precious and infinitely fragile planet is finally restored.

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)]

I rise to speak to amendment 15 tabled on behalf of the Alba party.

The choice we face is not between shutting down North sea oil and gas and carrying on regardless but how to make its continued exploitation compatible with the environmental challenges and to acknowledge the role that oil can and will play in a sustainable future for the planet. I do not disagree with the four broad objectives of the UK Government proposals, and amendment 15 would strengthen those ambitions on energy independence, safeguarding domestic energy supplies, energy security, reducing higher emission imports, protecting domestic oil and gas industry jobs and working towards our net zero target in a pragmatic, proportionate and realistic way. But I am not convinced that the Bill—and certainly Government policy as it is currently being delivered—will meet those ambitions.

If the provisions are to be truly applied to all parts of the UK as the Government state, then Scotland, the source of oil and gas and whose waters contain the lion’s share of carbon storage sites, cannot be left out of the action. Depleting Scotland’s industrial capacity has increasingly been the direction of travel from this Government in recent years and this strategy will not strengthen the Union as they claim they wish to do. They should be aware that eroding our industry and jobs will further drive up support for independence. They should also be aware that 74% of the Scottish population support domestic oil and gas exploitation and 54% of the Scottish public support new licences being granted for that purpose. Our amendment is without question helpful to all those ambitions, and indeed others, and should be supported by all sides. Its proposals are pragmatic, realistic, responsible and, most importantly, fair.

The infrastructure in Scotland is already in place to meet these objectives. In the north-east we have St Fergus and the Acorn project, in my Kirkcaldy and Cowdenbeath constituency we have at Mossmoran one of Europe’s four cracker plants alongside an LNG plant operated by Exxon and Shell, and at Grangemouth we have one of the UK’s current oil refineries. I reference the points made by the hon. Member for Banff and Buchan (David Duguid) with regard to the environmental impact of exporting oil and gas abroad, which should dissuade the Government from even considering closing the refinery at Grangemouth. All those operations have interconnecting pipelines that are bi-directional, so the infrastructure is all there and it is completely feasible to transport carbon from Grangemouth and Mossmorran north to St Fergus for offshore storage.

From my discussions with the operators in my constituency, I know their carbon reduction teams have been willing and ready to look at the opportunities since I was elected. Exxon has recently made a multi-million-pound investment in Mossmorran, securing its future. That is particularly relevant to some earlier comments on amendment 12 with regard to flaring. That was a persistent problem at Mossmorran where we had an elevated flare that caused light, noise, vibration and pollution, not to mention the environmental impact of the flaring. That investment has reduced flaring significantly, and all plants should seriously consider that to reduce the impact on the communities and the environment around them. That investment from Exxon is well in excess of the modest amount that is required to keep Grangemouth going; it is a multimillion-pound investment and significantly more than what is required to keep the refinery operating at Grangemouth.

--- Later in debate ---

[David Duguid]

I am reluctant to intervene, because the hon. Gentleman is making some interesting points, many of which I agree with, but I have a burning question. He makes a point about the amount of storage we have around the UK, which is equivalent to more than we have produced out of the North sea, and we must take advantage of that. In his amendment, he refers to licensing conditions for specific fields been tied to having a net zero effect through carbon capture and storage. He has already explained that carbon capture and storage is typically taken from flue gas from the likes of Mossmorran in his constituency, or Peterhead power station in mine, so how does he make that link between offshore exploration licences and the resultant carbon capture, which will be way down the production line?

[Neale Hanvey]

The hon. Gentleman makes an important point. Many of the operators are serious about exploiting the resource not just in Scottish or UK waters but in other countries, and other countries can leverage those types of concessions when they grant licences. The UK Government can therefore make no serious argument that they cannot do that.

One of the refrains we heard during the Brexit debate was about the reclaiming of national sovereignty. It was one of the reasons for Brexit. One of the most limiting factors for job creation in renewables was that contracts for difference and European rules prevented conditionality from being applied to the granting of oil, renewables and other licences. If the UK now has that sovereignty, why not use it to ensure that the communities that are part of the supply line get some form of benefit out of the process? One of the most obvious benefits is to reduce at source, through a levy on any licence, the carbon footprint of the exploitation of that resource. That would seem a reasonable expectation, and certainly we feel it is essential in granting any future licences.

