§ Mr. DarlingTo ask the Chancellor of the Exchequer (1) what information he has on the cost to the Exchequer of tax relief for decommissioning costs claimed by oil companies operating in the North sea in each financial year since 1985–86; [31226]
(2) what is the size of the adjustment in the forecasts of tax revenue published in the "Financial Statement and Budget Report 1995–96" to take account of relief claimed for decommissioning costs by oil companies operating in the North sea in 1995–96 and 1996–97 and any future years for which figures are available. [31227]
§ Mr. Jack[holding answer 28 June 1995]: The cost of decommissioning North sea oil installations is one of the costs of extracting oil in the North sea. As it is the profits of North sea oil companies that are taxed, it is right that tax relief should be given for relevant decommissioning costs.
There were no decommissioning costs in North sea oil and gas fields before 1991. From 1991–92 to 1996–97, deductions in tax revenues—royalties, petroleum revenue tax and corporation tax—average about £5 million per annum due to relief claimed for decommissioning costs. They are then expected to rise substantially.