Oil and Gas: North Sea

Energy and Climate Change – in the House of Commons at 12:00 am on 12th May 2016.

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Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Business, Innovation and Skills) 12:00 am, 12th May 2016

What steps she is taking to increase exploration for oil and gas in the North sea.

Photo of Andrea Leadsom Andrea Leadsom The Minister of State, Department of Energy and Climate Change

This year the Government have pulled out all the stops to support the oil and gas sector. This includes a fiscal package worth £1.3 billion over five years, £20 million for new seismic surveys and, of course, our core policy of establishing the Oil and Gas Authority, whose job is to maximise economic recovery from the North sea. This is a vital UK industry, and we are totally committed to keeping the UK continental shelf as an attractive destination for investment, securing hundreds of thousands of jobs.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Business, Innovation and Skills)

I thank the Minister for her answer, and I do appreciate the work that is being done. However, while the SNP welcomes the support announced in the Budget and what has been done, those who have lost their jobs in the north-east would not necessarily agree with her characterisation. It is essential that we listen to those in the industry who are calling for a strategic review of the fiscal and regulatory regime. What steps are being taken to review the tax rates and the investment allowance?

Photo of Andrea Leadsom Andrea Leadsom The Minister of State, Department of Energy and Climate Change

As I said, the Treasury has already taken enormous steps through fiscal policy towards the North sea to promote further oil and gas exploration. It is constantly looking at that; in fact, I am having a dinner next week to talk again to the maximising economic recovery group of operators and investors, the Oil and Gas Authority and so on to look at what more we can do, and the Treasury plays its full part in that.

However, we have to be clear that the Oil and Gas Authority is already transforming things such as production costs and the level of co-operation between different operators in the North sea. This is an incredibly important area. We have an inter-ministerial group, which I think is meeting again next week to discuss what more can be done. We are pulling out all the stops for the North sea.

Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

Although I sympathise with the constituents of Hannah Bardell who have lost their jobs in the North sea, would not the best thing for them be for us to create new jobs by allowing fracking in Scotland for those very people, with those skills, who have been denied the prospect of such jobs by the hypocrisy of the SNP Government in Scotland?

Photo of Andrea Leadsom Andrea Leadsom The Minister of State, Department of Energy and Climate Change

I absolutely agree. Obviously, it is a matter for the Scottish Government to decide, but one of the policy options I am looking at in my Department, together with the Department for Business, Innovation and Skills, is what more we can do in the energy space for those who have lost their jobs. For example, an experienced offshore engineer may well be able to retrain to work with offshore wind or even nuclear. There are therefore other opportunities in the energy space, and I know the Scottish Government are looking at that. I would certainly be delighted if they wanted to think again about the importance of shale gas.