Phasing Out of Aprt

Part of Orders of the Day — Finance Bill – in the House of Commons at 5:45 pm on 28th April 1983.

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Photo of Jack Straw Jack Straw Shadow Spokesperson (Treasury) 5:45 pm, 28th April 1983

The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) says that there have been 11. I calculated that there have been nine and the Financial Times said that there had been 10. As the Financial Times is the oracle, I took it at its word.

Irrespective of whether there have been nine, 10 or 11 changes, the Government's performance on this aspect of taxation, as with others, contrasts strangely with their promise. Many of us remember the criticism that the Conservatives, in opposition, made of Labour's oil tax regime. Many hon. Members may remember the statement on energy policy, which the right hon. Member for Bridgwater (Mr. King), then the Conservative energy spokesman, now the Secretary of State for the Environment, made on 10 April 1979. He said: We are still at the point where by restoring confidence, the North Sea success story could be prolonged into the 1980s.…Confidence has been shattered by frequent changes in the rules and by Labour's hostility to private enterprise… We shall pursue a steady policy designed to secure the fullest advantage to the nation as a whole… We shall therefore review the Government's licensing and tax policies to achieve these benefits". He said that changes that the Labour Government announced in October 1978 had been cobbled together in a hurry without consultation as a gimmick for the election from which they shrank in October. He said that the oil industry needs a clear assurance that there will not be countless changes in the rules and that there will be full consultation. As a possible means of reducing the uncertainty we shall examine whether a more predictable formula could be incorporated in the tax system to take fuller account of the changes in the real price of oil and in interest rates without the need to introduce further legislation on each occasion. That was the promise. As I have already said, the performance has been very different. The Government rejected the Institute of Fiscal Studies' proposal for a major reform of the oil taxation regime and they have not at any stage introduced a durable system of taxation which is designed so that they could respond, without major changes in legislation, to fluctuations in the real price of oil and interest rates which, we all accept, can make dramatic differences to the rate of return that is available from the North sea.