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The Scottish Government have endorsed the findings of Sir Ian Wood’s review on maximising recovery on the UK continental shelf and particularly his recommendation of a stronger, more effective regulatory body, and so, too, did the UK Government. We welcomed the long-awaited announcement of the appointment of the OGA’s chief executive. However, it is imperative that progress is much quicker so that we can start to reap the benefits that an effective, well resourced authority has the potential to bring the industry and the nation.

John Robertson: Has the hon. Gentleman taken into consideration the fact that the Saudi Arabians and the Russians have enormous resources in this field, which we are trying to maintain? If they wish to keep undercutting us, the policy he outlines will become useless.

Mr Weir: In a way, I am surprised by that comment from the hon. Gentleman, because it seems to be a counsel of despair. We must do what we can to keep our industry going. Unfortunately, we cannot influence what the Saudis or anybody else do with their oil prices. As far as we can, however, we must take the action necessary in the UK to make sure that the North sea industry, and particularly the employment that it provides, survives.

Even if the Saudis do try to do what the hon. Gentleman says, they cannot do it for ever. At some point, oil prices will start to come up again; indeed, the International Energy Agency has predicted—obviously, this is only a prediction—that the price will probably return to about $80 a barrel in the current year. We will have to wait and see whether that happens and, if so, how fast.

The OGA is particularly important, given the pressures being felt by the industry. The Scottish Government were pleased to see Aberdeen confirmed as the location for the OGA’s headquarters in June, and the suggestion that there will be an increase from 59 to 145 full-time equivalent staff by 2019 is welcome, because it might help to address the serious understaffing identified in Sir Ian Wood’s review.

The challenge is to ensure that the appropriate level of expertise and knowledge is secured, but it is critical, given present circumstances, that appropriate resourcing is put in place swiftly at the new OGA, with the correct level of industry experience and expertise. Industry is clearly concerned about delays in the process. As Malcolm Webb, the head of Oil & Gas UK, has pointed out, it looks as if it will take until summer 2016 before all the processes involved in setting up the OGA are completed. I agree that that is far too long, and I would appreciate an explanation from the Minister of why the process is taking so long and what action will be taken to speed it up.

The Wood review must be implemented effectively and with increased speed and resources, in the light of the growing challenges facing the industry. On the website Energy Voice, on 6 January, Malcolm Webb said:

“Years of confused and confusing energy policy, not helped by a revolving door approach to the appointment of ministers (we’ve seen a total of 35 different Energy and Treasury Ministers given responsibility for our industry in the last 14 years), have raised serious questions about our politicians’ awareness and understanding of this industry and its vital importance to the UK economy.”

I agree, and the UK Government need to take urgent action to assist the industry at this difficult time.

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3.18 pm

Sir Malcolm Bruce (Gordon) (LD): I congratulate my neighbour, the hon. Member for Aberdeen North (Mr Doran), on securing this debate at a critical time.

I have been connected with the industry since I first arrived at the North-East Scotland Development Agency in 1971—two months before BP announced the discovery of the Forties field. We have certainly had ups and downs before, but my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) was right to point out that we are much more vulnerable in a mature province than we were in the early stages. That is why it is much more important that we take appropriate and considered action—not panicky action—to get ourselves to a place where the industry has a secure future. One thing that we all have to accept is that the UK has no control over the world oil price. We must deal with it although it is, as all commodity prices are, erratic and unpredictable. It is certainly not a good basis for planning economic policy.

The other thing that we should recognise is that the good thing about our mature province, as the hon. Member for Aberdeen North pointed out, is that we have created a centre of excellence and a critical mass that are incredibly valuable to the UK domestic economy, and which sustain a £10 billion export industry; that industry, however, depends on an active domestic market and levels of activity, which we must secure. It is interesting that Sir Ian Wood, who inevitably has been quoted several times, is taking a characteristically calm and considered view of the situation. He has explicitly said that the Budget is the entirely appropriate place in which to determine the tax cuts and the timing, and he recognises that they need to be balanced and considered.

Having mentioned Sir Ian and the Wood review, I want to commend my right hon. Friend the Secretary of State for Energy and Climate Change, whose initiative it was to invite Sir Ian to conduct his review, on the basis of discussions with the industry and in the wake of its reaction to adverse tax changes in 2011. My right hon. Friend wanted to see how we could better co-ordinate the infrastructure and future development of resources, which the industry admitted were being undermined by its commercial rivalries; unusually, an invitation was issued to partnership with Government, to try to create a framework to secure and unlock a lot more resources than would be done if the industry was just competing within itself. That was a powerful initiative, and although I agree about the importance of establishing the new authority as quickly as possible, we should recognise that it would not exist at all without the initiative of the Secretary of State. I think we all agree that the sooner it can be set up with the right mix of people—who might just be available now—the better it will be able to get on with its important work.

Oil & Gas UK made the point that, with $50 oil, 20% of North sea activity is uneconomic. There are perhaps too many projects in the North sea that have become conditioned to looking at $70 to $90 oil as the essential basis. Frankly, from every discussion that I have had with an oil and gas economist, that is not a wise basis for planning. It has partly been necessitated by the escalating costs that the hon. Member for Aberdeen North addressed. We have a unique opportunity to tackle several problems at once.

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Mr Russell Brown (Dumfries and Galloway) (Lab): Like the right hon. Gentleman and, I think, everyone else present for the debate, I received an Oil & Gas UK briefing. It deals with the immediate problem in the sector, but there is no mention of how it arose, with the downturn in China and India, and oil and gas fracking in the United States. That is a longer-term issue. Something of a quick fix may be required, but in the longer term we must take cognisance of what is happening globally.

Sir Malcolm Bruce: That is a fair point; I would say only that I have never yet met an oil economist who was any good at anything other than explaining why prices did what they did, rather than what they would do next. Yes, the hon. Gentleman may be right, but people have told me many times that the oil price would stay low, and then it has gone up. When they have told me it would stay high, it has gone down. We have to live with that.

Those of us close to the industry, and the taskforce, of which many of us are members, are aware that in recent years prices have escalated unrealistically and unreasonably on the back of the high oil price. I want to make it clear to the hon. Member for Aberdeen North that that is no excuse for a slash and burn response on employment; it is, however, a recognition that a lot of fat has built up in some of the contractual arrangements.

With the right approach, it would be possible to slim down and maintain skills and capacity for the future. The wrong approach means, of course, making people redundant and losing their skills, so that if and when there is an upturn we will have lost capacity as well. I argue that we need to manage things proportionately. The industry has been rather late in tackling that problem. Quite a few of the redundancies that have been announced since the oil price fell were part of reviews that took place because of the escalating costs before we knew that the price was going to fall.

Sir Robert Smith: One of the lessons of history is that if downsizing in the current crisis is inevitable, the way it is handled and the way people are treated, so that they are still interested and willing to come back in the good times, are important. There is a lesson for the industry about the way it behaved in the past.

Sir Malcolm Bruce: I completely agree.

Finally, I want to set out what things the Government must consider—for which the Budget seems to be the appropriate place. First, the investment allowance that has been announced needs to be confirmed in the Budget. Secondly, there must be a review of the supplementary charge. In my view the Government will get none of it anyway in the present climate, so getting rid of it would not cost much.

There should also be a review of the petroleum revenue tax for the future. The industry has traditionally been taxed at about double the rate of any other sector. Perhaps that was all right in the good times, but in a mature province, in the present situation, asking for a review is not asking for subsidy; it is asking for a realistic tax regime that can secure an industry that has made a massive contribution to the balance of payments and contributed 25% of our fixed industrial investment every year for the past 40-plus years, and which has a great future if we manage it now. If we do not get it

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right, there is an existential threat to the industry—certainly to an industry on the scale that we have looked for. We do not need to score points off each other. We need to work together and come up with a systematic package of measures that will restore confidence.

I accept that one thing that has damaged the industry is constant change. It now needs a clear, simple, strategic regime that says that the UK wants its investment and will provide a climate in which, provided it can make itself competitive, the Government will work with it to enable it to secure jobs, exports and investment for the future. If we can do that, whenever the oil price turns up, the industry will be much stronger than it would have been if the crisis had never happened.

3.27 pm

Thomas Docherty (Dunfermline and West Fife) (Lab): It is a pleasure to serve under your chairmanship once more, Mr Streeter. I draw Members’ attention to my entry in the Register of Members’ Financial Interests, as I believe in clarity. I received some hospitality from ExxonMobil last year.

