North Sea Oil (Ministerial Appointment)

Statutory Instruments – in the House of Commons at 12:00 am on 25th May 1973.

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11.6 a.m.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

I welcome the opportunity to raise the question of the appointment of Lord Polwarth and associated matters in relation to his duties, but in welcoming this opportunity I return once again to the charge that it is a scandal that still, after all this time, there has been no debate on North Sea oil either initiated by the Government or in Government time. There has been no proper occasion on which we could have a full-scale debate on this topic.

Photo of Mr Gordon Campbell Mr Gordon Campbell , Moray and Nairnshire

I would point out that we did have a debate initiated by the Government in the Scottish Grand Committee, and it was a very valuable debate.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

That in no way answers the criticism I am making because, although this was in Government time in the Scottish Grand Committee, the debate was nevertheless arranged through the usual channels. I am certain that had this approach not been made we should not have discussed North Sea oil on two mornings in the Scottish Grand Committee.

I have two criticisms of the appointment of Lord Polwarth. I do not criticise that it was announced at the Tory Party conference in Perth. There is a precedent for that. The Prime Minister was in a particular difficulty. The morale of the Tory Party in Scotland was low as a result of its defeats at the municipal elections. On the platform the Secretary of State had been under severe criticism, and the Prime Minister naturally took the opportunity to try to boost the party's sagging morale.

However, having made the announcement, the Prime Minister should have come to the House and made a proper statement and set out for the House in question and answer what the job was about and how it was to operate. In order to find out what it is all about we have to rely on Press statements. We have had to try to winkle out the information in Questions and supplementary questions. My hon. Friend the Member for Midlothian (Mr. Eadie) asked what kind of job Lord Polwarth would do and what kind of troubles he would have to investigate. The Under-Secretary of State for Trade and Industry told him: If the hon. Gentleman takes the trouble to turn up next Friday morning he can make his speech about it then."—[OFFICIAL REPORT, 21st May 1973; Vol. 857, c. 17.] In my view, that was to hold the House in contempt, and it was the wrong way to deal with this matter. If the appointment is so important—and I regard all appointments in relation to North Sea oil as important—it is disgraceful that we should be treated in this way.

It is wrong that a Member of the House of Lords who is not answerable to this House should be appointed to this job. What is Lord Polwarth to do? It is clear that the appointment was made in a hurry because the details have not been properly worked out. For example, we are told, again from the Press, that Lord Polwarth is to have direct access to No. 10 Downing Street. In what circumstances will he go to No. 10?

Lord Polwarth is quoted in the Scotsman on 14th May as saying: I shall have a special link with Ministers at the DTI and indeed will be fully involved in their discussions. Where necessary I shall have a direct access to the Prime Minister—in circumstances of last resort where I find a position of unreasonable delay or conflict in the normal channels. I would, of course, only approach the Prime Minister with the agreement of the Secretary of State for Scotland. Who is involved in this question at the moment? There is the DTI and the Under-Secretary at the Scottish Office in the Commons. There is the North Sea Oil Standing Advisory Conference, which appears to be the body to which Ministers go to issue Press handouts, where the Press is not allowed to attend meetings and where details of the discussions which take place are not available to the Press. There are the Secretary of State for Scotland, the Prime Minister and Lord Polwarth. Now there is this curious body of which we know little, the North Sea Oil Advisory Committee, which is to be nominated by the Secretary of State. These add up to a curious conglomeration, and we are bound to ask, with all these people involved, who will answer in the House of Commons when we want to question aspects of Lord Polwarth's job. He cannot come here, being a Member of the House of Lords. Therefore, will it be a junior Minister at the Department of Trade and Industry, the Secretary of State himself or one of his junior Ministers in the Commons?

It is a curious position, especially as we are told that one of the reasons for Lord Polwarth's appointment is to counterbalance the influence of the Department of Trade and Industry. In a comment on 14th May the Scotsman said: If he "— Lord Polwarth— is successful in counter-balancing the London based departments—and in particular the DTI—he will undoubtedly have checked the erosion of the Scottish Office's rôle in guiding the evolution of the Scottish economy. That is a very curious attitude to be abroad in Scotland, that the rôle of the Scottish Office has been eroded in relation to the guiding and evolution of the Scottish economy. Will the real Secretary of State please stand up? Clearly, we have one Secretary of State in this House and another elsewhere.

But it is a much more serious question than simply how Ministers answer to the House of Commons. Lord Polwarth's rôle in planning is very important, and I find it very difficult to understand. I quote again from the Scotsmanp, which said on 14th May: The Secretary of State will remain in charge of planning in Scotland and will be ultimately responsible for all planning decisions. It then reports Lord Polwarth as saying: But through the broad forum I shall filter to Mr. Campbell public opinion and also insulate him from conflicting interests. Here is a man who is to be actively engaged in identifying sites for on-shore development, as the Secretary of State told us in answer to Questions on Wednesday. He is to filter public opinion. What is the purpose of the public inquiry? He is to insulate the Secretary of State from conflicting interests. What does that mean?

When asked about specific developments, the Secretary of State is very fond of dodging the question by pointing out that he has a quasi-judicial rôle in relation to planning.

Photo of Mr Gordon Campbell Mr Gordon Campbell , Moray and Nairnshire

That is the question of formal planning under the Town and Country Planning Acts. The word "planning" is used rather loosely in different ways, but under the procedures of the Acts I have that rôle.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

I do not think there is any doubt that in the formal planning procedures the Secretary of State has that quasi-judicial role. All sorts of influences are brought to bear before a public inquiry is reached. Individuals and interested groups will contact the Secretary of State and complain on one ground or another that a particular development should not go ahead. If there are conflicting interests, the Secretary of State should not be insulated from them. He should know what is happening, but not through the Minister, who we understand is still junior to him. All the conflicting interests should be made public, and at the public inquiry all those matters should come into the open.

I find it difficult to believe that people will still accept that the Secretary of State is behaving entirely impartially if there is to be that kind of link between himself and Lord Polwarth. We need a much clearer definition of the phrase.

There are all the signs in the appointment—the manner of its announcement, the way in which the duties apparently have not been properly worked out—that muddle prevails. The Government have never had firm control of the situation, which now seems to be getting completely out of hand. They have no control of the strategy. I am not alone in thinking that and in believing that there are grounds for disquiet.

Under the heading: Oil control system 'getting out of hand'". the Glasgow Herald of 22nd May reported: A warning that the whole system of control of oil development in Scotland was in danger of getting out of hand was given yesterday by Mr. William A. P. Jack, president of Glasgow Chamber of Commerce. Speaking about the different overlapping activities of the various authorities, Mr. Jack was reported to have said that Since those activities were bound to impinge on those of the Scottish Industrial Development Board"— another body now involved in North Sea oil— it seemed there was a distinct danger of the whole system getting out of hand.There was now an urgent need for a further look at the whole strategy of oil development control and of the development of the supply industry.He recognised that MPs were worried about parliamentary responsibility since Lord Polwarth was to have direct access, and would presumably report direct to the Prime Minister.In future, it appeared, responsibility to Parliament would be divided between Lord Polwarth, the Secretary of State for Scotland, and the Secretary of State for Trade and Industry.None of that appeared to be very satisfactory, but it was something he could leave to the MPs to sort out. One of the reasons why I initiated this debate was the conflicting responsibility and the great difficulties of finding out information. For the umpteenth time I must ask—and I am not the only Member to do so—when we shall have a White Paper from the Government laying out their strategy in serious detail. We have had all kinds of reports, White Papers, red papers, brown papers, telling us what is going on. They usually relate to past developments and not to the future.

