HC Deb 10 June 2002 vol 386 cc844-5W
Mr. Salmond

To ask the Chancellor of the Exchequer how the Treasury adjusted its oil revenue predictions after the discovery in January of the Buzzard field. [59537]

Dawn Primarolo

Oil was first discovered in the Buzzard field in June 2001. Data for the Buzzard field were included in the forecasts of North sea revenues for both the 2001 pre-Budget report and the 2002 Financial Statement and Budget Report.

Mr. Salmond

To ask the Chancellor of the Exchequer for what reason he did not formally consult the oil industry prior to announcing changes to the fiscal regime in the 2002 Budget. [59539]

Dawn Primarolo

In 1998 the Government started consulting on the reform of North sea taxation. Ever since then the options for reform have been subject to detailed analysis and discussion.

In last year's Budget the Chancellor said as we consider the next steps for taxation in the North sea, our approach will be guided not by short-term factors but by the need for a regime that raises a fair share of revenue and promotes long term investment.

It has become clear that the option of reintroducing PRT now would have imposed substantial compliance and administrative costs on the industry.

The Government have therefore decided that the simpler approach of a supplementary charge buttressed by specific and generous investment incentives is the right one, and that to ensure certainty for the industry going forward it was right to announce this as a firm decision in the Budget.

The Government are consulting on the appropriate timing of the abolition of the royalty.

Mr. Salmond

To ask the Chancellor of the Exchequer what incentives exist for oil companies to increase their exploration and appraisal drilling in the North sea. [59538]

Dawn Primarolo

Before the changes announced in the Budget, companies were already entitled to 100 per cent. first year relief for exploration and appraisal drilling. In future, companies will also have 100 per cent. first year allowances for the capital expenditure on subsequent development of discovered oil and gas fields. This will increase the overall post-tax rate of return on exploration and appraisal.

Mr. Salmond

To ask the Chancellor of the Exchequer with which companies he has had discussions regarding planning to build new gas pipelines to Bacton. [58898]

Dawn Primarolo

Ministers and civil servants have meetings with a wide range of organisations and individuals as part of the process of policy development and analysis. As with previous Administrations it is not this Government's practice to provide details of all such meetings. All such contacts are conducted in accordance with the Ministerial Code, the Civil Service Code and Guidance for Civil Servants: Contacts with Lobbyists.

Mr. Blizzard

To ask the Chancellor of the Exchequer, pursuant to his answer of 21 May 2002,Official Report, column 28W, on oil and gas industry (taxation), if he will publish data that have been agreed by the industry as not commercially sensitive. [60010]

Dawn Primarolo

The Economic Secretary to the Treasury explained in full the methodology the Government used on 9 May 2002,Official Report, columns 362–63. The analysis was based on commercially sensitive information.