I have a strong constituency interest, because not only is FMC Technologies a major employer in my constituency, but in the neighbouring seat, represented so ably by my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), is Mossmorran. I want primarily to talk briefly about them. However, I want to pick up on the point ably made by my hon. Friend the Member for Dumfries and Galloway (Mr Brown): Members may be interested in the fact that today the executive director of the International Energy Agency, Maria van der Hoeven, has been quoted as saying that there can be no expectation of a quick fix on oil prices—that the situation we face is a long-term one. Therefore, my hon. Friend the Member for Aberdeen North (Mr Doran) is right to draw the conclusion that we need to move away from Governments blaming each other and work together to achieve a sustainable future for the industry, across the United Kingdom and more specifically for interests in the North sea.

I have mentioned two companies working in West Fife and the points made by my hon. Friend the Member for Glasgow North West (John Robertson) are right: there is, rightly, a great deal of focus on the north-east of Scotland, but we should not forget that across Scotland and the United Kingdom the North sea industries are significant employers. To take FMC Technologies as an example, it employs 1,000 people across Scotland, a couple of hundred of whom are based at two sites in Dunfermline in my constituency. It has going on for 250,000 square feet of fabrication plant and engineering facilities in Dunfermline and it supplies the North sea market, among many others. It is located in West Fife because of the ready access it provides through the port facilities at Forth Ports and elsewhere, so the company can send around the world.

The company is fortunate in that it has a diverse market share and operates right around the world, so the North sea is not its critical life-support system, but without doubt it will be facing challenging times in the coming weeks, and I will seek to provide whatever assistance I can. However, my hon. Friend the Member

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for Glasgow North West was absolutely right to remember the knock-on effect that such industries can have in the communities where they are based.

Mrs Mary Glindon (North Tyneside) (Lab): Specifically on that point, which has been made by others, that is also the case for places such as Tyneside and the north-east of England, where there are fabrication companies such as OGN. It is currently providing 2,000 jobs, but they will dry up next year. There is bound to be a massive knock-on effect across the whole of Britain. Our region has the highest unemployment rate and cannot afford to lose more jobs. Does my hon. Friend agree?

Thomas Docherty: My hon. Friend is absolutely right to highlight the diversification of interests in this important sector across the United Kingdom. These are highly skilled engineering jobs, which are highly regarded and greatly sought after. She is also right that such jobs are particularly sought after in areas of relatively high unemployment. I used to work in the nuclear industry, and I was based in what was then part of the constituency of my hon. Friend the Member for Dumfries and Galloway and is now in the Minister’s constituency. Unlike in the south-west of England, where the engineering and scientific industries were in competition with other companies, there was almost a monopoly on the work force in places such as Dumfries and Galloway. To an extent it is the same in the north-east of England and the north-east of Scotland, where there is not the same diversification in jobs. It is important that the two Governments recognise their responsibility to work together.

John Robertson: I was in Belfast yesterday, right beside where Harland and Wolff used to be. There are some oil rigs sitting there that are now being fitted out because the contracts are signed, but what will happen to the companies that have invested in that kind of industry if we do not start getting work back in the North sea?

Thomas Docherty: I could not agree more with my hon. Friend. That is why I was genuinely asking the hon. Member for Angus (Mr Weir) what practical steps Scottish Enterprise will be taking. Many of us have had a slightly cynical or bitter experience of Scottish Enterprise as being great at putting out the initial press release, but when it comes to taking tangible, practical measures to help communities—I do not need to tell my hon. Friend the Member for Dumfries and Galloway or the Minister this—it comes into such situations with great promises but 10 years later everyone is scratching their heads and looking for the diversification it is supposed to have delivered.

I am conscious of the time and the important contributions that will be made by the two Front Benchers. On the other issue I mentioned, Mosmorran plant, which sits just over the border with the constituency of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath, is celebrating its 30th anniversary this year. Natural gas is brought ashore at St Fergus, primarily from the Brent field and from the Goldeneye field in the North sea, and is brought down from there in a pipeline that is about 140 miles long—my calculation might be slightly off—to Mossmorran, where it is split. The ethane goes across from the Shell plant to the ExxonMobil part of the plant, where it is heated to 800° so that it can

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be cracked, to use the scientific term, and turned into ethylene. Of course, ethylene is a daily part of our lives, as it used in a huge variety of products—perhaps even in the cups we are using today.

That work sustains jobs for more than 200 people, many of whom are my constituents. They will be looking to see that when we talk about long-term sustainability for the oil and gas industry we make sure that those crucial scientific jobs, which are also highly sought after, often by graduates—in both Parliaments we talk so much about encouraging those sorts of jobs—are protected. We need to see genuine substantive steps to do that for the sake of our constituents and their families. I hope that the two Governments will set point scoring aside and get on with standing up for all of our communities, whether they be in Aberdeen, Glasgow, my own area of Fife or across the border.

3.35 pm

Margaret Curran (Glasgow East) (Lab): Mr Streeter, it is a pleasure to serve under your chairpersonship—I do not know whether I am permitted to use that word, or whether that is a precedent, but I have done it now, so so be it. I congratulate my hon. Friend the Member for Aberdeen North (Mr Doran), whose contribution demonstrated his depth of knowledge of the industry and his enduring commitment to it and the people who work in it, which is greatly respected in this House and throughout the country.

The entire debate has demonstrated the magnitude of recent events and the sweeping impact of such a significant decline in oil prices. As we speak, oil is currently trading at below $50 a barrel. In July 2008, the price stood at $145 a barrel, and as is well known in Scotland the White Paper that was used by the Scottish National party during the recent referendum was based on financial planning with an oil price of $110 a barrel. This debate is therefore a significant one.

It may not have been said today but it will certainly be said in other forums that although the price might offer some relief to Scotland’s motorists it has significant impacts on the oil and gas industry. Many Members have referred to the key facts and figures, which I will emphasise once more. The production of oil and gas contributed £30 billion to the UK balance of payments; the supply chain, which has been a focus of the debate and is of great importance throughout the country, generated over £20 billion in the past year and, as my hon. Friend the Member for Glasgow North West (John Robertson) said, the industry supports 450,000 jobs across the United Kingdom.

It is an industry of international importance that is vital to the UK and iconic for Scotland, and has particular significance for Aberdeen and the north-east of Scotland—the effects of the fall in oil price will be felt throughout the country, but most deeply there. We heard about the loss of 300 jobs announced by BP but know that there are more to come.

Dr Whiteford: In the past half an hour or so, while we have been having this debate, a further 300 job losses have been announced by Talisman. I have stressed the importance of urgency and am worried that there will be further similar announcements between now and March. The Government need to give confidence to the industry that they will cut taxes. Does the hon. Lady

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share that view and will she urge the Government to act with more haste rather than waiting for announcements of yet more job losses in the North sea industry?

Margaret Curran: I will indeed emphasise that very point when I come to it later. I will begin by addressing the hon. Lady’s primary point about job losses. We are deeply concerned about them. As my hon. Friend the Member for Aberdeen North made clear, operators and trade unions are warning about job losses and their impact. Of the 30,000 jobs directly linked to the industry, 23,400 are in Aberdeen itself. One can only imagine the conversations taking place not only in companies but around kitchen tables in Aberdeen and the north-east. Jake Molloy of the National Union of Rail, Maritime and Transport Workers drew parallels with 1986, when the fall in oil prices led to long-term job losses and a very significant impact on the industry. We certainly do not want that to happen again, and need to take action. Sir Ian Wood, who has featured in many contributions this afternoon, indicated that there could be between 30,000 and 40,000 job losses. It would not be surprising if that were the long-term impact.

The Scottish Parliament information service said that 15,750 jobs could be lost in Scotland as a result of what is happening. The core question we must ask ourselves is, can we be assured that the Government and the Scottish Government get the magnitude of what is happening and what needs to be done? The trade unions have said that it would be the largest loss of jobs since the Ravenscraig steel works closed its doors 23 years ago in Scotland—23 years later, we still remember the impact of Ravenscraig. Let us take action now to ensure that does not happen again. The message of this debate must be that we have to work together on a cross-party basis to properly challenge the Government when they are not doing enough. The oil and gas industry is a strategic industry of critical importance, and it needs a long-term, predictable context in which to operate.

I congratulate, as one Member did, Jenny Laing, the leader of Aberdeen city council, who took immediate action, called for an oil summit and managed to get all the key players together. That was the right thing to do, and I expect that it will be successful, but the UK and Scottish Governments must take decisive action.