I have not had a chance to check the source, but I am advised by one of my hon. Friends that a Question on the material contained in the special issue of the Scottish Economic Bulletin relating to North Sea oil, issued by the Scottish Office, has been transferred to the Department of Trade and Industry for answer. How much of a muddle can the Government get into?

Because a number of my hon. Friends wish to speak, I shall not say much more about that document, except that it contains the following curious phrase in the introduction: So much has been written and said about the new discoveries in a short space of time that misconceptions abound. There seem even to be some who think the oil is a few feet below Aberdeen harbour and is already flowing. I do not know who wrote that, but it is so bad that it could almost have been written by the Secretary of State himself. I know no one who believes that the oil lies a few feel below Aberdeen harbour. How silly can one get?

Photo of Mr Gordon Campbell Mr Gordon Campbell , Moray and Nairnshire

I have met several such people.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

If the right hon. Gentleman has met some, his contacts must be solely with the Tory Party. It shows the kind of intelligence that there is there.

I turn finally to the serious matter of financial interests, which needs to be examined. I am indebted to the Glasgow News for sending me a copy of its current issue in which it prints facts about the involvement of Lord Polwarth in firms associated particularly with onshore development. I wrote to the Prime Minister asking certain specific questions, and I believe that the right hon. Gentleman has replied in a very cavalier way. He rightly says that If a Minister has shareholdings which at any time are likely to come into conflict with his duties he is required to relinquish them as well."— as well as directorships. Lord Polwarth reviewed his shareholdings from this point of view and satisfied himself that there did not appear to be any risk of conflict involved. I do not know whether that refers to Lord Polwarth's original appointment as Minister of State or to his specific appointment, but, bearing in mind the statement that he reviewed his shareholdings and was satisfied that there was no conflict of interest, I find his answers at the Press conference in Aberdeen on Tuesday remarkably coy and evasive.

Lord Polwarth said that he was not prepared to discuss his shareholdings, that if there was any question of public policy as to whether he should sell them he would naturally consult the Prime Minister. If he was satisfied that there was no conflict of interest he should have been able to say on Tuesday "I have reviewed my shareholdings and I am satisfied that there is no conflict of interest." That would have been a clear-cut, above-the-board statement, and most people would have accepted it. In fact, that is not what happened.

In view of that, one has to look at the companies in which Lord Polwarth has a financial stake. I refer specifically to his own financial stake. I do not refer to any trust settlements or the fact that his brother holds certain shares. Lord Polwarth has shareholdings in British Assets Trust, Second British Assets Trust, and Atlantic Assets Trust. I think it is worth quoting the statement issued on 23rd November 1972 by the Chairman of British Assets Trust. It reads: Management have spent a great deal of time on research among opportunities that are being created and in line with their optimism for North Sea oil. The company's percentage invested in oil has arisen from 13 per cent. to 15½ per cent. and the company has also invested in some industrial and financial companies with participation in North Sea oil leases. It may be argued that an increase from 13 per cent. to 15½ per cent. is not very big and that 15½ per cent. by itself is not a very large stake. However, more significant is the report of the Chairman of the Second British Assets Trust Limited on 27th February 1973, which reads: During the year, some significant changes have been made in the company's portfolio of investments. Firstly, 1972 has seen some considerable progress made in exploration and development of Britain's North Sea Oil. Discoveries being made are very large and it is possible that Britain could become self-sufficient in oil during the 1980s. Management has spent a great deal of time on doing research into opportunities which are continually arising. The amount invested in oil has risen from 10·5 per cent. to 15·6 per cent. and the company has also invested in some industrial and financial companies with participation in North Sea oil leases. These may all be said to be amorphous shareholdings in individually managed companies and for that reason they are not so significant. However, we have to look at the scale of the involvement and at the links of Atlantic Assets Trust, British Assets Trust and Second British Assets Trust. They have shares in oil direct. As the Glasgow News puts it: The total investments by the trusts in major firms were as follows: Pennzoil £3,084,000, Shell Transport and Trading £5,091,000, BP £3,383,000. Petrofina £1,950,000, Murphy Oil, £1,382,000. A 15 per cent. interest in North Sea oil, which sounds low, does not mean that there is not a major financial involvement. These are very large sums amounting to between £10 million and £13 million of investment.

That is the size of investment in major oil companies. However, again according to the Glasgow News:The investment trusts have not neglected onshore development. In 1972 Atlantic Assets bought £1,464,594 worth of shares (50 per cent. of the total stock) in the Mount St. Bernard Trust. That company owns and controls Onshore Investments, which is the parent company of the Cromarty Firth Development Company, Peterhead and Fraser-burgh Estates, and Nordport, which is the company owning 40,000 acres of land in Shetland and threatening to undermine the Zetland County Council Bill. That fact was brought out by the hon. Member for Kingston-upon-Thames (Mr. Norman Lamont), who said that it was wrong that this company should be able to thwart the views of Shetland County Council.

Anyone who believes that no conflict of interest can arise is incredibly naïve. The Prime Minister is on record as saying that if a conflict of interest were to arise Lord Polwarth would take no part in Government discussions. If that is so, it negates the whole purpose of his appointment. I have already dealt with his relationship with planning and with the identification of sites. He could be doing that for onshore development where a company in which he has a shareholding has a direct controlling interest in developments of this kind. It is a very serious matter.

This sorry tale of financial involvement throws a beam of light on the curious morality of the Prime Minister and his Government. I regard this matter as more serious even than the events of recent days. It is extraordinarily complacent of the Prime Minister to accept without qualm this apparent conflict f interest.

The Scottish Press has given this matter a fair amount of coverage and certainly does not take this view. In an editorial headed "Troubled Waters for Lord Oil", the Daily Record says that Lord Polwarth should sell his shares. It goes on: It is not just a question of 'public policy' Lord Polwrath. It is public confidence and duty. Your duty. I believe that Lord Polwarth should sell his shares or resign. It is clear that if no direct conflict of interest exists at the moment there is great danger that such a conflict will arise.

The Government's handling of this appointment has been totally inept. Their reaction to criticism is typical: hive oil the problem to some committee or other. We have this new North Sea Oil Advisory Committee. Just what it is supposed to do no one knows. If the progress, the spate and the rate of public and private exploitation of North Sea oil continues unabated, clearly this committee is simply a piece of window-dressing.

The Government are passing the buck and reacting typically to criticism. They must now act to control events. If they are unable or unwilling to control events, they should make way for a Government who can.

11.27 a.m.

Photo of Mr Iain Sproat Mr Iain Sproat , Aberdeen South

I welcome very much the appointment of the noble Lord, Lord Polwarth, to his new office. I do so because of the nature of the job, about which the hon. Member for Aberdeen, North (Mr. Robert Hughes) made rather heavy weather. I have no doubt that my right hon. Friend the Secretary of State will be able to explain that it is quite a normal application of the powers of State. I also welcome the appointment because of the character of the man who has been chosen to fill the job.

It was necessary to focus and to concentrate the powers that the Scottish Office already had, and it was necessary to co-ordinate those powers with the powers and interests of other Government Departments. To do that it was necessary to have one man under my right hon. Friend to act as a troubleshooter. It was necessary to have one man who, above all, was in a position to cut any red tape and unblock any blockages which inevitably would arise in so complex a matter in which so few people in Scotland had any experience.

