Fuel and Electricity (Control)

– in the House of Commons at 12:00 am on 9th December 1974.

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10.0 p.m.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I beg to move, That the Fuel and Electricity (Control) Act 1973 (Continuation) Order 1974 (S.I., 1974, No. 1893), a copy of which was laid before this House on 20th November, be approved. The Fuel and Electricity (Control) Act 1973, which the motion asks the House to continue, contains flexible and wide-ranging powers. Hitherto these powers have been used for two distinct purposes. Their main use—by the last Government in the winter of 1973–74—was for crisis management at a time of serious interruption in our energy supplies. Since that time the powers have been used on a limited scale for measures connected with the general management of energy resources. I shall describe these measures in more detail in a moment.

It is now clear that we need the powers in the Act for the introduction of a third category of measures—measures which are neither of a crisis nature nor, I think, of a kind that can be described as routine management of energy resources. I refer to the energy savings measures announced earlier today by my right hon. Friend the Secretary of State, some of which will require the use of the powers in the 1973 Act. Again, I shall say more about these in a moment.

The Order before the House extends for a period of one year, to 30th November 1975, the powers contained in Sections 1 to 8 of the Act. These powers enable control to be exercised over petroleum, substances derived from petroleum, any substances used as a fuel, and electricity. Thus, the controls extend not only to petroleum and electricity but also to coal and gas. As we have seen, the Act provides powers to introduce any emergency measures which might be necessary should our energy supplies be interrupted.

However, I can assure the House that the introduction of crisis measures is not the prime purpose of the Government in laying this order. For emergency situations the Act can quickly be revived by order. In any case, there is on the Government's part no present expectation of difficulties arising in the near future that would require the Act to be invoked for crisis management purposes as it was last winter by the previous Government. If such need should arise, I have no doubt that my right hon. Friend would seek to make a statement to Parliament before the powers in the Act were used for crisis measures of, if the need were very immediate, at the very earliest opportunity thereafter.

I should like to describe briefly the main uses which are at present being made of the powers in the Act. One use is to relieve British Gas Corporation of certain supply obligations; another is to control the prices of petrol, paraffin and derv. The Gas Act 1972 imposes a statutory obligation on the British Gas Corporation in specific circumstances to supply gas on request. The need to provide some relief from this arises from changes in the world energy situation in the last year or so. During this period the demand for gas has greatly increased, particularly for commercial and industrial use.

It became clear early this year that, if the corporation had to meet in full every request for large new and additional gas supplies which fell within the terms of its statutory obligation, this would endanger the continuing security of supply to other users in the winters preceding the arrival of Frigg gas. Accordingly, on 25th March 1974, authority under Section 4 of the Fuel and Electricity (Control) Act was given to the corporation to disregard this statutory obligation as respects new or additional supplies exceeding 25,000 therms per annum.

The authority does not affect any statutory obligation to continue to give a supply of whatever size to one who is already receiving it, nor does it affect any contractual obligation or interfere with the corporation's freedom to meet a new demand if it can do so without imperilling supplies to other consumers. The figure of 25,000 therms is about 25 times the consumption of a fair-sized domestic gas central heating installation. The great majority of the Corporation's industrial and commercial customers use less than that amount per annum.

Another power under the Act is the power to regulate oil product prices. It is important that these powers be retained in the light of the continuing uncertainty of security of world supplies arising from the situation in the Middle East and from the increasing frequency of demands by all producers for higher prices of crude oils. At present the powers, which were introduced during the difficult supply situation last December, are exercised only over the maximum retail prices of petrol, derv and paraffin. We are keeping these controls under constant review so that they are exercised no longer than necessary.

A third use of the powers for general management of energy resources which we propose is to give directions to oil companies restricting disposal of oil stocks. These will be issued shortly. The need for this arises from our international obligations to hold minimum stock levels. The United Kingdom is obliged under the international energy programme and an EEC directive to hold certain minimum stocks of oil. Such stocks are an essential part of our security of supply but with the huge increases in the price of oil it is no longer practicable to rely on companies voluntarily holding high stocks.

Photo of Mr Enoch Powell Mr Enoch Powell , South Down

The hon. Gentleman referred to an EEC directive. If I am not mistaken, that is the directive which was before the House a few days ago, which has not been approved and which it was understood would not be approved until the House had had a further opportunity of debate. Is that the case?

