I was disappointed but not actually particularly surprised that
the now former Minister of State for Energy Michael Fallon decided to ridicule
the nine months or so of effort that I and my fellow Commissioners put into the
production of the report of the Expert Commission on Oil and Gas by calling it
“copy-cat stuff”.
It was a childish, naïve and foolish remark which tells me he
either hadn’t read the report thoroughly enough or hadn’t read it all because if
he had he would have discovered that it was actually a far broader and
considerably more detailed report than that produced by Ian Wood.
That’s not in any sense a criticism of Ian Wood because whilst we
had a pretty open remit Wood was instructed – for example – to exclude fiscal
issues. Despite being one of the most
important issues affecting the oil and gas industry and in dire need of
attention it was presumably deemed by the UK Government to be a matter that was
entirely the domain of the glorious Treasury and mere mortals shouldn’t tinker
with it. That probably also tells us a lot about the
how serious the Treasury are about the whole business of consultation.
Fallon’s response also means that I’m now obliged to counter with
some observations of my own about Westminster policy. Not that this will be a hardship you
understand. Indeed, I’m grateful for the opportunity.
Fact is that the Treasury’s review on taxation is only just
starting whereas by virtue of the Expert Commission’s report then the Scottish
Government review is already completed.
The Commission consulted a wide swathe of companies across
the industry and gathered a mass of evidence and expert opinion before reaching
their conclusions and making their recommendations.
I’d also like to remind Mr Fallon that the Scottish Government –
after an extensive consultation with industry which included over one hundred
company visits - developed their oil and gas strategy in the Spring of 2012. Following that of course the UK Government
also thought it might be a good idea to have a strategy.
Whilst the Scottish Government’s prime objective has always been
to maximise recovery Westminster also decided this was a good idea. Holyrood established its Oil
and Gas Leadership Group to provide advice on this and other topics and bingo,
Westminster set up the Oil and Gas Council.
But
whilst both Holyrood and Westminster have been actively promoting fiscal and
regulatory stability and predictability the fact is that the Treasury
introduced an unannounced tax increase in 2011, since when it has engaged in
appeasement via a hotch-potch of field development allowances, and is still
prevaricating over the changes to the so called bareboat charter
allowances. As we know, the impact of
these two changes on industry confidence is still very evident.
But Fallon has gone
now. He’s been replaced by a chap called
Matthew Hancock who is disgracefully, the fourth Energy Minister in less than
two years. Hancock is a versatile
chap. Not only is he Minister of State
at the Department of Energy and Climate Change but he’s also a Minister of
State at the Department for Business, Innovation and Skills and Minister of
State for Portsmouth!
I wonder if he does all this
from one office or spends his time dashing across London and on the train to
Portsmouth? All seems a bit strange to
me given the importance of energy strategy to the nation. I still believe there
needs to be a dedicated energy minister.
But at least Hancock is an
interesting character. In fact in a magazine article a couple of years ago he likened
himself to wartime leader Sir Winston Churchill and William Pitt who became the
youngest Prime Minister in the late 18th century aged 24.
Asked for his view of the
criticism that the Conservative party is “full of career politicians who have
little experience outside politics and are too young,” Mr Hancock replied:
“Well, I remind people that Winston Churchill is widely regarded as one of the
finest statesmen our country has ever seen” and “likewise William Pitt became
prime minister in his twenties, and both of these men achieved great heights
over their careers.” Hancock added “I have a huge affinity for Disraeli, not
least because I come from a provincial background and I went to the local
village school and have arrived latterly in Westminster.” Hmm. Hancock’s not lacking in confidence
then.
He also seems to be an
energy market expert as he was reported saying last year that shale gas tax
breaks would mean “lower gas prices for everyone”. Bless his cotton socks.
However, if as I do you use
Twitter you’ll have noted that since his appointment he hasn’t “tweeted” once
about energy or the oil and gas sector.
In fact he seems to be preoccupied with EU reform of Red Tape, planning
a visit to Portsmouth, praising the fall in unemployment numbers, meeting the
Indian cricket team and promoting government policy on small businesses. Not a peep or a Tweet about energy which is
something I find really concerning. Perhaps
this job sharing lark really isn’t a good idea or Hancock just hasn’t mastered
the multi-tasking thing yet. Maybe that tells us his job should have gone to a
woman. Come to think of it has there
ever been a female energy minister?
There is another reason for
the oil and gas industry to be concerned because having put considerable effort
into house training and educating the Financial Secretary to the Treasury
responsible for oil and gas Nicky Morgan MP, she’s now been promoted to become
Education Secretary.
So, we now have the fifth
Treasury person in less than three years. It’s Priti Patel MP who is actually Exchequer
Secretary to the Treasury. So the role has moved and to be honest I’m not sure
if this is a downgrade or just a sideways move.
Regardless, Priti Patel is
the MP who suggested the Scottish independence debate provided a “good
opportunity” to slash spending in Scotland and wants to scrap any plans to
bring in plain cigarette packaging.
So good luck with her folks.
She seems like a real bundle of laughs.
(first published in the Aberdeen Press & Journal "Energy" supplement and on www.energyvoice.com on Aug 4th 2014)
