North Sea Oil and Gas Industry

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Angus Robertson (Moray): I am pleased to be able to wind up for the Scottish National party in this important debate. I declared my interest as a vice-chairman of the all-party group on the offshore oil and gas industry. I represent a constituency in which the industry provides considerable levels of employment. Sadly, my constituency has experienced high levels of unemployment in the industry and an export of jobs, as have many constituencies throughout the north of Scotland.

Since my election I have enjoyed the non-partisan approach on the oil and gas industry, with partnership, collaboration and co-operation with the Secretary of State for Scotland. We have worked hand in hand with those on the Pilot project, which is an innovative and positive way in which to embrace the oil and gas industry, Government and associated sectors. That is why I am frustrated and disappointed about so much that has happened recently. I am not simply whingeing but standing up for the concerns of those who work in the industry—just as the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) rightly stood up for the concerns of his constituents. We in the Scottish National party, and hon. Members from other parties, have taken the decision to stand up for our constituents. It is a right and proper thing to do.

The industry's concerns stem not only from the multinationals that make the multimillions; they are also expressed by the small and medium-sized businesses. I am surprised that more Labour Members have not referred to that fact.

Were we surprised by some of the measures in the Budget? The element of surprise has been denied and no reference has been made to the Treasury Committee's second report on the Budget, which said:

    ''The CBI told us that the new supplementary corporation tax charge of 10 per cent. on profits was 'both a surprise and a disappointment' . . . We agree.''

It is no surprise that the industry has reacted with unease to the Budget and its effects.

Several speakers have stressed the importance of the industry throughout Scotland, especially in the north and north-east of Scotland, where 40,000 jobs depend directly on the industry. I was interested to note the response of the UKOOA to the Budget, as it represents more than 30 off-shore operations and companies. The association warned that the tax measures, proposed without consultation, could

    ''undermine investor confidence in the long-term viability of the UK Continental Shelf.''

The industry is important to the coffers of large and small companies and to the people who work in it, but it plays a significant role in all our lives because of the thousands of men and women who face danger working in it. I have just received the news that 100 men are being airlifted to safety from a gas rig in the North sea that was hit by a fishing production factory vessel. I am sure that all hon. Members join me in extending our best wishes to them and to those involved in the rescue operation. The industry is important and dangerous.

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I commend the hon. Member for Inverness, East, Nairn and Lochaber on raising the issue of jobs in fabrication. We represent neighbouring constituencies, and a sizable number of our constituents, as well as people from constituencies further north, have been involved in oil yard construction. About 18 months ago, KBR at Nigg employed 3,000 people, but it now employs 100. I am certain that that is not what the Secretary of State meant when she talked with pride about job exports.

Moray trade union council delegates have called for pressure to be exerted on oil companies to give work to domestic yards. I entirely agree with the Local Authority Standing Committee on Oil Fabrication, which notes that the loss of major contracts to overseas yards poses a serious threat to the future of jobs. LASCOF has highlighted research that suggests that the current number of active yards will be halved, to three or four, unless work is secured. That is not whingeing, but expressing the concerns of trade unionists in the north and other parts of Scotland. It does not behove hon. Members who claim to stand for the interests of trade unions and their members to disparage those concerns as whingeing.

I recently met Mr. Jimmy Gray, the chairman of LASCOF, who is an Inverness Labour councillor. He emphasised the urgency of the situation and sought help in persuading the Government to do more to support oil fabrication jobs.

A Labour councillor in my constituency recently said in The Northern Scot:

    ''Over the past three years Britain has lost 20,000 fabrication jobs''.

I agree that the continuing decline in manufacturing under Labour is extremely disappointing, and I hope that every effort can and will be made to ensure that the potential at Nigg is not thrown away.

Mr. Doran: The hon. Gentleman will be well aware that BP recently took its latest platform to Norway. What is he doing about that?

Angus Robertson: I do not know what the hon. Gentleman is suggesting that I do. I am the first to welcome developments in manufacturing, fabrication and exploration that the Secretary of State has called positive. We should, however, look with great unease at other developments in the fabrication sector, which is important in the north of Scotland. Hon. Members who regularly travel on the Gatwick to Inverness shuttle will notice that a large proportion of the people on the plane are commuting. They work in the oil and gas industry, and it is interesting that they are commuting north to work not in Scotland, but as far away as Sakhalin island. That is a sad indication that, although the industry has a future, much of it is struggling. The BBC reported this morning that the number of Scottish firms going into liquidation soared by more than 40 per cent. in the first three months of this year, which is deeply worrying.