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I assure the right hon. Gentleman that it is not the case. The directive to which I referred is the directive of 24th July 1973, the effect of which is that the United Kingdom should hold certain stocks of oil from 1st January 1975. I assure the right hon. Gentleman that this is quite a different matter from the matter that we were discussing, I think, last week.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I assure the right hon. Gentleman that what I tell him is correct. He can pursue the matter later. I am surprised that he does not accept an assurance which I give with some confidence.

For the three measures I have described no other suitable powers exist at the present time, although consideration is being given by the Government to taking alternative powers under other legislation.

I turn to the energy savings measures announced earlier today by my right hon. Friend. Some of these will require use of the powers in the 1973 Act. For example, the compulsory maximum limits on heating levels in buildings of 68 deg. Fahrenheit/20 deg. centigrade will require the exercise of the powers contained under Section 2(1) of the Act. The ban on the use of electricity for external display and advertising purposes in daylight hours will derive from the same powers. The reduction in maximum speed limits on single carriage-way roads to 50 m.p.h. and on dual carriageways other than motorways to 60 m.p.h. will be imposed by use of the powers in Section 4 of the Act.

The need for energy-saving measures was explained in some detail in the statement made today by my right hon. Friend and I am sure the House recognises that we all have a duty to avoid waste of energy in one form or another. To achieve the full saving required we cannot rely entirely on voluntary effort. The package therefore contains an element of compulsion in the three measures I have referred to. To back these measures the Government have decided to make use of the powers in the Fuel and Electricity (Control) Act. Other than by invoking emergency powers, which would be totally inappropriate for this purpose, no suitable powers are readily available for these measures. This, then, is another reason for continuing the relevant provisions of the Act in force and for approving the order before the House.

To sum up, in the Fuel and Electricity (Control) Act 1973 we have a flexible means of dealing with a variety of energy problems. I repeat that the Government do not see in present circumstances a need for the use of these powers for crisis measures, nor would they use the powers for this purpose without consulting the House at the earliest possible opportunity. But we need the powers now both for energy saving measures which require an element of compulsion and in order to maintain in force certain other measures of control for the management of our energy resources.

I therefore ask the House to approve the order.

10.9 p.m.

Photo of Mr Patrick McNair-Wilson Mr Patrick McNair-Wilson , New Forest

The Under-Secretary has told us of the importance of the Act. The announcement by his right hon. Friend the Secretary of State this afternoon, and the juxtaposition, therefore, of these two announcements on the same day, gives a new importance to our discussions this evening. Indeed, the Secretary of State told us this afternoon that the Act would be used to implement many of the recommendations, and although those recommendations are extremely slight and are little more than a considerable public relations exercise in our view, the fact remains that some action had been heralded in the Press, and in spite of the expectation with which many people waited for that announcement, their disappointment must be considerable. I do not think that it would be unfair to say that it is a question of closing the stable door after the horse is three times round the field. However, it is important—

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

As I said this afternoon, we are not so proud as to believe that this is the final answer to energy conservation measures. I hope that the hon. Gentleman in the course of his speech will tell us what we should do and what the Opposition would do, and how much further he thinks we can go.