The UK Government’s 2011 tax reforms created difficulties and undermined confidence—I hope the Minister will acknowledge that. In the autumn statement, the Chancellor indicated the difficulties that it caused, and he hinted that there must be a new strategy for oil and gas. I concur with the hon. Members who said that we need action now. I hope the Minister will indicate that the Government will take action and respond to the industry’s call for support.

I ask the Minister to use his good offices to put pressure on the Scottish Government to publish the oil and gas bulletin as soon as possible. Scottish National party Members have said that they are looking for a range of actions, but we are asking the Scottish Government to provide the evidence on which they based their recommendations. They previously published a number of oil and gas bulletins and figures showing the impact that the industry will have on their revenues. I hope they will publish another one as soon as possible so our approach can be evidence-led, and so we know the basis on which we can take action.

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My right hon. Friend the Member for East Renfrewshire (Mr Murphy) called for a resilience fund to help strategic industries and to enable us to address local needs, including issues affecting local companies, local industries and the devastating impact the downturn will have on local communities. He has also talked about reducing business rates to help people through the downturn. As my hon. Friend the Member for Aberdeen North said, my right hon. Friend is in Aberdeen this afternoon with my right hon. Friend the Member for Morley and Outwood (Ed Balls). They are calling for profound, strategic action to address these issues. We need a road map—a strategic plan—for the industry that is not about short-term changes but comes to terms with the profound shifts that we are seeing. It must create certainty so the industry can be sure about the tax rates over a Parliament and firms can invest in the long term. It must be about sustainability, and it must put oil revenues in a UK public finances framework so we can protect ourselves against oil price volatility. It must not create high levels of risk that could jeopardise Scotland and our public finances.

We must ensure transparency. We must not make short-term, ill-thought-out tax changes, but consult with the industry to ensure a transparent regime. We must have the flexibly to meet immediate challenges. As many hon. Members have said, we must implement the Wood review. Will the Minister tell us when the new Oil and Gas Authority will be established? That demand is coming straightforwardly from the industry.

This has been a very good debate, and we have covered a lot of ground. Hon. Members have demonstrated a great depth of knowledge about the industry’s demands. We need to tell people—not only those in the north-east, but those in Scotland and elsewhere in the United Kingdom—that we understand the scale of the job losses that may be imminent, and that we can take action to address that. We must let them understand that, as we gather here together, we will challenge the Government, who must stand up and do more. That is what the industry is asking the UK and the Scottish Governments. We are prepared to work together to support our iconic oil and gas industry, of which we are so proud in Scotland, through this challenge to prevent job losses and to ensure that it has a healthy, sustainable future. We do that best when we recognise the true depth of what is happening and do not try to duck it. Government action can have results, but we need to see it now.

3.45 pm

The Parliamentary Under-Secretary of State for Scotland (David Mundell): It is a pleasure to serve under your chairmanship, Mr Streeter. I pay tribute to the hon. Member for Aberdeen North (Mr Doran) not only for securing the debate but for his well known support of the sector and, as his time in Parliament draws to a close, for his contribution to politics in the north-east over many years. I welcome his considered contribution. Many other Members also made valuable contributions. I apologise for the absence of the Minister for Business and Enterprise, my right hon. Friend the Member for West Suffolk (Matthew Hancock), who is currently overseas and would otherwise have responded to the debate.

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Mr Doran: The Minister is apologising for the absence of his right hon. Friend; I should have noted the absence of my hon. Friend the Member for Aberdeen South (Dame Anne Begg), who is with my right hon. Friend the Member for East Renfrewshire (Mr Murphy) in Aberdeen, but would otherwise have been here.

David Mundell: I echo the comments of all contributors, who pointed out the importance and timeliness of the debate, given the challenges faced by companies operating in the North sea and all those who work in the sector in the United Kingdom; that was emphasised by my hon. Friend the Member for Waveney (Peter Aldous) and the hon. Member for North Tyneside (Mrs Glindon).

The Government are committed to the long-term future of the sector in the North sea. We recognise that the sustained fall in oil prices presents real challenges for the sector. Announcements of job losses, such as those we have heard about this afternoon, are a real concern and particularly affect Aberdeen and the north-east. The effects will be felt not only in the north-east of Scotland and by big international companies, but by the hundreds of small and medium-sized businesses that are an integral part of the supply chain. Those businesses work across the UK to service the sector, and they play a role in the whole of the UK economy.

We are committed—I hope that the hon. Member for Glasgow North West (John Robertson) accepts this—to working in partnership with others. I welcome the tone of the contribution of the shadow Scottish Secretary, the hon. Member for Glasgow East (Margaret Curran). We are committed to working with the Scottish Government, local authorities and the industry to provide all we can for those affected by job losses. I will pursue the issue that the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) raised about the Department for Work and Pensions. My colleague, the Secretary of State for Scotland, has committed to participate in the First Minister’s jobs taskforce, which was announced last week, and the Aberdeen city council’s oil and gas summit in February.

Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): I apologise to the Minister and the House for not being at the earlier part of the debate; I was at a Committee speaking about, among other things, the issue of autism.

As the Minister was referring to the supply chain and jobs that link to the wider oil industry, may I remind him that in my constituency 30,000 people work in the Bellshill industrial park, and many of them fit that description? All of them are asking for honesty and transparency about the flexibility of the oil market and the oil industry.

David Mundell: I certainly take that point on board; it reinforces the fact that this issue is resonant not only in the immediate area of Aberdeen, but in the whole of Scotland and the rest of our United Kingdom.

At the PILOT meeting in London last Tuesday, industry leaders expressed real concern, but recognised the need and opportunity to work collectively with Government to introduce a range of efficiency measures that would help them through the downturn and ensure that the industry was stronger in the longer term. The right hon. Member for Gordon (Sir Malcolm Bruce) made the

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point strongly that the industry could emerge fitter from this time, without the necessity for sustained job losses.

The sector is a vital economic asset—one that supports growth and investment and one that we will do all we can to support. There are other events in Parliament today, one of which was the Chancellor’s appearance before the Treasury Committee. Given the signal that was asked for, he has made it very clear that he will take further steps in the Budget. As we heard in the debate, Sir Ian Wood and others in the industry have indicated that they think the Budget is the right time to take such steps. I do not think that that message could be clearer. I will undertake to convey the comments and thoughts of everybody who took part in today’s debate directly to the Chancellor, and I am sure that he and the Prime Minister will continue to engage directly with the industry.

The Government have already taken action in a number of areas. Our recent headline cut of the supplementary charge from 32% to 30% sent an important signal, as some contributors have mentioned, that the North sea is open for business. Last year, we commissioned Sir Ian Wood, one of the world’s foremost industry experts, to examine how we could maximise the North sea oil and gas industry economic recovery. Without being unduly partisan, I am very pleased to hear Sir Ian being lauded again for his contribution to the oil industry; only a few months ago, some people—I do not think they are in this room—were deriding him because he said he did not feel independence for Scotland was in the industry’s best interests.

On this matter, Sir Ian’s response is twofold: get the right regulator in place and get the right fiscal regime. The Government have moved fast to implement his recommendations. We have set up the regulator in the form of the Oil and Gas Authority. It will be up and running this year and based in Aberdeen, under the expert stewardship of Andy Samuel. Since starting in his role as chief executive at the beginning of the year, Mr Samuel has been working at pace to ensure that the authority will be ready to start operating effectively by the beginning of April.

Last week, in light of the recent falls in global oil prices, the Secretary of State for Energy and Climate Change asked Andy Samuel to accelerate work with industry to identify key risks to oil and gas production in the UK continental shelf and what further measures might be taken by Government and industry to mitigate them. In addition, we have carried out the oil and gas fiscal review to examine how we can build on the success of our existing field allowances and put in place a regime that is internationally competitive.

The oil and gas industry has acknowledged that our system of allowances has been transformational in incentivising North sea investment. Allowances were directly responsible for £7 billion of 2013’s record-breaking £14.4 billion investment in the North sea. That investment has supported more than 50,000 jobs in the United Kingdom. At the autumn statement, we announced a new allowance for high-pressure, high-temperature oil and gas projects. That allowance will reduce the tax rate on a portion of the company’s profits from 60% to 30%.

Last year, we also announced further reforms to the fiscal regime—reforms to generate investment. We will be introducing a basin-wide investment allowance to simplify and replace the existing system of offshore

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field allowances over time. We are also taking action to encourage companies that are already investing by extending the ring-fence expenditure supplement from six to 10 years for offshore oil and gas activities, helping the short-term cash flow of companies looking to invest.

