HC Deb 29 January 1990 vol 166 cc2-4
2. Miss Widdecombe

To ask the Secretary of State for Energy what was capital investment in the North sea in 1989 and 1988.

The Secretary of State for Energy (Mr. John Wakeham)

Capital investment in the United Kingdom continental shelf oil and gas projects was £2.1 billion in 1988, and my estimate for 1989 is £2.5 billion. Recent forecasts by the National Economic Development Office suggest that capital investment could reach £3.7 billion in 1990.

Miss Widdecombe

What effect have the changes in petroleum revenue tax and their relative tonnages had in respect of the southern basin?

Mr. Wakeham

The Government modified the offshore taxation regime to maintain the right environment for investment. I cannot give my hon. Friend exact figures, but it is generally accepted that the North sea has one of the most favourable taxation regimes in the world. All the evidence shows that North sea activity is booming.

Dr. Reid

I thank the Minister for giving us the capital investment figures for the North sea. Can he tell us what proportion of that investment goes to British firms and, in particular, what proportion of North sea oil steel purchases goes to the Clydesdale tube works—the only British Steel tube works? There is a grave suspicion that, despite all the efforts of the work force and management at the Clydesdale works, foreign tube producers are increasingly penetrating the North sea market. Can the right hon. Gentleman say what proportion is accounted for by British tube works?

Mr. Wakeham

The North sea is a great success story for British suppliers, who have a large proportion—about 80 per cent.—of the business, which is obtained by fair competition. There has rightly been an increase in imported steel tubes—mainly because British Steel was not in a position to supply.

Mr. Hannam

Will my right hon. Friend confirm that increasing investment in the North sea is now producing forecasts of self-sufficiency in oil for another 10 years? Is not that a tribute both to the effectiveness of the Government's policy and to the enterprise of the oil industry?

Mr. Wakeham

That is absolutely right. The surplus on trade in 1989 was a little bit down on the figure for 1988, but in the coming years the balance is expected to increase significantly to about £2 billion a year, the high investment in the North sea will ensure a healthy balance well into the 1990s.

Mr. Doran

We welcome the increase in expenditure that the Secretary of State has explained to us, but quite a large proportion of that expenditure goes on safety. The Secretary of State will be aware that hardly a week goes by without another safety problem arising in the North sea. I gather that only this morning the Shell Eider platform required partial evacuation because of a gas leak. When will the Secretary of State consider seriously the safety system in the North sea? Investment in technology is not enough, and there is clearly a problem with the multiplicity of agencies, including the Department, responsible for safety in the North sea.

Mr. Wakeham

I do not accept much of what the hon. Gentleman said. He is right that there was trouble this morning at the platform that he mentioned, but everyone was safely evacuated and there was no damage in that respect. We continually stress the paramount importance that the Government attach to the safety of offshore workers and repeat that safety standards will not be compromised for any reason. We constantly seek ways to improve the safety of all offshore workers and do not hesitate to introduce any new changes that we think necessary.

Mr. Ian Bruce

Did the figures that my right hon. Friend gave include figures for onshore workings? Will he confirm that there are valuable deposits available both onshore and in the English Channel and that the development at Wytch Farm is to be welcomed, in view of the enormous increase in the resources that have been found there?

Mr. Wakeham

The figures that I cited were for offshore workings, but my hon. Friend is right to point to the significance of onshore developments.