Finance (No. 3) Bill

It is always a pleasure to follow the right hon. Member for Gordon (Malcolm Bruce). He has made an eloquent case on behalf of his constituents, who are directly affected in more ways than most people by the Government's proposal to increase the supplementary charge on North sea oil to 32%. I will speak in favour of amendment 10, which simply asks the Chancellor to produce, before the end of this September, an assessment of the impact of taxation of ring-fenced profits on business investment and growth, including an assessment of the long-term sustainability of oil and gas exploration in the North sea. The amendment should not be at all controversial, although we saw in the debate on the last group of amendments that the Government were not happy to be asked merely to produce an assessment of the impact of that policy. That is surprising because, after all, the Government say that they want more consultation and more transparency in their tax policy making. They say that they will—I am quoting their tax policy making document—"““embed impact analysis in the policy development process””" and"““integrate impact analysis into the consultation process.””" Those are both the kind of sentences that one has to read several times before one can work out quite what they are on about, but my understanding is that the Government are trying to say that they want more transparency and consultation. We have had to table amendment 10 because, in reality, none of that has happened. The Government are right to consider increasing taxation on sectors of the economy that are enjoying windfall profits. We did the same when we were in government. There is an urgent need to deal with the fiscal deficit that is recognised on both sides of the House, and it is right that we should ask for more from those who are able to pay, but this change has been rushed through without consultation, as the right hon. Member for Gordon said, surprising the industry, and inevitably it has fallen down at the first scrutiny. If the Economic Secretary had consulted the industry, they might have told her that the stability and predictability of the North sea tax regime is important for investment. Oilfields are long-term investments that require long-term certainty and stability to attract investors. The industry believes that the value of investments in UK oil and gas has fallen by 24% as a result of the 2011 Budget. That will cause long-term damage to the industry's trust in the Government for short-term political gain. I agree with the Select Committee on the Treasury, which said:"““The decision to increase the supplementary oil and gas levy by 12% without warning, less than a year after the Government had undertaken to provide a 'stable' tax regime in the sector, may weaken the Government's credibility in seeking to establish a stable tax regime in this and other areas.””"