A Minister of State is precisely the right level at which to introduce the noble Lord, and Scotland is the right place for him to be based. As a Member of the other place he will have more time to be in Scotland and will not be tied to this House in the way that my right hon. and hon. Friends must be. In what the hon. Member for Aberdeen, North said, I detected some criticism that we should have chosen a Member of the House of Lords

Photo of Mr Iain Sproat Mr Iain Sproat , Aberdeen South

Is the hon. Gentleman criticising the British Constitution by saying that we should not have Members of the House of Lords in this position?

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

From time to time obviously we must have Ministers in the House of Lords. After all, it is part of the decision-making and part of Government. However, I believe that the power in the land should rest in this House and that extremely important appointments should be made here. I have always felt that it was wrong to have the Minister of Defence situated upstairs. I regard this appointment as being of equal importance, and, in my view, it is quite wrong that it should have been made outside this House.

Photo of Mr Iain Sproat Mr Iain Sproat , Aberdeen South

No doubt to pursue the question whether the Defence Secretary should be in this House would be out of order, but I believe that the previous Labour Government had more peer members than are in the present administration—certainly they had roughly as many. It is absolute hypocrisy to attack the Government for appointing Members of the other place to serve in this capacity. I think it is an ideal position for a man whose job should and must take him around Scotland as much as possible. Being a Member of the other House enables him to do that.

Contrary to what hon. Members opposite have implied and what I have read in the Press, I strongly welcome the idea of a Minister of State being advised by a council such as the Prime Minister has decided will be set up, backed by a special task force and with close relations with the other Departments interested in the development of North Sea oil. It is an ideal situation that we should have a council of this sort to include members who have a wide knowledge of various aspects of Scottish life, who will not serve specifically as delegates with vested interests but will nevertheless have a knowledge of those interests and be able to advise the Minister of State.

I imagine that one member of such a council would be somebody with a close knowledge of the trawling business—perhaps a member of the Scottish Trawlers' Federation. I know that in Aberdeen there has been considerable worry about how oil is going to affect the fishing inter- ests in general in Scotland, and, although many of these fears are groundless, we require constant liaison between those most closely associated with oil and the fishing interests so that the latter can feel that their interests are being taken into account and that their fears can be allayed. I was glad to see that Lord Polwarth had a meeting with representatives of the Scottish Trawlers' Federation this week. I believe he was able to allay some of their doubts and worries.

Others have suggested that, instead of the present arrangement of a Minister of State with an advisory council and a special task force, we should have a giant oil agency.

Mr. Sprout:

I do not think this is necessarily a political matter, and I did not approach my rejection of the idea in a political spirit. I hope that politics will come into North Sea oil as little as possible. I reject any idea of such a giant, all-embracing agency for the development of oil in Scotland on two main grounds. First, such an agency would become inevitably more and more oriented towards sheer development as speedily as possible. The momentum would be towards the exploitation of the oil as such. This would inevitably lead to conflict between the quasi-commercial interests and environmental interests, which would to a degree upset the balance that we must strike between commercial exploitation and other interests, such as social community needs, housing and environment.

The second and even more important objection to such an agency is the fact that it would not be sufficiently politically sensitive and politically responsible. It is vitally important that there should be the closest political control by Parliament so that this development is not undertaken by some amorphous State bureaucracy not responsive to social needs as we know them through the representations we receive from constituents.

Such an agency would become totally oil-dominated as opposed to all the other connected facets of oil development—environment, social community needs, housing and so on—and it would not be politically responsive. These are my two main reasons for opposing the setting up of such an agency. There are other reasons, but I will not develop them in view of the time.

I therefore welcome the manner in which the Prime Minister has appointed Lord Polwarth to this job with an advisory council and with a task force to help him. But I also welcome the appointment because of the character of the man himself. It is only right to point out that we have a man of proven and outstanding ability—ability and experience in commerce and industry, and all in Scottish terms. I do not need to go through the list of his achievements, but I remind the House that he has been President of the Scottish Council, a governor of the Bank of Scotland and Chairman of General Accident, whose headquarters are in Perth. This gives him wide experience of Scottish industrial and commercial life. We are lucky that a man of his calibre is prepared to come into politics at this late stage; we are equally lucky in the perception of the Prime Minister in appointing him. For the job itself and the man who is filling it, I strongly welcome the appointment.

When I came here today I was not certain how much time we should have to discuss Lord Polwarth's oil interests. I do not criticise the hon. Member for Aberdeen, North for raising this matter. It is right that a matter of this nature should be given the widest inspection in the House. I took the trouble yesterday, therefore, to look into one or two precedents.

I think the present rules stem largely from the Marconi case in 1913, when the then Prime Minister, Mr. Asquith, set out certain sensible regulations and suggestions. This was followed up in 1952, when the then Prime Minister, Mr. Churchill, made an announcement. I refer to it because it is important to put on record precisely what the situation is and the criteria against which Lord Polwarth should judge his own holdings and against which the House should judge him. When the House hears what is on record, it will realise that Lord Polwarth has behaved perfectly correctly.

Mr. Churchill said of shareholdings: Ministers cannot be expected, on assuming office, to dispose of all their investments. I certainly accept that. I do not think that many people would dispute it. Mr. Churchill also said: Each Minister must decide for himself how these principles apply to him. Over much of the field … there are established precedents; but in any case of doubt the Prime Minister of the day must be the final judge, and Ministers should submit any such case to him for his direction."—[OFFICIAL REPORT, 25th February 1952; Vol. 496, c. 702.] Lord Polwarth has behaved impeccably He has kept the Prime Minister fully informed of his holdings, and the Prime Minister has decided as he wrote to the hon. Member.

The latest statement on this subject was made by my right hon. Friend the Prime Minister in reply to a Question in November 1970. He repeated the ruling about Ministers: If they have shareholdings which at any time are likely to come into conflict with their duties, they are asked to relinquish them as well. If at any time they find that a matter arises in an industrial or economic sphere which will cause a conflict with their existing holdings, they must notify their colleagues and desist from taking part in a discussion on that subject."—[OFFICIAL REPORT, 19th November 1970; Vol. 806, c. 1429.] The Prime Minister paraphrased that in his letter to the hon. Member.

If Lord Polwarth's holdings in British Assets Trust, Second British Assets Trust and Atlantic Assets Trust are all that is in question, it does not seem at this stage that there is the slightest question of there being any permanent conflict between his holdings and his new duties. If at any time such a conflict should arise in some small aspect of his job, everybody would know his interest—after all, we have now debated the subject.

The hon. Member gave away the point when he talked of such a conflict arising in future, which seemed to imply that even he did not think that the small holding in the unit trusts, which themselves have small holdings of 15 per cent. and 8 per cent., would cause any conflict. If at any time those holdings should increase, no doubt Lord Polwarth would reconsider his position in the light of the changed circumstances. In view of his totally impeccable and proper behaviour so far, that is what we should all expect.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

That is precisely the point. If such a conflict of interest did not arise on his appointment to the job of Minister of State in which he deals primarily with regional development, it certainly arises now that he is to be specifically concerned with on-shore developments in connection with North Sea oil. The company has said that it will increase its holdings, and will no doubt continue to do so. Does the hon. Member think that a holding of 15 per cent. would not bring the interests into conflict? If he does, what does he regard as a conflicting interest—20 per cent., 25 per cent.?

The difficulty is that there is so much distrust of public figures arising primarily out of recent bankruptcy proceedings that Ministers must behave totally impeccably. Lord Polwarth has the opportunity to do that by selling his shares.

