James Murray

I thank hon. Members for their contributions to the debate. I will respond to some of the points raised, and set out the Government’s views on the new clauses. The Opposition spokesperson, the hon. Member for Grantham and Bourne (Gareth Davies), asked for confirmation of our decision to retain the energy security investment mechanism. I hope that he will take yes for an answer, because yes, I can confirm that the ESIM will remain in effect until 31 March 2030, when the energy profits levy is due to end. It will continue to be adjusted in line with consumer prices index inflation in future financial years. I hope that sets his mind at rest on that point. The hon. Gentleman asked about modelling the impact of the energy profits levy. I am sure that he will remember from his time in the Treasury the role that the Office for Budget Responsibility plays. He will see that in the report that it published alongside the Budget, it forecast £12.6 billion being raised from the levy over the forecast period. Of course, the OBR will provide updated forecasts next year. The hon. Gentleman and other hon. Members kept raising the phrase “extraordinary profits” when talking about trying to understand the position that the oil and gas sector is in. That links directly to the energy security investment mechanism, because prices remain higher than the price floor that we set. The energy security investment mechanism means that if prices fall sufficiently and return to historically normal levels, the levy will be disapplied. The relationship between the levy, profits and the maintenance of the energy security investment mechanism is key to understanding the Government’s approach. The Liberal Democrats spokesperson, the hon. Member for St Albans (Daisy Cooper), asked about our choosing a 78% rate, how we set the rate for the energy profits levy, and about other attributes of the system being set up by the clauses under debate. We seek to achieve a balanced approach. We are raising the rate to 78%, extending the levy for a further year and removing the investment allowance, which we deem to be unjustifiably generous; yet we are maintaining 100% first-year allowances, the decarbonisation allowance, and the energy security investment mechanism. That strikes the right balance between ensuring that oil and gas companies continue to invest in oil and gas for years to come, and ensuring that they contribute to and support the transition to clean energy. The hon. Member for Angus and Perthshire Glens (Dave Doogan) spoke about the need for long-term stability. I entirely agree that we need it. That is precisely what we seek to achieve by saying that the energy profits levy will come to an end in March 2030, by having a price floor in the ESIM—we have mentioned that several times—and by proceeding with our consultation on the post energy profits levy regime. That will give confidence to those thinking about investing in the oil and gas sector not just before the end of the energy profits levy, but post 2030. The right hon. Member for East Antrim (Sammy Wilson) also mentioned long-term stability. He seems distracted right now, but I hope that will be of some reassurance to him. The hon. Member for Angus and Perthshire Glens said that a £78 investment relief is available in Norway, whereas the figure is £46 in the UK. I want to put on record that in the UK, while the energy profits levy remains in place, the sector continues to benefit from an £84.25 relief for every £100 of investment. I hope that gives him some reassurance on the points that he raised. I thank my hon. Friend the Member for Earley and Woodley (Yuan Yang) for her thoughtful and informed contribution, which explained that our approach strikes the right balance. I must say, however, that I was disappointed by the contribution from the hon. Member for Waveney Valley (Adrian Ramsay), because he seemed not to support our moves to ensure that tax is not a blocker to CCUS, which will play an essential role in our progress towards net zero. The UK has a chance to be a world leader in that sector; I hoped that he would support our efforts to ensure that it is. Two new clauses were tabled, which hon. Members spoke about. They require reports to be published. I can remember tabling many such new clauses over the last few years. New clause 2, tabled by the hon. Member for St Albans, would require the Government to produce a report setting out the fiscal impact of the removal of the energy profits levy investment allowance and the change to the decarbonisation investment allowance rate. New clause 3, tabled by the right hon. Member for Central Devon (Mel Stride), would require the Government to produce a report on the expected impact of the levy changes in a number of areas, including on capital expenditure in the UK oil and gas industry and on the Scottish economy. The Government oppose new clauses 2 and 3 on the basis that they are unnecessary. We have already set out the impact of our measures in a tax information and impact note, which was published at the time of the Budget. That note states that the changes made to the energy profits levy will raise an additional £2.3 billion over the scorecard, and further data on the UK oil and gas industry is regularly published on gov.uk. I hope that I have addressed some of the points raised by hon. Members, and have reassured them that the new clauses are not necessary. I urge the House to let clauses 15 to 18 and schedule 3 stand part of the Bill, and to reject new clauses 2 and 3. Question put and agreed to. Clause 15 accordingly ordered to stand part of the Bill. Clauses 16 to 18 ordered to stand part of the Bill. Schedule 3 agreed to. New Clause 2 Report on fiscal effects: relief for investment expenditure “The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before Parliament a report setting out the impact of the measures contained in clause 16 of this Act on tax revenue.” —(Daisy Cooper.) This new clause would require the Government to produce a report setting out the fiscal impact of the Bill’s changes to the Energy Profits Levy investment expenditure relief. Brought up, and read the First time. Question put, the clause be read a Second time.