The Government do not subsidise fossil fuels exploration, and support international efforts to eradicate inefficient fossil fuel subsidies and deliver net zero objectives. In addition, since 2021 no Government support has been provided to the sector overseas, including from UK Export Finance.
Really? At COP26 the UK signed up to a pledge to eliminate inefficient fossil fuel subsidies, but now the windfall tax has a super deduction loophole worth £11 billion to oil and gas companies—a benefit enjoyed by no other industry. That money could pay to insulate 4 million homes or build renewable power for millions of homes. This will not reduce bills, and it will drive a coach and horses through our climate commitments. Is it not a terrible way to spend public money as well as breaking our climate obligations?
Only for Labour Members—and perhaps some other people on the Opposition side of the House—is it possible to have a 75% tax on the sector, with the levy alone bringing in £25.9 billion between 2022-23 and 2027-28, and then talk about subsidy. Tens of billions of pounds come from the oil and gas sector in this country, and it provides energy security, keeps the lights on and keeps people warm. If the hon. Gentleman’s party were in power, it would cut off domestic supply, weaken energy security and slow down our transition. In every way, they get it wrong.
I think the Minister needs to look at the dictionary definition of “subsidy”. The approval of the Rosebank oilfield would be an astronomical waste of public money, handing £3.75 billion in subsidy to a Norwegian company in tax breaks and incentives without making any difference to British people’s bills. Does he accept that it will not create jobs or solve our energy security needs, and that it will be a backward step for climate targets as it pumps out carbon dioxide equivalent to running 56 coal-fired power stations a year?
Of course, we are a net importer of oil and gas and, if we do not produce domestic gas, for example, we will have more tankers—[Interruption.] We will have more tankers with higher emissions coming into this country. We will undermine a sector—[Interruption.] Oil, gas and renewables is effectively one sector—[Interruption.] It is very hard to get through my answer with all this enthusiastic barracking. It will undermine the energy security of this country if we do not produce oil and gas here while we are burning that. Thanks to the legislation of this Government, we can be confident that it is compatible with net zero because we have carbon budgets that are taking us there.
Rosebank is an oilfield and 80% of the fossil fuels produced will be exported. If what the Minister says is true, why has the Government’s own net zero tsar said that approving Rosebank would undermine our climate leadership on the world stage and “trash” our net zero pledge? Why are leading scientists warning that
“we already have more than enough coal, oil and gas to overshoot what is deemed our best hope of maintaining a liveable climate”?
Why is the Minister right and all the scientists wrong?
It is quite simple. We are reducing demand for fossil fuels, but we are net importers of them. Producing them here and destruction of demand have to be our focus and that is what the Government are doing. We are getting rid of the power stations burning coal. In 2012, nearly 40% of our electricity came from coal, the most polluting of fossil fuels—that was the legacy of Edward Miliband—but by next year it will be zero. We have moved from 7% to well over 40% with renewables, as the Secretary of State has said. It is economic insanity for us not to produce the oil and gas that we will need for decades to come when we are a net importer.