Constitutional Law

Robert Smith Excerpts

Monday 2nd February 2015 Commons Chamber

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I welcome this order which will deliver on commitments made in the Smith commission. Its timeliness will allow it to be implemented effectively, efficiently, and in time for the Scottish election and future local government elections, and in particular it will allow us to get the register right.

I wish to reinforce the experience of having 16-year-olds involved in the political system. The referendum did that in a practical sense, but for years many Members of the House have been going into schools and recognising that 16-year-olds have an informed and enthused approach to the political system and engagement with politicians. An important aspect of engaging people at 16 is that they are in a stable environment such as school or college, and many are still in a home environment. There is therefore a chance of getting them registered and involved in the electoral system before they get into the flux and change of life that goes with the upheaval of moving on from school and towards the rest of their lives. If we can engage people at 16, they are more likely to stay engaged with the voting system throughout their lives.

Many of us criticise short-termism in electoral decision making, but 16-year-olds clearly have the most long-term future in decisions that are made about this country and what is happening. If we can engage with them and get them to think about the future and build on that, we can perhaps take a longer term approach to our voting system. I welcome the order and I hope that the House will see it come to fruition, honouring the Smith commission and delivering votes for 16 to 18-year-olds in Scotland.

North Sea Oil and Gas (Employment)

Robert Smith Excerpts

Tuesday 20th January 2015 Westminster Hall

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Thank you for giving me the opportunity to take part in this debate, Mr Streeter.

I congratulate the hon. Member for Aberdeen North (Mr Doran) on bringing this timely and important debate to the House. He has set out how important the industry is to the north-east of Scotland and the whole of the UK. I declare an interest recorded in the Register of Members’ Financial Interests to do with the oil and gas industry—a shareholding in Shell—but I am participating in the debate because mine is one of those north-east constituencies and many of my constituents are affected by what is happening out in the North sea, and because of how important the industry is to the country.

It is not only the specialist jobs that are at risk; in fact, some of those jobs might well not be so much at risk in the long run, because of the skills shortage and the need for people globally to sustain oil and gas production. I worry about the cascade effect on jobs: as companies reduce their use of catering facilities, for example, those who work in catering will lose their jobs locally, and they will not be able to go to Angola or Azerbaijan to find other employment. I have written to the Department for Work and Pensions to find out what it is doing to gear up its facilities and resources to tackle that challenge in the local economy. Perhaps the Minister will chase up the Department for a reply.

The hon. Member for Aberdeen North mentioned 1986, and some people have said, “We’ve been through this before. We’ve had downturns. We had one in 1986 and we bounced back.” He was right to say that there was a difference going into this downturn, but even without the cut in oil price, a restructuring was needed in the industry and there were concerns about the cost base and the profitability of the North sea, as it was becoming more challenging. In 1986 the platforms were younger; the neglect of maintenance showed through only later on in their life. Also, in 1986 the finds and the reserves were bigger, so the temptation was to hang on, see through the trough and still be there when the upturn came.

Now we have much smaller finds, but we still need the larger hubs to be sustained and maintained throughout the downturn. It is not only a matter of price; there is still a future. BP is coming forward with investments that will last for 40 years, and that is before they get an extension of life—almost every field seems to last longer than originally planned. It is the scale of the future that we need to be worried about, as well as the size of the tail and how it is to be sustained.

As the hon. Gentleman said, it is very important to deal with tax incentives and the implementation of the Wood review. That review should result in swifter and more independent regulation, and bring the industry together to co-operate in maximising production from the North sea. The crucial message to the Treasury is that it does not have the skills to produce oil and gas from the North sea; with the Treasury acting alone, there would be no oil and gas production. It needs to incentivise skills so that tax can be taken off the profits that come out of the North sea, and we need a cross-party consensus.

The hon. Gentleman highlighted some of investment incentives needed. We need to build on the work that the Treasury has already done. The 2% cut was small, but it was symbolic of the fact that the Treasury is beginning to understand how important the long-term signals are to the industry. The wider investment allowance will be helpful and investment in more seismic will encourage greater exploration, but the current negotiations to see what else can be done to encourage exploration are extremely important. We still need to look at the message that a cut across the board in the supplemental tax would send to investors. If they can see that more of the profit will be retained by them after an investment, they will see that this country wants to see us through this trough and come out the other side.

