HC Deb 08 March 1984 vol 55 cc972-3
2. Mr. Dubs

asked the Chancellor of the Exchequer what was the total revenue derived from North sea oil in 1982–83; and what he expects it to be in the present financial year.

The Chief Secretary to the Treasury (Mr. Peter Rees)

The total tax take from the North sea was £7.8 billion in 1982–83 and is estimated to be £9 billion in 1983–84.

Mr. Dubs

Does the Chief Secretary agree that one of the most damaging accusations that is being made against his Government's policies is that they are squandering the benefits of North sea oil, to the detriment of Britain's industry and jobs? The question can best be summed up in the phrase, "Where has all our money gone?"

Mr. Rees

If the hon. Gentleman had reflected a little on the facts, he may not have gone into that cul de sac. Oil revenues have helped to reduce Government borrowing and so have contributed to a reduction in inflation and interest rates, which is essential for substantial growth in output and jobs.

Mr. John Townend

Does my right hon. and learned Friend agree that one reason why the forecast level of oil revenues is higher than expected, and likely to last at a higher rate for longer, is the sensitive and pragmatic way in which the Government have dealt with oil taxation as compared with their predecessors and especially the way in which they have encouraged the developmment of marginal fields?

Mr. Rees

I am grateful to my hon. Friend, who has perceptively observed that the Government have struck the right balance in this rather delicate issue.

Mr. Gould

Contrary to what the hon. Member for Bridlington (Mr. Townend) said, are not the Government caught in a cleft stick? To sustain the present peak of production they are having to grant tax concessions to the oil industry. Does that not make it inevitable that tax revenues will fall sharply from next year onwards?

Mr. Rees

It is true that oil tax revenues may fall from next year onwards. That is due not to the structure of the tax but to the geological conditions of the oil reserves that have been or are likely to be discovered.

Mr. Bill Walker

Does my right hon. and learned Friend agree that tax revenues, whether from oil or anything else, once collected cannot be spent twice? Scotland has gained remarkable benefits from having the North sea so close to its shores.

Mr. Rees

I agree with my hon. Friend. It is right and proper not to double count revenues, as previous Administrations did. I am happy to note the remarkable increase in industrial and related activities, particularly in and around Aberdeen.

Dr. McDonald

Is the hon. and learned Gentleman aware that the total oil tax take since 1979 to date amounts to £29 billion? Why have the Government frittered all that money away on unemployment during that period?

Mr. Rees

I am surprised if the hon. Lady feels that unemployment benefit should have been cut. If she does her sums more accurately she will find that the oil revenues have used to productive purposes, not exclusively for that purpose.