Energy Profits Levy: North-east Scotland
John Cooper Excerpts(2 days, 21 hours ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Harriet Cross
Exactly—I thank the hon. Member for that intervention. On that point, I will skip forward a little bit to my first question to the Minister, which is when the Treasury will publish its consultation outcome on the future fiscal regime for the North sea, and whether the Government will wait until 2030 to implement that new regime, or whether they will implement it straightaway. Investment decisions worth billions are being put on hold waiting for that answer. They need to know a month, or ideally a week—not just a vague “in due course”.
Capital investment forecasts for the North sea have fallen by 84%, from over £14 billion to £2.3 billion for the period 2025 to 2029, and Offshore Energies UK calculates that £26 billion of economic value will be lost under Labour’s EPL extension. Some 90% of OEUK’s member companies are now seeking opportunities overseas, and Aberdeen and Grampian chamber of commerce agrees, warning that the EPL is
“eroding investor confidence and driving capital to rival overseas regions.”
Shell’s finance chief has called for certainty and a “stable environment”, noting that the UK’s 78% tax rate is “larger than most” other countries and makes it difficult to have confidence in long-term investments.
Although Norway, which the Government love to use as a comparison, has a similar tax rate, the Government know that this is a false comparison, because Norway also offers full capital cost deductions. It refunds almost 72% of losses to companies and gives a 24% uplift on investment over four years. The result is that Norway attracts 3.8 times more investment than the UK into the same mature North sea basin. Norway’s North sea will see around £35 billion in exploration and production investment through to 2030; ours will see just £10 billion.
John Cooper (Dumfries and Galloway) (Con)
I am from the south-west of Scotland, which is as far from the north-east as one can get in Scotland. None the less, this is a huge issue for the whole country. My hon. Friend is making a point about the North sea basin being mature. We always hear that—it is mature, it is declining—but the Norwegian investment is exploiting areas of gas and oil that previously would not have been accessible. New techniques such as horizontal drilling are delivering huge benefits for the Norwegian economy; we are denying ourselves those benefits. Is that not the case?
Harriet Cross
It is absolutely the case—my hon. Friend is completely correct. We are forgoing so many opportunities in the North sea to secure energy for our country and safeguard the skills and jobs that we will need for the transition. There are endless opportunities that, for some reason, we are willing to leave under the North sea.
That brings me to my second question for the Minister. Does the Treasury recognise the damage that the EPL is doing to the North sea? We know that the decline in the North sea did not start with the EPL—it is a mature basin—but the EPL is accelerating that decline. Its ripple effects go far beyond the energy producers themselves. The supply chain is haemorrhaging jobs. Hunting in Aberdeenshire laid off 143 employees; Wood Group cut 200 jobs last year; Belmar Engineering entered liquidation this year, with 48 redundancies; Beam in Westhill collapsed, with 100 jobs lost; Well-Safe Solutions cut about 45 jobs; and Harbour Energy has cut 250 jobs, which is 25% of its onshore workforce. I keep coming back to the words that the Chancellor said when Harbour Energy announced its job cuts earlier this year and cited the EPL as a principal factor. She said that this was just
“a commercial decision by one company”,
but the list I have given—which is not exhaustive—is evidence that that is not the case. It shows that the Chancellor either does not understand, or does not want to understand, the impact the EPL is having.
As I am sure other Members do, I regularly visit companies in the north-east of Scotland whose order books for offshore work have completely dried up, forcing them to adapt their business models to other sectors just to keep afloat. Many of those companies do not know whether they will be here in 12 months’ time. They are not hiring, they are struggling to justify investments, and in many cases, they can do nothing more than hope for a change in Government policy. These companies are owned, grown and run by some of the most innovative and entrepreneurial people I have ever met. They are not afraid of branching out or trying new things—they have done so for their whole business careers—but they are being backed into a corner and are running out of options.