Our third area of reform is exploration, where access to good-quality seismic information has been an issue for the industry. Our commitment to provide financial support for seismic surveys in under-explored areas of the UK continental shelf will help the situation.

We want to reward investment in the North sea. As the UK’s economy grows and our recovery strengthens, our direction of travel will be to implement further measures to increase investment. Of course, decommissioning also has to be considered; in the coming decades, that will be increasingly important as the UK continental shelf moves into the decommissioning phase ahead of many other basins. The challenge here is that the North sea, owing to its maturity, will often have to be the site of pioneering methods. Industry will need to develop new operating models and bring in skills and expertise. However, the opportunity is immense. Get this right and we will develop highly valuable—and saleable—expertise here in the UK and reap great rewards down the line. It will be vital to attract new entrants and specialists into the basin to take on decommissioning work.

Sir Robert Smith: The Minister is making an important point about the value of decommissioning, but we really want that to be as far away in the future as possible. The crucial thing is to sustain production. I would be grateful if he took the message back to the Treasury that when people drill for oil, they take a big risk, and if they find something, they would like a larger share of what they find as a reward. The supplemental tax needs serious review.

David Mundell: I think I had set out in my initial remarks that the issue is a combination of ensuring that what future production there can be is maximised and of taking advantage of the opportunities that may arise through decommissioning.

I want to address a point that the hon. Member for Aberdeen North raised on health and safety and the ageing infrastructure. As many of the UK’s onshore installations are working beyond their original design lives and have been exposed to a harsh environment and heavy usage, it is absolutely essential that asset integrity is maintained. Asset integrity is critical to effectively managing and controlling major accident hazards, protecting the work force and maintaining production. Maintaining such arrangements, even during a period of low oil prices, is essential for the two key reasons that he set out: first, to comply with legislation to manage major risk hazards; and secondly, to maintain these assets for use in the future. I assure him that the Health and Safety Executive will continue to inspect thoroughly asset integrity issues and raise those with the industry at every opportunity to ensure that regulatory standards are not compromised.

It is by bringing a package of measures together and by working together—I think that is the sentiment of this afternoon’s debate—that we will maximise the potential of the industry and support vital jobs across the sector and the supply chain in the north-east of Scotland, as

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well as in areas such as East Anglia, to which my hon. Friend the Member for Waveney drew attention so adroitly. We have been talking about those jobs today; it is because the UK has such a large and diverse economy, of course, that we are able to commit to these long-term support measures.

We can deal with the volatility of oil prices and continue to provide the stable regime that is so important to the industry. The hon. Member for Glasgow East drew our attention to the many predictions that have been made about oil prices, but it is in a country on the scale of the United Kingdom that changes can be sustained. On that basis, having listened to today’s debate and set out the measures that the Government have taken, I conclude my contribution.

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Football Broadcasting Rights

4 pm

Mr Gary Streeter (in the Chair): We now move to the next debate. Will colleagues who are leaving please do so quietly and speedily? We are turning to the important issue of the Ofcom consultation on football broadcasting rights, and it is a pleasure to call Thomas Docherty.

Thomas Docherty (Dunfermline and West Fife) (Lab): It is a pleasure to serve under your chairmanship again so quickly, Mr Streeter. The subject of this debate is probably slightly less pressing for many people, but is none the less of great interest to all our constituents.

You will recall, Mr Streeter, that John Major famously evoked an image of cricket being played on village greens for the Britain that he thought we should all aspire to, but of course the reality is that football holds a special place in people’s hearts in all four parts of the United Kingdom and is, indeed, our national sport. On Saturday afternoons, up and down the United Kingdom, football supporters put on their coats and woolly scarves and hats and travel to support their teams. This cultural phenomenon stretches back 150 years in the United Kingdom. More recently, the growth of television has enhanced people’s enjoyment of football. It is probably fair to say that “Match of the Day” still holds a special place in everyone’s heart—the theme music, which I will not try to emulate this afternoon, still makes the hairs on the back of everyone’s neck stand up when it comes on. It is great to see “Match of the Day” enjoying its 50th anniversary this year.

Of course, there has been a revolution in football in the United Kingdom in the past 20 years with the advent of the Premier League and, in particular, Sky Broadcasting. I should probably declare a constituency interest, in that Sky is our third largest private employer, employing some 2,000 people in my constituency and contributing, at a conservative estimate, more than £30 million a year to the local economy. I am incredibly grateful for the work that Sky does locally and for the opportunities it provides to local people.

I share the concerns of many—I do not know whether the Minister would care to comment on this—about the way Sky is advertising gambling products alongside football. I do not know whether the Minister is aware of whether Ofcom or the Advertising Standards Authority plans to look at gambling and particularly the spot gambling that we see on Sky Sports News and during football matches. None the less, Sky has been an absolute force for good in revolutionising the way football is understood and enjoyed and the calibre of football. Football is now without doubt a cosmopolitan sport, not just in the Premier League but throughout the English leagues and in Scotland, with players drawn from throughout the European Union, from the Commonwealth and, indeed, from emerging footballing nations. That is a sign of a multicultural sport. I believe that it is not just because we have got away from mullets and short shorts that there is no great desire to go back to 1980s football.

It is interesting to look at the attendance figures for football grounds—as always, I am indebted to the House of Commons Library for its assistance. When the Premier League began in 1992-93, the attendance figures for

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Premier League grounds showed that only two thirds of the capacity was being taken up by supporters—average attendance in the stadiums of Premier League clubs was only 70% in 1992-93. Now, despite the economic conditions and the fact that the cost of football has risen for supporters, 95% of seats are taken at Premier League games. If we bear it in mind that 40% of games are on television—live to broadcast—that goes to show that the Premier League and the broadcasters have delivered a product that people want to buy.

Mark Field (Cities of London and Westminster) (Con): It is worth making the point also that of course a number of larger stadiums have been built, from Old Trafford to the Emirates. The capacity at many of the premiership clubs is markedly higher than was the case before, so the statistic possibly slightly understates just how much more popular the game has become, notwithstanding the televisation. Many of us remember that in the 1970s and ’80s, when only a handful of games were shown at the weekend, it was felt that TV would be the ruination of football, yet in many ways it has proved to be the absolute opposite.

Thomas Docherty: The hon. Gentleman is entirely right. That, indeed, is my point. Vast sums of broadcast revenues are paid in. From memory, the deal that BT and Sky have with the Premier League is worth just over £3 billion for the current broadcast period. The hon. Gentleman refers to the very modern stadiums. I was at the Emirates a couple of years ago for a Champions League game. It is an absolutely modern, first-class, wonderful facility, and that is repeated up and down the country.

The problem, if I may digress for a second, involves those clubs that aspired to get into the Premier League, because of those riches, and have fallen along the way. They built those stadiums because they were holding on to the dream, the aspiration, of reaching the top flight and then found themselves in great difficulty. I do not believe that that is the fault of the Premier League or the broadcasters; it was a business decision taken by the boards of those clubs. Those of us who are a little older, Mr Streeter, will recall some of the great names of English football that have found themselves in very difficult situations in recent years. One need only think of Leeds United, whose board gambled everything. Reckless decisions were made by the board to aim constantly not just for Premier League status, but for Champions League status, with the additional riches that that brings.

It is worth remembering that the broadcast deal brings huge benefit to the grass roots as well. I am very grateful to the English Football Association for the briefing that it provided to me and, I think, to other hon. Members, which shows that hundreds of millions of pounds are coming down to grass-roots football as a result of the deal. The Premier League is also right to point out that through the parachute payments and the solidarity payments paid to lower league clubs, it continues to support grass-roots football. Whether we represent constituencies in Scotland, England, Northern Ireland or Wales, it is without doubt the case that every young boy’s ambition is to play in the Premier League.

Mark Field: The hon. Gentleman makes a perfectly valid point. It is important that we stress that although many people feel that footballers are earning untold

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riches, certainly compared with those of a generation or two ago, and perhaps too much money, from the television funds does go directly to the talent, there is still huge investment in the grass roots of the game, which has transformed the game over the past 20 years. Does the hon. Gentleman agree that unfortunately in terms of this debate relating to Ofcom, there has not really been any serious attempt to demonstrate how just showing more matches, as Ofcom suggests, would lower the cost to the subscriber? The TV deal that has been done, which has gone onwards and upwards, none the less does sustain and is of interest to—

Mr Gary Streeter (in the Chair): Order. Thomas Docherty.