Photo of Mr Patrick McNair-Wilson Mr Patrick McNair-Wilson , New Forest

The Secretary of State is a member of the Government. It is for the Government—not the Opposition—to tell the country what to do, unless he would like us to change sides. It is important to remember the genesis of the Act. When the Act was introduced we were facing a severe crisis. The coal industry dispute was beginning at that time, and was having its effect, and we had uncertainties of oil delivery as a result of the Arab-Israeli war. The present Secretary of State for Energy said, The long-term energy problem is of the utmost seriousness and the gravest significance for the future wellbeing of everyone in these islands. It is the problem of oil, which is cynically played down to some extent, again for political reasons. The long-term and short-term problems are being tangled together, as they were, for example, by the Prime Minister in his speech at Nelson last Thursday, when he wrongly referred to the combined effects of the action of the miners and the Arab States. There is no such combined effect". Therefore, the Secretary of State was clear at that time that it was an oil problem. He was specific in his comments. As far as he was concerned the matter related to the problems revolving around the shortages and uncertainties of oil supplies. He also stated at that time The crisis was bound to come. It was inherent in a situation in which the appetite for oil in the industrial nations was growing more and more insatiable while world inflation was convincing the oil producers of a simple economic fact—that oil was worth more untapped, underground than being shipped in tankers to Europe and Japan. He further stated: The policy for oil is essential. But more than that, we need a comprehensive fuel policy, to maximise fuel production here at home, to maximise efficiency in the use of fuel, and to cut out waste. This calls for some kind of coherent policy for public transport.…" —[OFFICIAL REPORT, 26th November 1973; Vol. 865, c. 49–55.] I cannot quarrel with anything that the right hon. Gentleman then said. He likes to think that it was a good speech. Many of us took part in that debate, which was at a critical moment in the economy of the country. Why was it, having made such an excellent contribution in the debate, that the right hon. Gentleman, now as Secretary of State, has allowed the spring, the summer and even the autumn of this year to disappear without taking any action? He told us previously what was wrong. We knew that he was right. We all said the same thing, but now a whole year has been spent in doing nothing.

The Minister for Transport said on 28th March this year, The regulations made last December introducing the general maximum speed of 50 mph on all roads not subject to lower limits were made without the need for specific parliamentary approval as a result of an Order in Council under the Fuel and Electricity (Control) Act 1973… Yet when the Government were in power earlier this year, they removed these limits. Indeed, it was the Minister for Transport who said at that time, they were thus putting motorway speed limits back to where they were before the fuel crisis."— [OFFICIAL REPORT, 28th March 1974; Vol. 871, c. 761–62.] That implies, in my view, that the crisis was deemed to be over.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

The main consideration which I put to the House was that my predecessor had made it clear that the 50 mph overall limit was to be limited to the problem of the acute shortage of oil, not to the present problem that we have, which is one of cost. If the hon. Gentleman thinks that the 70 mph limit on motorways that I am retaining is wrong, perhaps he will say so clearly.

Photo of Mr Patrick McNair-Wilson Mr Patrick McNair-Wilson , New Forest

I am making the point that the controls were removed at the beginning of this year, giving the impression to the general public that the crisis had disappeared. In fact we all know—the right hon. Gentleman knows— that that crisis has not only remained with us but is, perhaps, more frightening today than it was then, because it has clearly become part of our way of life. I do not want to misrepresent the right hon. Gentleman in any way. I was here to listen to his announcement this afternoon. However, there was no magic wand that could suddenly be waved, because this was a deep-seated and long-continuing crisis with which many of us may have to live for the foreseeable future.

It was, therefore, very surprising that this silence about the crisis lasted for so long. Some of us might be sufficiently suspicious to suggest that it had something to do with the forthcoming General Election. We remember the headline in the Daily Mail five days before polling day at the last General Election, 'Labour's Chilly Secret'. The Government plans to restrict oil consumption have been secretly shelved because of the election. On the very same day Transport House, with its usual alacrity, issued a Press statement by the Secretary of State for Energy, part of which said, To suggest that the Energy Conservation Advisory Council is being set up to deal with a winter programme of fuel saving is plain distortion. I find that hard to square with the right hon. Gentleman's statement this afternoon, in which he said, My Advisory Council on Energy Conservation has already produced a number of suggestions for the Government to consider, and its work will grow and develop over the months and years ahead. The measures and proposals I announce today, therefore, must be regarded as an interim package, which we intend to extend and reinforce in the future." —[OFFICIAL REPORT, 9th December 1974; Vol. 883, c. 28.] The Government were well aware of this crisis for a long time. For various reasons of their own, they may have decided to suppress any action about it. We have had a shabby story of lofty words which have masked indecision, inaction and, I believe, political wheeling and dealing. It is only now that we are getting the beginnings of a glimmer of action from a Government who have known and hidden this problem from the people for far too long.

I believe that this Conservative Act of Parliament should remain on the statute book but the powers are enormously wide. As the Under-Secretary told us, they give the Government powers of an almost wartime severity. The hon. Gentleman referred briefly to the operation of Section 4, which relaxes the statutory or contractual obligations and he pointed out that these can be used and have been used. Will he give the House an indication of how many times Section 4(2)(a), (b) and (c) have been used, which paragraphs provide powers for the driving of motor vehicles without registration and other forms of certification?