Amendment 15 would create a requirement for a specific field commitment of a net zero carbon footprint, as we have just discussed. That would be achieved mainly through connection to the carbon capture network. The prize is to be a world leader in research and development, with an economy built on renewable energy, of which Scotland has an absolute abundance. The UK Government’s dither and delay on Acorn has gone on for far too long. It is time for Scots Members on the Government Benches and their Government colleagues to back a secure future for Scotland’s North sea oil and gas sector and to back this amendment.

Making Britain a Clean Energy Superpower

Neale Hanvey Excerpts

Thursday 9th November 2023 Commons Chamber

[Dave Doogan]

I thank the hon. Gentleman for his contribution. I think that we actually agree: the gas that we extract from the North sea is less environmentally damaging than that which would be shipped in from around the world. The point that I am making, and the point that many other observers are making in this space, is that we should be running as far away as we can from yesterday’s hydrocarbon technologies and throwing everything that we have, including the kitchen sink, at getting into a renewable space, protecting bills and saving the environment from further damage. That is where we should be, so mithering over percentages here or there is not the way for us to proceed.

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)]

The hon. Gentleman is making some really important points, many of which are to be applauded. One significant point is how do we make that transition away from hydrocarbons and deplete the carbon that is already being generated and stored in offshore carbon banks? Does he agree that one way to do that is to introduce a wellhead tax on all new oil and gas to fund carbon capture and storage offshore? Secondly, does he support the establishment of a publicly owned energy company in Scotland?

[Dave Doogan]

On the hon. Gentleman’s latter point, I say yes. On his initial point, we would not need to be overly sceptical to take a jaundiced view of the tax regime that operates in the oil and gas sector in the UK. Let me leave it at that.

The only way to achieve long-term energy security, which goes in some way to answering the hon. Gentleman’s question, is through renewable energy produced on and offshore in the North sea and all around these islands. Scotland’s future is at the heart of this green gold rush but we are, as usual in this so-called Union, held back by London doing to Scotland, never with, and talking at us but never for us.

Wind energy is demonstrably and by some margin the cheapest to produce of all the energy in the UK, but despite that, the UK Government managed in auction round 5 to offer a price for wind energy that was so low that not a single offshore wind producer could sign up to it. This is cack-handed arrogance from a Department that thought it knew better than industry—a Department that, rather than working in partnership with industry, deluded itself into thinking that it had the whip hand, that it held all the cards. In this, as with so much else, it was entirely wrong. It tried to call industry’s bluff, but the Westminster Government were forced to blink first—you could not make this up.

The interesting thing about that failure in auction round 5 is that when that generation capacity comes online—now it will come online I assume as a result of auction rounds 6, 7 and so on—the gap will still exist in the supply pipeline. We do not have the energy infrastructure to take that generation from where it is being generating and deliver it to industry and homes across Great Britain. That infrastructure is not there. The Government talk about how good they are on a global scale. They love to trumpet their record—this ridiculous debate heading “clean energy superpower” is specious nonsense—which betrays the fact that we cannot even deliver the energy that is being generated today. This Government are paying generators to switch their wind off, but the demand still exists, so where does this energy come from? Yes, gas. Every way that the consumer turns in this country, they are being let down and circumvented by this Government.

We could augment the grid and network infrastructure by properly supporting community energy ownership and generation. But let me be clear: there is £10 million for England only—perhaps the Minister could clarify whether that will be consequentialised for the devolved nations—which is not properly standing up for community generation. In Scotland, community-owned wind farms average £170,000 a year for community benefit payments per installed megawatt hour—an astonishing leverage of capital into communities, compared with £5,000 from standard community benefit payments.

Not only do communities fund those projects themselves —no public money is used in their construction—they solve the problems of the local community, including fuel poverty, improving home insulation and upgrading heating systems. Local communities know better than the UK Government what their priorities are, and are willing to fix them themselves. I would have thought that that was pretty consistent with Conservative ambitions—the hon. Member for Banff and Buchan (David Duguid) may want to intervene—of self-reliance and resilience, but apparently not.