The irony is that this policy is failing on its own terms, in shrinking the very economic activity that it seeks to tax. The Office for Budget Responsibility originally forecast that the energy profits levy would raise more than £65 billion between 2023 and 2028, but the revised forecast is £21.1 billion. We are on track to miss the target by £44 billion, and revenue from the EPL fell from £4.2 billion to £2.7 billion between 2022-23 and 2024-25. His Majesty’s Revenue and Customs figures show that revenues from oil and gas production were down 27% last year.
When did the Treasury last carry out an impact assessment of the EPL’s impacts on production, jobs, economic activity and tax receipts? Have those assessments been revisited following those recent HMRC figures showing the downgraded forecast? Forecasts show that the policy could ultimately cost the Treasury £12 billion in lost revenue by 2050. We have reached the point where the level of taxation means less money. The Government are taxing the North sea so heavily that tax revenues are being lost. We cannot tax jobs that no longer exist, we cannot tax production that no longer exists and we cannot tax businesses that no longer operate in the UK.
There is something else that the Government are ignoring. From the early 2030s, the Treasury will face a £2 billion to £3 billion cost each year in decommissioning rebates, a decade earlier than expected. The premature shutdown of fields, driven by the EPL making them too unviable to continue, makes that liability ever more imminent.
The policy is also undermining our energy security at a time of global instability, suppressing domestic oil and gas production and increasing our dependence on foreign imports. We are now 42% dependent on energy imports. By 2030, it is projected that our reliance on imported gas will increase to 80%, and our liquefied natural gas imports have increased by 40% in the past year alone. Those changes are partly down to geology, but the decline is accentuated by the punitive tax regime for companies operating out of the North sea.
Estimates suggest that there could be 7.5 billion barrels of oil equivalent remaining in the North sea that could be recovered with the right investment. We could cover half our energy needs to 2050 with North sea reserves. If we drive investment away, we will leave that resource untapped, only for imports from elsewhere to cover them. That is a huge loss of economic opportunity for the north-east of Scotland and the UK as a whole.
That brings me to my final question, and I will soon conclude. Will the Treasury please commit to de-linking oil and gas pricing in the energy security investment mechanism so that both commodities are assessed on their individual market conditions? Time is running out, and that is not an exaggeration. Every month of inaction means another thousand jobs gone. Every delayed investment decision means less energy security for Britain. Every skilled worker who leaves to go overseas is one we will struggle to get back when we need them for the energy transition.
I and, more importantly, the oil and gas sector have four questions for the Minister. First, when will the consultation outcome be published? Secondly, does the Treasury recognise the damage it is inflicting? Thirdly, when was the last impact assessment carried out by the Government? Fourthly, will the Government de-link oil and gas in the energy security investment mechanism? The north-east of Scotland has powered Britain for 50 years. We have contributed hundreds of billions in tax revenues. We developed expertise that is renowned around the world. We have so much more to offer to meet the UK’s current and future energy needs, but only if we are given the chance. Scrapping the EPL is a vital part of that chance.
Dan Tomlinson
As I said just a few moments ago, 100,000 jobs are directly or indirectly linked to the work and activities in this sector, and it is vital that we support people with that transition. In the long-term, carbon capture and storage alone is expected to support 50,000 skilled jobs by 2050 as we move towards a clean energy transition. I am acutely aware—I have heard it from Opposition Members, and I am sure that I will hear it from my hon. Friends in a second—that we must get the balance right between the timing of phasing out and winding down production in the North sea, and ramping up the clean energy and good jobs that we need for the future. We have to do all we can to protect the sector.
Dan Tomlinson
I will first take the intervention from my hon. Friend the Member for Edinburgh South West (Dr Arthur).
Dan Tomlinson
I believe the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) was slightly quicker in standing up than my hon. Friend.
I do understand my hon. Friend’s points. It is very important not to be cowardly in politics, which is why I will make sure that we come forward as fast as we can to set out the approach after the EPL is set to end. This Government, under the leadership of a whole range of Cabinet Ministers, is making sure that we can provide that long-term certainty, not chopping and changing when it comes to our policies on net zero.
