§ The oil companies present a special problem so far as their profits are concerned, and particularly as to the question of how to ensure that profits from North Sea oil bear their proper weight of corporation tax. My predecessor announced in his Budget last year that he proposed to follow the recommendations of the 1973 report of the Public Accounts Committee and introduce legislation this year. This legislation would enable administered prices to be prescribed for oil for United Kingdom tax purposes and would ensure that oil companies' accumulated losses could not be set again profits of the Continental Shelf. On a later occasion it was stated that the Conservative Government had decided not to meet another point made by the Public Accounts Committee in relation to group relief for capital allowances on investment unconnected with the North Sea.
§ It is clear that there will have to be legislation affecting, among other things, the tax treatment of oil company losses and the computation of their profits for tax purposes. However, though I do not necessarily reject my predecessor's approach, I am, of course, not bound by it, and I shall want to consider this matter as a whole in the context of the Government's proposals to ensure that the public derive an adequate share of the very large profits flowing from the Continental Shelf and to remedy existing shortcomings in the tax treatment of oil companies. These are major issues requiring more than three weeks' consideration.
§ I shall, therefore, not be bringing forward proposals on this matter in this Budget, but when I do I will ensure, as was intended by the right hon. Member for Altrincham and Sale, that the Exchequer does not suffer from the delay, and my proposals will deal comprehensively both with the accumulated losses up to 31st December 1972 and with liabilities accruing from 1st January 1973 onwards.