Photo of Mr Iain Sproat Mr Iain Sproat , Aberdeen South

We all agree that public figures must be not only above suspicion but seen to be above suspicion. I believe that Lord Polwarth has been above suspicion, and in that sense I wish that the matter has not been raised here: however, as it has been raised publicly, we might as well have it out.

I do not know whether it was by a slip of the tongue or whether the hon. Member is under a delusion, but he referred to Lord Polwarth having a 15 per cent. interest in one of the companies. It is the unit trust in which Lord Polwarth has only a small holding which itself has this small holding, so that it is at one or two removes. Perhaps we should leave the matter. I do not think that any conflict arises at the moment, and if it does, no doubt the noble Lord will look at the matter again.

Important as is the appointment of Lord Polwarth and excellent as is the structure of the new post, it would not be right to view these matters totally by themselves. They must be seen in the perspective of all that the Government, particularly my right hon. Friend the Secretary of State for Scotland, have done to encourage the best possible framework within which to maximise for the people of Scotland the benefits of oil development. The House is well aware of the benefits in roads, housing, ports, airports and so on that will improve the infrastructure. This is another example of the energetic, flexible and speedy response that my right hon. Friend has shown to the challenge of North Sea oil.

11.45 a.m.

Photo of Gavin Strang Gavin Strang , Edinburgh East

I, too, congratulate my hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) on his success in obtaining the opportunity to initiate the debate. To some extent it was inevitable that it should have dealt with the issues of Lord Polwarth's investments, but I do not wish to dwell unduly on that subject. I do not wish for a moment to suggest any impropriety has taken place but it is an important matter of principle. It is rather different from whether a Minister holds part of an investment trust. It is not just that this investment trust has a heavy stake in the oil companies but it has major holdings in the important companies set up to develop onshore facilities.

The point is that a large proportion of the capital of these companies is held by British Assets Trust and Atlantic Assets Trust and that raises a separate issue. It is between the situation in which a Minister holds an investment in an oil development company and that in which he has investments in an ordinary investment trust. I do not know what the answer is, but it raises new questions and I do not believe that the Prime Minister's ruling has come down on the right side.

I want to concentrate on the Government's handling of North Sea oil development. Lord Polwarth's appointment was hastily conceived and ill thought out. All the suggestions have been to that effect and subsequent Government statements have confirmed it—not only statements attributed to Lord Polwarth himself, but subsequent statements by the Secretary of State. Lord Polwarth will have no power to take major decisions. The big decisions will still be taken at the top of the Department of Trade and Industry and to a lesser extent at the top of the Scottish Office and in the Cabinet.

I believe that he was appointed because the Government are extremely vulnerable on their handling of North Sea oil. The appointment was an electoral response to Scottish opinion, not just in the Labour Party, but throughout a wide range of people and organisations. The Government are mishandling and not coping with this development as they should, and they reacted ill-advisedly by making this appointment.

The question of North Sea oil impinges on a number of distinct issues of Government policy. It raises the whole subject of energy policy, with its implications for the balance of payments and the subject of taxation of international companies. I do not wish to touch on those, because in the short term the most important issues for Scotland can be summed up in two words: "employment" and "environment". By "employment" I mean the need to see that the Scottish economy obtains the maximum possible benefit from this development, the maximum number of new and lasting jobs. By "environment" I mean the need to develop an infrastructure to cope with this massive commercial investment while at the same time protecting the environment so that our national heritage is not destroyed or irredeemably spoiled.

The appointment of Lord Polwarth is a culmination of all the mistakes made by the Government on this issue. The biggest mistake of all was in the Government's response to the IMEG report. The Government had a real chance to start tackling this issue in a sensible and decisive way. That report recommended the setting up of a petroleum supply industries board. It recommended that the board should be independent of existing Departmental structures. The Government rejected that. The arguments were spelled out in detail but I do not accept them. It was a great mistake.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

I am sure that the hon. Gentleman would wish to be fair about this. He would wish to point out that the action taken by the Government involved the alternative structure set out in the IMEG report.

Photo of Gavin Strang Gavin Strang , Edinburgh East

The hon. Gentleman is making too much of that. The IMEG report said decisively that the PSIB was its first choice. It said that if that was not acceptable there was the possibility of doing it within the context of the Department of Trade and Industry.

The Government has missed not just the chance to set up a separate agency but also to base it in Scotland. I have heard it said that the consultants who produced that document almost recommended that such a set-up should be based in Scotland. Whatever was recommended I believe the IMEG report was a useful document in terms of spelling out the existing opportunities. It is a pity that the Government could not bring themselves to be as interventionist as was advocated by the consultants from private industry.

Whatever should have been done, I believe that we will, sooner or later, be forced to establish a separate development agency or board, independent, but accountable to Parliament—[Interruption.] If the right hon. Gentleman reads the IMEG report he will see that it uses the word "independent". There are plenty of precedents. The research councils, for example, are independent of Departmental structure but accountable to Parliament. Such an agency would carry out the function of the Offshore Supplies Office. It would be a separate body and would not call simply on the general pool of money available under the Industry Act.

It would have a separate budget which it would use to encourage industry to obtain a bigger share of the market. In my view—and I think it is the Labour Party's view also—this body should also have a separate state holding company so that when we create new enterprises to supply the oil companies there will be a State stake in them. At the same time it would support research and development in the new techniques required for deeper waters.

I believe that ultimately there is a strong case for the revenue coming from the North Sea to go to this body which would have a United Kingdom remit although it will be based in Scotland. The returns from the oil companies would go to this body for scrutiny together with details of equipment purchased so that the experts could bring pressure to bear upon the oil companies to buy from Scottish and English firms. We would have an agency headed by people acknowledged to be experts. They would have a clear-cut, well-defined remit to do the sort of job which the IMEG report set out, namely to ensure that we get a large share of the jobs being created by the exploration and exploitation of North Sea oil.

In my view there is a strong case for making that body the main repository of Government expertise, including expertise required by the Secretary of State in reaching decisions about the siting of developments, handling infrastructure matters, protecting the environment and carrying out studies and investigations. Local authorities would be able to draw on such expertise.

I welcome the publication of the study by the Scottish Office planners of the possible sites for development to produce platforms for North Sea oil work. It is a useful step forward. The logic of the situation is that the Secretary of State must go further. He acknowledged at his Press conference on this document that this did not change any of the planning machinery. These issues will still be handled by the local public inquiries.

I do not think that is satisfactory. Anyone who followed the Dunnet Bay inquiry closely must come to the same conclusion. The Secretary of State must be prepared to take new powers and to implement an overall plan. It seems—this is the impression I got when I was up there, that the local authorities do not have the expertise with which to answer the big oil companies. If Chicago Bridge says that it is Dunnet Bay or Spain there is not the expertise to challenge this. The objectors are able to call witnesses at a public inquiry but that is not the best way to take decisions—on an "either—or" basis.

The local inquiry can decide simply whether or not a development should take place in a certain area. We want the developments, but in the right place. That means an overall plan. There is a strong case for the Secretary of State's taking into public ownership those areas which he wants to see developed. It is interesting that a Conservative Member—the hon. Member for Kingston-upon-Thames (Mr. Norman Lamont)—has drawn attention on more than one occasion to the danger of allowing one company, and one individual—because that is sometimes the case—to buy up large areas of land and thus be able to decide which oil companies and which supply companies shall develop there. In addition, extortionate rents can be demanded.