Can the Under-Secretary explain why it is necessary to have these special price controls over and above the ordinary operation of the Price Code? After all, these controls and this Act were introduced at a time of acute shortage in garages to avoid profiteering by those who had supplies. Why is it now necessary, when the situation is so dramatically different, to continue with these additional price controls which are in many cases having a deleterious effect on the retail trade?

The Act, if it is to be useful, requires very clearly set objectives from the Government and it is those objectives which my hon. Friends and I find totally lacking. It is one thing to be cutting back and controlling without offering the real incentives which are necessary to create a situation which we believe is essential, namely the ultimate independence from imported oil, a situation in which one can make a real dent in the balance of payments problem.

The Secretary of State, when he gave us his statement this afternoon, said at the end that he could not possibly predict the exact savings which would flow from it. He said that if it were possible to save 10 per cent. that would be the equivalent to £700 million off the balance of payments. But he did not say that it was possible to do this. We on this side of the House find it disturbing that, at a time like this, the Government are still hell-bent on nationalising those people who are doing the most difficult and important work for us, namely finding an alternative source of our energy in the North Sea, and introducing taxation legislation which may, unless it is very sensitively drafted, create a situation where people will be driven away from the area.

Where in this statement, which can be implemented by the Act of Parliament, are the encouragements to find new sources of energy to supplement the two fuels on which we are to a greater or lesser extent dependent, namely coal and oil? Where is the intent to get us into the big league of nuclear generation? I believe that we in Britain can solve the problems which face us today, daunting though they are. I believe, however, that it means that we must use our resources and skills to the full. Energy is the life blood of this country, and this Act of Parliament produces little more than a tourniquet. It lacks behind it the clear objectives of a Government determined to make us independent of those terrible high import bills which are crippling our whole economy.

10.23 p.m.

Photo of Mr Bob Cryer Mr Bob Cryer , Keighley

I give a guarded welcome to this renewal order. When I take it in conjunction with the Secretary of State's remarks this afternoon, I urge him to re-examine his powers under the Act whereby he intends to control advertising displays during daytime only. I am sure the Secretary of State is listening intently, as he always does to my strictures, and I hope he will not confine such restrictions to daylight hours only. One of the worst exhibits of a profligate society is the way in which energy is wasted on neon displays often into the early hours of the morning. It is something which we could well take in hand, and I hope the right hon. Gentleman will consider extending the controls on which he is embarking.

The powers which this order extends are very wide, and I hope that when the Secretary of State is considering instituting price control he will consider a scheme whereby people who live in rural areas and disabled drivers are exempt from any increases in prices which he may be forced to institute and that the price control scheme will involve some differentiation for these people.

May I ask about Section 4(2) of the Act? I accept that this is an Act which he has inherited and is using as a matter of convenience. I am not always happy that the executive should use old Acts as a measure of convenience and receive thereby much wider powers. I wonder why and in what circumstances he intends to dispense with the whole of the legislation which has been built up over many years to protect the standards of operation and maintenance of public service vehicles. I can understand and appreciate the need for energy conservation, but I should have thought that there ought to be greater emphasis on public transport rather than on individual and possibly wasteful motor vehicle transport. I should have thought, therefore, that it was the duty of the Secretary of State to ensure that higher standards were maintained in public service vehicles. Here he has powers to reduce those standards and, indeed, to dispense with them entirely. I shall be most interested to hear my right hon. Friend's explanation.

To that end, I hope that the Secretary of State will not rely on a hotchpotch of old legislation, making it do for present circumstances, but will bring to the House his own legislation tailor-made for present needs.

If the Act, as the hon. Member for New Forest (Mr. McNair-Wilson) said, has prevented profiteering in the past, that is one reason which commends it strongly to me, for if it prevented profiteering in the future as well that would be excellent and help forward one of the aims which, I am sure, the Labour Government have constantly in mind.

I am certain that we shall have to control our future use of energy. We no longer have an energy glut. When we have North Sea oil under our control for the benefit of the people not for the benefit of a tiny group of oil shareholders, we shall be able to use it not in the profligate fashion of the oil companies but for the benefit of the nation. To this end, we shall need controls. I, therefore, welcome the continuance of the Act, though I have reservations about it and look forward to the Secretary of State's explanation.

