§ 12. Mr. Fisher
asked the Chancellor of the Exchequer if he has revised his forecast of the total tax take from North sea oil in the light of exchange rate and oil price movements that have occurred since the Autumn Statement.
§ Mr. Fisher
Is it not a fact that, since the Autumn Statement, the pound has fallen 12 cents against the dollar? In the light of Treasury Ministers telling the Select Committee that each cent. is worth about £150 million more in oil revenues for Britain, that means that the Chancellor of the Exchequer has about £1.8 billion of manoeuvre for his Budget statement. Will he use that money to create jobs in industry and not waste it as he has wasted it before?
§ Mr. Moore
It is important to remind the House of what was said by Treasury Ministers and the chief economic adviser at the meeting to which the hon. Gentleman has referred. When asked about calculations, the chief economic adviser said:to achieve a systematic set of calculations right across the board you have to specify rather precisely quite a lot of assumptions about whether one is speaking of a particular bilateral rate, or whether one is speaking about the effective rate and in turn what effects you think that would have upon world commodity prices, and particularly upon oil prices, the impact upon the inflation rate etc.The chief economic adviser was trying to point out the danger of the simplistic trap into which the hon. Gentleman has sought to lead us. He should recognise the other implications for oil price and exchange rate changes.
§ Mr. Malone
Does my hon. Friend agree that the tax take from the North sea will be vital in the long term for Britain's economy? Is it not absurd that the Leader of the 1193 Opposition has announced that it is his policy to take and retain controls over North sea oil development? This will prejudice development in the North sea and eventually the tax take from it.
§ Mr. Moore
My hon. Friend is right. The tax revenue system, as he will know from his Scottish experience, is extremely important. He will know also, from the Autumn Statement, that revenues expected in the current fiscal year amount to £12 billion. It is forecast in the Autumn Statement that revenues in 1985–86 will be a similar £12 billion. North sea oil is an important national asset, and my hon. Friend is right to draw our attention to the fact that it will, we trust, continue to produce good results for the nation for many significant years.