Thomas Docherty: I am grateful for that short speech. The hon. Member for Cities of London and Westminster (Mark Field) makes a serious point, which I have raised with Ofcom myself, that there is frustration among many fans that even after Sky lost a quarter of the fixtures, it did not reduce its price by a quarter. Can the Minister say whether he believes that Ofcom should be taking that up with Sky—whether the fact that the reduction in the number of games has not been passed on as a reduction to the subscriber should be considered as part of the broader picture?

I want to talk specifically about the splitting of the packages. At the moment, some 154 of the 380 games are shown live on BT or Sky. In the next round, the intention is to increase that to 168, so we are talking about approximately 40% of fixtures now, rising to 45% in the next period. Genuine concerns have been raised by the FA and supporters’ groups about the drift away from Saturday afternoon. Football clubs and publicans report a pattern: a lot of match day customers either watch a game beforehand and go along to their local club at 3 o’clock, or go to their local club first and then watch the 5.30 pm game at the pub or elsewhere. Ofcom has refused to rule out allowing the 3 o’clock slot to be looked at, but even if it is prepared to allow that, there are real concerns that moving more and more fixtures away from 3 o’clock to Saturday lunchtimes, Saturday afternoons, Sundays or even Friday nights—I believe that there are 10 games planned for Friday nights—will have an impact on the wider football community.

I am sure you know, Mr Streeter, from your constituency that many local, grass-roots clubs play on Sunday or on Saturday morning. If more and more fixtures are shown on Saturday at lunchtime or on Sunday, they will attract people who otherwise would go along to support a club or to play grass-roots football. Ofcom must bear that in mind, because not only does it have a duty towards competition in the narrow sense as it relates to broadcasters, but it has a broader social responsibility for the good of the game in the United Kingdom.

I am aware that many fans, particularly of some bigger clubs—I include Chelsea in that for the benefit of the Minister, who I know is a Chelsea fan—complain that their clubs’ fixtures are regularly moved. They see the initial fixture on a Saturday afternoon, so they make travel arrangements, book time off work and spend a lot of money on tickets for their families, but at a relatively late stage the broadcasters shift the game. My cousin, Philip Morgan, complained to me about that on Facebook the other day—a big Manchester United fan, he is very frustrated about that practice. I hope that the

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Minister will assure us that the Government will make it clear to Ofcom that it must bear those things in mind when it carries out its investigation. The interests of the supporter who goes through the turnstile are absolutely critical.

I wish to make two points before I conclude. One is about individual deals versus collective bargaining. I am conscious that Conservative colleagues in the room do not always agree with collective bargaining, but I am sure that Members of the House would agree that collective bargaining is one of the strengths of the Premier League. That is not the case in La Liga, for example, where Barcelona, Real Madrid and other major clubs negotiate their own deals. As a result, large clubs become richer and richer, while smaller clubs struggle a lot. In last year’s Premier League payout, however, the total payment to the winner was only 1.5 times the size of the payment to Cardiff City, who finished bottom of the table. All clubs receive the same amount of money as the initial broadcast share, there is an element based on prize money and there is a small element based on how many times they are shown. It is important that Ofcom understands that collective bargaining must be maintained.

My final point concerns a good book that can, I am sure, be found in the Commons Library: “The All American War Game” by award-winning British journalist James Lawton. It came out about 30 years ago, when Channel 4 was covering American football for the first time, and it looked at the state of American football in the United States. James Lawton talked at great length about the fact that in the US, people can watch American football on a Friday, Saturday and Sunday; if they have cable, they can watch college games, the NFL and the local high school game. He was absolutely blown away by the idea of American football saturation, culminating in the Monday night game. At the time, of course, we only had four channels in the United Kingdom, and Channel 4 was very new.

Fast forward—pardon the pun—30 years. We now have a situation where football is readily available seven days a week. We can watch a Friday night game, perhaps a Scottish game or one of the 10 Premier League games that will be available; there is a Saturday lunchtime game, and there is a Saturday evening game. There are two games on a Sunday and there is a Monday night game. This evening, League cup fixtures are taking place—I am sure that the Minister will be taking a close interest in those. We have Champions League and Europa League football on a Thursday. My constituents tell me that, as football mad as they are, there is a limit to how much football we need on the television.

I am conscious that I am eating into the Minister’s time, but I think that the issue is important. I respect the fact that Ofcom has the lead on it, but I hope that the Government will make it clear to Ofcom that they expect the regulator to be the supporter of the supporters and not the champion of media interests.

4.16 pm

The Minister for Culture and the Digital Economy (Mr Edward Vaizey): I am grateful to appear under your chairmanship, Mr Streeter. I thank the hon. Member for Dunfermline and West Fife (Thomas Docherty) for

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giving us the opportunity to debate this important issue, in which Members of the House clearly take a significant interest. It has been useful to hear the range of views—both of them, thanks to the able contribution of my hon. Friend the Member for Cities of London and Westminster (Mark Field). Today’s debate concerns a topic about which the public and many Members of the House are passionate—football—and a far-reaching issue that directly affects consumers and the economy, namely competition in the broadcasting market.

The last time I debated football matters in this House, I engaged in some good-natured football banter. That spectacularly backfired on me, but it taught me a valuable lesson: football fans are extremely passionate about their clubs. Let me say on the record that although I am a Chelsea fan, I have nothing but admiration for all other football clubs, particularly Manchester United.

Competition in markets is important in all parts of the economy. It can drive down costs, improve consumer choice, encourage innovation and boost growth. A thriving, competitive industry reacts readily and at low cost to changing consumer demands. In an ideal world, made up of highly competitive markets, new entry would be unimpeded, products would be supplied at minimum cost to the consumer, there would be a lot of innovation and we would encourage economic growth.

Football remains as great a passion for people in this country as it has ever been. The hon. Gentleman pointed to the extraordinary success of the Premier League over the past 20 or so years. It has been a phenomenon, and it has become part of the fabric of our country and our culture. It is arguably the most exciting, compelling and competitive league anywhere in the world, with many of the best managers and players in the world coming here to ply their trade, and has some of the safest football stadiums to be found anywhere.

The popularity of football is making a big impact on our creative industries. As Minister for Culture and the Digital Economy, I note that clubs have not only their own websites and but often their own TV channels. Football is almost an anchor tenant for some television channels, radio, print and internet media, all of which use it to attract consumers.

Thomas Docherty: Although Crystal Palace are my second team, I forgive the Minister his Chelsea links. I have seen Sky’s new XD technology, which it piloted at the Ryder cup—XD is 16 times the quality of high definition. Does the Minister agree that that is the type of creative technology breakthrough that we should be supporting in the United Kingdom?

Mr Vaizey: I do. Football and sport are a mode of content that encourages technical innovation. I remember watching football broadcast in 3D by Sky, and I thought it was compelling, although for some reason it has not had the consumer impact that we expected. HD television was probably partly driven by football, and it is another example of the kind of innovation that the hon. Gentleman talks about.

Sports content remains critical to the success of a lot of our broadcasting industry. It is common sense to say that the success of pay TV has been built on sport. It could be argued that it is a chicken and egg situation in the sense that the Premier League has benefited greatly from the innovation that has come from the way in

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which Sky has broadcast the Premier League, but equally Sky has benefited from having those rights. Indeed, about one in four people who watch pay TV say that sport is their must-have content. Premier League football is hugely valued by those customers, particularly as it is not available live on free-to-air platforms. Content such as the Premier League drives consumer decisions about pay TV subscriptions, so it is not a surprise to find such an inquiry taking place.

Broadcasting rights to key content remain in the hands of a small number of providers, mainly BT and Sky, and there was a complaint to Ofcom by Virgin Media last September. People often miss this point—they think that Ofcom has somehow woken up one morning and just decided to call an investigation, or that perhaps the Government have asked Ofcom to call an investigation—but the investigation, like most Ofcom investigations, emerged from one part of the ecology, in this case Virgin Media, complaining about its perception of the behaviour of another part of the ecology, namely the Premier League and, behind it, Sky and BT. As a result of that complaint, Ofcom decided to open an investigation into how the Premier League sells the live UK audiovisual media rights for Premier League football matches.

