§ Mr. Patrick McNair-Wilsonasked the Chancellor of the Exchequer whether he will make a statement on the treatment of gas under the proposed supplementary tax on North sea oil which he announced in his statement on 24 November.
§ Mr. Peter ReesI propose that the new tax should in general extend to gas as well as oil. However, special considerations apply to gas which was sold to the British Gas Corporation under contracts made before the end of June 1975. This gas is exempt from PRT under section 10 of Oil Taxation Act 1975 as the contract terms were settled before PRT was introduced at prices which took no account of the possibility of special North Sea taxes. I propose to extend this exemption including the de minimis exemption in Section 10(1)(b) for small quantities of oil and gas not sold to the BGC in fields where the bulk is sold under pre-end June 1975 contracts—to the new tax. The legislation will be included in the 1981 Finance Bill.
§ Mr. Dubsasked the Chancellor of the Exchequer, in the light of the recent price increase, what is now his estimate of the total revenue to the Exchequer in the current financial year from royalties and taxes on North sea oil.
§ Mr. Peter Rees[pursuant to his reply, 21 January 1981]: Any price increase after the end of 1980 will not affect the PRT and corporation tax receipts for the current financial year: these will be determined by prices and profits in the period up to that date. Such an increase would add to the value of royalty taken in kind before the end of the financial year but my estimate of overall total revenue remains at about £4 billion.