Thankfully, the Scottish Government recognise the huge opportunity of community energy schemes to empower communities, solve those challenges, and reduce the need for vast infrastructure investment projects through the community and renewable energy scheme. In Scotland, the Government have provided more than £58 million. Contrast that with the £10 million from the English Government for England—it is not actually £10 million anyway, because £1 million is for administration; it is really only £9 million—and we can see which Administration are supporting community energy generation, and which are not.

Time and again, we hear from local community groups that there is no support for gaining connection to the grid, and that the Government are utterly apathetic regarding the benefits of community energy generation. Perhaps we can get an answer today on when the Government will launch the much-anticipated consultation on the barriers blocking growth in community energy generation, given their promise to do so back in September.

This debacle has needlessly set back wind production in auction round 5, and we need to see something very substantial in auction round 6. I assume that we will have a realistic strike price for offshore in auction round 6. I hope that it will be around 50% to 60% inflated over what was in auction round 5, in cognisance of supply chain constraints, construction price inflation, and the challenges of capital expenditure and attracting investor confidence in the UK, which of course has taken a real battering after the Prime Minister’s announcements to row back on climate emergency legislation.

--- Later in debate ---

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)]

There is not an awful lot to talk about in this King’s Speech. Certainly there is not a lot to encourage the people of England, Wales, Ireland or, indeed, Scotland. In fact, there is really nothing in the King’s Speech for Scotland other than more pain. Today’s debate is about making Britain a clean energy superpower. That sounds grand, but it will not help the people who are struggling to pay their energy bills, and what is the cost to Scotland? The Government’s North Sea Transition Authority is concerned only with the transition of Scotland’s wealth south into His Majesty’s Treasury.

In 2014, we were told that our oil was running out and that we needed the broad shoulders of the United Kingdom. Those broad shoulders were built on the poverty and deprivation of generations of Scots, and that is a price that we are still paying. We often hear the words—and we heard them today from the SNP spokesman, the hon. Member for Angus (Dave Doogan)—“energy-rich Scotland and fuel-poor Scots”. Let us take a look at that. There is no doubt that Scotland has vast energy wealth. According to the Office for Budget Responsibility, as of April 2023, the projected cumulative tax receipts from North sea oil and gas for the year 2022-23 was £11 billion. Throughout my lifetime, Scotland has bankrolled the UK Treasury and global corporations to the tune of billions and billions of pounds.

In 2019, oil and gas production in Scotland accounted for 82% of the total UK production. By 2030, Scotland will be sending south 124 billion kWh of energy—all for nothing. That is 12.5 times the amount of energy that Scotland requires. With 8.1% of the UK population, Scotland is responsible for almost a quarter of the UK’s green energy production, 85% of its hydro production, 82% of its oil and gas, 90% of its surface fresh water and 50% of the world’s tidal stream capacity. Despite that, we have fuel-poor Scots.

In 2019, a quarter of Scottish households were estimated to be living in fuel poverty. Speaking to Energy Action Scotland yesterday, I learned that, as of 31 October 2023, fuel poverty now sits at a disgraceful 34% in energy- rich Scotland. One in three households live in fuel poverty. That is why, in a Tory-made cost of living crisis, independence is the only urgent priority for the people of Scotland.

For some time this winter, Tory mismanagement will be a matter of life and death. None of this is hyperbole. We need only look at Norway, our direct comparator across the North sea. We know that the Norwegian sovereign wealth fund is equivalent to £1,175 billion— I repeat, £1,175 billion. The Scottish equivalent is zero. The UK equivalent is zero. We know that successive Labour and Conservative Governments hid the McCrone report from the people of Scotland and hid the truth along with it. Gavin McCrone spoke of an “embarrassment of riches”. He rightly predicted the riches that Norway currently enjoys, but that Scotland has been denied all along. In return, we are chided by Conservative and Labour Members as scroungers. The destruction of our economy and our communities has happened under Westminster’s rule, and still the robbery goes on.