Virgin Media’s argument is that the collective selling of live UK television rights on an exclusive basis by the Premier League for matches played by its member clubs is in breach of competition law. Virgin Media’s key argument is that the proportion of matches made available for live television broadcast under the current rights deal is lower—154 out of 380 matches a season—than in some other leading European leagues. Although, as the hon. Gentleman pointed out, the new auction will see the figure go up to 168 matches a season, Virgin Media would argue that more matches are available for live television broadcast in other European countries.

Thomas Docherty: The Football Association and the Premier League point to the fact that the attendance of away fans in other leagues, such as La Liga, is very poor because there is such availability of broadcast. Does the Minister accept that point?

Mr Vaizey: It is not for me to accept or reject that point, but I will elaborate on my answer. Virgin Media would say that, because fewer matches are broadcast, consumers pay more money for their pay TV packages because there are fewer matches to go around and therefore less competition—that is the argument in its crudest form. If this were a court or a competition appeal hearing, an extremely expensive Queen’s counsel would no doubt pick me up on how I have characterised the argument.

As the hon. Gentleman indicates, there is a counter-argument. First, the Premier League would talk about its success over the past two decades. Both he and my hon. Friend the Member for Cities of London and Westminster have pointed out the increase in live attendance at Premier League matches over the past 20 years and the commercial success of clubs due to the way the Premier League sells the rights to live matches. I was inadvertently in the position of, in effect, supporting a socialist solution: the Premier League selling its collective rights. The hon. Gentleman made a compelling point, which will be of particular interest to my hon. Friend, on whether we could introduce collective selling into the

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City of London, whereby the top-performing traders collectively negotiate their salary with the rest of the company, so that the difference between the highest earners and the lowest earners is somewhat smaller—but I digress, and no doubt that is not helpful.

Mark Field: I would not describe myself as a socialist in any way, but the collective system has worked very well, which is greatly to the credit of all concerned. It is worth putting it on the record that Sky has done a terrific job of transforming the broadcasting of the game, in tandem with the BBC and other providers. I feel that Virgin Media’s complaints are unfounded. There is no evidence to suggest either that there is dissatisfaction with subscription rates or that subscription rates would be lowered if we had more games on TV.

Mr Vaizey: I cannot be drawn on that point, except to say that I have described Sky’s acquisition of Premier League rights as a bit of a chicken and egg situation. Sky’s success has been built on having those Premier League rights, but there is no doubt that Sky has brought extraordinary innovation to broadcasting Premier League games.

Thomas Docherty: On attendances and popularity, is the Minister aware that, even with so much live football on a Saturday and even with the high attendances, the BBC reports that 4.5 million people tune in on a Saturday night to watch “Match of the Day”? Another 1.5 million watch the repeat and 2 million watch “Match of the Day 2” on a Sunday. Does he agree that that shows that football fans have a genuine appetite to watch recorded highlights and to see the punditry and technology to which he refers while also going along on a Saturday afternoon to support their team? We should protect that.

Mr Vaizey: I absolutely agree. The post-match punditry on the Chelsea victory at Swansea on Saturday’s “Match of the Day” was some of the best punditry I have seen for a long team. As I said earlier, we have talked about solidarity and the Premier League’s business model, which is heavily reliant on its broadcasting deal. The deal is important for Premier League clubs, but it also helps the football league pyramid. Having put Virgin Media’s arguments, I stress the hon. Gentleman’s point that the FA’s position of preserving the 3 o’clock kick off for a number of matches that are not broadcast in order to maintain attendances at live football matches is very important.

I have little time left, so I will simply help the hon. Gentleman in the best way I can by explaining the process. Ofcom will gather further information using its powers under the Competition Act 1998. The case is still at an early stage, and it does not mean that the Ofcom investigation will go the full length. Ofcom has to reach a view on whether there is sufficient evidence of infringement of competition law, and I understand that it hopes to reach an initial view towards the end of March. Ofcom is also mindful of the timing, given that the auction of UK audiovisual rights is under way and is expected in the spring of 2015.

I have obviously been briefed on Ofcom’s investigation process. Ofcom has emphasised to me—this will be music to the hon. Gentleman’s ears—that the heart of

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its investigation is the best interest of fans and consumers and that it is aware that fans and consumers benefit from the principle of collective selling. This is a complex issue with a number of arguments to be made. I have outlined some of those arguments, but it is important to stress in my last few seconds that Ofcom, quite rightly, is an independent regulator. I assure anyone watching this debate that the hands of politicians will not be directing how Ofcom goes about its investigation. The arguments on both sides of this debate have been well rehearsed. I have every confidence that Ofcom will conduct its investigation in a scrupulous and fair manner and will come to clear decisions at each stage in a timely and helpful way.

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Planning (Community Right of Appeal)

4.30 pm

Anne Marie Morris (Newton Abbot) (Con): It is a great pleasure to serve under your chairmanship, Mr Streeter. This debate is about the potential for changing the planning system to give communities a genuine stake in the planning process. My proposal is to introduce a community right of appeal.

The Government rightly recognised when they came to office that there was a significant housing problem, and that one of the challenges was unburdening the planning system of bureaucratic processes so that the houses we so badly need could be developed. The Government said that while liberating planning processes to make them easier, they would give communities a greater say in what happens in those communities and in planning decisions.

However, the reality was that the changes in the planning system and in communities’ rights did not move at the same pace, although the legislation was passed pretty much in parallel. The benefits of the community legislation—the Localism Act 2011—inevitably lagged, because neighbourhood plans, the last stage of the planning process, could not be put in place until local plans were in place. Although there was some grey debate about whether they could precede local plans, in reality, neighbourhood plans must conform with a local plan, so one had to follow the other. Clearly, they will give communities great benefit, as they bring community infrastructure levy benefits, but they are late.

There were many other provisions in the Localism Act 2011: for example, communities’ ability to identify community assets, which could therefore be considered for preservation for community use, and a further provision enabling them to be acquired. The problem is that many such community assets are owned by local authorities, which decide whether or not an asset can be listed, giving them an inevitable conflict of interest.

Likewise, although the potential sale option was not intended to give communities a particular financial advantage to give them time, the reality is that it will not help communities acquire time, because if the local authority owns the asset in question, all it has to do is wait for the months to expire and then sell to a developer who will give a better price. I have some concerned constituents in Shaldon and Kingsteignton who have suffered as a result of those deficiencies in the legislation.

Meanwhile, the planning side of the balance—the national policy planning framework and local plans—moved ahead apace. The Minister wrote to me recently to advise me that 80% of all planning authorities now have local plans in place. That is much to his credit, but the problem is that during that tortuous three to four-year process, developers have been able to develop without communities feeling that they have a real say. Clearly there are provisions for consultation, but that is not quite the same thing. Communities feel that they are in no better position now than in the old days, when parish councils used to be consulted and then, they felt, roundly ignored. As I am sure the Minister will tell me, where communities are agreed, there is the option of judicial review, but the problem is that it is an expensive process that few communities can afford.

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I will give some examples from my constituency of how the process has frustrated constituents and made them feel that they are not being listened to and do not have a voice. As local plans were introduced, the Government indicated that as a plan got closer, more weight would be given to it. In Shutterton, in Dawlish, an application was made for 350 houses. Those houses were not part of the local plan provision, and the council and constituents violently opposed them. None the less, three weeks before the local plan was adopted, the application went through. After our local plan was adopted, the council continued to authorise infill development. Although some infill development is understood and accepted, the amount in this case was substantial.

In other cases, we have found that a number of developers applied for more housing on the site allocated than was in the plan. On other occasions, due to density changes, where a site would not take the designated number of houses, the local authority extended the land on which the development could take place. The result in Dawlish was that instead of the expected 1,200 houses in the area, the community are now facing 2,000. That seems to be a significant mission creep from what was originally intended.

Mr Andrew Smith (Oxford East) (Lab): I congratulate the hon. Lady on securing this important debate. Does she agree that what ought to be at issue is not a question of more or less development but of the quality of planning decisions? Would not the right of appeal for which she advocates correct an asymmetry in the present system, whereby an applicant who thinks that a refusal is contrary to the planning framework can keep appealing to get the decision that they want, whereas a community that thinks an approval is contrary to the planning framework has no right of appeal other than judicial review, which as she says is prohibitively expensive? Therefore, it would empower people to balance things out.

Anne Marie Morris: I could not agree more, and I commend the right hon. Gentleman on his comments. The point that he makes entirely supports the point that I am making. It is about creating a balance and fairness in the planning system that do not currently exist.

