Fossil Fuels and Cost of Living Increases

Debate between Peter Grant and Caroline Lucas

Wednesday 11th January 2023 Westminster Hall

[Peter Grant (Glenrothes) (SNP)]

Like my hon. Friend the Member for Stirling (Alyn Smith), I congratulate the hon. Member on securing this debate. She is referring to the appallingly bad standard of insulation in the United Kingdom’s homes. I do not know if she is old enough, but I remember protesting as a student in the 1970s against a new nuclear power station at Torness on the east coast of Scotland. Even at that time, it was identified that if the money that it would cost to build a nuclear power station had been spent on insulating homes and buildings, the energy saved would have been significantly more than Torness could produce. Does she agree that the short-sighted, almost religious zealot-like fascination with nuclear power in the United Kingdom has been damaging our energy prospects for a great many years and has got to stop?

[Caroline Lucas]

I thank the hon. Member for his intervention, with which I agree 100%. The nuclear obsession is using vast amounts of money, diverting attention and also sending mixed signals to investors, who really do not know what kind of energy future this country is planning for itself. It is a massive white elephant. Nuclear power stations are not coming in on budget and on time anywhere, and the idea that we can now achieve that here in the UK, against all the evidence in so many other countries—and, indeed, against the evidence here at home with Hinkley, for example, which is massively over budget and massively late—beggars belief.

Finance Bill

Debate between Peter Grant and Caroline Lucas

Committee stage
Wednesday 30th November 2022 Commons Chamber

[Peter Grant]

Does the hon. Lady agree that the Government have missed a huge opportunity in limiting the windfall tax to oil and gas companies? They could have introduced a windfall tax on other companies that have, fortuitously, made massive profits as a result of the pandemic.

[Caroline Lucas]

I certainly agree with the hon. Gentleman. If I had to make a suggestion about where the Government should look next, it would be the distribution network operators—the companies that run the grids. There has been no spotlight on them at all even though they are making massive profits right now.

The hole at the heart of the windfall tax has led Shell—the UK’s fourth largest oil and gas producer—to pay no windfall tax or, indeed, any normal oil and gas tax at all. Indeed, oil and gas companies, which have made frankly grotesque profits, will still be able to claim £91.40 in tax relief for every £100 invested in oil and gas infrastructure. What is more, from January 1 a company spending £100 on upstream decarbonisation—which essentially translates as reducing emissions from the process of extracting oil and gas that goes on to be burned—will now be eligible for £109 relief. In other words, the taxpayer is actually paying the oil companies, which are already raking in massive profits—not the other way around.

The Government plan to make real-terms cuts to Departments that have already been starved of funding. They talk about “sacrifices” and “difficult decisions”, as the Chancellor has. Charities warn of a humanitarian crisis, and new research published this weekend shows that almost 200,000 additional young families will be pushed into fuel poverty come April when the energy price guarantee rises to £3,000. In that context, how can the Government possibly justify a situation in which taxpayers are supporting oil and gas companies, whose profits have absolutely ballooned, to fulfil obligations that they can perfectly well afford to pay for themselves.

It is also worth comparing this tax with the one on low-carbon electricity generators, which will be subject to a windfall tax of 45% for revenues above £75 per MWh, yet will not be eligible for investment relief at all. That leads to a ludicrous situation whereby companies will get a bigger tax break for building a wind turbine to power an oil rig than for building one that generates power for the energy grid. I simply cannot see how that is defensible in any shape or form.

The autumn statement should have been the moment where the Chancellor launched a transformation of our economy, powered by abundant renewable energy and with good green jobs. Instead, we had continued support for a costly and slow nuclear white elephant, and for the fossil fuels choking our planet. The so-called investment allowance—it is better termed “obscene subsidy”—is, frankly, a disgrace that fails to tax oil and gas companies properly and comes at huge cost to the public purse. Indeed, it has been estimated that if Rosebank—the UKs largest undeveloped oilfield—is developed, its owners would effectively receive more than £500 million in taxpayer subsidies.

To put that figure into context, it would be enough to extend free school meals to every child whose family receives universal credit, to pay the annual salaries of more than 14,000 nurses, or to build one new medium-sized hospital. Choosing between genuinely improving our society or subsidising a climate-wrecking project—Rosebank, in this case, which would produce more emissions than 28 low-income countries combined—should not be a difficult choice.

Make no mistake, it is a subsidy—including, it would appear, according to the Government’s own definition in the Subsidy Control Act 2022. I am sure the Government will deny that, but perhaps they will be more inclined to take note of the Institute for Fiscal Studies, which has stated that the investment allowance

“means that North Sea investment will be massively subsidised”,

through which loss-making investments could be rendered commercial.

Put simply, my new clause would require the Government to publish an assessment of the impact of the investment allowance on revenue raised by the windfall tax. The Government estimate that the oil and gas sector will pay around £80 billion in tax over the next six years, but it is essential that we have greater transparency on how much revenue will be forgone. That revenue could help to finance a real retrofit revolution to upgrade the UK’s leaky homes so that we get off gas for good.