In the past, Scotland enjoyed some crumbs from the table. When I was younger, there was employment in manufacturing and supply chains. Offshore, there were jobs. People were content with that, despite the robbery. I listen very carefully to UK Government Ministers when they talk about the great bounty of Britain’s energy, which is truly Scotland’s energy. There is no surprise from me there, but I also listened to the leader of the former party of Scottish independence, the hon. Member for Aberdeen South (Stephen Flynn). All he could muster was a plea for more devolution; he did not mention independence once. That is not all that his party has abandoned. The hon. Member for Moray (Douglas Ross) was right that it has abandoned North sea oil and gas. That is unthinkable for any Scottish MP, let alone one from Aberdeen, north or south.

Scotland faces challenges on two distinct fronts: first, our southerly Government in London and their well-established rapacious greed; and secondly, a Scottish Government who have abandoned North sea oil and gas, sold off ScotWind for a song, capitulated to Tory tax havens on the Forth and Moray estuaries, and driven the case for independence up a cul-de-sac in the UK Supreme Court. They have parked the vehicle of independence and walked away from the aspirations of the people who want to live in a normal independent country. I plead with SNP Members to get back on track.

The Minister is free to correct me, but there is nothing in the King’s Speech for my Kirkcaldy and Cowdenbeath constituents, or for the people of Scotland. Scotland needs something more than this. We need more than a party that comes to London waiting for independence to fall into its lap. It is time for Alba to lead Scotland.

[Kate Osborne (Jarrow) (Lab)]

People are sitting at home unable to buy food or pay their energy bills, while watching the King’s Speech in its all pomp and ceremony —so much money spent for the King’s Speech to be so vacuous and void of policies, with barely any Bills, announcements that have already been shelved, and no answers for the majority of the country. The speech was a wasted opportunity. The Government have no new ideas, no plans to improve the country, and nothing for small businesses, or for the majority of people in the UK. The Government have made no attempt to help the 14 million people living in poverty, no attempt to tackle rising unemployment, and no attempt to fix our broken benefits system.

The empty promises will not tackle the housing crisis, the NHS crisis or the cost of living crisis, or lift any of the 6,000 hungry kids in my constituency of Jarrow out of poverty. It is not right that in one of the richest countries in the world families are having to turn to food banks. The Trussell Trust has delivered 1.5 million food parcels in just six months. We have a Government who have given up on governing. They have wasted the last 18 months in Parliament. On 100 days, the Government finished early, cancelling planned legislation and votes as they made U-turns and broke promise after promise. In 2022, they announced 29 Bills, more than a third of which were abandoned or not introduced. In this King’s Speech, they announced just 21. We have to wonder how many of those will ever see the light of day.

The Government’s failed economic policies have resulted in £2.6 trillion of public debt—the highest debt the country has ever faced, alongside the highest rate of inflation in 41 years. Decades of inaction have left us with runaway rents, rising evictions and record levels of homelessness, and Ministers are blaming everyone but themselves. Despite the worst energy bill crisis in a generation, they admit that their lauded flagship plans will not cut energy bills by a single penny. There was nothing in the King’s Speech that will help people to pay their bills and stay warm this winter, no help for pensioners and children in cold homes, and no help for the record numbers of people currently in debt on their energy. With more than 75% of people saying that they are very concerned or somewhat concerned about affording energy bills this winter, we need a Labour Government that will bring down energy bills once and for all and make Britain energy-independent.

We have a morally compromised Government attempting to gaslight the country. Their sleaze, cronyism and failure to deliver on promises have left the country in a mess, degraded Parliament and eroded trust in politicians. Their new oil and gas plans will not deliver energy security. Their housing plans will not tackle the housing crisis, help renters or ban no-fault evictions. There is no sign of local housing targets or of the reform needed to our planning system.

The Government say that inflation has finally started to fall, in the full knowledge that that will not help with the cost of living crisis. The damage has already been done, and it will be even worse for most people this winter. They talk up their Victims and Prisoners Bill, when the reality is that they have destroyed our policing and criminal courts, with 90% of crimes going unsolved and prisons already full. Their plans to reduce or scrap sentences for abuse, harassment and stalking, in order to tackle the overcrowding crisis in prisons, is just appalling. Although the Government have repeatedly said that ending violence against women and girls is a priority, it continues at epidemic proportions, with an estimated 1.7 million women experiencing domestic abuse last year. Women and girls should not be put further at risk, yet those plans could see thousands of abusive men released.