I know that the Secretary of State is not with me all the way on the question of the public ownership of land. The answer he gave me about this was not unreasonable, in the sense that it did not rule out public ownership. The sensible thing is to designate areas and to have an overall plan, with the Secretary of State controlling the situation.

In his foreword to the Scottish Economic Bulletin on North Sea oil the right hon. Gentleman said: There is no reason why Scottish industry should not become a focus for the new expertise required, taking part in under-sea operations elsewhere in the world as well". I am afraid that if things go on as they are now, in 10 years' time we shall look back and realise that the reason for our failure to capitalise on the opportunity presented to us was the inadequacy of the response of the British Government.

The Government have a chance to change their policy, but we cannot wait indefinitely for them to do so. Their response to this massive development has been inadequate. Only the week before last the Department of Trade and Industry spelled out again the fact that we have been underestimating the amount of oil that we are likely to get. We still do not know the quantities involved, but all the signs are that this will be a major development which could have a major influence on the development of the Scottish economy if it was handled in the right way. The Government have a chance to rethink the whole issue and to establish a new structure. I hope that they will have the courage to do so.

12.1 p.m.

Mr. Bruce Milian:

I, too, should like to congratulate my hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) on his good fortune in being able to have this debate and on choosing this subject for discussion.

I propose to deal particularly with the appointment of Lord Polwarth and to say something about his financial holdings, but before doing so perhaps I may take up one or two of the points made by my hon. Friend the Member for Edinburgh, East (Mr. Strang) because it is important to remind ourselves of the background against which Lord Polwarth's appointment was made.

The fact is that since it became clear that there were large resources of exploitable oil in the North Sea the Government have badly mishandled the situation. They have been subjected to criticisms which they have met with constant reassurances that everything was being handled adequately and that the criticisms were uniformed and malicious. But every time an independent body has looked at the situation it has confirmed that the criticisms of Government policy have been justified. The Government's policy has consisted largely of reactions to those criticisms.

That was true of the IMEG report, which confirmed the criticisms made from this side of the House that unless there was a greater emphasis in Government policy on getting Scottish industry involved in the offshore development and ancillary activities it was liable to miss the boat and not be involved in North Sea oil exploitation. In addition, it would miss the opportunities which ought to present themselves worldwide. The Government's response to the IMEG report was totally inadequate, and in appointing Lord Polwarth to the job that he has been given they are to some extent reacting to criticisms of their response.

The Public Accounts Committee's Report confirmed the criticisms made from this side of the House and elsewhere that the licensing arrangements laid down by the Government, particularly in the fourth round of licences, were ridiculously generous to the oil companies, and there was a strong suspicion that the tax revenue from North Sea oil development would be derisory because of the international ramifications of the companies concerned. The PAC said that, and the Chancellor in his Budget this year said that he had taken that view to heart and that the Government intended to look again at licensing policy and new tax provisions would be introduced in next year's Budget.

The Government had been criticised for consistently underestimating the out- put of North Sea oil and for having been misled by the oil companies themselves. During the last week, the Minister for Industry has admitted that previous estimates have been too low, and, although he has not come up to some of the figures quoted, the Government have revised their estimate of the output of North Sea oil in the 1980s.

On the question of planning—whether in the technical sense where the Secretary of State is involved in a quasi-judicial capacity, or in the overall sense—again there have been strong criticisms of Government policy on the grounds that there is no coherent strategy, that there is no means of knowing the Government's views about the general planning issues involved in this development.

When the Zetland Bill was debated the other day, the Government said that they wanted to deal with the matter piecemeal, that there was no need for an overall strategy and that the kind of Bill which the Shetland County Council was promoting was what should be done. But the situation in the Shetlands has changed following the local elections, and there is now a state of uncertainty there.

That is the background against which Lord Polwarth's appointment has been made. It is a background of increasing criticism, anxiety and concern in Scotland, not just in political party circles antagonistic to the Secretary of State but also within his own party. There is criticism about the way in which the Scottish Office and the Government generally have handled the whole question of North Sea oil development, and it is in that context that one has to look at Lord Polwarth's appointment.

It is not yet clear, but perhaps it will be clearer after today's debate, exactly what will be the range of Lord Polwarth's responsibilities. He has been described as a troubleshooter, as a co-ordinator, and as many other things, but, on reading the Prime Minister's speech and on reading what Lord Polwarth himself has said about his job, I find it difficult to understand just what he is to do.

About a week ago Lord Polwarth said he did not want to see the State being involved in oil affairs, and there was the profound statement that "a dictatorship, however benevolent, is a negation of democracy". I did not think that took us very much further along the line, and we are still uncertain about what Lord Polwarth is supposed to do. The uncertainty exists despite the fact that the newspapers assure us that the appointment was the Secretary of State's idea and that he had been working on it for months. That being so, one might have expected to be given a good deal more information about just exactly what Lord Polwarth is meant to do.

This week there was the announcement about the establishment of the Scottish Economic Planning Development, and I welcome that. It seems to be a sensible rearrangement of duties within the Scottish Office, but it ought to be said—because this is not always understood outside—that by itself it adds not one bit to the responsibilities, statutory or otherwise, of the Scottish Office. It is merely an internal reorganisation, however sensible it may be. Within the Scottish Office, it is no more than that. It does not in any way add to the powers of the Secretary of State.

Similarly, there was announced the other day the setting up of the so-called task force. It consists almost entirely of Scottish Office officials, but it has on it representatives from the Department of Trade and Industry, the Department of Employment, and so on. However, anyone who is familiar with the processes of Government knows that interdepartmental committees of officials are ten-a-penny in Whitehall and in the Government machine as a whole. Calling it a task force means nothing. This is the great "in" expression recently. We do not talk about interdepartmental committees now because that sounds fuddy-duddy and bureaucratic, and we call them task forces, but they are only interdepartmental committees, and there are literally hundreds of them littering Whitehall at present. This task force adds nothing of additional power to the Secretary of State and the Scottish Office.

After the months of planning which have gone into this I hope that the Secretary of State will be able when he answers this debate to announce the names of the membership of the Oil Development Council. Again, by itself, however useful this may be as a piece of advisory machinery—although till we have seen what its membership is and what it is to do it is difficult to say how useful it will be—it does not alter the main spheres of responsibility of the Scottish Office in relation to the Department of Trade and Industry.

Nor does that rather pathetic little bit in the Prime Minister's speech which has been repeated again about the right to see papers. That does not tell us very much about what is likely to happen as a practical consequence. It was my experience when in Government that I had no difficulty in seeing papers because if a Minister wants to see papers he will always get plenty of papers to see. What really matters is what he does with the papers and whether he has any responsibility for them.

These are, therefore, some of the questions I want to put to the Secretary of State. First of all, and perhaps he would answer this—it is a simple question but I think it is important—has there been any transfer of decision-making from the Department of Trade and Industry to the Scottish Office? My answer to that is that, as far as I know, there has been no transfer of decision-making responsibility from the Department of Trade to the Scottish Office. It remains exactly the same as it has always remained.

Secondly, what authority does Lord Polwarth have over the Department of Trade and Industry? Again, the answer to that, in my view—perhaps the Secretary of State will contradict me—is that he has no authority at all over the Department of Trade and Industry. He is exclusively a Scottish Office Minister, and seeing all the papers in the world will not make any difference to that.

