Oil and Gas Industry

Oral Answers to Questions — Scotland – in the House of Commons at 12:00 am on 27th April 1999.

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Photo of Anne Begg Anne Begg Labour, Aberdeen South 12:00 am, 27th April 1999

What measures his Department is taking to assist the oil and gas industry in Scotland. [80999]

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

The Government have set up the oil and gas industry task force under the chairmanship of the Minister for Energy and Industry, who is based at the Department of Trade and Industry, to examine the key issues facing the industry and to produce recommendations for action by the summer. My noble Friend Lord Macdonald, the Scottish Office Minister responsible for business and industry, is vice-chairman of the task force, and Scottish Office officials sit on the main task force group and on three of the working groups.

Photo of Anne Begg Anne Begg Labour, Aberdeen South

I am sure that my hon. Friend will be pleased to note that the people from the oil industry in Aberdeen with whom I have had contact are pleased with the setting up of the oil and gas industry task force, and speak highly of the progress made so far. Can he confirm that the Labour Government will continue to support the oil industry, which is the major employer in my constituency, and will not treat it as some kind of "liquid plug" to fill the gap in Scotland's finances that would be caused by the Scottish National party's plans for divorce?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

I am pleased to hear that the task force is being well received. It is working hard, and includes representatives from industry and the unions, as well as from the Scottish Office. It was set up in the context of a 25-year low in oil prices but, although the price of oil is rising now, it is very important that we continue to support the task force and enable the industry to compete in very tight international markets.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

Will the Minister explain what will happen to the functions of the Department of Trade and Industry with regard to the oil industry? My constituency has the largest oilfield in the European Union, but will it have to rely on civil servants in Aberdeen to decide certain aspects of oil policy? Will we have to ask the Scottish Parliament, to which oil policy may be devolved, for details of what is happening in the oil industry in Dorset?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

Energy policy will remain a reserved matter. I am sure that there will continue to be good co-operation between the Scottish Office and Westminster on that policy, as on all other issues.

Photo of David Marshall David Marshall Labour, Glasgow Shettleston

I was one of many Labour Members who visited the Kvaerner Govan shipyard last Friday. We all wholeheartedly supported the upbeat and optimistic presentation from management and shop stewards. Does the Minister agree that that excellent yard has a future, and will he say whether the task force will be able to put any oil and gas work the yard's way, to enable it to overcome its short-term difficulties?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

I am pleased to hear that my hon. Friend and other Labour Members have visited the yard and talked to management and unions. I am sure that that will have been a boost to the morale of the work force. We have set up a task force to examine how to find prospective buyers for the yard. It is working extremely hard, and I am sure that we all wish it every success.

Photo of Robert Smith Robert Smith Liberal Democrat, West Aberdeenshire and Kincardine

I welcome the task force and acknowledge that it is working hard and constructively, but it will be judged by the outcomes that it achieves. The Minister has said that the oil price is rising, but will he assure the House that the Chancellor of the Exchequer has learned the lesson of the Government's first two years in power, and will not regard the higher oil prices as an excuse to re-examine the tax regime and increase taxes on the oil industry?

Photo of Mr Calum MacDonald Mr Calum MacDonald Parliamentary Under-Secretary (Local Government and Transport), Scottish Office

That is a matter for my right hon. Friend the Chancellor but, through the task force on the oil and gas industry, we will examine a range of measures to support and develop the oil industry, some of which are already being implemented.