The final complaint, which it is worth articulating for the Minister, involves the infrastructure challenge. Although stakeholders involved in roads, schools and so on are consulted, some stakeholders who are relevant are not statutory consultees, including the NHS. There is no obligation for the NHS to put forward its views about whether there is an adequate number of GP surgeries and the like. It is probably fair to say that although county councils have a duty and will consider infrastructure issues carefully, if one looks at how they justify some developments, it is in the hope and expectation of a school that might open in five or 10 years’ time, or a road that might be built if some other development occurs in two or three years’ time. Sometimes, communities feel that that is a bit fanciful. They perceive—I share that perception—that some communities have significant infrastructure issues that seem to have been ignored.

Caroline Nokes (Romsey and Southampton North) (Con): I commend my hon. Friend on securing this important debate. Does she agree that infrastructure is

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not just about roads and schools? One huge concern in my constituency is drainage. Local communities are absolutely terrified that new development will be granted permission and built without an adequate upgrade to the existing sewerage system.

Anne Marie Morris: My hon. Friend makes a key point. When houses are joined to the system, it puts far too much pressure on it, resulting in the flooding problems that many of us have experienced in our constituencies. She is absolutely right, and her point is well made.

I emphasise first and foremost that the concept of a community right of appeal is for the community. I am not advocating a third-party right of appeal. It would clearly not be appropriate for anybody who simply does not agree with a development in their neighbour’s garden to be able to bring back the bureaucracy that the Government has rightly tried to get rid of, just in order to complain about an issue next door. It would not be a nimbyist charter; it would be a proper rebalancing of the planning system to be fair and balanced. The idea would be to ensure that between the developer and the community, both sides’ arguments would be properly considered and have some power in the process.

It would also ensure that local authorities think long and hard about their decisions. Clearly, there is a great incentive for them to develop, because then they get community infrastructure levy moneys, but if they recognised that there was potential for an appeal from both sides, they might give some thought to it.

Chris Skidmore (Kingswood) (Con): I thank my hon. Friend for calling this debate; I am listening with interest to what she says. I declare my interest, having introduced a ten-minute rule Bill back in 2012 to call for a community right of appeal. What does she think about neighbourhood plans? It is unfair that local plans get precedence over neighbourhood plans. Could a community right of appeal be linked to neighbourhood plans, which would give those plans teeth and put rocket boosters under them, convincing people that they are the right things to produce?

Anne Marie Morris: My hon. Friend makes an extremely good point. What one could certainly do is to link a right of appeal to those communities that have adopted a neighbourhood plan. However, we could go further than that and perhaps at this point I can set out what a community right of appeal might look like.

First, there must be true planning grounds for such a right of appeal, including a situation in which the local authority was ignoring Government guidance. The case in Shutterton was not entirely on-point here, because clearly the decision there was made by the inspector. None the less, there could be a right of appeal if it is seen that Government guidance is not being followed. Secondly, there would be grounds for appeal if there was a failure by the local authority to abide by the provisions of a local plan. Thirdly, and this addresses my hon. Friend’s point, there could be an appeal if there was a failure to abide by the neighbourhood plan. Finally, there could be an appeal if there was a failure to provide infrastructure properly.

Those are my suggestions; I am sure there are many other planning grounds that could and should be included in that list. Perhaps, however, they could be a “starter for 10”.

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Rosie Cooper (West Lancashire) (Lab): I congratulate the hon. Lady on securing a really important debate. Does she agree that a community right of appeal would help residents not only where they oppose developments but in situations where, for example, the council has set a limit on the number of houses in multiple occupation, specifically student homes, in a designated area, and yet it fails to take enforcement action against predatory landlords who are disregarding the planning rules and already exceeding the limit? Alternatively, perhaps the council is granting permission for HMOs in apparent contradiction of its own rules, leading to a situation in which neighbourhoods are up in arms against the people who are supposed to help them.

Anne Marie Morris: That is an interesting point. Clearly, the devil will be in the detail, once this proposal is properly worked up. In a way, however, the hon. Lady leads me on to my next point, which is this: for this appeal system to work, we must define what a community is. For me, a community will be something like a ward, or a neighbourhood as defined under Localism Act 2011, but it also needs to be the people in an area who will be truly impacted by a development. I do not have a precise solution, but that is a way forward.

Clearly, there must be weight, and therefore a percentage of the community that feels strongly about an issue. There cannot just be nimbyism, so there has to be quite a high threshold before a planning appeal can be triggered.

Richard Graham (Gloucester) (Con): My hon. Friend is the champion of communities and we are all grateful to her for securing this debate. On the specific point of a community right of appeal, does she agree that one aspect that councils and therefore the Department for Communities and Local Government should look at is situations in which a council has already listed something as being an asset of community value but then decides to give a developer permission to do something that effectively destroys that asset? Does she agree that that is entirely contradictory, and that we need to include consideration of such situations in a community right of appeal?

Anne Marie Morris: I strongly support that suggestion and it would be an excellent addition to the list of things that might be considered.

If the appeal mechanism is to be effective, it must be easy to use, low in bureaucracy and cheap. However, it cannot be beyond the wit of the Government to come up with a set of forms and a formula that will make it accessible to communities. I also believe that there are communities, community groups and charities out there that will be more than happy to put forward proposals for support.

Jim Shannon (Strangford) (DUP) rose—

Mr Gary Streeter (in the Chair): Before the hon. Lady gives way again, I must say that interventions are becoming rather long, and we want to give the Minister plenty of time to respond to the debate.

I call Jim Shannon to speak—very briefly.

Jim Shannon: I will be very quick. The hon. Lady mentioned the figure—the number of people—that would trigger an appeal. In every case, the number of people

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living in an area who are impacted by a development might vary. There would be occasions when the impact of a development would be great, but the number of people living in the area impacted would be small. So I just wondered what the trigger figure would be.

Anne Marie Morris: Again, the devil would clearly be in the detail. However, the challenge is to create a relatively simple system. If we make things too complicated, including the definition of the “group” or “community”, this system will never be established. So, while I take the hon. Gentleman’s point, we must look at how we would make the system work in practice.

The appeal would need to be an appeal to the inspector, to give communities a right equivalent to the one that developers now have. In the same way, it is right that the council would have to pay a penalty if it refuses an application but the developer then succeeds in overturning that decision. Similarly, if the community succeeds on appeal, having initially been refused, the council would have to pay a penalty.

The benefits of this process would be that the community would at last see some fairness; that developers would be encouraged in a proactive way to better engage with communities; that local authorities would have to think long and hard, and not only about the community infrastructure levy, when making their decisions; and that in the future we would create communities rather than blocks of houses.

I commend the Government for what they have done in dealing with our housing issues and problems. However, I hope that the Minister will recognise and accept that there is a challenge here, and that communities feel aggrieved at their lack of engagement in the planning process. I also hope that he will agree to give this issue some proper attention, and will consider whether or not such an appeal is workable. Clearly, the matter would have to go out to proper consultation and I appreciate that this close to an election it may be more of a manifesto issue, rather than something to be done today.

Nevertheless, this is not just a case of amending existing legislation, and it would not be an adequate response to say, “We have done a great job.” We have; the Government have done a good job. And—dare I say it?—if the Opposition’s view held sway instead, communities would have no rights or say in where housing was located. However, we need to take this issue seriously and come up with some positive proposals. So I ask the Minister—through you, Chairman—to acknowledge that there is an issue and to agree to take some concrete steps.

4.46 pm

The Minister of State, Department for Communities and Local Government (Brandon Lewis): Thank you, Mr Streeter, for calling me to speak. It is a pleasure to serve under your chairmanship.

I congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing this debate. In her closing remarks, she said something that I absolutely agree with: what is important for us, as we go forward, is that we are building communities and not just houses. I myself have said that we cannot afford to see lots more big housing estates built just to hit various targets that people set from time to time; we had 13 years of

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top-down numbers and hitting targets, rather than building communities. The changes that we have made to the planning process are specifically designed to ensure that we are building communities—homes that not only make the people who live in them proud, but are welcomed by the communities that those people are becoming part of. I will touch on that issue in the next few minutes.

It is also worth noting that one of the reasons why we are having this debate is the frustration that many of us have experienced—I myself was in local government for a decade or more—about the lack of power that people have had over what is happening around them compared with the power of somebody in a suit in Whitehall saying, “This is what will happen in your area.” It will take some time for people to realise that we have moved on from that situation and that we should attack this issue from the front end of the planning process instead of from the back end. The appeal system itself is at the back end.

