Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the effect of trends in the level of oil prices on the cost to the public purse of the Transferable Tax History.

Transferable tax history (TTH) is expected to increase tax receipts from the oil and gas sector by £65 million between tax years 2018-19 and 2023-24. This is based on forecast oil and gas prices as set by the independent Office for Budget Responsibility.

A higher oil price will encourage investment in oil and gas extraction, facilitating more transactions for oil and gas fields and increasing the use of the TTH mechanism. Therefore, TTH would help increase revenues from oil and gas through increased production.

A lower oil price will reduce the incentive for investment and decrease the likelihood that mature oil and gas fields will be sold. In this scenario the yield from new investment as a result of TTH will be lower. However, a low oil price is unlikely to result in TTH having a negative impact on tax receipts.