The third question I want to ask the Secretary of State is this. On what issues and in what circumstances can Lord Polwarth go directly over the head of the Secretary of State to the Prime Minister? On this aspect of Lord Polwarth's appointment I must say that if it is indeed true that the appointment was the idea of the Secretary of State, and if the Secretary of State negotiated the proposition that a Minister of State within his Department should have access directly to the Prime Minister, the Secretary of State must have gone mad. No senior Minister, no Cabinet Minister, should place one of his juniors in his Department, regardless of what that junior is responsible for, in a position to have direct access to the Prime Minister, for this can only be damaging to the status of the Secretary of State. The Secretary of State is a senior and Cabinet Minister. He is Scotland's voice in the Cabinet, and anything which requires to be done either at Cabinet level or Prime Ministerial level ought to be done by the Secretary of State himself, and it can only diminish his status and damage his own position if there is in his Department a junior Minister who has this direct access to the Prime Minister. I hope the Secretary of State in answering the question can tell us on what issues and in what circumstances Lord Polwarth will have this direct access. Perhaps if he feels that the Secretary of State has not done his job properly in Cabinet Lord Polwarth will be able to make direct representations to the Prime Minister.

Then, again, what about planning responsibility? First of all, let us take the town and country planning aspect of this. Lord Polwarth cannot have ultimate responsibility for this. This can rest only with the Secretary of State. Otherwise, again, he diminishes the status of the Secretary of State and his responsibility in relation to this matter. Can we know what the rôle of Lord Polwarth is in relation to planning?

What is Lord Polwarth's rôle in the planning strategy of oil development? This is in the wider, overall sense—the whole business of how the oil industry, offshore and onshore, should be guided and developed and controlled in relation to the Scottish economy. I do not know what Lord Polwarth is meant to be doing. He has said to the newspapers that he does not believe there should be an overall strategy. He thinks it misguided to have an overall strategy at all in relation to oil developments in Scotland. If the Minister himself has said that he does not believe there is a need for an overall strategy, exactly what is he supposed to be doing in the Scottish Office? I quote his words as reported in the Glasgow Herald of 14th May: I do not think it is realistic to talk of laying down an overall strategy. Oil developments are unpredictable and one does not know where oil is going to be found next. I have certainly had the impression over the last two years that the Government do not know what is going to happen next in regard to oil developments or in other respects. They are always caught on the hop and, as I said earlier, they are always reacting to events after they have happened—and, normally, have happened disastrously.

It seems to me that the real questions with regard to Lord Polwarth's appointment are two. First of all, appointing special Ministers and giving them special responsibilities with access to the Prime Minister and the rest of it does not really make a ha'p'orth of difference unless the policies are right. The Government's policies have been found to be wrong and misguided and inadequate, and there is no sign yet that the policy of the Government and what the Government are doing will make the policies right.

The second thing is that in the Scottish context, if Scottish interests are to be protected, we need a Secretary of State who takes the widest view of his responsibilities as Scotland's Minister and that, whether he has statutory or departmental responsibilities directly or not, he interests himself in economic developments and in industrial developments and ensures that at every point Scotland's voice is heard and Scottish interests are looked after. That is one of the reasons, the main reason in my view, for the Secretary of State's presence in the Cabinet.

The Secretary of State, unfortunately, takes a rather legalistic attitude towards his office. He rather takes the point of view that unless something is directly within his departmental responsibility it would be wrong for him to get involved and that he might be treading on somebody else's toes. I think the success of a Secretary of State for Scotland is to be measured by the frequency with which he treads on other Ministers' toes. There is no sign at all that in oil developments over the last two years the Secretary of State has done the principal job which is required to be done—to fight always for Scottish interests in the Cabinet and elsewhere.

Finally, I turn to Lord Polwarth's financial interests, because I think that this is a really extremely unsatisfactory situation. I must confess that I saw the Glasgow News article only an hour or so before this debate started, and I have only seen at the same time my hon. Friend's letter to the Prime Minister and the Prime Minister's reply, but I must say that, reading the Prime Minister's reply, I wondered whether—perhaps he had other preoccupations this week—he or his officials actually read the Glasgow News article, because his reply is completely inadequate as an answer to the charges made in the Glasgow News.

First of all, for the purpose of what I have to say, I take the Glasgow News article as being an accurate account of the shareholdings. My hon. Friend in his letter specifically asked the Prime Minister whether the article was accurate in that respect, and there was no denial and no repudiation of the point, and, therefore, one must assume that this is an accurate article.

I want to deal only with the Atlantic Assets Trust. It is not true that in relation to oil development Atlantic Assets Trust simply has, as an investment trust, minor holdings in a wide range of companies. In 1970 Atlantic Assets Trust took over Edward Bates and Sons Holdings Limited, merchant bankers, which is now a completely owned subsidiary of Atlantic Assets Trust. It is well known that Edward Bates and Sons Holdings Limited is heavily involved in the oil industry.

During the last financial year up to June 1972 the considerable increase in the profits of Atlantic Assets Trust came almost exclusively from the considerable increase in profits of Edward Bates and Sons Holdings Limited. As the chairman's statement says: For the year to 31st March … that is 1972— … Atlantic's share of Bates after tax profits increased from £95,000 to £547,000 and this momentum has continued into the current year. This increase in profits of Edward Bates came from the company being involved in a number stock issues, flotations, and so on, all specifically related to North Sea oil.

Time does not permit me to give the full details of this, but they are available. There has been an involvement, over the last year in particular, of Edward Bates with the Viking Resources Trust Limited, an investment trust formed to specialise in oil and gas, KCA Drilling Group Limited, which provides drilling services for oil and gas exploration, Viking Resources International NV, which has a similar investment policy to that of Viking Resources Trust Limited, and North Sea Assets Limited, an unquoted public company specialising in support services for North Sea oil development. These were the main new activities of Edward Bates, and, presumably, they produced these considerably increased profits which have gone into Atlantic Assets Trust Limited in which Lord Polwarth has certain holdings.

Atlantic Assets Trust Limited is also associated with Mount St. Bernard Trust —not by way of a normal investment trust investment. It has bought—and it is stated in the annual report of Atlantic Assets Trust that it owns—50 per cent. of Mount St. Bernard Trust. That is a normal investment of, say, 10 per cent. suggested by the hon. Member for Aberdeen, South (Mr. Sproat).

Mount St. Bernard Trust in its turn controls Onshore Investments, and Onshore Investments controls the Cromarty Firth Development Company, about which there has been controversy, Peterhead and Fraserburgh Estimates Limited and also Nordport Limited, a company that is the subject of considerable controversy in the Shetlands. It has bought 40,000 acres of land in the Shetlands for oil development, and the executive head of Onshore Investments a week ago in a rather threatening speech said: There is no question of our selling the land even at a large profit unless we are left with absolutely no alternative by the Shetland County Council. What does that mean except that if the county council does not follow a policy which the company finds acceptable the company will be awkward and cash in on its substantial holding of land in the Shetlands?

I have not time to go into these matters in the detail they require. I have concentrated on one particular trust. I have absolutely no complaint that Lord Polwarth should have had at one time an association with these companies. He had that before he went into Government, and it is perfectly natural that that association in terms of investment has continued. But even before this appointment, and particularly after it—to confine myself only to Atlantic Assets Trust —it is absolutely wrong that Lord Polwarth should have holdings in Atlantic Assets Trust, and I hope that he will relinquish and divest himself of these holdings immediately.

There is a potential clash of interests. The whole business of land development in relation to North Sea oil has caused the greatest concern and anxiety. There have been allegations of malpractice, and it is utterly wrong that Lord Polwarth should be involved in any way, even indirectly through his holding in Atlantic Assets Trust, in the activities of some of these companies.

