North Sea Oil and Gas Producers: Investment Allowances

Baroness Bennett of Manor Castle Excerpts

Tuesday 7th June 2022 Lords Chamber

[Baroness Penn (Con)]

The Government absolutely recognise the importance of consistent baseload power as well; that is why we are committed, for example, to more investment in nuclear.

[Baroness Bennett of Manor Castle (GP)]

The OECD last year calculated that UK support for fossil fuels, through tax breaks and subsidies for exploration and research and development, totalled £10 billion. Can the Minister tell me what the new figure will be with the 80% investment allowance? Moreover, last January the noble Lord, Lord Grimstone of Boscobel, told me that the Government were seeking to ensure that free trade agreements included an end to fossil fuel subsidies. How is that going?

[Baroness Penn (Con)]

I believe that it is going very well. As I have explained to the House, according to the IEA’s definition of fossil fuel subsidy, the UK is subsidy-free and will continue to be so. We are happy to offer investment allowances to companies investing in the North Sea: it is a key part of our energy security strategy and consistent with our path to net zero. I reassure the noble Baroness, that those investment allowances can be used to support the decarbonisation of upstream activities, which could include electrification, making it a cleaner form of energy.