HC Deb 17 June 1999 vol 333 cc543-4
2. Mr. Bob Blizzard (Waveney)

If he will make a statement on progress made by the oil and gas industry task force. [86492]

The Minister for Energy and Industry (Mr. John Battle)

The oil and gas industry task force is making good progress. We intend to finalise our proposals in July and publish a full report in September. I am confident that the work that has been done during the past few months will make a significant impact on the future prospects of the UK's oil and gas industry both at home and in export markets.

Mr. Blizzard

The establishment of the task force has been welcome, demonstrating, as it does, the Government's commitment to the offshore oil and gas industry. Does my hon. Friend agree that the main challenge facing us is to ensure that it remains economically viable to exploit the remaining 20 or 30 years'-worth of reserves which exist in marginal fields? Is it not important that investment continues to support jobs and the valuable storehouse of expertise and innovation that Britain has built up? To that end, will he urge the Chancellor to avoid taking a narrow fiscal view of the North sea tax regime and to ensure that we have a framework that will encourage further investment?

Mr. Battle

I congratulate my hon. Friend on recently forming an all-party group on the oil and gas industry. Our fiscal regime is recognised as one of the most helpful in the world, particularly at a time when oil prices have been low. The task force's role is to ensure that the 30,000 people who work offshore, and the 300,000 people throughout the industry who support it onshore, remain in employment even when the oil price is low. The key to delivering that is to consider all aspects of training, the fiscal regime, regulation and licensing and, in particular, innovation and new technologies. We obtain oil and gas in the incredibly difficult circumstances of the rough terrain in the North sea and our expertise remains world class. We continue to build on that expertise in the North sea even in a low-cost environment, and that will allow us to continue winning jobs abroad.

Mr. John Bercow (Buckingham)

With regard to the gas industry, are the Minister and task force aware of the important fact that there is no proposed energy tax in Belgium, France, Norway or Sweden, and that that which applies in Germany carries a substantial rebate for important energy sectors? If so, will he reflect on the damage that is being done to our industry? Given that British Steel estimates that the proposed climate change levy will increase gas prices by 40 per cent. in the United Kingdom, will the hon. Gentleman tell the House when he will stop helping our competitors and start helping British businesses and British consumers?

Mr. Battle

The climate change levy proposals are out for consultation and representations are being made now. There is much comment on their impact, some accurate, some over-hyped. I recall the 1996 and 1997 Budgets. In 1996, the Conservative Government, without any notice, slapped an intangible cost tax on the North sea which priced out precisely the developments that we wanted. It was the hon. Gentleman's Administration who made things more difficult. We have consulted and said let it be, and the industry feels that there is a good tax regime for oil and gas exploration offshore. That contrasts markedly with the previous Administration's approach. The Opposition have somewhat short memories of the damage that they did when they were in government.