I repeat that on all these points we require assurances from the Secretary of State today. Above all, we want to get some impression, which has so far been lacking, that the Secretary of State has a grip on the situation, that he understands the issues involved and that he will see that there is a policy for oil development in Scotland in the widest sense which meets the needs of the Scottish nation.

12.25 p.m.

Photo of Mr Gordon Campbell Mr Gordon Campbell , Moray and Nairnshire

I, too, am glad that the hon. Member for Aberdeen, North (Mr. Robert Hughes) chose this subject for debate. I welcome the opportunity to discuss the arrangements made to respond to the rapid growth in a short time of this new industry. The House will recall that only three years ago no one knew whether workable oil fields existed in the North Sea, although gas has been discovered in the southern basin.

I regret the sniping at my noble Friend and the carping at the initiatives being taken by the Government. I also regret the muddled thinking evident from the hon. Gentleman's speech. In Scotland there has been a general welcome from all sides to a Scottish Minister being given special responsibility for the important, new and rapidly developing situations arising from the promising new resource. In matters of such importance major decisions must remain with the Government. They cannot be shuffled off to some agency which is non-elected. Licensing and formal town and country planning decisions are matters which the House expects to be dealt with by the elected representatives of the Government who are accountable to Parliament for them.

The whole House will agree that the discovery of oil is probably the greatest thing for Scotland this century. Providence, it seems, has inscrutably arranged for all the oil so far found to be off the shores of Scotland. Natural gas has for some years been found and piped from the Continental Shelf off the shores of England. This situation may change if oil is discovered off England or Wales. At the moment the position is that valuable oil fields have been discovered off Scotland and that the oil industry, as distinct from the North Sea gas operations, has been rapidly developing over a short time.

The oil is about two miles below the sea bed in deep water. Operations often have to be carried out in formidable weather conditions. The first oil is not expected to start flowing before next year, 1974, but already there is a stimulating prospect for Scotland. It brings great promise but it also brings problems.

The new oil industry has appeared only within the last two years. During that time things have been happening fast, and the Government have been helping them on. Oil is joining whisky as a very important liquid for Scotland. But the distilling industry has had at least two centuries in which to evolve. The oil industry has so far had only two years.

There is still a lot of exploration to be done. There are many blocks in the North Sea still undrilled and huge areas of the Continental Shelf to the north and west where exploration has not yet started. Almost every week there have been announcements of new discoveries, plans for extraction or land-based projects, and it is still not possible to forecast precisely future developments, as some speakers recognised. For example, even with all the latest technology, within the past few weeks two wells have been drilled which proved to be dry. Each cost about £2 million and will produce no oil.

I do not think that hon. Members of the Opposition are claiming to know whether oil will be found, for example, west of the Shetlands, where only one block has been drilled so far, or whether it will be found eventually near Rockall. I hope that hon. Members of the Opposition are not setting up as oil diviners. If they are, they will be claiming powers greater than the most modern devices and beyond the scope of the huge investment now being deployed. That is why Government policy has been and must in the future be flexible and ready to react quickly, and respond to new discoveries and their effects.

I am glad to say that we have already had a considerable impact upon the employment situation in Scotland. About 4,200 jobs have been created already from the projects which have started or those in train, and about another 9,000 jobs are in prospect. These are in addition to indirect employment which is caused in services and through the generally increased activity.

The House will have been pleased to see the unemployment figures yesterday. The largest proportional drop in wholly unemployed was in Scotland. The new oil industry is playing an increasing part in bringing about this improvement. The new industry offers gleaming prospects for Scotland. At the same time, it presents many problems, which we have been tackling in this brief period of two years. The matters which arise affect almost every sphere of Government, both central and local. At sea there are questions of the safe operation of oil rigs, for example, 100 miles or more from land, the prevention of pollution and the effects on the fishing industry. Onshore there are problems of harbour facilities for service vessels, landing points for pipe-lines, and sites for constructing mammoth rigs and platforms. Those are just some examples.

There are also questions of location, governed by the planning procedures among other things, and all the rapid building required where new communities are added or existing communities are growing. Here we have demands for housing, schools and other living requirements to be produced as quickly as possible, but in the right places and properly planned. We also want to ensure that Scottish industry, together with British industry as a whole, plays a full part in the new development, and that Scottish firms in particular get into the wide range of this new business.

Another important factor, which is part of planning, is the need for conservation and protection of natural assets. In certain areas of natural beauty or amenity —I hope that hon. Members will listen, because this matter is exceedingly important—the Scottish interest of conser- vation can be more important than any other Scottish interest.

Against this background, and the likely course of events in the future, my noble Friend Lord Polwarth, has been given his new task. As a Minister in the Scottish Office he will take direct responsibility for those matters which fall within the work of the Scottish Office departments and which affect the oil industry and its developments. This covers much of the work and development on shore, in contrast to the activities at sea which mainly fall to the Department of Trade and Industry. On these and other matters affecting the DTI, Lord Polwarth now has special links with the Minister for Industry and the other DTI Ministers on matters relating to oil affecting Scotland. Everything to do with the new oil industry in Scotland will have priority in his work. Lord Polwarth will be spending most of his time in Scotland supervising and co-ordinating, and ready to deal with situations rapidly as they arise.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

Will the right hon. Gentleman say whether the responsibilities at present resting on his hen. Friend the Under-Secretary of State for Development. Scottish Office, are now to be placed with Lord Polwarth?

Photo of Mr Gordon Campbell Mr Gordon Campbell , Moray and Nairnshire

Fortunately, because of the arrangements within the Scottish Office team, some adjustments are now being made, so that my noble Friend is dealing primarily with all matters affecting oil developments, whereas my hon. Friend the Under-Secretary of State for Development, Scottish Office, will be concentrating more on the wider aspects of development, the development department's rôle which covers roads, houses, electricity, and so on, for the whole of Scotland, and developments which are not necessarily related to oil. They will work together, and my hon. Friend will naturally be the Minister who, with me, is accountable to the House on these matters.

Here I should remind the House of the procedures which the House itself has prescribed for planning, in the formal sense of the Town and Country Planning Acts. I am glad that hon. Members have raised this matter because it is important to try to get this clear. Important or highly controversial decisions go to the Secretary of State for Scotland, who has the responsibility clearly placed upon him to take decisions in a quasi-judicial capacity, for example, after a public inquiry. I agree that he can call in, if the procedures do not bring matters to him and if he considers that there are matters of such major importance that they should come to him. But there is no question of Lord Polwarth's taking over that final responsibility, any more than he or any other Scottish Minister in his work has in the past assumed responsibilities in other fields which are laid by Acts of Parliament upon the Secretary of State. Their functions are to work as a team with the Secretary of State in helping him to carry out these responsibilities.

There is a great deal which can and should usefully be done in the other sense of planning ahead, in the ordinary meaning of the phrase, in forward and informal planning, for example, as distinct from the formal procedures laid down by the Acts. Much can be done to help and steer firms and projects before a formal planning application is submitted and the statutory procedures are started under the Town and Country Planning Acts.

My noble Friend will be assisted by a task force led by a senior official of the Scottish Office. It will consist of senior officials from the Department of Trade and Industry, including the petroleum division, from the ports directorate of the Department of the Environment and the Department of Employment, as well as from the Scottish development department. This task force had its first meeting with Lord Polwarth this week and it will be meeting regularly in the future. A new Oil Development Council for Scotland is also being established to advise on all aspects and implications of oil developments. My noble Friend will take the chair and the members will be individuals who can bring special knowledge and experience from industry, trade unions and local Government. In particular, it will include members with knowledge and experience of conservation and environmental matters.