An important message to the Treasury is that a smaller percentage of a real cake is better than a bigger percentage of no cake. It is crucial to optimise those signals to the industry, not just for the benefit of getting more of our energy out of the ground rather than importing it, or for the jobs in the north-east of Scotland and throughout the United Kingdom, but to sustain that jewel in the crown of the industry: the export potential of the skills that we have developed in the North sea, particularly in subsea engineering, where we are world leaders. By keeping the North sea as vibrant and as active as possible, we maintain the anchor that keeps those industries here in the United Kingdom, exporting and earning us considerable amounts of revenue and keeping many people in employment.

We have a Budget coming up that can be used, following the negotiations, to produce the best signal and incentive to see us through this trough and through to a brighter future, when we can maximise the jobs, the energy production and the tax take for future generations.

--- Later in debate ---

[Mr Mike Weir (Angus) (SNP)]

I congratulate the hon. Member for Aberdeen North (Mr Doran) on securing this timely debate.

Despite current difficulties, the North sea oil and gas industry remains vital for Scotland—north-east Scotland, in particular. The industry makes a huge contribution not only to the Scottish economy, but to the economy of the whole UK: since its inception, it has contributed more than £300 billion in taxation to the Treasury. We have built a world-class industrial cluster in the North sea, and we now export the skills and services required to support it around the world.

In my constituency, for example, many people work in the oil and gas industry, increasingly not only in the North sea, but in various parts of central Asia, Africa and the far east. Many companies in Angus are also part of the supply chain for the North sea industry. The low level of oil and gas prices and the difficulties that that is causing are obviously of great concern. Clearly, we have experienced such falls in prices before; the previous time it happened was as recently as 2009, when the price plunged from $144 to $40 a barrel. Nevertheless, the current low price is of concern, and action must be taken to ensure that the industry is assisted through such a turbulent period.

Despite the rather dramatic headlines in some newspapers and other media reports, the North sea oil and gas sector continues to have a bright future. Indeed, when I spoke to BP about the job losses that it announced last week, it emphasised that it remained committed to the North sea, with the Kinnoull field coming on stream and the Clair field due to continue operations well into the 2050s. We should not, therefore, get too downhearted about what is going on. Immediate action is needed, however, to ensure that employment and exploration continue.

[Sir Robert Smith]

We need to realise that we face quite a large challenge. There is an undercurrent of jobs going, and that is not necessarily being reported. Contracts are being lost, especially by subcontractors, but that does not necessarily show up straight away in unemployment figures.

[Mr Weir]

I accept that. This is going on throughout the industry—in direct employment and among subcontractors.

Within their limited powers in this area, the Scottish Government have taken action. The First Minister has announced a new taskforce to focus on supporting jobs across the energy sector, with an initial emphasis on the oil and gas sector, and to secure an employer apprentice guarantee, under which firms would commit to taking on apprentices facing redundancy to ensure that they completed their training. That commitment would be supported by the Adopt an Apprentice recruitment incentive—currently, there is a one-off grant of £2,000, which is to be increased to £5,000—and by Skills Development Scotland staff.

If we are to protect Scotland’s vital oil and gas sector, however, the UK Government, specifically the Treasury, need to step up to the plate and to make immediate tax changes. We have already called on them to take urgent action to support investment and exploration. The Scottish Government have consistently called for measures to be implemented without delay, including an investment allowance to provide support for the development of fields that incur higher costs. That would support technically challenging, high-cost fields and sustain future investment. Professor Alex Kemp, a respected oil economist at Aberdeen university, estimates that an investment allowance could increase investment by £20 billion to £36 billion to 2050 and boost production by 1.2 billion to 2.2 billion barrels. Scottish Government estimates suggest that it could support between 14,000 and 26,000 jobs per year across the UK.

The Scottish Government have also called for a reversal of the increase in the supplementary charge implemented by the UK Government in 2011. The high overall tax burden faced by the sector is damaging its international competitiveness. The supplementary charge was increased by 12% in 2011, and the 2% cut announced so far does not go far enough in the current context of falling prices. Professor Kemp estimates that a reversal would increase production to 2050 by 500 million barrels and boost investment by £7 billion. Scottish Government analysis suggests that such a move could support up to 5,600 jobs per year across the UK.

In addition, the Scottish Government have called for the introduction of an exploration tax credit to help increase levels of exploration and sustain future production. As most of us are aware, levels of exploration in the North sea are low, which will inevitably reduce future discoveries. An exploration tax credit would help to increase exploration and, in turn, sustain future production. A similar approach was adopted in Norway in 2005. In the three years following its introduction, the number of exploration and appraisal wells drilled in the Norwegian North sea increased fourfold.