The hon. Member for Gordon and Buchan mentioned energy security, which links to the challenge we have with energy bills. It is worth recognising the truth that, even if we extracted every single drop of oil and gas in the North sea, that would not make any material difference to people’s energy bills or the prices that people pay at the pump. Oil and gas are traded on international markets, and given the declining basin on the UK continental shelf, domestically produced oil and gas do not do anything to reduce prices. In fact, it is our reliance on oil and gas that leaves British consumers exposed to unstable fossil fuel markets.
In closing, this Government are determined to provide a balance—
Dan Tomlinson
Does the hon. Member really wish to intervene? [Interruption.] Go on.
John Cooper
I thank the Minister for giving way on that point: this is about balance. We need to find a balance in the transition of people coming out of oil and gas and moving into renewables. The difficulty is that we cannot say to these highly-skilled people that there is a great job for them in renewables but it is going to be 10 years down the line. That is no use to them at all: they have bills to pay and families to feed. The balance is out of kilter, and I am afraid that the Government are getting this wrong.
Dan Tomlinson
I disagree that the Government are getting this wrong. We are doing our best to try to find the right balance to support people, industry and jobs.
We will continue to provide a balanced, responsible and predictable regime for the UK oil and gas industry, which I hope will continue to drive growth, support workers and communities, protect our energy security and ensure a prosperous future for the North sea as we make our way towards net zero. Our commitment, and my commitment as a Minister, to the future of the North sea is clear, and I will continue to engage closely with the industry, workers and Members across the House on this important issue.
I again thank the hon. Member for Gordon and Buchan for securing this important discussion, and I thank Members from across the House for their contributions.
Question put and agreed to.
Oral Answers to Questions
John Cooper Excerpts(1 month, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
John Cooper (Dumfries and Galloway) (Con)
Damian Hinds (East Hampshire) (Con)
James Murray
I have been involved in many debates in this House that the right hon. Gentleman has been a part of as well, and we have set out how the decisions we have taken mean the system coming in from April next year will maintain generous tax reliefs within the agricultural property relief and business property relief system, while also raising revenue in a fair way to support the public finances. That money for the public finances, as I and my right hon. and hon. Friends have said many times today, is crucial to have economic stability and to get our public services back on their feet.
John Cooper
The Chancellor elicited much public sympathy with her recent tearful appearance on these Benches, but over the summer I have had Dumfries and Galloway farmers in tears at the loss of the next generation of farming. A new Centre for the Analysis of Taxation report says that HMRC’s own figures indicate that these changes to taxes are unfair and unbalanced. Will the Minister please think again?
James Murray
The hon. Gentleman is wrong. The CenTax report he refers to is independent analysis demonstrating that, in its opinion, the reforms improve on the current position and are expected largely to meet the Government’s objective. In fact, the report validates the Government’s position.
UK Infrastructure: 10-year Strategy
John Cooper Excerpts(3 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Darren Jones
My hon. Friend is absolutely right. One of the challenges that I learned on coming into government is that the last Government did not even ask what the maintenance backlog was in certain Departments. There was not a clear set of data that told us which assets the Government own and the quality or state of them, so we have some pretty basic work to be getting on with through NISTA as we allocate the money, which will go directly to the schools, hospitals and other public sector buildings that have been ignored for many, many years.
John Cooper (Dumfries and Galloway) (Con)
The creation of another new authority will be met with an eye-rolling sigh in Scotland, because although it is called the National Infrastructure and Service Transformation Authority—a very shiny title—the reality is that it will have little oversight in Scotland. The plan announced today will generate Barnett formula money, which will go to Holyrood and disappear—it will go into ferries that do not float and things like that. In my constituency the A75 road is a piece of critical national infrastructure. It services the ferry ports to Northern Ireland, and it is vital for all the countries that make up the United Kingdom. Will we see any money coming for that road through today’s innovation, or will the money once again disappear into the coffers in Holyrood?