I have already issued invitations to a number of people asking them to become members. I hope to enlist leading members of Scottish conservation bodies and, for example, at least one from the fishing industry. The council will be concerned not only with the most effective industrial development which can be beneficial for the Scottish economy but with the preservation of amenity, the coastline and the countryside.

This council has had a wide welcome in Scotland. So has the appointment of Lord Polwarth. He is the ideal person for this special task. His experience as Chairman of the Scottish Council for Industry in the past has meant that he is held in wide respect throughout Scotland, regardless of politics, for what he has achieved for Scotland in that capacity and in other capacities. As a Minister in the House of Lords he can spend more time in Scotland without risk of recall and sudden changes of plan which affect us in this House. A large majority of the people of Scotland have already recognised this, and many regard it as regrettable that there should be petty sniping at someone who has battled successfully for Scotland's interests in the past before he became a Minister.

The Liberal Party has criticised the new council in the Press. I have been informed by the right hon. Member for Orkney and Shetland (Mr. Grimond)— who is, I believe, the Liberal Party's spokesman for Scottish affairs and whose constituency is near the oil fields—that he welcomes this new council and considers it to be the kind of council that is needed.

Quotations were made from a speech of Mr. Jack, of the Glasgow Chamber of Commerce. In that same speech he said: We welcome the recent appointment of Lord Polwarth to be in overall charge of oil developments in Scotland and to preside over an oil development council. Most of us here know him and some of us have worked with him in various spheres of activity. We are glad that he should have been chosen for this important task. That was another part of the speech which was not quoted.

I come now to the question of my noble Friend's shareholdings—

Mr. Milian:

rose

Photo of Mr Gordon Campbell Mr Gordon Campbell , Moray and Nairnshire

I must get on. I have already given way sufficiently. If the hon. Gentleman will give me time I shall not run into the next debate.

I must deal with the question of my noble Friend's shareholdings. The Prime Minister replied to the hon. Gentleman last night. The hon. Gentleman put forward a proposition that no Government —Labour or Conservative—has ever adopted or applied when he said in his letter: A Minister whose duties are connected with economic affairs should divest himself of all his industrial shares. That shows a complete misconception of the convention observed in this matter by all Governments. My right hon. Friend the Prime Minister has given the hon. Gentleman a full reply.

I come to the questions asked by the hon. Member for Glasgow, Craigton (Mr. Millan). He asked about the transfer of responsibilities. It has been made clear that there are no transfers between the Department of Trade and Industry and the Scottish Office. He then asked a question about access to the Prime Minister. This has been a red herring. Before this new appointment—the same applied to his predecessor, my noble Friend Lady Tweedsmuir—my noble Friend has been a deputy for the Secretary of State and if the Secretary of State is engaged on some other matter, as for example when a few days ago I was at the last meeting of the Scottish Standing Committee, where I had to be, my noble Friend naturally, as he has done and as his predecessor did on many occasions, attended meetings of Ministers in my place—[Interruption.] As I understand it, the question of access to the Prime Minister arose, in the Press, from the fact of that meeting which happened to take place like many other meetings. That is why this question is a complete red herring, and why I can say that at present my noble Friend is with the Prime Minister in Edinburgh because I have the duty of answering this debate in the House today. That is just an example, because the Prime Minister has duties in Edinburgh at this moment.

I have already dealt with the town and country planning aspect, which was the next question the hon. Member for Craigton raised.

The hon. Gentleman also said that the Government had been reacting after events. He is completely wrong. The Government have been operating completely flexibly. We have been ahead of events and, in fact, assisting them. Peterhead is a good example. The hon. Gentleman will know what happened at Nigg and Ardersier. The Government enabled the projects to go ahead faster than anything comparable has happened in this country previously.

In the short time since the oil industry has appeared the Government have been helping events, so creating thousands of valuable new jobs. We have been able to help to steer projects to suitable sites. As these become occupied there are bound to be more difficult decisions to be taken between conflicting interests of desirable development and jobs, on the one hand, and the dangers of despoiling the countryside, upsetting small communities or endangering the existence of rare species of wild life.

Where such conflicts occur, it must be our job to reconcile them and achieve a proper balance, though this may mean some inconvenience or delay to the industry. The new council can help us to make decisions which are seen and understood to be in the best interests of Scotland.

Housing is one of the urgent problems in the areas of the north and north-east of Scotland affected by oil developments. Extra housing is needed quickly for those coming in to work on the new projects. Some time ago, when this first became apparent, machinery was set up to enable all the agencies, including local authorities and private builders, to get together and make the most effective and swift arrangements. An important contribution by the Scottish Special Housing Association has been authorised by me to help to meet particular needs. The association now has a programme to build about 2,500 houses in north and north-east Scotland.

All that the Opposition have proposed in this matter is nationalisation. That was confirmed by the Scottish Council of the Labour Party's Conference at Dunoon this year. What can that do to help those working on the job at the moment? It is merely a threat to the jobs of the men who are working on the rigs now—[Interruption.] That is what it is. It is also a threat to the new jobs that are being created. That is the Labour Party's policy, which seems more designed for the Stone Age than for the new oil era in Scotland. The snail's pace of the Labour Party's thinking and its ideas is incapable of keeping up with the speed of events in the new Scottish oil scene.

Let me remind hon. Members of the recent history of the steel industry. The threat of nationalisation, and then nationalisation itself, held up investment and modernisation for several years. Nationalisation then produced the Steel Corporation, which Scottish Labour Members now criticise and abuse more than anyone else in the country. Are they now prescribing the same treatment for this valuable new industry—the oil industry—which is so important for Scotland?

We have made phenomenal progress within two years in responding to and gaining the maximum of benefit from the discovery of the oilfields. More are likely to be found. We have made special expenditure on roads, harbours, housing and infrastructure. These are going ahead. Much has been done already, for example at Peterhead Bay. These expenditures are not affected by the reduction in Government expenditure announced last Monday by my right hon. Friend the Chancellor of the Exchequer.

There are one or two exceptions among hon. Members opposite. The hon. Members for Greenock (Dr. Dickson Mabon) and for East Stirlingshire (Mr. Douglas) have made it clear that they do not agree with the policy of nationalisation. However, the general policy of the Opposition is apparently one of nationalisation. With one or two exceptions; there are too many Jeremiahs on the Labour benches. Instead of recognising the success in Scotland so far, and the opportunities for the future, all we get from them is carping criticism of those involved in Scotland.

Scottish industry and industry in Scotland are going ahead, with the Scottish Industrial Development Office and the Scottish Petroleum Office working together in Glasgow, ensuring that the opportunities of entering this new field are known, and to providing help to do it. Several prominent Scottish firms have already won orders and also delivered the goods on time.

I ask those hon. Members who have been carping about what has been happening to visit and see what is happening at Nigg Bay. Let them see what has happened in just over a year—the transformations that have occurred, for example at Peterhead, Lerwick and Mont- rose. A good deal is happening. If they saw that for themselves, instead of simply carping and doing nothing about it they would recognise what a success Scotland is making of this new resource.

I am sure that the House and all concerned in Scotland will wish to see oil development in Scotland go ahead successfully, with the protection of the environment. The Government have been flexible and have made a positive contribution to the success so far. We shall continue to give all encouragement with the main Scottish interests, including conservation, well in mind.