Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 3:49 pm on 30th April 2002.

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Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury 3:49 pm, 30th April 2002

I am familiar with the report. I am grateful for the hon. Gentleman's prompting, because I have read it and have a view on it that I shall reveal to the House shortly. I know that the hon. Gentleman numbers patience among his qualities and I will happily offer him my verdict on that important matter in due course. However, even if the Liberal Democrats do not agree, I would have thought that many important features of the Bill remain to be addressed, including North sea oil taxation.

Clause 90 will introduce a 10 per cent. supplementary charge on companies producing oil or gas in the UK on the UK continental shelf. That charge will apply to companies' profits from the extraction of oil or gas in the UK or on the UK continental shelf. The Red Book predicts that the tax will cost the industry £100 million this year, £450 million next year and £600 million the year after that. However, commentators Wood McKenzie put the figures at £127 million, £454 million and £771 million, followed by £1 billion in 2005–06. Already it is predicted that investment will be discouraged, with a serious adverse impact on the Scottish economy. That is the considered judgment of the United Kingdom Offshore Operators Association and of the respected head of BP, Lord Brown, who said only last Tuesday:

"I don't think any other country in the world has increased production taxes in this way over the last 10 years—with two exceptions—Venezuela and Argentina."

The risk to jobs in the UK is so obvious, and to those in Scotland so palpable, that everyone is aware of those risks except, apparently, the Government.