Bank Closures and Banking Hubs
John Cooper Excerpts(4 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
John Cooper (Dumfries and Galloway) (Con)
At the risk of disappointing the hon. Member for Blyth and Ashington (Ian Lavery), I rise not entirely to criticise the banks, which have done tremendous work on apps and the like, and many people—not all of them spring chickens—make great use of them. But as banks retreat from bricks and mortar locations, a problem is that even silver surfers who are comfortable with the technology may simply not be able to get the relevant app to work. In rural Dumfries and Galloway, we have too many notspots, where the mobile phone signal is sketchy at best and non-existent at worst. Similarly, there is a lack of decent broadband. The ground truth is that while it might be easy-PC for some to get online, sclerotic broadband and thick stone walls designed to keep out the Scottish damp make too many computers and smartphones expensive placemats.
The need for access to face-to-face banking services remains high, as we have heard. As we have also heard, there are numerous issues with the current banking hub regime. Take Wigtown in my constituency: it is Scotland’s official book town, yet the current banking hub criteria fail to capture the significance of that. Wigtown is evaluated on its modest resident population, with no account taken of the huge influx of visitors when its famous book festival opens its covers. I have a stream of reports of the town centre cash machine running out of spondulicks outwith the festival and anecdotal reports of people gathering for a trip to the nearest hub in Newton Stewart to lift their pensions. That hub is 12 miles distant, and notwithstanding our positively balmy climate in Dumfries and Galloway—no, really—it is not walkable. As for the public transport system, let us just say that we need a calendar and not a stopwatch to time the buses.
When Dalbeattie, the third biggest town in my constituency with a population of more than 4,000 souls and a slew of thriving businesses, struggles to get a banking hub, surely there is a compelling case for lowering the threshold for hubs. I accept that we cannot have an ethos of “wherever two or three are gathered, there shall be a banking hub”, yet equally, we cannot expect one ATM to carry the banking needs of hundreds, if not thousands, of people.
Banking has come on in leaps and bounds since the days of little pens chained to counters and limited opening hours, but on balance, too many people are being left behind in the technological revolution. American banker Felix Rohatyn, who rescued New York from financial disaster, said:
“banking is not simply about profit, but about personal relationships.”
Even in this digital age, we need to capture some of that spirit via our banking hubs.
Oral Answers to Questions
John Cooper Excerpts(7 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
James Murray
I hope my hon. Friend will welcome the £200 million investment in the Grangemouth facility, which has already been spoken about today. I hope he will also support the Government’s decision to restore fiscal responsibility to public finances within the tough fiscal rules that the Chancellor set out at the Budget.
John Cooper (Dumfries and Galloway) (Con)
The Chancellor of the Exchequer (Rachel Reeves)
Economic stability and growth are vital to help businesses across the UK to grow. The Lloyds business barometer published last week showed business confidence up 12 points, building on recent surveys by EY and PwC that show that business and investor confidence is rising. The Government are partnering with business to unlock investment and to drive growth.
John Cooper
The Chancellor, with her unimpeachable record in the sector, will know that economics is known as the dismal science. As a member of the Business and Trade Committee, rather than using second-hand statistics, I have spoken directly with businesses one to one and found that the mood is indeed dismal. After her dud Budget, can she think again and go back on this desperate jobs tax? She is in danger of becoming tough on growth and tough on the causes of growth.
Rachel Reeves
Conservative Members welcome the additional money for the NHS, but they never welcome the means to pay for it, which is why we are in the mess that we are with the £22 billion black hole we inherited from the previous Government. The hon. Member says that these are backward-looking surveys. The EY survey of UK CEOs found that 82% felt optimistic. PwC’s latest global CEO survey ranked the UK as the second-most attractive global destination for international investment, and last week the Lloyds survey showed a boost in business confidence. Those are the facts. People are choosing Britain as a place to invest and to locate their businesses. On the Government side of the House, we welcome that.
