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 John Wakeham Mr John Wakeham , Maldon 7:45 pm, 28th April 1983

There are two justifications. First, 1 April 1982 was about the time when we started to have detailed discussions with the industry about future fields. It seemed a reasonable point at which to start. Secondly — perhaps this is more controversial — there was something of a gap between first generation and second generation fields, and it seemed that 1 April 1982 was about the right time to draw the line. It was the time when we started seriously to investigate the changed circumstances that were becoming apparent for marginal fields in future.

It has been suggested that the oil companies cannot rely upon this year's reliefs because they will be taken away before they are of any help to the companies—in other words, a further reflection to the companies, to repeat the charge of the hon. Member for Blackburn, of the changing situation. I recognise that no Government can constitutionally bind their successors or themselves, but there is a common interest between the Government and the industry in future successful North sea oil developments, and history has shown that changes have not produced profits of unacceptable levels from existing fields. Our figures show, however, that existing fields are still very profitable, and the phasing out of APRT is a sign that we are ready to help such fields to the extent that is necessary.

Our carefully balanced package, coupled with the full discussions that we have had with the industry, should give the companies confidence in our future intentions. With companies such as Shell, BP, Texaco, Philips, and Esso reported to be reassessing development plans for the North sea, it is clear that our Budget strategy represents an excellent basis for encouraging future investment.