§ Mr. Austin Mitchell
asked the Chancellor of the Exchequer what is the marginal increase in revenue of all kinds, including royalty oil, from a representative average barrel of North sea oil at the present time for each $ increase, all other things being equal; and what the increase would be on a fully-taxed basis.
§ Mr. Moore
It is estimated that the marginal increase in North sea revenue — that is, royalty, petroleum revenue tax and ring fence corporation tax (before ACT set-off)—which would result from a price increase of $1 per barrel for a year is around £500 million, of which about 80 per cent. would arise in the first year. This is equivalent, on average to about 56p per barrel of North sea oil. I have assumed that the fully taxed basis, to which the hon. Member refers, relates to oil extracted from a field on which royalty is charged and which has exhausted all forms of tax reliefs and allowances. On this assumption, the extra revenue would be about 63p per barrel.