Family Businesses
John Cooper Excerpts(7 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
John Cooper (Dumfries and Galloway) (Con)
Britain’s got talent! Right across this great land we have many clever people innovating and working hard. As a member of the Business and Trade Committee, I have been in places as far apart as Exeter and Glasgow, talking with people who make everything from satellites to sausage rolls. The mood, however, is not good. The strivers are still striving, straining every sinew to deliver success, but confidence is not so much on the floor as deep in the cellars below.
In my constituency I spoke to a family firm of bakers who had modest expansion plans—two or three extra staff drawn from the ranks of youngsters who might struggle to find that all-important first job. Those plans are parked; those youngsters, for all I know, are on the dole. Similarly, The Usual Place, a charity in Dumfries that provides wonderful opportunities for youngsters in catering, is making cutbacks. Six people will lose their jobs as the reality of the anti-business agenda—designed in No. 11 Downing Street—bites.
When we, in government, proposed raising national insurance to fund the NHS, one Labour Back Bencher denounced it as the “worst possible tax rise”. Now that same politician is Chancellor, and the tune has changed. And spare us the claim that Labour’s manifesto pledge on national insurance covered only that paid directly by employees, which is sophistry—sheer sophistry.
We lack not for start-ups in Britain, but we struggle for scale-ups—the firms that expand and grow. Family businesses are often among the front rank of successful scale-ups, as their multi-generational nature and the investment, literal and metaphorical, of senior figures imbues stability. The Prime Minister talks a good game, but talk is cheap, and his actions have expensive consequences. He said that he and his Chancellor had made it clear to Cabinet colleagues that in each of their briefs
“growth is the number one mission”.
Well, the Deputy Prime Minister did not hear—perhaps her rave music was too loud—for how is growth compatible with her Employment Rights Bill, which the Government’s own analysis says will cost businesses up to £5 billion a year. That is £5 billion, when grandparents are in tears as family farms face being split up; £5 billion, when families who have been in business for decades look at their bottom line and despair?
The worst aspect of that Bill is the premise that all trade union organisers are saints and all business owners are robber barons intent on exploiting the workers. [Interruption.] The unions are restive. The Secretary of State for Scotland would not attend a reception in his own magnificent Dover House because of a picket line—and how ironic that the meeting was with the Scottish CBI. Now those same strikers have forced the cancellation of a Scotland Office event with National Air Traffic Services. I have said it before, and I make no apology for saying it again: “Unions gonna party like it’s 1979.”
Labour Members see business as a dripping roast to be devoured, taxed to a standstill, and not much mischief if it fails. They perceive a nobility in the public sector when they see only avarice in the private sector, but they are as wrong about that as they are about profit being a dirty word. The drivers of growth are in the private sector. They deserve our admiration and, more important, our support. What can the Government do for them? How about getting out of the way? How about less legislation, not more? How about less petty regulation, and more can-do attitude? How about lightening the tax load, not adding to it? Labour needs to step away from its anti-business policies so that firms in every part of the country can step up with wealth creation, with the private sector leading the charge.
Inheritance Tax Relief: Farms
John Cooper Excerpts(8 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
John Cooper (Dumfries and Galloway) (Con)
It is a pleasure to serve under your chairmanship, Dr Murrison.
I represent Dumfries and Galloway, which is the land of milk and slurry. With due deference to the hon. Member for Strangford (Jim Shannon) and his super-valuable land, we have some of the most productive grassland in the whole country. The point that the farmers there make to me all the time—they do not, by the way, have the large estates, but are small and often tenant farmers—is that Treasury Ministers, like accountants, often know the cost of everything and the value of nothing. That is the situation.
