Skip to main content

Modification Of Part I In Connection With Certain Gas Sold To British Gas Corporation

Volume 888: debated on Wednesday 19 March 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Amendments made: No. 189. in page 15,line 9, after ' above ', insert

' or used for production purposes '.

No. 204, in line 21, after ' 4 ', insert

' (including, in the case of any expression used in any of those provisions which is defined elsewhere, its definition so far as it has effect for the purpose of that provision) '. — [Mr. Dell.]

I beg to move Amendment No. 72, in page 16, line 1, leave out ' and approved '.

With this amendment we are to take the following amendments: No. 73, in page 16, line 4. at end insert:

Provided that, where estimates have been submitted, the expenditure allowable for the field under section 3 of this Act by virtue of the said paragraph (a), (b) or (c) shall be determined in accordance with those estimates until such time as notice of approval is given by the Secretary of State '.

No. 74, in page 16, line 4, at end insert:

(4) Where estimates have been submitted under subsection (3) above or this section—
  • (a) further estimates may be submitted to the Secretary of State and approved by him and paragraph (a) of section 3 above shall, with any necessary modifications, apply to such estimates as it applies to estimates submitted under that paragraph ;
  • (b) the Secretary of State may determine the proportion mentioned in paragraph (a) of subsection (3) above otherwise than in accordance with the estimates and shall give notice of his determination or of his approval of the estimates (as the case may be) in writing within sixty days after receipt by him of the estimates to each person by whom they were submitted ; and
  • (c) any person to whom notice of a determination has been given under paragraph (b) above may within sixty days of such notice being given appeal against the determination giving the reason for his dissatisfaction, and an appeal thus made shall be referred to and determined by a Tribunal consisting of three persons appointed by the President of the Institute of Petroleum '.
  • The clause excludes from PRT the gas sold on the contracts before the end of June 1975, but it also excludes the expenditure related to the exempted sales. This is done on the basis of apportionment, based on estimates which are to be submitted by the companies. They have to be approved by the Secretary of State for Energy, and our amendment is designed to have a provisional deduction made before the Secretary of State's approvals are given. This will be of considerable help to the companies involved. It does not appear to us in any way to try to get through loopholes in the tax base. It seems to us to be perfectly reasonable.

    Amendment No. 74 deals with an appeal related to that approval on the basis that the clause imposes no time limit within which the Secretary of State is required to give a decision and gives the taxpayer no right of appeal. It makes no provision for the updating of estimates as more reliable information about the field becomes available, and it contains no procedural machinery for application in situations in which the estimates are not acceptable to the Secretary of State. The amendment would remedy those omissions by providing a tribunal of not less than three persons to be appointed by the President of the Institute of Petroleum.

    I hope that the Government will not resist this group of amendments. They do nothing other than to tidy up an aspect of the clause which appears to be hang- ing in the air. There is to be an apportionment at some stage, and this will be a deduction. All that we are seeking to do is to have a provisional situation to enable the companies' cash flow not to be affected by having to wait for approval from the Secretary of State.

    The amendments, although I am sure that they are well intentioned, make difficulties where there are none.

    I deal first with Amendments No. 72 and 73. The Bill provides a simple and workable procedure. It is not unreasonable to ask participators to draw up estimates of the make-up of the reserves in the lifetime of a field, and there is ample time for them to be settled before PRT liability comes in. The Secretary of State will not delay in approving the estimates. As the range of expenditure is fairly limited, I do not think that the industry has much justification for concern on this point of detail.

    Amendment No. 74 would introduce a great deal of bureaucracy and delay into what should prove to be a simple procedure. I do not think that the Secretary of State for Energy will be looking for arguments on the estimates submitted by the companies. We should be satisfied with the procedure here.

    If experience showed a need for an appeal procedure, or if it showed that companies found that they were being unjustly dealt with, the matter could be reconsidered. But on present evidence the sensible thing is to leave the Bill as it is, in the hope and expectation that it will work fairly to everyone concerned. That is simply the intention.

    Amendment negatived.

    Amendment made: No. 154, in page 16, line 13, leave out subsection (6). — [ Mr. Dell.]