We have previously highlighted and backed industry concerns about the speed with which the new Oil and Gas Authority is being established, and we have called for appropriate resourcing of the new OGA to be put in place swiftly. The industry is concerned that the investment allowance the Chancellor is expected to announce in the March Budget will not be nearly enough at current oil prices, and we share that concern.

It has also become evident that an early commitment to reduce the supplementary charge rate would have the benefit of instilling confidence in operators and the sector, while discouraging premature decommissioning, which is obviously important for future work in the North sea. To significantly enhance the industry’s long-term competitiveness, we have recommended that, at the very least, the industry requires a reversal of the supplementary charge increase implemented by the Government in 2011.

That substantial package of measures should be announced without delay to safeguard investment, jobs and the long-term sustainability of the North sea. If it is not forthcoming, UK Government policy on the industry will be found seriously wanting once again. Despite what other Members say, reform of the fiscal regime must not wait until the Budget, but must be implemented now, and that should include a commitment from the UK Government to a substantial reduction in the supplementary charge rate.

--- Later in debate ---

[Sir Malcolm Bruce]

That is a fair point; I would say only that I have never yet met an oil economist who was any good at anything other than explaining why prices did what they did, rather than what they would do next. Yes, the hon. Gentleman may be right, but people have told me many times that the oil price would stay low, and then it has gone up. When they have told me it would stay high, it has gone down. We have to live with that.

Those of us close to the industry, and the taskforce, of which many of us are members, are aware that in recent years prices have escalated unrealistically and unreasonably on the back of the high oil price. I want to make it clear to the hon. Member for Aberdeen North that that is no excuse for a slash and burn response on employment; it is, however, a recognition that a lot of fat has built up in some of the contractual arrangements.

With the right approach, it would be possible to slim down and maintain skills and capacity for the future. The wrong approach means, of course, making people redundant and losing their skills, so that if and when there is an upturn we will have lost capacity as well. I argue that we need to manage things proportionately. The industry has been rather late in tackling that problem. Quite a few of the redundancies that have been announced since the oil price fell were part of reviews that took place because of the escalating costs before we knew that the price was going to fall.

[Sir Robert Smith]

One of the lessons of history is that if downsizing in the current crisis is inevitable, the way it is handled and the way people are treated, so that they are still interested and willing to come back in the good times, are important. There is a lesson for the industry about the way it behaved in the past.

[Sir Malcolm Bruce]

I completely agree.

Finally, I want to set out what things the Government must consider—for which the Budget seems to be the appropriate place. First, the investment allowance that has been announced needs to be confirmed in the Budget. Secondly, there must be a review of the supplementary charge. In my view the Government will get none of it anyway in the present climate, so getting rid of it would not cost much.

There should also be a review of the petroleum revenue tax for the future. The industry has traditionally been taxed at about double the rate of any other sector. Perhaps that was all right in the good times, but in a mature province, in the present situation, asking for a review is not asking for subsidy; it is asking for a realistic tax regime that can secure an industry that has made a massive contribution to the balance of payments and contributed 25% of our fixed industrial investment every year for the past 40-plus years, and which has a great future if we manage it now. If we do not get it right, there is an existential threat to the industry—certainly to an industry on the scale that we have looked for. We do not need to score points off each other. We need to work together and come up with a systematic package of measures that will restore confidence.

I accept that one thing that has damaged the industry is constant change. It now needs a clear, simple, strategic regime that says that the UK wants its investment and will provide a climate in which, provided it can make itself competitive, the Government will work with it to enable it to secure jobs, exports and investment for the future. If we can do that, whenever the oil price turns up, the industry will be much stronger than it would have been if the crisis had never happened.

--- Later in debate ---

[David Mundell]

I certainly take that point on board; it reinforces the fact that this issue is resonant not only in the immediate area of Aberdeen, but in the whole of Scotland and the rest of our United Kingdom.

At the PILOT meeting in London last Tuesday, industry leaders expressed real concern, but recognised the need and opportunity to work collectively with Government to introduce a range of efficiency measures that would help them through the downturn and ensure that the industry was stronger in the longer term. The right hon. Member for Gordon (Sir Malcolm Bruce) made the point strongly that the industry could emerge fitter from this time, without the necessity for sustained job losses.

