Draft Scotland Clauses

Debate between David Mundell and Tom Clarke

Thursday 22nd January 2015 Commons Chamber

[David Mundell]

The hon. Lady makes a good point, and I am sure that our counterparts will want to raise that issue in the Scottish Parliament to ensure that the Scottish Government set out a timetable for devolution. Of course a strong body—an equivalent to the Office for Budget Responsibility—is required, and I am sure that that will be discussed as we go forward with the fiscal framework.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Does the Minister accept that nothing in this decent and honourable document diminishes the standing of local government, given that local authorities deliver more, day by day, to ordinary people than the Scottish Parliament or even this House?

[David Mundell]

I absolutely agree, and I was appalled by the comments of Joan McAlpine MSP in relation to denigrating local government in Scotland. Local government in Scotland currently does an excellent job under very difficult circumstances. We need devolution within Scotland, not the ever-centralising nature of the current Government.

North Sea Oil and Gas (Employment)

Debate between David Mundell and Tom Clarke

Tuesday 20th January 2015 Westminster Hall

[David Mundell]

I echo the comments of all contributors, who pointed out the importance and timeliness of the debate, given the challenges faced by companies operating in the North sea and all those who work in the sector in the United Kingdom; that was emphasised by my hon. Friend the Member for Waveney (Peter Aldous) and the hon. Member for North Tyneside (Mrs Glindon).

The Government are committed to the long-term future of the sector in the North sea. We recognise that the sustained fall in oil prices presents real challenges for the sector. Announcements of job losses, such as those we have heard about this afternoon, are a real concern and particularly affect Aberdeen and the north-east. The effects will be felt not only in the north-east of Scotland and by big international companies, but by the hundreds of small and medium-sized businesses that are an integral part of the supply chain. Those businesses work across the UK to service the sector, and they play a role in the whole of the UK economy.

We are committed—I hope that the hon. Member for Glasgow North West (John Robertson) accepts this—to working in partnership with others. I welcome the tone of the contribution of the shadow Scottish Secretary, the hon. Member for Glasgow East (Margaret Curran). We are committed to working with the Scottish Government, local authorities and the industry to provide all we can for those affected by job losses. I will pursue the issue that the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) raised about the Department for Work and Pensions. My colleague, the Secretary of State for Scotland, has committed to participate in the First Minister’s jobs taskforce, which was announced last week, and the Aberdeen city council’s oil and gas summit in February.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I apologise to the Minister and the House for not being at the earlier part of the debate; I was at a Committee speaking about, among other things, the issue of autism.

As the Minister was referring to the supply chain and jobs that link to the wider oil industry, may I remind him that in my constituency 30,000 people work in the Bellshill industrial park, and many of them fit that description? All of them are asking for honesty and transparency about the flexibility of the oil market and the oil industry.

[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.

Referendum (Scotland)

Debate between David Mundell and Tom Clarke

Monday 15th October 2012 Commons Chamber

[David Mundell]

As I am sure my right hon. Friend is aware, the Government have established a commission that is looking at the so-called West Lothian question and will deal with the issue he raises about the governance of England within a range of devolved settlements for the other nations of the United Kingdom.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Has anyone the responsibility—if so, who?—of ensuring that when this debate is reported over two years, people in Scotland can expect impartiality, particularly in broadcasting? That has not always been the case.

[David Mundell]

I am aware from contributions to debates about television in Scotland that people feel strongly about bias in some elements of the media. I assure the right hon. Gentleman that the normal rules he would expect to apply within an election period will apply during the referendum process.

Oral Answers to Questions

Debate between David Mundell and Tom Clarke

Wednesday 20th June 2012 Commons Chamber

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

7. What steps he is taking to reduce energy prices in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The Government are committed to ensuring that consumers get the best deal for their energy usage, and have put in place measures to help to reduce household energy bills. In May, I held a summit in Rutherglen, bringing together the big six energy suppliers, Scottish consumer groups and the regulator, Ofgem, to examine ways of addressing this issue.

[Mr Clarke]

Over the past eight years, average energy prices have increased by 140% per household, while the increase in average income for households has been a mere 20%. What are the Government doing to respond to people’s worries—especially those of low-income families, elderly people and people with disabilities—and to deal with this onslaught on vulnerable people?

[David Mundell]

The Government are continuing the cold weather and winter fuel payments, and bringing forward the green deal. We are also working with voluntary organisations across Scotland to help them to support the most vulnerable people, so that they can access all the fuel-related benefits that are available to them.