Mr. Deputy Speaker
With this it will be convenient to take amendment No. 148, in page 122, line 8, leave out clause 142.
§ Mr. Cook
The purpose of these two amendments is to leave out clauses 141 and 142. Those two clauses provide a favourable tax regime for the hiving-off of the assets of BNOC and British Gas. They provide that when any such disposal takes place in future, it will not trigger a charge under capital gains tax or development land tax.
The House will be aware that the opposition are opposed to any such disposal. We believe that our North Sea oil represents one of the major national strategic assets of Great Britain. It provides us with a secure energy supply, the means of transforming our balance of payments and generous tax revenues. Against that background of the importance of that asset to the British national interest, it is perverse that we should not have a direct public sector share in that asset. Were we to divest ourselves of the public sector share we would be unusual among oil-producing nations in that we would not have our own public sector company capable of protecting the national interest in that asset.
British Gas is such a successful company that Conservative Members have been using a covert method of taxation through the gas levy. So enterprising is that company that Conservative Members constantly criticise it for its successful contract, by means of which British consumers have been able to enjoy gas at a cheaper price than could have been provided by the free market under any conceivable system of free market competition.
Therefore, as the object of the clauses is to pave the way for the disposal of the assets of the companies and threaten that successful record, it logically follows that we object to those clauses. In Committee, the Financial Secretary 986 said that the clauses were necessary, otherwise potential investors who might buy the public sector companies might be deterred. If that is so, it is an eminently good reason for leaving the clauses out of the Bill and carrying the amendments.
I invite the Minister to correct what I hope was an error in Committee. In relation to the sale of British Gas, the Financial Secretary said:I confirm that it is our intention to ask the BGC to transfer its assets both in oil fields and gas fields in the sea" — [Official Report, Standing Committee A, 22 June 1982; c. 869.]That flatly contradicts what the Under-Secretary of State for Energy said in Committee on the Oil and Gas (Enterprise) Bill. He said:At present there are no plans for BGS's interests in gas fields to be privatised."—[Official Report, Standing Committee E, 2 March 1982; c. 682.]He could not have been clearer. The Committee eagerly and willingly accepted that undertaking.
The Opposition have their reservations about the clauses. We hope to persuade the House to strike them out of the Bill. Whatever may be said for them and the House's scrutiny of them, I hope that we shall get through our debate on them without widening privatisation and increasing the number of assets that are stripped off BGC.
I hope that we shall be told that the Financial Secretary was in error and that the Government stand by what the Under-Secretary of State for Energy said. I hope that it will be reinforced in the urgings of the Secretary of State for Energy to his colleagues that the Government have no plans to dispose of BGC's gas fields.
We meet only 14 hours after the OPEC conference broke up is disarray. Yesterday's Financial Times described that event as giving rise to the gravest crisis in the history of OPEC. Spot oil prices have been tumbling, companies' oil shares have been declining for some time and are likely to accelerate in that direction. It is doubtful whether either of those developments will be reversed before the end of next year.
If Conservative Members wanted an historic moment at which to receive the least return for the sale of oil assets, they could not have done better than hit upon 1982. If any Conservative Member consulted his broker about whether now was a good time to dispose of his oil shares, it is extremely doubtful whether the broker would advise him to do so in the present climate or in any foreseeable one.
Perhaps the Secretary of State for Energy will answer. He would make a pleasant change from the Treasury Ministers that we have had to put up with for the past six weeks. We are entitled to ask whether, given that any private individual would now receive advice not to dispose of his assets, the Government seriously intend to press ahead with the sale of public interests, even though the price will be depressed—certainly until the next Finance Bill.
When that matter was raised on the Oil and Gas (Enterprise) Bill, the Minister said:We would not arrange for the sale of shares merely to meet a timetable. I made our objectives clear and said that we were anxious to obtain the best possible price."—[Official Report, 31 March 1982; Vol. 21, c. 350.]The best possible price will not be obtained this year.
As I assume that a Treasury Minister will reply to the debate, although there seems lo be some doubt about that at the moment, I hope that as Treasury Ministers have responsibility for the revenue, expenditure and assets of the nation they will make it clear that whatever rash 987 intentions the Secretary of State for Energy may have he will not be permitted to dispose of those assets in the next year at the depressed price that would be obtained for them.
When we considered the clause relating to the BGC in Committee, the Financial Secretary indicated a certain distaste for its provisions. He said:I do not like having to give tax relief to pampered public sector bodies".—[Official Report, Standing Committee A, 22 June 1982; c. 869.]The only way in which one could describe the BGC or BNOC as pampered at the moment is in the sense that lambs are fattened for slaughter. It is an insult to suggest that either company has been pampered. BNOC is an expansionary, dynamic company that has held its own in a very competitive industry. The BGC has provided its product reliably throughout the nation and in the past two decades has changed its infrastructure and achieved productivity gains that shame the private sector.
The reward for those two companies is that they should have their assets stripped—a decision which has no logic other than the prejudice of Conservative Members that wherever profits occur they should be handed over to the private sector. That prejudice has the happy corollary for them of ensuring that only loss-making enterprises remain in the public sector, thus confirming their other prejudice that companies operating in the public sector must by definition be failures.
The Opposition do not share that dismal vision of the public sector. We shall therefore vote against these clauses which pave the way for the Conservatives to turn their prejudice into reality.
§ Mr. Ridley
I am beginning to be dimly aware that the Opposition do not favour the privatisation of BNOC and parts of the BGC. In this context, I wish to correct two small errors straight away.
First, I said that without these clauses the uncertainty about capital gains tax liability would not so much deter investors from buying the shares as deter them from paying the most advantageous price that could be obtained for the nation. In the aftermath of Amersham International, I am sure that the Opposition would not wish to do anything that would put at risk the amount of money received from the sale of shares.
Secondly, I willingly acknowledge that only the oilfields in the sea are included in my right hon. Friend's plans.
Of course the Government will time the sale of the assets as and when it is believed that the timing is right. If a higher authority than me is required, may I say that my right hon. Friend the Prime Minister, in referring to this at Question Time on 8 July, used the words:… if the market is right".—[Official Report, 8 July 1982; Vol. 27, c. 455.]We shall sell the shares when the market is right.