HL Deb 06 February 1986 vol 470 c1274

3.15 p.m.

Lord Williams of Elvel

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is the annualised effect on their revenue of a fall of 1 dollar per barrel in the price of Brent crude oil, if the sterling/dollar exchange rate remains constant.

The Secretary of State for Employment (Lord Young of Graffham)

My Lords, about £500 million assuming that the price of all North Sea oil deliveries falls by a sustained 1 dollar per barrel.

Lord Williams of Elvel

My Lords, I am most grateful to the noble Lord for that response. In view of the substantial decline in oil prices since the Autumn Statement, and hence the projected shortfall of revenue in both this financial year and, more importantly, the next, will the noble Lord kindly tell us whether the Government have any policy towards the oil price, and, if so, what it is; and whether they have any corresponding policy towards the exchange rate, and, if so, what that is?

Lord Young of Graffham

My Lords, those supplementary questions go very far of the Question on the Order Paper. What I can say is that in fact the recent price changes had little effect on 1985–86 receipts, since the 1985–86 revenues were largely determined by prices for oil deliveries up to the end of 1985. Lower oil prices for 1986 will of course reduce Government revenues from United Kingdom oil and gas production in 1986–87. However, consumers and industry will benefit from lower oil prices. Lower prices will permit higher world trade and output with lower inflation, and that must be good for Europe, the United Kingdom and for jobs.