9. Mr. R. C. Mitchellasked the Chancellor of the Exchequer by how much he estimates British capital stock will have increased by 1985 as a consequence of North sea oil, using as a basis the National Income and Expenditure Accounts, section 11.
§ Mr. WakehamThe total gross United Kingdom capital stock at 1975 replacement cost was about £550 billion at the end of 1981. On the basis of rough projections of total fixed investment, the gross addition to the capital stock is expected to be of the order of £80 billion by the end of 1985. It would be impossible to say how much of any increase could be attributed to North sea oil.
Mr. MitchellDoes the Minister agree that part of the benefits of North sea oil ought to be passed on to our children and grandchildren, but, because of the Government's economic mismanagement, especially the effect that North sea oil revenues have had on the exchange rate, that is highly unlikely to happen unless there is a rapid change in policy?
§ Mr. WakehamI disagree with the hon. Gentleman. The Government's policy is not to fritter away North sea oil revenues on consumption; it is exactly the opposite. Reduction of the PSBR means lower interest rates and more room for the private sector to borrow and invest. The private sector is the best judge of how much and where to invest and of how many of the benefits of North sea oil should pass to future generations.
§ Mr. EggarIs not the entire North sea saga, and the increase in the capital stock, a fine tribute to the work of the private sector? Should not my right hon. and hon. Friends be congratulated on the decrease in oil companies' taxation in the Budget?
§ Mr. WakehamI am grateful to my hon. Friend. The changes for North sea oil taxation announced in the Budget have been well received and are showing signs of increased development, which means further jobs and investment in the North sea.