North Sea Oil (Revenue)

Oral Answers to Questions – in the House of Commons at 12:00 am on 24th July 1980.

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Photo of Mr Alfred Dubs Mr Alfred Dubs , Wandsworth Battersea South 12:00 am, 24th July 1980

1. Mr. Dubs asked the Chancellor of the Exchequer what is his latest estimate of North Sea oil revenues from corporation tax, petroleum revenue tax and royalties in 1980–81.

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

The figures—which were published in the Treasury economic progress report for July—are £450 million, £2,560 million and £1,090 million for corporation tax, petroleum revenue tax, and royalties respectively.

Photo of Mr Alfred Dubs Mr Alfred Dubs , Wandsworth Battersea South

Is the Minister aware that many experts believe that the Treasury is seriously under-estimating the likely revenue from North Sea oil over the next two or three years? That is likely to result in a lower, or possibly negative, public sector borrowing requirement. Will the Minister make clear that, if that happens, he will review the public expenditure cuts with a view to reducing them?

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

The hon. Gentleman is making certain assumptions that we are not disposed to make at present. Naturally, we are concerned with the structure of petroleum revenue tax, but we feel that it is designed to secure a proper share of the profits of North Sea oil for the British people.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

Will my hon. and learned Friend consider making a statement on the revenue implications of the Secretary of State for Energy's recent statement on depletion policy?

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

We are aware of the implications of that statement, but we do not think that it will make a substantial difference to the figures that I gave.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

Will the Minister of State explain why the figures that are published in the brown book on the effects of North Sea oil revenue are all in 1978–79 prices and therefore understate by more than half the actual benefit that the Government are deriving from North Sea oil? Will he assure the House that the reason for that is that the Government are now throwing £ 4 billion worth of revenue down the drain in financing unemployment that they have created?

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

The Government are not throwing any money down the drain. Our costing of the draft manifesto of the Labour Party is that it would throw £20,000 billion down the drain in nationalisation.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

Will the Minister answer a question that has been asked repeatedly in the House? Why are the Government understating by more than 60 per cent. in the brown book the actual value of oil to them?

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

I have given the figures for the current year. As the right hon. Gentleman will know, it was not the practice of either his Administration, nor is it of this Administration, to give forecasts for future years.