Budget Resolutions
Debate between Martin McCluskey and Harriet Cross(3 days, 11 hours ago)
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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.
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.
Energy
Debate between Martin McCluskey and Harriet Cross(3 weeks, 1 day ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I beg to move amendment (b), to leave out from “House” to the end of the Question and insert:
“welcomes the extension of the Warm Homes Discount which this winter will provide £150 off energy bills for 2.7 million more families, taking the total households supported to around six million; regrets that the previous Government’s failed energy policy resulted in the worst cost of living crisis in generations; supports the creation of Great British Energy, to take back control of the UK’s energy system and provide energy security; notes that the Government is delivering the biggest nuclear building programme in decades, kickstarting Sizewell C nuclear power station, backing small modular reactors and investing in fusion power; further welcomes the consenting of enough clean power to provide power for more than 7.5 million homes across the country; also welcomes that the Government is bringing forward a plan for the North Sea’s energy future, and the creation of tens of thousands of jobs in nuclear, carbon capture, hydrogen and renewable industries as a result of the Government’s clean power mission; and recognises the Government is putting the UK back in the business of climate leadership, for energy security today and the protection of future generations to come.”
For too long the British people have paid the price for a broken energy system and an over-reliance on imported fossil fuels. When Russia invaded Ukraine in 2022, the wholesale price of gas went spiralling, and as a result our typical energy bills nearly doubled in the space of a year. This was a direct result of successive Conservative Governments refusing to invest in clean, home-grown power while leaving our electricity grid to wither. In recent years, millions have struggled with fuel poverty, and many still face enormous debts today. Their failure was a disaster for family finances, business finances and public finances.
As we head into another winter, the effects of this are still being felt by the many, but we must be honest: this was neither unexpected nor unavoidable. Since the 1970s, half of the UK’s recessions have been caused by fossil fuel shock. The Conservatives had 14 years to do something about our energy security, but instead of making us stronger and more secure, their policy of complacency, dither and delay left us completely reliant on petrostates and dictators to keep the lights on.
Harriet Cross (Gordon and Buchan) (Con)
I was just wondering whether the Minister remembers what else happened in 2022, around February time, that might have impacted gas prices.
Martin McCluskey
I have mentioned the war in Ukraine in 2022, but this was not a crisis caused only by the war in Ukraine. It was a crisis caused by 14 years of under-investment—as I just said there, it was dither and delay.
Martin McCluskey
My hon. Friend makes an excellent point. I will carry on arguing for jobs across the UK, but particularly in Scotland and not all in Cornwall.
I will make some progress on my speech. Even in the face of rapid progress across the country, some, including many on the Opposition Benches, still cling to the status quo of stagnation and decline. Those who suggest that we should simply generate more electricity and generate more electricity with gas, leaving billpayers across Britain—
Martin McCluskey
If she will allow me to make progress, I will allow her to intervene. Those would leave billpayers across Britain to deal with the consequences. The reality is, as the shadow Secretary of State must know, that with our ageing gas fleet, half of which is more than 20 years old, in any scenario we would need to invest in rebuilding our power system. The truth is that replacing old gas plants with new ones would be significantly more expensive, and those costs would be met by consumers while also leaving us more exposed than ever to the global price of fossil fuels, over which we have no control.
Martin McCluskey
The hon. Gentleman will allow me to make some progress.
The data shows that solar and onshore wind remain the cheapest power sources to build and operate in this country. When faced with a choice between investing in new, expensive gas and increasing our reliance on unstable fossil fuel markets, or the alternative of clean, home-grown energy controlled by Britain, creating jobs for Britain, bringing investment to Britain and powering Britain, really, there is no choice at all.
Harriet Cross
The Minister just referred to the oil and gas sector as “the status quo” or something that we should be moving away from. Does he also mean the 100,000 jobs supported by that sector, the millions in investment and the billions that we get in revenue from that sector? Which part of that does he not support and which part of that does he not want to protect while we transition to new energies? It sounds to me like he wants to shut it down tomorrow. Those are my constituents, the local economy in my area and energy security for the country. He seems to be very willing to get rid of them.