Phasing Out of Aprt

Part of Orders of the Day — Finance Bill – in the House of Commons at 7:45 pm on 28th April 1983.

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Photo of Mr Timothy Eggar Mr Timothy Eggar , Enfield North 7:45 pm, 28th April 1983

I accept that point, but the fall in the real oil price has also had an effect.

The package announced by the Chancellor was particularly well designed. The hon. Member for Blackburn made this point well by quoting the increase in the rates of return that Wood, Mackenzie drew on the new marginal fields. It quoted those returns by way of saying that the Government had gone too far. That the increases are so significant in the marginal fields shows how effective the Government have been in zeroing in on the fields that need assistance and making sure that the tax concessions go to those fields. The industry has recognised that. My hon. Friend the Member for Canterbury (Mr. Crouch) was being a little less than fair to the Government about fields that are under development and in production. Those fields, in so far as they are paying APRT, will benefit from the phasing out of APRT payments.

In addition to the way in which the Government have been able to zero in on marginal fields, the industry has particularly welcomed the simplification of the tax system in the changes. By 1987, instead of this crazy system of four different levels of tax, with each different level reacting in a curious way to the level above, or below, there will be two levels of taxation — PRT and corporation tax. That will make the life of hon. Members much easier, even if it might reduce the bills and fees of the oil taxation lawyers who have been growing fat on giving advice to the oil industry.

Other hon. Members have asked how many fields will result from these concessions. About five or six fields have already been announced, and a number of other plans have been dusted off. The old drilling results are being looked up and the teams are being put together again. Progress is being made and I understand from the industry that over the next few weeks and months we shall see a new annex B submission.

The right hon. Member for Greenock and Port Glasgow referred to the problem of the length of time, administratively, that annex B took to assess, but he is rather out of date. My right hon. Friend the Secretary of State for Energy has introduced a new system, which one could roughly call the rolling annex B submission. That means that the awful fandango that everybody had to go through to get everything ready then slap it into the Department of Energy, with all the delays that ensued, and the strains that that placed on the officials in the Department are no longer necessary, because the annex B submission can be phased. I am sorry that the right hon. Member for Greenock and Port Glasgow is not willing to be at least as generous to my right hon. Friend over this reform as he was to my hon. Friend for the general tenor of the tax changes.