The sector is a vital economic asset—one that supports growth and investment and one that we will do all we can to support. There are other events in Parliament today, one of which was the Chancellor’s appearance before the Treasury Committee. Given the signal that was asked for, he has made it very clear that he will take further steps in the Budget. As we heard in the debate, Sir Ian Wood and others in the industry have indicated that they think the Budget is the right time to take such steps. I do not think that that message could be clearer. I will undertake to convey the comments and thoughts of everybody who took part in today’s debate directly to the Chancellor, and I am sure that he and the Prime Minister will continue to engage directly with the industry.

The Government have already taken action in a number of areas. Our recent headline cut of the supplementary charge from 32% to 30% sent an important signal, as some contributors have mentioned, that the North sea is open for business. Last year, we commissioned Sir Ian Wood, one of the world’s foremost industry experts, to examine how we could maximise the North sea oil and gas industry economic recovery. Without being unduly partisan, I am very pleased to hear Sir Ian being lauded again for his contribution to the oil industry; only a few months ago, some people—I do not think they are in this room—were deriding him because he said he did not feel independence for Scotland was in the industry’s best interests.

On this matter, Sir Ian’s response is twofold: get the right regulator in place and get the right fiscal regime. The Government have moved fast to implement his recommendations. We have set up the regulator in the form of the Oil and Gas Authority. It will be up and running this year and based in Aberdeen, under the expert stewardship of Andy Samuel. Since starting in his role as chief executive at the beginning of the year, Mr Samuel has been working at pace to ensure that the authority will be ready to start operating effectively by the beginning of April.

Last week, in light of the recent falls in global oil prices, the Secretary of State for Energy and Climate Change asked Andy Samuel to accelerate work with industry to identify key risks to oil and gas production in the UK continental shelf and what further measures might be taken by Government and industry to mitigate them. In addition, we have carried out the oil and gas fiscal review to examine how we can build on the success of our existing field allowances and put in place a regime that is internationally competitive.

The oil and gas industry has acknowledged that our system of allowances has been transformational in incentivising North sea investment. Allowances were directly responsible for £7 billion of 2013’s record-breaking £14.4 billion investment in the North sea. That investment has supported more than 50,000 jobs in the United Kingdom. At the autumn statement, we announced a new allowance for high-pressure, high-temperature oil and gas projects. That allowance will reduce the tax rate on a portion of the company’s profits from 60% to 30%.

Last year, we also announced further reforms to the fiscal regime—reforms to generate investment. We will be introducing a basin-wide investment allowance to simplify and replace the existing system of offshore field allowances over time. We are also taking action to encourage companies that are already investing by extending the ring-fence expenditure supplement from six to 10 years for offshore oil and gas activities, helping the short-term cash flow of companies looking to invest.

Our third area of reform is exploration, where access to good-quality seismic information has been an issue for the industry. Our commitment to provide financial support for seismic surveys in under-explored areas of the UK continental shelf will help the situation.

We want to reward investment in the North sea. As the UK’s economy grows and our recovery strengthens, our direction of travel will be to implement further measures to increase investment. Of course, decommissioning also has to be considered; in the coming decades, that will be increasingly important as the UK continental shelf moves into the decommissioning phase ahead of many other basins. The challenge here is that the North sea, owing to its maturity, will often have to be the site of pioneering methods. Industry will need to develop new operating models and bring in skills and expertise. However, the opportunity is immense. Get this right and we will develop highly valuable—and saleable—expertise here in the UK and reap great rewards down the line. It will be vital to attract new entrants and specialists into the basin to take on decommissioning work.

[Sir Robert Smith]

The Minister is making an important point about the value of decommissioning, but we really want that to be as far away in the future as possible. The crucial thing is to sustain production. I would be grateful if he took the message back to the Treasury that when people drill for oil, they take a big risk, and if they find something, they would like a larger share of what they find as a reward. The supplemental tax needs serious review.

[David Mundell]

I think I had set out in my initial remarks that the issue is a combination of ensuring that what future production there can be is maximised and of taking advantage of the opportunities that may arise through decommissioning.

I want to address a point that the hon. Member for Aberdeen North raised on health and safety and the ageing infrastructure. As many of the UK’s onshore installations are working beyond their original design lives and have been exposed to a harsh environment and heavy usage, it is absolutely essential that asset integrity is maintained. Asset integrity is critical to effectively managing and controlling major accident hazards, protecting the work force and maintaining production. Maintaining such arrangements, even during a period of low oil prices, is essential for the two key reasons that he set out: first, to comply with legislation to manage major risk hazards; and secondly, to maintain these assets for use in the future. I assure him that the Health and Safety Executive will continue to inspect thoroughly asset integrity issues and raise those with the industry at every opportunity to ensure that regulatory standards are not compromised.