There is a fundamental misunderstanding about the reliefs. They are not loopholes; they were specifically put in place to allow multigenerational farming to continue. One of my farmers, Robert, who farms near Moniaive, said:
“APR and BPR are not, as has been suggested, ‘loopholes’ but targeted and necessary reliefs designed to allow multi-generational farming businesses to contribute towards food production and economic growth.”
Chris Bloore (Redditch) (Lab)
Labour Members have made several attempts to project possible tweaks to the legislation, with feedback from our members. On that point about loopholes, however, I do not think that anyone is saying that family farms have tried to abuse loopholes; it is the big billion-dollar corporations and land banks that have started to exploit them—[Interruption.]
John Cooper
I thank the hon. Gentleman for his intervention, but as he can hear from Opposition Members it has repeatedly been called a loophole. I have been told in the main Chamber that I am scaremongering, which is not right either. That is nonsense—the fear out there is real. Listen to the noise outside. The people outside are not multimillionaires; they are not shroud waving for the sake of it and are not exploiting a loophole. This is a bit like red diesel—again, I suspect, the Minister does not even know what that is. Red diesel is priced cheaply, and that has a direct link with, and effect on, the price of food that we pay in our shops. The whole system is designed, first and foremost, to ensure food security and to deliver quality food at low prices.
We have heard about tweaks and so forth, but it is not for me to suggest tweaks. The Government are in power with a huge majority; they must think again and it is not, as I say, for me to sit down to write out specifics for them. They have the ability not to make a great screeching U-turn, but to make the tweaks that can protect this most important and vital industry. Will the Minister please take away the message he has heard today—including the change of tone from those on the Benches behind him—that this is a real and serious problem? Changes can be made. It is not too late.
Agricultural and Business Property Reliefs: OBR Costing
John Cooper Excerpts(8 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
James Murray
I thank the hon. Gentleman for raising his constituent’s concern. I do not know the specifics of the case, but more broadly, investment decisions depend above all else on a stable economy and stable public finances. Without the hard work that we have done since taking office to fix the public finances and bring back economic stability, investment would be hampered, and our growth ambitions would not materialise in the way that we are determined to ensure happens.
John Cooper (Dumfries and Galloway) (Con)
There will be a rally on Saturday, and the Minister appears to imagine that this indicates acclamation for his policy. We heard earlier in the week from the hon. Member for Falkirk (Euan Stainbank) and today from the hon. Member for Newcastle upon Tyne Central and West (Chi Onwurah)—both well-known rural areas—that this is all about the landed estates and wealthy people, but I can assure the Minister that the farmers I will speak with in Castle Douglas on Saturday are tenant farmers and family farmers, and they face being put off the land after generations. Is he really suggesting that I should tell them they have nothing to worry about?
James Murray
I am not going to tell the hon. Gentleman what he should say to his constituents, but what I can tell him about the Government’s policy is that we have reserved generous inheritance tax reliefs for people in the situations he describes. I encourage anyone who is concerned to seek advice, to understand exactly how the new rules might apply to them.
Winter Fuel Payment
John Cooper Excerpts(1 year, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
John Cooper (Dumfries and Galloway) (Con)
We have heard descriptions today of pensioners as millionaires. We have heard that this is a principled decision to cut money from them. I am astonished at that description. Like my hon. Friend the Member for South West Devon (Rebecca Smith), I am from the south-west—the south-west of Scotland—and I can count on one hand, I would suggest, the number of millionaire pensioners there. Even if their homes were worth millions, having risen in price through no fault of theirs, they are asset-rich, and that is very different from being cash and liquidity rich. If they are hit with a bill, they cannot sell their home. That leaves people in an absolute bind.
We have heard very little today from the SNP, because in Scotland the SNP Government have the ability to ameliorate this decision, should it go ahead. It will cost, they estimate, £160 million. I accept that is not buttons; it is not peanuts. However, the last Conservative Government sent £41 billion to Scotland and I think we should be able to find that money in Scotland to help the worst-off in our society. This is a wrong-headed decision, and I am astonished to hear it being described as a principled decision.