Orders of the Day — Industry and Energy

Part of the debate – in the House of Commons at 12:00 am on 13 March 1974.

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Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford 12:00, 13 March 1974

But on the whole we welcome the shift in the opinion that has taken place in the party opposite. Why has it happened? Perhaps because of the noble Lord, Lord Balogh. He made his views abundantly clear in a happily-timed article in the Banker which came out earlier this week. A hurried takeover by an inexpert body of men would only further discredit the idea of national oil ownership and in a footnote: I hope that the Labour Party's programme in this field will he speedily and drastically reconsidered". It obviously was, and he has now been put in charge of it. I hope we have heard the last of this nonsense of bringing the development of North Sea oil into public ownership. It always was nonsense, and we are glad that it has gone.

But then, yesterday, we had a curious passage in the speech of the Prime Minister, of an almost baffling vagueness, where he purported to quote—I have checked and he did indeed quote—something that he had said in this speech at Leith on 23rd February. He said: There could be a United Kingdom Hydrocarbon Corporation with exclusive buying power like the Gas Board. What attracts me—and there must be consultations about this area by area—would be the idea of a separate buying corporation for each area—one for Scotland, or even separate parts of Scotland: one for the North-East … and so on". He continued yesterday—and this is the point of real interest— The words I have just used are the words I used in the General Election. It was on those that we fought the election with regard to gas and Oil."—[OFFICIAL REPORT, 12th March 1974; Vol. 870, c. 82.] If he did, he kept it remarkably dark. The words are in the Leith speech but they were not in the Press handout given to the Press and I had to obtain the transcript of the speech from Transport House. Very interesting it is, too.

But it goes further than that. What was the guidance given to the Press who asked questions about this area by area purchasing corporation? I quote from an article by Peter Harland in the Sunday Times:But I understand that the regional boards proposal has been considered by the Labour Party only very recently, and that yesterday Mr. Wilson was simply 'floating' an idea which attracted him personally—prodded, perhaps, by the Scottish National Party's much publicised 'It's Scotland's oil' campaign.' The Prime Minister is up to his old tricks. This leopard has not changed its spots: back to instant government to government by nod and by wink and by background briefing; government by the small print. It is foolish of the right hon. Gentleman to try to pretend, as he did yesterday, that this was the policy on which the Labour Party fought the last election. I wonder how many hon. Members opposite knew about it?

I cannot comment usefully on the merits of the proposals because their sheer vagueness defies analysis. But I can tell the Secretary of State—and this is a matter of some importance—that he must clear up the doubts at once. The mere suggestion that the companies will not be able to market their products, or will have to sell at an artificial price to be negotiated in the future with the Government, will cause a grave danger of undermining confidence in North Sea operations.

The question of the Government "take" is one thing—and I will come to that later—but the suggestion that the National Hydrocarbons Corporation, let alone a whole series of regional corporations, will have exclusive buying power, such as the Gas Corporation, is already causing some alarm and this must be clarified.

I confess that I have not had time to consult fully, but I was able to arrange for a number of North Sea operators to be contacted—British, American, Canadian and French. The message was unanimous. If the Government propose to establish a monopoly buyer of North Sea oil, or regional buyers, on the model of the Gas Corporation, it will be exceedingly difficult, if not impossible, for these companies to continue to raise fresh capital for the development of North Sea oil. The Secretary of State must state his policy swiftly. It is probably right that there should be consultations, but consultations on the basis of firm plans and not wild schemes dreamed up by the Prime Minister sitting in a hotel bedroom in Edinburgh five days before the election.

The question of a Government "take", by taxation or otherwise, is a separate matter. So are the terms on which the licencees should enjoy licences. It is totally unclear as to what the Government intend and it should be cleared up.

There has been a great deal of ill-informed criticism of what we proposed and it is right for me briefly to outline those proposals. My right hon. Friend the Member for Altrincham and Sale last year accepted the PAC's recommendation on the tax proposals, and the Chancellor will be aware that the necessary legislation is ready, subject to minor drafting details. Similarly my right hon. Friend said the Government are considering the PAC's other recommendations, including the "take" from the operation of the Continental Shelf. How this should be done is a matter on which various pro- posals were under active consideration, as I am sure the Secretary of State's officials will have told him.

Here, too, a number of proposals were in an advanced state of preparation. But the Opposition will not contenance the Government taking a majority share in oil consortia because it is quite unnecessary. It is possible to secure a proper "take" and adequate control by other means.

To the hon. Member for Dundee, East I can say that we in the Department of Energy were considering the establishment of a strong Department of Energy presence in Scotland in order to assume full oversight of offshore operations based on Scottish ports.

But the Government must now announce their plans because nothing is more urgent in the national interest than that there should be no interruption or even hesitation in the momentum of exploration and development.