§ Mr. Darling
To ask the Chancellor of the Exchequer (1) if he will indicate the effect on projected Government oil revenue resulting from a fluctuation in oil prices per barrel of(a) 5 cents, (b) 15 cents, (c) 50 cents, (d) $1 and (e) $5 above and below a price of $18 per barrel;
(2) if he will indicate the effect on projected Government oil revenues resulting from a fluctuation in the price of the United States dollar against the £ sterling by (a) 1 cent, (b) 5 cents, (c) 15 cents and (d) 50 cents above and below the exchange rate assumed in his Autumn Statement of 3 November 1987.
§ Mr. Lilley
[holding answer 18 January 1988]: The effects on oil tax revenues of different oil prices and dollar exchange rates are subject to wide margins of error. On the basis of forecasts prepared for the 1987 Autumn Statement, a sustained change of $1 a barrel with a constant exchange rate would lead to a change of about £0.3 billion in North sea tax revenues for 1988–89. A 10 per cent. change in the exchange rate with a constant dollar oil price would give a change of about £0.5 billion. Smaller changes in prices or exchange rates would lead to approximately pro rata effects, but the results of larger changes would depend on their effect on other factors such as oil companies' exploration and investment decisions.