10.26 p.m.

Photo of Mr Peter Rost Mr Peter Rost , Derbyshire South East

I do not find it strange that we should be asked to renew the Act, but I find it extraordinary that the powers under the Act have not been used by the Government throughout this whole period. At a time when the balance of payments has continued to deteriorate, with the import of oil as a major element in that deterioration, it is extraordinary that the Government should have removed controls which provided some sort of restraint on energy consumption, and should have done so at a time when other countries were imposing an energy conservation programme. This is all the more surprising when those countries, such as France, Germany, America and Holland, have already managed to achieve savings of more than 15 per cent., and in some cases over 20 per cent., are wealthier than we are, yet we, the poorest, are the most wasteful of our energy resources.

I was appalled by the Secretary of State's statement this afternoon, after the big build-up which we had had for months about the major energy conservation programme which the Government would announce and the endless delays before the statement was finally delivered to Parliament. What measures covered by that statement could not have been announced at least six months ago? I have looked carefully through the right hon. Gentleman's statement and I find no item in his proposals which called for more than an afternoon's deliberation by his Department of lethargy.

The measures are not only inadequate but are too late. By this year, Britain could have saved about 10 per cent. of its energy consumption, which would have saved about £600 million on our balance of payments. All the Government needed to do was to apply their own policy and that already laid down by the previous Government as a positive programme for energy conservation. Instead, we have the hotch-potch of measures announced today, most of which are nothing but talk about measures in the future.

I am anxious to know from the Secretary of State why his Advisory Council on Energy Conservation, which was set up more than six months ago, had its first meeting only in October. What has it done to accelerate a programme of energy conservation? Why have we not had more positive measures even now to conserve energy?

Let me briefly go over one or two of the proposals presented to us today. At a time when a 10 per cent. saving of energy would yield £600 million, and a time when the Government are squandering hundreds of millions in unproductive areas of the economy, they are proposing a mere £3 million loan to help industry promote energy conservation projects.

There is also a proposal that there should be a 6 per cent. saving of energy in Government buildings. That is a minimal contribution which will have not even a psychological effect. What is the point of asking offices to lower their thermostats to 68 deg. F when the current normal level in most offices is 68 deg. to 70 deg. anyway?

There is also the Secretary of State's fifth proposal in this hotch-potch list that there will be urgent discussions with local authorities to encourage conservation. Why have these discussions not taken place before? I understand that they are only now opening up. What has the Department of Energy been doing all these months if the discussions are only now about to start?

There is also a proposal to improve thermal insulation standards, but even by doubling the level of the standards they will still be among the poorest in Europe. Even then they will apply only to new building. Why did the Government not bring in improvement grants, discretionary grants and tax allowances for thermal insulation months ago? This was something that the Secretary of State suggested many times before he took office. He said in the speech which has been quoted already, and which the right hon. Gentleman himself modestly admitted was such a good speech, a comprehensive fuel policy … calls also for new building standards and higher levels of insulation.—[OFFICIAL REPORT, 26th November 1973; Vol. 865, c. 55.] Why has he not done more to encourage that?

Apart from the short-term measures where we could have applied sensible economies months ago, there is nothing in the package to tackle the medium- and long-term problems. There are proposals for discussions with management and industry and for a publicity campaign which will begin over the months ahead. Why was such a campaign not launched in the last few months? Why are the extraordinary controls on display and advertising during daylight hours not due to start until the New Year? Other countries have imposed restrictions already and have achieved substantial savings.

Naturally only a moderate degree of saving can be achieved in the short term. We have not even seen that. The Government have done absolutely nothing to promote medium- and long-term conservation. For example, what has happened to the Central Policy Review Staff programme on energy conservation which was published last June? What have the Government done about the excellent recommendations from the Rothschild "think-tank"? What action have the Government taken towards allowing the price mechanism to have its effect? What have the Government done over the EEC recommendations on energy conservation policy, published last June or July not in the form of directives but as strong recommendations? They were sensible recommendations, but the Government have done nothing about them.

