Sir Alok Sharma welcomes the COP28 agreement on transitioning away from fossil fuels but urges the Government to lead by example by reviewing its plan to issue new oil and gas licences, and the tax regime that gives significant subsidies to new oil and gas projects.
Sir Alok Sharma (Reading West) (Con)
I agree that we saw significant progress at COP28, particularly the agreement on transitioning away from fossil fuels in the energy system. However, that agreement and all previous agreements are literally just words on a page; they will come to fruition only if all countries follow through in their domestic policies.
The Minister talked about raising the torch to inspire others. Once again, will he please review the plan to issue these annual oil and gas licences, and consider whether they are consistent with the international commitments we have made? Secondly, will he ask our right hon. Friend the Chancellor to urgently review the tax regime that gives significant subsidies to new oil and gas projects? This is a matter of trust. The Minister talked about the voices of the most climate vulnerable; they will be listening and watching, and they want to see action, not just from the UK Government but from every Government.
The Minister for Energy Security and Net Zero (Graham Stuart)
I pay tribute to my right hon. Friend for his efforts at COP26 in Glasgow, including the significant measure on phasing down coal. [Interruption.] Could the right hon. Member for Doncaster North (Edward Miliband) be quiet for one second? He did so little in government, and he has so much to say now—it is quite a contrast, is it not?
Returning to my right hon. Friend’s serious and respectful question on oil and gas licences, as I said, we are a net importer. We are producing our own oil and gas to ever higher standards, and I am proud of the North sea transition deal, which has seen the industry work with Government to cut emissions from production by 50% by 2030. My challenge back to my right hon. Friend is this: in what way is there any linkage between producing to ever higher standards and a falling level of oil and gas? New licences simply allow us to manage the decline of a basin that is expected to fall at 7% a year and to halve in a decade, and will see us growing our independence from imports, even with those new licences. That is why we are issuing them.
On the issue of subsidies, our tax regime is set at 75% —among the highest in the whole world. [Interruption.] The right hon. Member for Doncaster North cannot win the argument when he is on his feet, so he tries to do it when he is sitting down. If only he had shown the same energy when he was in government, we would not have had the woeful inheritance that we alone have had to turn round. We are expecting £50 billion in taxes from the oil and gas sector, and without new licences to allow for the greening of the basin so that we reduce emissions, we would not be able to ensure that each barrel of oil and production of gas comes with a lower level of production emissions than it does today. That is our ambition.