It is by bringing a package of measures together and by working together—I think that is the sentiment of this afternoon’s debate—that we will maximise the potential of the industry and support vital jobs across the sector and the supply chain in the north-east of Scotland, as well as in areas such as East Anglia, to which my hon. Friend the Member for Waveney drew attention so adroitly. We have been talking about those jobs today; it is because the UK has such a large and diverse economy, of course, that we are able to commit to these long-term support measures.

We can deal with the volatility of oil prices and continue to provide the stable regime that is so important to the industry. The hon. Member for Glasgow East drew our attention to the many predictions that have been made about oil prices, but it is in a country on the scale of the United Kingdom that changes can be sustained. On that basis, having listened to today’s debate and set out the measures that the Government have taken, I conclude my contribution.

Smith Commission

Robert Smith Excerpts

Thursday 27th November 2014 Commons Chamber

[Mr Carmichael]

I can confirm the figure that the right hon. Gentleman has put to the House. What is being offered to the Scottish Parliament is the power to design a welfare system that is fit for purpose in Scotland. That will be one part of tackling the generational issues of poverty and social exclusion to which he refers. The increased powers in job creation and taxation, especially income tax, and the powers to grow the economy in Scotland, can be used to tackle the issues that the right hon. Gentleman is so right to highlight.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

During the referendum campaign, the four party leaders made commitments to the Scottish people. Today we see three party leaders delivering on the vow that they made. Does my right hon. Friend agree that the best way forward for Scotland is for the SNP to acknowledge their leader’s statement that this would be a once-in-a-generation referendum?

[Mr Carmichael]

Indeed; I could not agree more. The Prime Minister, the Deputy Prime Minister and the Leader of the Opposition made a vow during the referendum campaign. Today we honour that vow. The former First Minister and his successor—Alex Salmond and Nicola Sturgeon—also made a vow. They said that they would respect the outcome of the referendum and the decision of the people of Scotland. There is no reason from today for them to do anything other than to make it clear that we will not be returning to this question in a referendum, as they said, in a generation.

Scotland’s Place in the UK

Robert Smith Excerpts

Thursday 6th February 2014 Commons Chamber

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

It is a pleasure to follow the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) and I congratulate the hon. Member for Glasgow North East (Mr Bain) on securing this debate and the Backbench Business Committee on recognising the importance of addressing this issue.

I want to take a positive approach to Scotland’s place in the United Kingdom. It has played a dynamic role and it is one that has evolved. With 300 years of common history, we have still got our distinctive legal system, our distinctive education system, our national identity, and we have recreated our own Parliament to deal with those issues that directly affect us in our lives in Scotland, so we do, as the slogan says, get the best of both worlds: a say in those decisions that affect us that are taken at the UK level, and a say in those decisions that affect us directly in Scotland in the Scottish Parliament.

In putting the positive case for voting no, I return to what the hon. Member for Chichester (Mr Tyrie) said, and point out that the best and simplest way of keeping the pound sterling is to remain part of the UK. That is most easily achieved by voting no in the referendum. It gives us a say in how our currency is managed and it keeps us part of a borderless fully internal market, with a more diversified economy. The banking crisis reminded us that Scotland’s heavy dependency on the financial services sector—a great achievement by many people working in that sector—presents a challenge when it goes wrong. It was the rest of the UK’s economy and diversification that helped to sustain us through that crisis.

The oil and gas industry is also a great success story in Scotland, as the former Secretary of State my right hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Michael Moore) mentioned. It is a great technical achievement and there are a lot of people with a lot of skills and the work they do has a lot of export potential. It is also a very unstable source of revenue to the economy, however, because it depends on the global oil price. When the price is high, the economy does well. When the price is low, being part of a larger economy, when other parts of the economy can benefit from the low oil price, gives the ability to transfer resources and sustain the economy. The UK’s diversified economy also allows us to come up with tax incentives to stimulate exploration, forgoing cash flow now for long-term benefits.

[Mr Mike Weir (Angus) (SNP)]

The hon. Gentleman talks about being part of a larger economy. Norway is not part of a larger economy. Is he suggesting it is not successful with its oil and gas and its general economy?