The Government blame NHS workers for the crisis in the NHS, when it is their drive to privatise and underfund it that caused issues far before the pandemic or any strike action. The King’s Speech failed to address the NHS nursing workforce crisis, and the NHS and patients will continue to pay the price until at least the next general election. We need investment in the NHS, not the introduction of minimum service levels. Only the Conservative party thinks that the answer to the shortage of doctors and nurses is to sack NHS staff. After the past few years, it sums up how out of touch this Government are that one of the only things they promised to do in the King’s Speech was to sack doctors.

Ministers have doubled down on their anti-worker rhetoric, when the right to strike is a fundamental human right, protected in UK and international law. They have failed to tackle those making billions in profit while simultaneously leaching money from our public services and dumping raw sewage in our waterways, and they hope that people will not realise that the taxes they are paying are the highest they have been for 70 years.

Unfortunately, neither the King’s Speech nor yesterday’s statement called for a ceasefire in Gaza. People in Gaza are without food, water, electricity, fuel and communications, and the death toll is now more than 10,000. I agree with Oxfam, the United Nations Secretary-General and many others that a ceasefire is the only real solution. A cease- fire is essential to ending the huge daily loss of innocent lives, to ensuring that aid gets into Gaza and to ensuring the safe return of the Israeli hostages. We must have a path to peace out of the conflict in Israel and Gaza.

Instead of plans to improve people’s lives, what we get from this Government is divisive rhetoric, a “war on woke”, attacks on benefit claimants, attacks on minorities, attacks on refugees and attacks on the LGBTQ+ community—attacks designed to make us hate each other instead of hating this Government’s actions. The Home Secretary talks about “decent British people” at the same time as playing politics with our police force and wanting to remove tents from the homeless. Those plans may have been dropped by the Prime Minister, but they portray the callous and contentious way the Conservatives view people.

The Government’s failure to ban so-called conversion therapy shows a vile disregard for LGBTQ+ people living in this country. So-called conversion therapy is not therapy; people cannot consent to abuse. The decision to leave LGBTQ+ people suffering that torture, and at the mercy of bigots and abusers, is despicable. The Government have previously described conversion practices as “abhorrent”. They first pledged to outlaw them in England and Wales in 2018, as part of their LGBT+ action plan. That was pledged again by the then Prime Minister in 2019, then again in the 2021 Queen’s Speech, and then again in the 2022 Queen’s Speech, and yet again by Ministers in January this year.

[Neale Hanvey]

I thank the hon. Member for giving way on that point. This matter is important to us both, although I accept that we have very different views on it. One point that I struggle with when it comes to the discussion about conversion therapy is what to say to young gay men who have gone along with transition without talking therapy and then discovered that transition was actually completely wrong for them. They now find themselves with complete sexual dysfunction and have in some cases had their genitals removed surgically, and the same is true of young women who have gone through that. If we call talking therapy “conversion therapy”, and pursue an affirmation-only model, what hope is there for young gay people, or young people who are questioning their gender, to be able to get the support they need to have a decent puberty and grow up successfully?

[Kate Osborne]

I think the hon. Gentleman is conflating the issues here. We are talking about so-called conversion therapy, which starts from a place where it has already been decided that people need to be converted. What people need is support and understanding to help them through whatever process is best for them.

Multiple promises have been made by five different Ministers and four Prime Ministers in five years, and all of them have been broken. The work on the legislation has been completed; it has been worked on for years. The Women and Equalities Committee has said to Ministers that

“conversion practices are abhorrent and need to be stamped out.”

It is time to stop making empty promises, take action and make the ban a reality. With that aim in mind, I have tabled amendment (f) to the King’s Speech. I hope that as many Members as possible will agree to back it, including the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey), and that Mr Speaker sees fit to select it.

As I say, the work has been done. The Government know that the legislation is vital. The Leader of the House said this morning that

“it is still a manifesto commitment”,

and that they will update us on progress, but we cannot wait any longer. They should take action. They must accept my amendment and find a way to bring forward legislation to ban so-called conversion therapy as soon as possible.

Labour will ban those conversion practices in full. I hope that the next general election is very soon so that Labour can get on with passing the legislation. Many LGBTQ+ people are suffering now and need the ban to be put in place immediately. I plead with Members to back my amendment, and with the Minister to take action.