Amendment of the Law
Debate between Brandon Lewis and Anne Begg(13 years, 1 month ago)
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Dame Anne Begg
I could not agree more. In fact, I believe that 200 constituencies have 50 jobs or more that are directly related to the supply chain of the offshore industry. The change will come as a big shock out of the blue, and I do not think people are prepared for it.
As my hon. Friend suggests, in its long-term planning, the offshore sector tends to use an oil price of between $50 and $60 a barrel. In other words, it projects a stable oil price in its forward planning. That is clearly not the real situation, because sometimes the price dips below that level and sometimes, as at the moment, it goes up to $100 a barrel. The fluctuation of the oil price makes the sector’s long-term planning difficult, and the Chancellor has added another factor that will fluctuate, making the situation even less stable. To call it a fair fuel stabiliser is a complete misnomer.
Brandon Lewis (Great Yarmouth) (Con)
Like the hon. Lady, I represent an area in which the oil and gas industry is prevalent. Does she agree that the measures that the Chancellor has taken today deal with the problem that arises when there is effectively a windfall for companies because of oil prices? In the long run, the change will be neutral to the taxpayer and the companies will not be at a loss. It just deals with what are effectively windfall profits that they have received because of the current high oil prices, to the benefit of the consumer.
Dame Anne Begg
With all due respect, that is not how the Chancellor has sold it. Even if there has been a windfall, perhaps it would have been better had he given some warning of the change so that people in the oil industry in particular could have taken account of it in their planning.
When we look at the Red Book, we see that the change is not tax-neutral. It states that by 2012-13, the tax raised will be £2.2 billion, and that it will be £2.1 billion the following year. The Chancellor is expecting to raise more than £2 billion a year—a much larger amount than is being given back to the consumer who buys petrol at the pump. Line 6 on page 42 of the Red Book shows that the Chancellor is taking more from the offshore oil and gas industry than from the banks, by a factor of 10.