Of course, I welcome the £6 billion investment in energy efficiency from 2025, but that will be of little comfort to households that are struggling to heat their homes right now. Crucially, my amendment would also require the Government’s assessment to cover the impact of the investment allowance on the UK’s ability to meet its domestic and international climate targets. The Glasgow climate pact, which the UK presided over, includes the commitment to pursue efforts to limit global heating to 1.5°C degrees, but the UN has made it clear that Governments plan to produce more than double the amount of fossil fuels in 2030 than would be consistent with staying below that critical threshold. I am aware that a number of amendments seek that kind of assessment of the investment allowance, and I welcome them, but I believe mine goes further because it would require the assessment to consider the impact on the 1.5° target, in addition to net zero and the UK’s carbon budgets.

It is no longer acceptable for the Government to look at its policies in isolation from our planet’s shared carbon budget. Not only does oil and gas extracted in the UK add to global emissions regardless of where it is burned, but, as the Committee on Climate Change has acknowledged, further extraction

“will support a larger global market overall”—

I remind hon. Members that that global market already has more oil and gas planned than we can possibly burn in keeping below 1.5°, and that is before we start extracting more. I therefore urge the Government not only to accept my new clause but to scrap the investment allowance once and for all, for the sake of our climate and the lives of so many people who are struggling with the cost of living crisis.

Exiting the EU: Sectoral Impact Assessments

Debate between Peter Grant and Caroline Lucas

Wednesday 1st November 2017 Commons Chamber

[Peter Grant]

I suspect that it may have been all the above and more reasons besides.

Is it not ironic that yet again, in response to a decision that was supposed to restore sovereignty to Parliament, for those who believe in such an idea, it now appears that even the Parliament that exercises sovereignty on behalf of Her Majesty does not have the right to instruct the Government to make representations to Her Majesty on our behalf? We can ask, and the Government can simply ignore—well, they cannot ignore, but they can say, “No, we’re no’ doing it,” which apparently is not the same as ignoring. What an utter shambles of a way to run a sweetie shop, never mind a country.

I have been a very long-standing supporter of open government and freedom of information. I remember as an opposition SNP councillor being in the strange position of enthusiastically supporting legislation proposed by the then Labour-Lib Dem coalition in the Scottish Parliament against complaints from Labour councillors that it would somehow undermine the working of the council. I believe that improved public availability of information always leads to better government. Occasions when information needs to be restricted, or some information needs to be redacted, should be seen very much as the exception rather than the rule.

[Caroline Lucas]

I am sure the hon. Gentleman is aware that there is a legal case pending, which my colleague in the European Parliament, Molly Scott Cato, is leading. Does he agree that rather than going through all the extra work, time and taxpayers’ money involved in fighting a legal case, the Government should just show us what it is in the public interest to show us now?

[Peter Grant]

I was going to say that, not having seen the information, I am at a disadvantage compared with the Cabinet, but I am not convinced that I am, because I do not think most of them have seen it either. I am perfectly prepared to accept that some of it—perhaps quite a lot of it—cannot be made public, but I do not think a document exists that cannot be made public in some form. If the Government really want to give the public information, there are always ways in which details can be removed.

The comment has been made that we are talking about public information, paid for by the public and produced by a public organisation, which exists only for the benefit of the public. I always take the view that information should be disclosed where possible and withheld only where necessary. My view of freedom of information was eloquently expressed 250 years ago, and I am pleased that Madam Deputy Speaker is still here to hear this, although she is no longer in the Chair:

“Here’s freedom to them that wad read,

Here’s freedom to them that wad write,

There’s nane ever fear’d that the truth should be heard,

But they whom the truth would indite.”

I appreciate that for some Members, that might be a difficult thing to think about just now.

I have always been convinced that far too many public bodies have hidden behind statutory exemptions in freedom of information legislation, not to protect the interests of the public but to protect the interests of those who withhold the information. That seems to have played a significant part in the Government’s thought processes in this instance. A member of the Government originally claimed that even to confirm that the analyses existed would somehow fatally undermine the UK’s negotiating position with the European Union. It is hard to see how anybody could make the UK’s negotiating position any more untenable than it already is, but let us look at how making any of the information available might weaken the UK’s position.

It seems to me that there are three possible scenarios. In scenario 1, the secret information shows that the UK’s position is a lot stronger than any of us suspected—I do not know; that might be possible—so instead of negotiating from a position of weakness, the UK is negotiating from a position of considerable strength. How does it weaken our negotiating position if those on the other side of the table think that we are strong, rather than weak? It does not, so in scenario 1, it is in the UK’s interests for the European Union to have the information.

In scenario 2, the analysis simply confirms what everybody knows and what analysis from everybody else under the sun has already indicated, which is that leaving the European Union is seriously bad for the UK economy, that it is seriously bad for us socially and culturally, and that it will weaken our reputation worldwide, emboldening other potential trade partners to push for ever more difficult and damaging trade deals and ensuring that we have to go cap in hand to look for them.