Orders of the Day — Fuel and Electricity (Control) Bill

Part of the debate – in the House of Commons at 12:00 am on 26th November 1973.

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Photo of Mr Nicholas Edwards Mr Nicholas Edwards , Pembrokeshire 12:00 am, 26th November 1973

The crisis arises from two causes. There is the crisis of oil and the added multiplier effect of the coal situation. It is clear that if we face a rundown of our energy sources we cannot use up those 10 weeks' stocks of coal and run down coal supplies.

I agree with the hon. Member for Chesterfield that my right hon. Friend the Secretary of State has sometimes been over-optimistic and has played down the threat too much, but it is clear that he has not been over-optimistic in his actions. I take this opportunity of congratulating him on the foresight which he and his colleagues have shown in preparing to meet the situation by building up oil stocks, by injecting £1,100 million into the coal industry, and by introducing the Bill.

It would be absurd to suggest that the Bill is welcome, but that it is vitally necessary no one can deny. There are among us people who have a curious tendency to play down the severity of the situation. Optimism about the outcome of the energy crisis can still be found in the most unlikely places—although it seems to have left the Stock Exchange in the last few few days. I do not share that optimism.

The optimists, when they are not just vaguely proclaiming that it cannot happen to us, argue that the Arabs, like the Labour Party, will collapse into disunity. They point to the fact that Iran, Iraq and Nigeria have failed to join the boycott, or they argue that the Israelis will be forced to give way and accept a peace settlement on Arab terms. Failing those two solutions, they speak of the counter-measures that we might take to put pressure on the Arabs. I hope that the optimists are right, but I do not share their optimism.

I see no reason to think that Israel will easily surrender all that she has fought for. I see no compelling reason why Saudi Arabia and the Gulf States, which are maintaining their revenues by higher prices, will easily be deflected from their course. In referring to a possible 80 per cent. cut in oil production in Saudi Arabia, Sheik Yamani said : You know what would happen then. A barrel of crude oil instead of being sold at, let us say, 3·50 to 4 dollars from Saudi Arabia … could be sold for 15 to 20 dollars. Also we could get more income from 20 per cent. production instead of our present level. It is the law of supply and demand. Even if the Arab States ease their most extreme pressure there is no compelling long-term reason why they should not restrict supplies to a figure well below that which the developed world needs to maintain output, if, as the Sheik says, they can maintain their incomes. We are, therefore faced with the possibility rather than the possibility that oil supplies will be severely restricted for a long time to come.

Whatever the long-term alternative energy sources may be—and, clearly, into the 1980s there are many—there is no possible way by which in the short term we can replace oil as the prime source of our energy requirements. We therefore face the threat of a world recession as a result of the oil cut-backs. We in this country cannot escape the consequences that others will suffer. Oil is an international business, and the oil companies, faced with demands from all their customers that they cannot meet, will not maintain supplies to one country at the expense of the others.

All this would be serious enough without the coal crisis. Confronted by this situation the Government would be wildly irresponsible not to take the powers contained in the Bill. If there is to be no immediate relief, each day's reserves are vital. Each day's reserves must be defended. I share the concern of the hon. Member for Chesterfield about the apparently sharp drop in production that has already occurred.

My right hon. Friend even today succeeded in being modestly optimistic, although less so than on previous occasions. I do not mean by that that there are no grounds for optimism, but I believe that when the situation is bad it is as well to say so. He spoke of the possibility of a lasting peace settlement in the Middle East. He spoke also of continuing uncertainty. As I have suggested, that clearly is there. I understand my right hon. Friend's reasons for refraining from introducing rationing and further controls sooner than need be. No one wishes to impose on industry the severe burden of a further cut-back, but early action is infinitely preferable to late action, and I urge the introduction of petrol rationing if there is any sign of a further deterioration in the situation.

I welcome the announcement that coupons are to be sent out. My right hon. Friend need fear no criticism on that score. I welcome, too, the assurance from the Opposition that criticism will not come from them on that account. If we have to introduce rationing it is vital that it should be introduced when we need it and not be delayed by unnecessary administrative problems. Unless there is some unexpected international development, rationing should be introduced without further delay. I believe that an even larger cutback will be needed for industry as a whole, and, although that will have serious consequences, we should not attempt to disguise them from the nation.

There has been Press and BBC comment about exports of refined petroleum from this country. In the normal course of business some went out last week from Milford Haven. The Press suggested that it was absurd that we should be exporting petroleum at this time of crisis. It needs to be said that this is part of a two-way trade. I think I am right in saying that we import about twice the quantity of refined products that we export. If we cut off our exports we should risk the cutting off of those vital imports. I hope that my hon. Friend will confirm this and that there will be no more criticism on that score.

I am concerned about the grim prospect that faces the rural areas. Unless special provision is made, the remoter areas where public transport has been run down will be in a desperate situation. I seek a further assurance from my hon. Friend that the rural areas will be in the forefront of his thoughts in devising the rationing scheme. In rural areas the whole life of the community depends entirely on transport by private motor cars. Many bus services have ceased. Without an adequate petrol allowance many of my constituents would be unable to visit shops, get their children to school, get to hospital and go about their daily business.

It is also true that some of these remoter areas depend on the tourist industry for a major part of their business. I am concerned about what an announcement of rationing this winter will do to bookings in that industry. Having argued that we must introduce rationing and that the country as a whole faces hardship as a result of this crisis, I cannot and will not pretend that the tourist industry will escape from it. But the fact remains that we want to maintain our tourist industry, particularly at a time of balance of payments difficulties. Therefore, I hope that the Minister for Industry will be able to assure me that the problems of the tourist industry in areas such as the South-West and in many parts of Wales and elsewhere—areas which are entirely dependent on people coming down in their cars—are at least being considered.

Reference has already been made to the problems of agriculture. I know that a number of farmers have faced severe difficulties in obtaining supplies, and I welcome the assurance made by the Secretary of State that this matter is receiving Government attention. I noted his suggestion that farmers should get in touch with regional offices in the Department of Trade and Industry.

I wish to put in a special plea for consideration to be given to seasonal farming requirements. In many areas there are special seasonal demands at this time of the year, such as ploughing and all the rest of it, and it is important that the agriculture industry should be able to carry out these operations. Therefore, this aspect should also be given special attention.

I should like to draw attention to one special aspect of this situation, and that is bunkering oil for shipping. A serious situation is developing throughout the world, and recent comments in Lloyd's List have emphasised the problems which arise in terms of shipping. I plead with the Government not to attempt any discrimination against foreign shipping and to do everything in their power to avoid discrimination in other countries. We are dealing with what is essentially an international trade. If one country starts by saying "We shall supply only our own shipping", we shall face very real difficulties. I hope that my hon. Friend will be able to assure me that he has taken note of the warnings of the shipping industry and that he and his Foreign Office colleagues are doing their best to bring this problem to the attention of other countries.

I believe that in the present situation my right hon. Friend the Secretary of State would act in the interests of the nation if he curbed his natural, and at times sometimes excessive, optimism. In such a situation as this it is better to be safe than sorry. My right hon. Friend must maintain stocks at adequate levels, and as soon as those stocks are threatened he must act without delay. I urge him not to hesitate. I urge the nation to recognise that we face a major national crisis, and I urge everyone to respond accordingly.