§ Q2. Mr. Douglasasked the Prime Minister if he is satisfied with the co-ordination between the Treasury and the 1460 Department of Trade and Industry in determining what balance between taxation, royalties and fees for licences in respect of oil from the United Kingdom sector of the Continental Shelf will produce the maximum advantage to the economy of the United Kingdom.
§ The Prime MinisterYes, Sir. My right hon. Friends are co-operating closely on these matters in the current review of licensing policy.
§ Mr. DouglasWill the Prime Minister care to enlighten us about the criteria being used to ensure that this country benefits from its indigenous oil in no way less than other countries similarly placed? Will he consider setting up a separate fund into which these revenues could be put, so that it could be used to redress the regional imbalance?
§ The Prime MinisterThe arrangements made with other countries have been studied fully and will be taken into account in the review of the licensing procedures now being carried out. However, the implications of putting the revenue into a separate fund for the financial policy of the United Kingdom are very considerable. All previous Governments have refrained from doing this, for obvious reasons. The imbalance in Scotland and other regions is adjusted from the central Treasury and, again, the implications of any change in the arrangements for the sums which would go from the central Treasury to Scotland, Wales or any other region, would be considerable.
§ Mr. Laurance ReedIs my right hon. Friend aware that the latest revised estimates of reserves in the British sector of the North Sea which have still to be announced will reveal that we are now 80 per cent. self-sufficient in oil? Bearing in mind that the search for oil in the North Sea has been going on for only three years, is not this a full vindication of the Government's policy? In the light of the world energy imbalance, does my right hon. Friend agree that the policy should continue to be the most rapid exploration of the Continental Shelf, and not the maximising of revenues at this stage?
§ The Prime MinisterThe last part of my hon. Friend's question is obviously a matter of balance. Complicated energy 1461 issues arise on this question, as to the speed with which particular oilfields can and should be developed in the national interest, and the balance has to be struck between that and the revenue which can be obtained. There is considerable misunderstanding in different parts of the country about the first part of my hon. Friend's question. We are not at the moment 80 per cent. self-supporting in oil. Oil does not begin to flow until 1975. There is time for adjustments to be made as a result of the review before the oil begins to flow. The potentialities of these fields are bound to change continually as fresh discoveries are made. The last figure was 75 million tons a year, and no doubt that has now increased. We must complete the review before we can know what the possibilities are at any time.
§ Mr. DellIn view of the fact that the Public Accounts Committee was told that a review of licensing policy had been going on since the first half of 1972, is not it time that the Government made a statement?
§ The Prime MinisterWe wish to take account of the views of the PAC. It is right to do that. We shall make a statement as soon as possible. But there will not be a fresh round of licensing before a statement is made.