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North Sea Oil (Equipment Subsidies)

Volume 974: debated on Wednesday 21 November 1979

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asked the Secretary of State for Energy if he will list in the Official Report the total amount of subsidies given to national suppliers of equipment to the offshore oil industry since the inception of the scheme; if he will make a statement clarifying the present departmental policy on the continuation of the scheme; what discussions have taken place with representatives of the EEC on this matter; and if he will consider its resumption.

Grants under the offshore supplies interest relief grant scheme have since its inception been available both to companies developing oil and gas resources on the United Kingdom continental shelf and to the United Kingdom suppliers of offshore equipment and services. In practice, however, applications for grants have come only from the offshore operating companies and their consortium members. To date, 34 of these companies have received grants totalling £36 million.

The Government announced on 25 September 1979 that no applications to register contracts placed since 2 July 1979 for grants had been accepted and that the scheme was to be terminated forthwith. Expenditure on contracts registered before that date will continue to be eligible for grant.

There were a number of discussions with the European Commission before the Government decided to terminate the scheme for new contracts with effect from 2 July 1979. This decision followed from legal uncertainty created by the Commission's unwillingness to accept the Government's original intention to unwind the scheme over the period to 31 March 1980.

The Government have no plans to reopen the scheme; nor could they do so in view of the Commission's ruling that the scheme was incompatible with the Treaty of Rome.