What have the Government done to direct the Central Electricity Generating Board to recycle waste heat? Even now plans are going ahead for the construction of new oil- and coal-fired power stations with a thermal efficiency of only 33 per cent. to 35 per cent. and with no effort made to use waste heat for district heating or for any other purpose. There are still statutory restraints imposed on the on-site generation of electricity, which could be far more efficient and which is done in other parts of the world.

When we come to the nuclear programme I must quote from the Secretary of State's excellent speech of last November when he said of the nuclear programme and the CEGB: There must be a complete re-examination of power station policy. There must be a decision about nuclear reactors which will ensure the quickest possible advance towards electricity generation by nuclear power"— [OFFICIAL REPORT, 26th November 1973; Vol. 865, c. 55.] I have not seen very much of that. Our nuclear programme is shameful compared with what is happening in France, where 50 per cent. nuclear power is expected by, I think, 1985; in Germany, with a similar programme; and the United States. Nothing in the proposals attempts to rectify the flagging coal production in this country. They only aggravate the problem and make it even more essential that the Government should have applied energy conservation programmes to save oil sooner than they have.

The Government have talked and not acted. They have shamefully wasted the country's resources. They have been disgracefully complacent. At a time when the country was waiting for a lead, and would have been ready to respond, we have a hotch-potch series of measures, and even the Secretary of State is not prepared to put a figure on the amount that will be saved.

The right hon. Gentleman should have acted months ago. There was nothing in the proposals that could not have been announced at least six months ago. Even now, the proposals are not effective enough to produce the sort of saving that other countries are already achieving, countries better placed than we are to finance oil imports.

It is time the Secretary of State became a little less complacent and got on with a policy that would make a contribution towards getting the country out of the economic mess that the Government are doing their best to get us into.

10.38 p.m.

Photo of Mr James Lamond Mr James Lamond , Oldham East

The speech of the hon. Member for New Forest (Mr. McNair-Wilson) was almost breath-taking in its impudence. He used the order as a means to rake over the embers of the last election, using what he seemed to assume was the impeccable background of the Daily Mail as his source of information about what was being concealed by the Labour Government to lull the electors into a false sense of security. He suggested that there was a deep-laid plot to bring in severe measures which we were afraid to reveal to the electors. But he then complained that the measures we had been trying to conceal in case we lost votes were not severe enough.

Like his right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), who appeared on television tonight, the hon. Gentleman refused to give any information about what the Opposition would have done in the present circumstances. He tried to answer an intervention by saying that it was the Government's duty to govern, and that they should tell us what should be done. That may be true, but there is also an obligation upon the Opposition to make clear their alternative policies if they are not satisfied with what the Government are doing.

At some stage I want to hear exactly what the Opposition propose that would achieve the savings that we all wish to see. Would they re-introduce rota working in factories as a fuel-saving measure? Would they reduce the temperature allowed in offices to 59 deg. F.? Would they reduce the speed limit on motorways to 40 mph or something of the sort? Perhaps that is the plan that they are afraid to reveal to us in case it rebounds on them at the coming election, whenever that may be.

Photo of Mr Patrick McNair-Wilson Mr Patrick McNair-Wilson , New Forest

The basis of our case is that a whole year has been wasted. Does the hon. Member for Old-ham, East (Mr. Lamond) not think that these measures should have been introduced at the beginning of the year and that we should not have allowed the spring, summer and autumn to go by without action being taken?

Photo of Mr James Lamond Mr James Lamond , Oldham East

My faith in the Opposition is not such that I can believe that they would have done anything of the kind, as they were so dilatory in taking action on anything else. For example, we had an attack towards the end of the speech of the hon. Member for New Forest about how we were making the fuel position more difficult by suggesting nationalisation of the oil companies. It was said that we should draft our tax legislation carefully in case we do anything which might disturb the basis on which the companies are proceeding.

I draw the attention of the House to the fact that the previous Tory Government when in office were so careful about how they drafted tax legislation concerning the oil companies that they did not draft anything.