Local authority decisions overturned during the course of a year still represent just 1% of all local planning decisions, although at the same time a record number of planning applications—about 240,000—were approved in the last year. One of the reasons for that small percentage is that more and more parts of the country are now having development in areas where they have specified they want development through their local and neighbourhood plans.

The planning reforms introduced by this Government have gone further than ever in ensuring that planning is centred on community involvement, by maintaining and strengthening a plan-led system rather than just the development control system of the past. We are removing regional strategies and introducing neighbourhood planning. We are also making the system not only fit for purpose but more accessible to everybody in terms of its understanding and outline.

The system currently gives statutory rights for the views of communities and individuals to be heard at each stage in the process—for example, in the preparation of the local plan. That is achieved most directly through neighbourhood plans, but also, of course, in making representations in any applications or appeals that arise. As I said, we are looking to create a much more collaborative and effective planning process in which people are engaged and able to take the lead from the beginning, not at the back end, particularly regarding the future development of their area. Our reforms are empowering communities to take a leading role, and we want to continue to see development proposals being determined locally, through plan-led and community-led planning decisions.

Caroline Nokes: Does the Minister share my frustration that, particularly in places such as Bassett in Southampton, where the local community has been working on its neighbourhood plan for some years now, it still takes a phenomenally long time for neighbourhood plans to be worked up, consulted on and come to fruition?

Brandon Lewis: I have been determined about speeding up the neighbourhood plan process. I hope that my hon. Friend is pleased that we have made some new announcements in the last few weeks. I will drop her a

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note about them to outline how we can speed the process, although we can probably still do more. I can certainly get some details to her on that.

Our aim is to make sure that everywhere has a clear local plan: that is where people’s local views on how they want their community to develop, consistent with the national planning policy framework, and against which planning applications will be decided, are going forward. Local plans form the basis for decisions on planning applications and appeals, of course, under planning law. Plan preparation is the best way for communities to be involved. Good progress has been made. Some 62% of all authorities now have an adopted plan and 80%, as my hon. Friend the Member for Newton Abbot said, have now published theirs. That is up from just over 30% in 2010.

The NPPF reminds local authorities that the community should be proactively engaged in the process as far as possible, reflecting a collective vision on an agreed set of priorities for the sustainable development of their area.

Anne Marie Morris: The Minister is making some good points. I do not for one minute disagree that there has been change and improvement, but I still cannot see any movement on his part beyond consultation. The crux of the matter is that communities do not feel that consultation is enough; they want some form of right.

Brandon Lewis: Actually, they do have a direct right because a local plan, when adopted by a local authority, has not only been consulted on with the local authority, but is voted on, adopted and approved by the elected councillors. It is part of that democratic process.

Going further than that, neighbourhood plans are the real key to what my hon. Friend is talking about. They can, and in some areas do, go ahead of the local plan and they have weight in law. They were introduced by the Government, and for the first time communities are able to produce plans that will be used in determining planning applications: as well as having powers to grant planning permission for development, they want to see through neighbourhood plan development orders. Neighbourhood planning gives a community direct power to develop a shared vision for its neighbourhood and deliver the sustainable development that it needs. The local community gets a vote on this by referendum in the community.

It is clear that communities have positively embraced these new powers, going beyond the old approach and giving real community involvement at every stage. Let me outline that by mentioning that we now have just over 1,300 designated areas, so more than 5.2 million people are now covered by neighbourhood planning. Four areas in my hon. Friend’s constituency are going through the neighbourhood planning process. I hope there will be more to come, because with that process people get direct involvement and a say in what development will go on, how it goes on and the look and feel of it—in relation to not just residential, but commercial, retail and infrastructure.

Anne Marie Morris: Will the Minister clarify? He said that the neighbourhood plan went beyond and above the local plan. Can a neighbourhood plan override and rewrite what is in a local plan? I thought not.

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Brandon Lewis: That is not what I said; I said it could go ahead of it and lead. There can be a neighbourhood plan where a local plan is not necessarily adopted and finished, so it can move ahead. It obviously has to fit with the local plan—it might need to be reviewed down the line—but if an area is getting on with a neighbourhood plan, it does not necessarily need to wait for the local plan. In some areas there have already been planning decisions. I point my hon. Friend to case law in relation to Coates road in Devizes, where a planning appeal decision was made, backing up a neighbourhood plan that had not yet been to referendum.

There has been overwhelming support for neighbourhood planning. So far in referendums, an average of 87% of voters have said yes to a neighbourhood plan or an order, on an average turnout of 33%. That means that local people are directly involved. The NPPF clarifies that early engagement has significant potential to improve the efficiency and effectiveness of the planning application system for all parties. Good quality pre-application discussions enable better co-ordination between public and private resources, as well as improved outcomes for the community.

We have been determined to make the planning system more accessible to everybody through the publication of the NPPF and by simplifying the system—moving away from documents and often complex, repetitive technical guidance found in 230 separate documents and 7,000 pages. We have moved to the NPPF, which has just 50 pages, dropping away from the more than 1,300 pages of sometimes impenetrable jargon in 44 separate documents. We now have the NPPF with 50 readable pages. That is making the planning system easier to navigate for everybody.

Interested parties already have statutory rights to contribute their views as well—at each step of the process in the production of the local plan or, as I outlined, even more directly in the neighbourhood plan, as well as at the planning application stage and in response to any appeal by the applicant against a local authority decision. Interested parties can raise all issues that they are concerned about at each stage of the process, in the knowledge that the decision maker is required to have regard to their views in making a decision.

The existing right of appeal recognises that, in practice, the planning system acts as a control on how an individual may use their land. As a result, the Government believe it is right that an applicant should have the option of an impartial appeal against the refusal of planning permission. The existing right of appeal compensates for the removal of an individual’s right to develop.

We do not, at this stage, support the proposal for a community right of appeal; this would create a further opportunity to challenge development proposals in a system that is already geared towards ensuring that the views of third parties are heard and understood.

Richard Graham: On the point that I raised with my hon. Friend the Member for Newton Abbot, will the Minister clarify something about assets of community value? Once an asset has been listed as of community value, is it appropriate or inappropriate for a council then to give permission to a development that would inevitably mean the destruction of that asset?

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Brandon Lewis: My hon. Friend knows that I cannot comment on any particular case, although I appreciate that he was not talking about a specific case. These things sometimes come down to specific cases. Obviously, listing an asset of community value gives protection—potentially, if an asset is to be sold or changed—for six months so that the local community can come together to consider acquiring it. However, it does not move to the next stage of stopping somebody from developing, changing or using that property should the community not be able to come together. The listing of an asset of community value gives the opportunity to pause the sale for six months so that the necessary capital can be raised, but it does not necessarily stop it ad infinitum and was never designed to.

Richard Graham rose—

Brandon Lewis: I see that my hon. Friend wants to intervene again.

Mr Gary Streeter (in the Chair): Order. I would prefer him not to intervene again. I think the Minister should respond to the person who has actually secured the debate.

Brandon Lewis: Absolutely—that is a fair point, Mr Streeter. I will happily liaise with my hon. Friend after this debate.

I return to the point that I made at the outset. Inherently, the idea behind the planning reforms is to make sure that there is community involvement through local plans and neighbourhood plans—I cannot stress enough that those are a key way for people to be involved—by getting public involvement where development should be: what it should look and feel like, what it should be built like and how it should be supported at the beginning of the process, not at the back end.

Anne Marie Morris: You are being very indulgent, Mr Streeter. The Minister’s point is that the appeal system was intended to provide redress for the individual owner. I understand why that change was made. I think we are at a point in history where we should review again the importance and value of a community, and we should seriously consider its having a voice now, given how closely we live together and how many houses are built in such close proximity.

Brandon Lewis: We believe that the best way for communities to have a voice in the planning system is for them to be engaged in the development of local and neighbourhood plans at the beginning, not to wait till the back end of the process, because that forms the basis of decisions on planning applications under planning law.

A community right of appeal at the end of the process is too late to allow meaningful engagement and has the potential to slow down or even prevent sustainable and appropriate development at a time when our other planning reforms are geared towards speeding up the planning system, to drive our economy and provide the homes and jobs that we need.

We want a more collaborative and effective planning system, where people are engaged early in the process and able to influence meaningfully the future of their areas. We want development proposals to be determined locally, in accordance with local and neighbourhood

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plans, and our planning reforms are already empowering communities to achieve their aspirations by taking an active role in planning their areas.

Question put and agreed to.

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4.59 pm

Sitting adjourned.