[Sir Robert Smith]

Norway is far more dominated by the oil and gas sector and has a successful economy, but if there is a downturn in the oil price Scotland does not have the economic resources and reserves to take that hit, yet we have the benefit of being part of a wider, dynamic, more diversified UK economy—and we will be, too, when the oil eventually runs out.

As has been mentioned, we also have access to a global network of embassies and trade missions that work positively to benefit Scotland and promote Scottish trade and investment in Scotland. We will continue to enjoy that positive benefit if we vote no in the referendum.

As has been highlighted in recent speeches, the business community does not have a vote in the referendum. The referendum is for the people of Scotland to decide Scotland’s future. It is one person, one vote and it is up to the people of Scotland to make that decision, but they are entitled to know the concerns of business. We want to hear the voices of business. Yes they cannot tell people how to vote, and yes they cannot dictate the result of the referendum, but if they remain silent and then quietly implement what they plan to do in the event of a yes vote in the referendum, the people of Scotland will have voted for a future without knowing the consequences and being able to take that on board. It is therefore extremely important that the business voices have the courage to speak up and inform the debate so people can make a clear and decisive choice in the referendum.

[Sir Gerald Howarth]

Having talked to some businessmen in Scotland, I have discovered there is a feeling of nervousness on their part. They feel that if they were to put their heads above the parapet and express a view in favour of the Union, they might get picked on and discriminated against by the SNP.

[Sir Robert Smith]

There is an undercurrent of a bullying culture in respect of some of the voices that come forward in this debate, but I notice that people of the level of Bob Dudley, who is high up the pecking order, are less easily bullied. That is an important point, however, and I hope the fact that these voices are coming forward will encourage others to speak up. Businesses do not, of course, want to fall out with customers and their work force, but they can put their concerns in a way that says, in effect, “It’s up to you how you vote, but we have this concern and the consequence of voting that way is that there will be the following implications for our business, and you need to take that into account.”

With a yes vote, there is no turning back. It is not an experiment. The message that must go out to the people of Scotland is that if they vote yes it is for life, so they need to be very confident and certain about their decision. A no vote is a positive vote for the benefits of Scotland as part of the United Kingdom, with the best of both worlds. We are better together and I urge people to vote no in the referendum.

--- Later in debate ---

[Pete Wishart]

I am not giving way. I do not like where the UK is going at all. I do not have much time, so I will mention just two examples. The first was last week’s appalling Immigration Bill, which would charge visitors to our country fees for health care and turn those who rent houses in the private-rented sector into immigration officers. It is a nasty, pernicious and rotten Bill that is designed to counter the threat of the UK Independence party. We do not do UKIP in Scotland; we barely do Tory. We have a national treasure on the Front Benches; our one and only Tory Member. None the less, we will get that Bill, because this Government took it through on a Labour abstention. I object to my country being dragged into this monstrous race to the bottom between this Government and UKIP about who can be the hardest on those who might want to come and live in my country. Scotland is better than that, yet the Bill was passed. It was passed on the same day as the House of Lords debated our country. I do not know whether you saw that, Mr Deputy Speaker. That bloated, unelected Chamber stuffed full of party placement cronies and donors had the audacity to tell our nation what it should do. Then it also had the effrontery to defile the memory of our war dead and insult the many brave veterans who have served this country with distinction just because they happened to support independence for our nation. One thing we will get with independence is the ability to wipe away that ermine-wearing unelected Chamber from the face of Scottish public life, and our nation will be much better for that. Scotland is so much better than that.

We know that if we gain control of our own resources and secure all the necessary powers, there is nothing stopping us becoming an economic powerhouse, and that is what we look forward to.

[Sir Robert Smith]

The hon. Gentleman is putting an emotional case for independence, but he is not taking on board the wise words of the Governor of the Bank of England who talked about the illusion of independence if an independent Scotland keeps the pound sterling. The voice of Scotland will be taken away from the decisions that will affect its very core monetary policy.

[Pete Wishart]

I have had enough of that “You cannae do that stuff”, so I thank the hon. Gentleman. We have a decision to take. It is a choice between negativity and positivity—[Interruption.]

