HC Deb 25 February 1991 vol 186 cc633-4
7. Mr. Tim Smith

To ask the Secretary of State for Energy what is his estimate of the level of investment on the United Kingdom continental shelf in 1990.

Mr. Moynihan

My estimate of investment in 1990 on the United Kingdom continental shelf is £3.5 billion. That represents a significant increase of around one third on 1989.

Mr. Smith

Is not that a remarkable achievement by Shell, Esso, British Petroleum and the other oil companies that invest in the North sea? Given the substantial fall in the real price of oil in the past decade, is not it also a tribute to the improved technology there, as well as to the fiscal and regulatory regime governing the area? Will my hon. Friend continue to press Treasury Ministers to ensure that our tax regime encourages marginal investment?

Mr. Moynihan

The answer to my hon. Friend's first two questions is yes; as for the third, the Government are fully aware that a stable fiscal regime and regulatory framework have been part and parcel of the success of investment in the North sea over the past decade.

Mr. Skinner

The Minister just said, in a kind of coded language, that the Government would allow the tax regime to be shifted in relation to the smaller underground pools of oil. When miners run into narrow seams of coal, however, the Department decides that they are unprofitable—in its language—and closes them. If it is right to use every possible effort to maximise oil production, the same should apply to getting out the coal, and pits such as Creswell in my constituency should not be shut.

Mr. Moynihan

The hon. Gentleman has obviously misunderstood the code.

Mr. Bill Walker

The Opposition constantly seek to ignore the effects of our indigenous energy, and our investment in oil and gas, on the performance of the United Kingdom economy, while constantly drawing attention to the technology and out-of-date practices in the coal industry. Does not that clearly show that they are people of the past, not of the present—and certainly not of the future?

Mr. Moynihan

I entirely agree. I am glad that my hon. Friend has recognised the continuing outstanding success of our buoyant oil and gas market.

Mr. Doran

The Minister will know that a substantial part of the investment that he rightly praised relates to safety improvements. Is he aware that, according to the trade figures announced this morning, our present deficit includes an oil deficit of £109 million compared with the surpluses that we have enjoyed over most of the past decade? Does he agree that the main reason for that deficit is the need to close down platforms for safety modifications? Had the Government taken their job of ensuring safety more seriously, and had they accepted the Opposition's criticisms, the shutdowns would have been unnecessary, the improvements phased and the present large deficits avoided.

Mr. Moynihan

I disagree with the hon. Gentleman's conclusion. I agree, however, that the reason for our lower net exports is a temporary reduction in North sea oil production. The first priority must always be the safety of the work force in the North sea. If that means reducing output at any time, so be it.