Budget Resolutions

Martin McCluskey Excerpts

Monday 1st December 2025 Commons Chamber

[Harriet Cross]

Yes, absolutely. Many flights that take off from Aberdeen are full of workers who are leaving north-east Scotland for Norway, taking their skills and taxable income with them. Norway welcomes the opportunity for investment in its energy sources. Norway drilled more than 30 new exploration wells in its North sea this year. We drilled zero. That is not because the North sea is different on either side of the boundary line, but because of the United Kingdom’s fiscal and regulatory regime. We are banning ourselves from our own resources.

We are making it so financially unviable to get at our own resources that we are becoming more and more reliant on other countries for our energy security. That does not make sense. Even if we come at the issue from a green angle and pretend that we are helping the climate, imports are more carbon intensive. We are bringing more carbon-intensive energy, which we need, into the UK. The Government love telling us that we will need oil and gas for years to come. We will, but we will not be using UK oil and gas for years to come. We will be using oil and gas from Norway, Qatar, Mexico or America, and we will import it at a huge carbon cost, and at a huge cost to the Treasury through loss of tax, other revenue and investment.

Offshore Energies UK states that £50 billion of investment will be lost because of the EPL being kept in place. That £50 billion could go to a huge number of schools, roads or NHS projects, or it could fill any deficit that we have, but no, it is being left, because the ideology of this Government is to run down our domestic oil and gas sector.

When I am out having constituency meetings in north-east Scotland, I spend most of my time listening to people who are worried about their jobs. They are worried about when—not if—their job will be lost, and where they will get another one. There are no new jobs in the oil and gas sector. They are not being created. When a job is lost in north-east Scotland, or in any other constituency with oil and gas jobs, there are no replacement jobs. Our skilled workers are moving abroad. That expertise and those skills—the ones that will drive the transition and keep our communities together—are moving away.

One of the most cynical things that the Government did on Wednesday last week, when they chose to keep the EPL, was to release their consultation results for the future of the North sea. They thought that the people of north-east Scotland were so dim, so stupid, that they would not realise that keeping the EPL in place was going to have a destructive impact. They thought that they could wave a little flag with “North sea future plan consultation” written on it, and it would distract us, but guess what? We are not distracted. We know that it does not matter how many tie-backs are allowed, or whether we rename a licence as a certificate; that will not make any difference when it comes to how long the North sea lasts, because we do not have the fiscal regime to make it viable.

I met representatives of a large oil and gas producer on Friday—I am sure that no Government Members did, because they do not actually engage with the sector or listen to it.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)]

Rubbish.

[Harriet Cross]

Well, in that case, the Minister will have heard exactly the things that I hear from it, so why has he not acted on them? I asked the company I met on Friday what it thought about the North sea future plan paper. Its words to me were: “We didn’t need 170 pages, we just needed a fair fiscal regime.” That is all it wants. It wants the EPL to be taken away, and it needs the fiscal regime to make sense.

The EPL windfall tax was brought in when there were record prices. Last week, the Government defined “windfall” as $90 a barrel and 90p a therm, yet we have to wait until 2030 to get that. We therefore now have a windfall tax on $68-a-barrel oil and about 80p-a-therm gas. Why do we need to wait until 2030? Why are we doing that to our oil and gas sector? Why are we making sure that they are completely taxed into the ground? Why are we making investment unviable, ensuring companies move abroad and undermining our industry? We have defined what a windfall is, but we will still tax companies on windfall profits now. That does not make sense. There is no windfall. We are now taxing the oil and gas sector so much that the tax revenues are falling. The decrease in revenue from the oil and gas sector last year was 40%. Why was that? It is because investment is going abroad and production is falling. It is because it is not viable to invest in the UK any more.

A company I met last week said that it is more stable to invest in west Africa than the North sea. That is the situation that is being created by this Government. That is the issue that we see in north-east Scotland, and it is my constituents and the constituents of neighbouring MPs who are feeling the brunt. My constituents do not talk about career progression, but about career survival: “How much longer will my job last? How many more redundancy rounds will I survive?” Those are the conversations we have in north-east Scotland. That is the reality of the oil and gas sector in north-east Scotland, and that is the absolute madness of the policies that this Government are following.

Will the Government, please, for the future security of our energy, for £50 billion of investment that could come into our energy systems, and for the survival of tens of thousands of jobs, scrap the EPL? It must be scrapped. In no other sector in any other part of the country would this Government allow that many jobs to be lost, yet they are willing to do that to the energy sector in north-east Scotland, and to our oil and gas workers, and that is completely irresponsible.