Oral Answers to Questions

Robert Smith Excerpts

Wednesday 5th February 2014 Commons Chamber

[Mr Carmichael]

In that regard, the most pertinent intervention came from the Institute of Chartered Accountants of Scotland—not a political party or a body that has an axe to grind, but people who know what they are talking about. They told us what we already know: there are substantial questions on pensions and other areas, and the Scottish Government have still failed to answer them.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Surely one of the great weaknesses of the White Paper is on the future of the pound in Scotland. Surely the simplest way in which the people of Scotland can guarantee to keep the pound is to vote no in the referendum.

[Mr Carmichael]

That is indeed the case and I am confident that they will do so, because the people of Scotland value having the pound sterling as their currency. They value having the Bank of England as a lender of last resort and they value the fact that, as a result, risks and opportunities are spread across the whole United Kingdom.

Oral Answers to Questions

Robert Smith Excerpts

Wednesday 18th December 2013 Commons Chamber

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Is not the most exciting thing about Sir Ian Wood’s report the consensus he has discovered in the industry, which is that with more regulation and a stronger regulator with more resources there is the potential to unlock even greater investment, supporting jobs, taxpaying and energy security?

[Mr Carmichael]

The real strength of the Wood report, at least the interim version, is its credibility in the industry, because it has been informed by the industry and led by one of its most respected figures.

Piper Alpha Disaster

Robert Smith Excerpts

Thursday 11th July 2013 Commons Chamber

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I, too, congratulate the hon. Member for Aberdeen North (Mr Doran) on giving us this opportunity to pay tribute to the victims of Piper Alpha and to ensure that we remember the lessons that need to be learned. I should of course remind the House of my entry in the Register of Members’ Financial Interests that relates to the oil and gas industry, particularly my shareholding in Shell. However, my interest in the debate, like that of the hon. Members for Aberdeen North and for Angus (Mr Weir) and my right hon. Friend the Member for Gordon (Sir Malcolm Bruce), stems from the fact that we represent a part of the country that is touched by, and lives with, the oil and gas industry on a day-to-day basis.

We need to remember that the work force in that industry, particularly the offshore work force, come from throughout the country, and that people from all parts of the United Kingdom were touched by the tragedy. Our thoughts today are with the relatives and friends of those who lost their lives, and with the survivors, as we remember the terrible events. The re-dedication of the memorial garden involved a poignant and moving service that reminded us that, above all, the oil and gas industry is a people business. It might contain a lot of big industrial structures and high-tech industry, but ultimately it is people who make it work and it is people who suffer when it goes wrong.

I also pay tribute to Lord Cullen for the lessons that he has given us, and the legacy that he has left us. His investigation led to a sea change in the whole offshore safety regime, and to a permanent restructuring and refocusing of the system. It also led to the introduction of the safety case regime, after which companies could no longer simply tick a box and say, “I’ve complied with the regulation, so I’ll be okay if something goes wrong.” Under the regime, a company has to assess the risks and come up with its own safety case. That, too, is a lasting legacy.

The Piper 25 conference brought together representatives of the industry, the work force and the regulators, to refocus their efforts to ensure that all the lessons are being learned and all the issues are being dealt with. I want to pay tribute to the organisers of the conference. It would have been easy to have had a conference that simply paid lip service to the 25th anniversary and went through the motions, but the hon. Member for Aberdeen North and I, who were both there, agreed that it was a genuine attempt to take forward safety matters and to ensure that more lessons were learned.

We must avoid complacency. It has been pointed out that there are still many leaks, although fortunately they have not been ignited. If they had been, there could have been equally tragic consequences, so a redoubling of efforts is crucial. There have been other incidents in the North sea, and more lives have been lost, although not on the same scale as Piper Alpha. They are none the less equally tragic for the victims and their families and friends, and we must remember them, too, at this time.

There has been a refocusing on safety, but a danger is creeping in because the risks that are the easiest to measure are the slips, trips and falls—the people safety risks. There has, therefore, been a chasing of statistics that has focused on that element, and perhaps a lack of recognition of the importance of structural safety and integrity. The KP3 and KP4 reports focused on ensuring that that was understood. Structural safety issues might not show up so often in the statistics, but when something goes wrong, the effects are far more dramatic and serious. That structural safety element must be paramount.

Certain challenges remain, including that of ageing infrastructure. Ironically, the really old platforms were so over-engineered that, even though some of their equipment and processes might need rededication and redesigning, the actual structures have many years left in them. In a sense, the more dangerous legacy is the stuff that was built at the time of low oil prices when costs were kept to a bare minimum. The structural integrity of those platforms needs a great deal of investigation.

