Fossil Fuels: Lobbying

Wera Hobhouse Excerpts

Tuesday 30th January 2024 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

To avert climate breakdown, the vast majority of the fossil fuel industry’s coal, gas and oil reserves need to stay firmly in the ground. Yet successive Governments, led by different political parties, have failed to take the kind of action that the science demands. They have known the indisputable facts and the consequences of inaction. Such consequences include the fact that the costs of delaying, and of failing to address climate, economic and social chaos, far outweigh those associated with an orderly transition along the lines of a jobs-rich, inequality-busting green new deal. Yet Government after Government have continued with business as usual. Government after Government have refused to grasp that despite some breakthroughs, successes and progress, the big picture has continued to get worse.

I do not deny that we are now seeing record amounts of energy being generated from renewable resources, for example, but these very welcome achievements do nothing to eliminate the dangerous damage arising from the continued extraction and burning of fossil fuels. Given what the experts have been saying for decades now, we have to ask ourselves why this Government, and others before them, have presided over, and colluded in, the frankly criminal decisions that have seen yet more oil, gas and coal continue to be explored and exploited. The answer to that question can be traced back to one consistent factor: the role of the fossil fuel industry in our politics. For over those very same decades when climate scientists have been warning of the rapidly shrinking window to avert a climate emergency, fossil fuel companies and their lobbyists have been denying the science, and then they have delayed, weakened and sabotaged climate action. Those tactics have enabled them to make billions in profits, while heating the planet and destroying communities.

In this debate, I want to highlight some of the ways in which fossil fuel influence is exerted in our politics and to propose how it should urgently be curtailed. I want to start with a case study, featuring the little-known fossil fuel lobby group Offshore Energies UK—OEUK—whose members include North sea operators such as Equinor, Harbour Energy, BP and Shell, and whose activities have resulted in a windfall tax that actually rewards companies for digging up more oil and gas, and a “price floor” introduced entirely at the industry’s behest. Let me explain how that has happened. According to analysis of data in the public domain, OEUK and its members met UK Government Ministers more than 210 times in the year following Russia’s invasion of Ukraine—that is nearly once every working day. In June 2022, in that one month, when the Energy (Oil and Gas) Profits Levy Bill was drafted and consulted on, the industry went into lobbying overdrive: OEUK and its operator members had twice as many meetings with Ministers as they did in the month before or after. It also held a parliamentary reception, in the name of the all-party group on the British offshore oil and gas industry, for which it provides, conveniently, the secretariat. The main message for the MPs and peers in attendance was that the windfall tax would “undermine and disrupt” investment in the sector. In a meeting a few days later with the then Chancellor, now Prime Minister, the industry spelt out what it wanted to see in the Bill. Its recommendations, also put in writing to the Treasury, included protection for petroleum revenue tax repayments, which are, in essence, an existing tax break that can pay fossil fuel firms back for taxes they have paid in the past. The subsequent legislation did exactly as OEUK requested. Moreover, it introduced an enormous 80% “investment allowance”, which, combined with existing tax breaks, means that fossil fuel companies can claim £91 back for every £100 they invest in UK oil and gas extraction. As a result of that climate-wrecking loophole, Shell, for example, went on to pay no windfall tax at all in 2022.

The lobbying around the Bill was happening in the context of a wider lobbying campaign by OEUK, which had been urging the Treasury all year to reinstate regular meetings of the so-called “fiscal forum”, an advisory group that basically invites OEUK and its members to shape their own tax regime. On 9 December 2022, they got their wish; the fiscal forum met again, hosted by the new Chancellor, the right hon. Member for South West Surrey (Jeremy Hunt), and the industry used the meeting to claim, yet again, that the windfall tax would harm investment in the sector. That meeting occurred in the wake of the Chancellor’s already having announced further changes to the windfall tax regime that would, in effect, see taxpayers actually paying and handing over money to oil and gas firms for investments being made. None the less, those companies wanted still more and they used the fiscal forum to demand that a price floor be introduced—and, surprise, surprise, they got it.

In spring 2023, OEUK board members of Harbour Energy and Equinor met with Treasury officials. The minutes, secured via a freedom of information request, state that the “Equinor reps smiled” at Government’s reassurances—yes, I am sure they did.

[Wera Hobhouse (Bath) (LD)]

The hon. Lady is eloquently setting out how the Government are responding to heavy lobbying from the fossil fuel industry. Does she agree that no future generation—neither our children nor our grandchildren—will ever thank us, the politicians of today, for having put all our energy and focus into the energies of the past? Does she agree that the fossil fuel industry should really look at itself as well?

[Caroline Lucas]

It will come as no surprise to the hon. Member that I completely agree with her. I do wonder what our own kids will think when the planet continues to heat still further, and what their kids, in turn, will think. What were we thinking of? What was the fossil fuel industry thinking of, certainly, beyond its profits? Apparently very little.

--- Later in debate ---

[Caroline Lucas]

I thank the right hon. Gentleman for his intervention, and I understand, of course, why he would want to make it. I would simply say that there is concern around perceived influence as well as direct influence. I have no reason to doubt for a second what he has just said—I am sure that it is absolutely true—but at the same time, when people outside this place look at the facts that I have been laying out this evening, in a dispassionate way I hope, alarm bells will start to ring, at the very least. We are talking about an industry that has a massive impact on the future of our planet, and I think it right, given the access that it appears to have to people in high places, to have this debate and raise those questions in this place.

[Wera Hobhouse]

Does the hon. Lady agree that, although we all roughly agree that we need to get to net zero, the biggest problem is the pace of change? The fossil fuel industry has successfully lobbied us all to say, “Not so fast! You can’t do it so fast. Don’t pull the rug from under our feet.” That is the biggest danger we face, because if we miss the target, there is no point talking about net zero. We have a 2050 target and we need to reach it urgently; we cannot delay any further, or go at a slower pace than necessary.

[Caroline Lucas]

I thank the hon. Member for her intervention, which reminds me of a powerful thing that the US campaigner Bill McKibben says: delaying is the new denial, and winning slowly is the same as losing. There is a real imperative here to be fast.