Photo of Mr James Lamond Mr James Lamond , Oldham East

That is the record of the previous Tory Government, despite a report from the Public Accounts Committee which was produced quickly so that it might be presented to the then Chancellor of the Exchequer, Mr. Anthony Barber—now Lord Barber—to enable him to give the matter some consideration prior to his Budget. He did the Public Accounts Committee the honour of mentioning the matter in his Budget statement. He said that he had received the report and that it revealed disturbing matters concerning the oil companies. It was the unanimous view of the committee that tax dodging was involved. He said that he would take speedy action. Twelve months later the Chancellor made another appearance, and not one thing had been done about the matters that had been raised by the committee.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

Does the hon. Gentleman recognise that the matters to which he is referring were to have been introduced in Mr. Anthony Barber's next Budget, which for reasons of which we are all aware he was prevented from introducing at the beginning of this year? That was the intention.

Photo of Mr James Lamond Mr James Lamond , Oldham East

The then Chancellor had ample opportunity to take action on taxation matters which were costing the country £1,500 million in lost revenue. The present Government, who have been attacked viciously by the Opposition, have been taking action.

Photo of Mr Peter Rost Mr Peter Rost , Derbyshire South East

The hon. Member for Old-ham, East (Mr. Lamond) has referred to lost revenue of £1,500 million. Will he say how much oil was landed from the North Sea during the years of alleged delay?

Photo of Mr James Lamond Mr James Lamond , Oldham East

I am prepared to debate the whole matter. There was no revenue from the oil but the oil companies were building up considerable tax reserves to set against the future profits that they would make. In the end that was recognised not only by the Public Accounts Committee but by the then Chancellor of the Exchequer, without any dubiety or argument, to cost the British people £1,500 million in lost revenue. That was because of the manipulations that took place to ensure that the oil companies had tax losses to set against the tax which they would eventually have to pay. However, we can cheerfully let that matter rest, because this Labour Government were elected in good time to do something about it. I am sure that all my colleagues—Tory and Labour—on the Public Accounts Committee are glad that the change in Government took place in time for something to be done about it.

The hon. Member for New Forest ended his speech with a vicious attack on this legislation. That was rather surprising because, just before he launched that attack, he said that it was a piece of Tory legislation that we were seeking to renew. The allegations made by the hon. Gentleman, if true tonight, were true at the time that this legislation was introduced. Therefore, it is surprising that the hon. Gentleman should have supported it at that time.

10.46 p.m.

Photo of Mr Wyn Roberts Mr Wyn Roberts , Conway

The hon. Member for Oldham, East (Mr. Lamond) spoke of severe measures being necessary. I think that the Secretary of State for Energy announced some fairly severe measures this afternoon, but I am not convinced that he was thoroughly questioned on them. My speech is by way of a delayed question on the right hon. Gentleman's statement, but nevertheless pertinent to the order.

I particularly want to ask about the second of the Secretary of State's measures for conserving energy. The right hon. Gentleman said that the Government would use their powers to ensure that the next round of oil price increases bears more heavily on motor spirit than on other oil products.

I understand that of the total oil imports into this country, about one-fifth go into motor spirit. Does the right hon. Gentleman's statement mean that if oil prices generally go up by, say, X per cent., he intends to put up motor spirit by 5X per cent.? If so, bearing in mind that the last increase in oil prices was about 8·5p per gallon, can we expect an increase in petrol prices of five times that, which would be 42·5p? There has been a great deal of talk about petrol at £1 a gallon. Are we in fact on the verge of facing that possibility?

This is only one bit of highly dubious speculation that I have put before the House, but the Financial Times has been indulging in other speculation. In an article on petrol prices on 13th November it said: if the Government decided to make them"— the oil companies— put the full weight of this on petrol rather than other types of fuel such as heating oil or diesel oil, the increase could be 7p a gallon. Unlike the petrol revenue duty, which has remained constant at 22·5p a gallon, VAT increases automatically with any rise in pump prices. Thus the VAT at 25 per cent. will increase by one-quarter any price rises which the oil companies make.As a result, petrol could go up by another 10p a gallon before Christmas. It seems that the choice is anything between an increase of 10p a gallon or my speculative 42p a gallon. Which is it to be? After the right hon. Gentleman's statement this afternoon, we are entitled to know, because it affects the thinking of a great many people in this country.

I happen to be concerned with the prospects for the rural areas. I have already been approached by the Motor Agents Association, which tells me that small petrol stations in the rural areas will be knocked out of business altogether. I am particularly concerned about that aspect of the matter, but surely, especially these days, we are all concerned about the car industry, and the likely increase in petrol prices, whatever it may be, will certainly have a tremendous effect on car manufacturing in this country.