We have heard about the concerns relating to the new energy division. As the hon. Member for Aberdeen North said, some reassurance has been received, but the jury is still out. Much of what was attempted was designed for the best of motives, but it was perhaps not presented in the most effective way. Post-Macondo, we have the restructuring of the safety and environment regime as a result of the EU’s intervention, which will divert resources into resubmitting safety cases, rather than looking at new safety cases. Someone working offshore now aged 30 was just starting primary school when Piper Alpha happened. It is important for that legacy to be passed on to the next generation and to the new owners who have mainly not inherited the same culture as the original owners of the platforms. Redoubling safety is the best legacy for the members of Piper Alpha.

Oral Answers to Questions

Robert Smith Excerpts

Wednesday 26th June 2013 Commons Chamber

[Michael Moore]

Once again, from the other side of the Clyde, the hon. Gentleman makes a very important point. That question is directed to the SNP routinely and it is one for which it has no answer. The arrangement we have with the shipyards and with construction at Rosyth and elsewhere is very good for Scotland, and we should long continue to be part of the UK.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Will the Secretary of State confirm that many of the jobs are in the offshore oil and gas industry, and we must not forget that that is a very dangerous environment to operate in, especially as we mark the 25th anniversary of the Piper Alpha disaster, when 167 lives were lost? Will he study the outcome of the conference Piper 25 held last week, to see the redoubled efforts of the industry to make conditions as safe as possible for those who work for us offshore?

[Michael Moore]

My hon. Friend is right to draw the House’s attention to the tragic events of 25 years ago. The loss of 167 lives is something that the families, communities and area are still dealing with a quarter of a century later. We all remember that tragedy and remain committed to ensuring that we have the highest possible standards of health and safety in the North sea. As a Government, we remain committed to working with the sector, the trade unions and others to ensure that is the case, and of course we will study the recommendations from the conference to which my hon. Friend referred.

--- Later in debate ---

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I recently met Banchory Academy’s Amnesty International group, which has highlighted concerns about the risks to women in Afghanistan. What reassurance can the Prime Minister provide that the Government will continue their efforts to make sure that there is no return to the threats to women that we have seen in Afghanistan in the past?

[The Prime Minister]

My hon. Friend makes an important point and we should continue to support the Afghan constitution, which gives important guarantees in that regard. I spoke yesterday to President Karzai, including on the issue of the Afghan constitution and how important it is. We are making a major investment by supporting the Afghan national security forces, and through our aid programme—over $100 million a year—we can help to secure the sort of advances in Afghanistan that we all want to see.

Oral Answers to Questions

Robert Smith Excerpts

Wednesday 24th April 2013 Commons Chamber

[Michael Moore]

Just in case Labour Members did not hear that, I repeat that the measures taken by our Government have saved remote island communities, such as those in my hon. Friend’s constituency, 18p a litre, and they have saved those on the mainland 13p a litre. That is a huge help to hard-pressed families the length and breadth of the country.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Many jobs in Scotland, especially in north-east Scotland, depend on investment in the oil and gas industry. Does the Secretary of State recognise the important role that the Budget has played in delivering tax certainty on decommissioning to unlock that vital investment?

[Michael Moore]

My hon. Friend always makes a powerful case for the oil and gas industry, as does my right hon. Friend the Member for Gordon (Sir Malcolm Bruce). It is important to recognise their input in the decisions about decommissioning, which give certainty and good news for investment, not only now but for decades to come.

Oral Answers to Questions

Robert Smith Excerpts

Wednesday 9th January 2013 Commons Chamber

[Michael Moore]

The hon. Gentleman chooses to ignore the fact that, thanks to the UK Government, we have our network of offices across the whole world, and our embassy network is second to none—certainly when compared with what an independent Scotland would have. Scotch whisky is in a much stronger place as a result of Scotland’s being part of the United Kingdom than it would be if we were independent.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Does the Secretary of State recognise how important the energy industry in north-east Scotland is to driving export potential for Scotland? We have built a strong home base for skills and technology, honed in the North sea, and that is a base for great export potential to provinces around the world.

[Michael Moore]

I pay tribute, as I have in the past, to my hon. Friend’s significant work in this area. He is an undoubted champion of the oil and gas sector, not just in north-east Scotland but across the whole UK. He is right to point out the sector’s potential and will be aware that I met the Brazilian ambassador and Brazilian oil and gas interests in Aberdeen a few months ago. I look forward to returning to Brazil to focus on oil and gas issues in the next few weeks.