Let me touch on the contributions that have been made so far. The expertise of my hon. Friend the Member for Banff and Buchan in the oil industry was clear to everyone, which may explain the unease among Ministers, none of whom sought to intervene

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on him. I note with interest—I am sorry that the hon. Member for Aberdeen, Central (Mr. Doran) chose to ignore this point when he claimed that no SNP policy had been presented. [Interruption.] If the hon. Gentleman chooses to read the record, he will see that he did say that in his contribution. He chose to disregard three sensible suggestions that would help the oil and gas industry and secure jobs: uplift for exploration; offset for fuel financing and relief for incremental investments. I hope that Labour Members will embrace those sensible suggestions.

I was interested in several of the points made by the Secretary of State. She said that there had been consultation on the Pilot project. That will be news to many in the industry, and perhaps in summing up, the Minister will say exactly who was involved. I also noted with interest that the Secretary of State said that the impact on jobs would be minimal. What is ''minimal impact''? Is it 1,000, 5,000 or 10,000 jobs? Where is the assessment, and when will it be available in the Library for all hon. Members to read?

Mr. Connarty: Does the hon. Gentleman not think that that sort of fatuous argument is undermined by the fact that BP is slashing jobs throughout Scotland, although the barrel price is $27 and the company's profits have never been higher? That has nothing to do with marginal changes in the tax regime and everything to do with the demand for assets to be sweated at the expense of the labour of Scotland, and the hon. Gentleman did nothing about that.

Angus Robertson: The hon. Gentleman, who is a colleague of mine on the European Scrutiny Committee, was not present when my hon. Friend the Member for Banff and Buchan opened the debate for the SNP and covered those very points.

I should be grateful if the Minister would reply to the three points that he has not addressed. When will a job impact assessment be handed in to the House of Commons Library for everyone to read? Will the Minister tell the Committee about the involvement of the Treasury, the Department of Trade and Industry, the Scotland Office and the Scottish Executive? What representations were made by the Department of Trade and Industry, the Scottish Executive and the Scotland Office on the issue? When did the Minister find out about the proposals on taxation for the North sea? Of course, I do not expect him to tell the Committee whether he supported those proposals before the Budget.

Mr. Malcolm Savidge (Aberdeen, North): Will the hon. Gentleman give way?

Angus Robertson: If the hon. Gentleman will allow me, I must allow the Minister time to reply to the debate.

Many people in the north of Scotland will be very interested to hear whether decision-making powers in the Department of Trade and Industry have shifted from Aberdeen to London. It would be a matter of grave concern that the key decision makers, who have been based in Aberdeen, may see greater advantages by following London's magnet for key decision-making powers. There is great unease in the north of Scotland and we need answers to all those points.

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Mr. Wilson: It is a great pleasure to respond to the debate. It is some time since I last replied to a Scottish Grand Committee debate, but as my hon. Friend the Minister of State is downstairs talking about the Scottish biotechnology industry, it fell to me to respond. This is new to me, and I have a whole new platoon of Private Frasers sitting opposite—''We're doomed, all doomed.'' Characteristically, we have not heard a word about the successes. The hon. Member for Banff and Buchan actually hates successes.

There has not been a word about the development of the Clair field after more than 20 years, or about Goldeneye, with its pioneering tie-back technology, or the huge investment and 300 construction jobs at St. Fergus. There has been not a word about the Argyll field, or Ardmore, as it is now to be, a marvellous example of what innovative independence can do. There has been not a word about the huge progress made through Pilot in bringing Government and industry together, the new relationship with Norway, which is now more positive than at any time in the history of the North sea or the fallow fields initiative with its exciting opportunities for independence. We hear only the hopeful hypothesis that things will get worse in future.

The speech of the hon. Member for Banff and Buchan consisted of little more than briefings from oil companies on why they should pay less tax. Oil companies want to pay less tax—what a sensation! I shall share a secret with the hon. Gentleman: if oil companies paid 3 per cent. tax, it would complain about paying 4 per cent. tax, and the really sad thing is that the SNP and the Liberal Democrats would support them. I wonder how much consultation there has been between the hon. Gentleman and his erstwhile colleagues in the Scottish Parliament because, as a result of the Budget, there will be a cumulative total of £8.2 billion extra for the Scottish Executive by 2007–08. How will that be funded if not through taxation? If it is to be funded through taxation, why should oil companies be exempt when oil prices have doubled since the matter was last reviewed?

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