I end with another quotation from the same edition of the Financial Times:The average motorist, driving 10,000 a year with a car such as a Cortina which returns 25 mpg, will find Mr. Healey's measures adding £34 a year to his costs. The oil companies' increases, if granted, will add another £40 to that. And, if he does not reduce his annual mileage, motoring in 1975 will cost him £288 in petrol alone, £144 more than in 1973. This was meant to be a supplementary question to follow the right hon. Gentleman's statement this afternoon and I am grateful to you, Mr. Deputy Speaker, for allowing me to put it at such length.

10.52 p.m.

Photo of Dennis Skinner Dennis Skinner , Bolsover

I intervene in the debate because, like the hon. Member for Conway (Mr. Roberts), I did not have the opportunity to question my right hon. Friend when he made his statement this afternoon on energy conservation. I took especial note to see who was called, and I saw that on my side of the House the emphasis was on those who are known to be extremist in these matters—[HON. MEMBERS: "And the Common Market? "] On matters such as the Common Market I am very much a moderate.

I should first like to deal with the hon. Member for Derbyshire, South-East (Mr. Rost)—or is it for The Hague? He remembers The Hague very well and remembers the company he kept on that occasion, but there will be other occasions nearer the next election to go into that matter. What astounds me is that the hon. Member should have the audacity to talk about energy saving.

I recall a right hon. Gentleman opposite, who was then in a fairly prominent position—I think that he was Prime Minister at the time and he is certainly very much the Leader of the Opposition now—at any rate, he is one of the Opposition leaders—being involved in a peculiar affair connected with fuel saving. Rumour has it that he got as far as the bottom of Whitehall and then got involved in a traffic jam. So incensed was the then Prime Minister and so little concerned was he with saving energy that he telephoned Tokyo to ensure that he had the privilege of going the extra 150 yards from the bottom of Whitehall to Downing Street. Now the Opposition have the cheek and audacity to talk about energy saving.

Photo of Mr James Lamond Mr James Lamond , Oldham East

My hon. Friend is not entirely fair, because the suggestions by hon. Members opposite included cleaning one's teeth in the dark, which might have compensated for the energy used in the incident of which my hon. Friend is speaking.

Photo of Dennis Skinner Dennis Skinner , Bolsover

That suggestion landed the right hon. Member for Wanstead and Woodford (Mr. Jenkin), who is lying fast asleep on the Front Bench, in serious trouble, and cohorts of journalists ran to his house complete with their cameras.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Redbridge Wanstead and Woodford

I am grateful to the hon. Member for giving way. Would he comment on the fact that, although it took me only two days to go on television and apologise to the public for having made a boob, it has taken the right hon. Gentleman the Secretary of State nine months to come up with a proper energy-saving programme?

Photo of Dennis Skinner Dennis Skinner , Bolsover

I watch the television avidly, and I cannot remember the right hon. Gentleman apologising for everything that he did. One of the characteristics of the Conservative Government was their complete and utter obstinacy on almost every issue, particularly the Common Market. I think that I carry the right hon. Member for Down, South (Mr. Powell) with me when I say that.

Can you recall, Mr. Deputy Speaker, before you were in the inflated position that you now occupy—

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

On a point of order, Mr. Deputy Speaker. Surely the hon. Gentleman is being discourteous to the Chair. I hope he will withdraw what he said.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

I think that the hon. Member for Bolsover (Mr. Skinner) was looking for a complimentary term but could not find one.

Photo of Dennis Skinner Dennis Skinner , Bolsover

What I said was meant in the nicest possible way, Mr. Deputy Speaker, and I hope you will regard the matter as frivolous. I hope, further, that when I want to take the opportunity of making a few more points on other occasions when you are in the Chair you will remember that any remarks I make about you will to all intents and purposes be extremely complimentary.

Just after the order that we are renewing tonight was originally brought into effect, the then Prime Minister toured the country in an aeroplane, making about seven trips in all. Those were in the halcyon days of Court Line. One notices that the Liberal Party is not represented here tonight. Liberal Members have something to say about energy problems so long as the debate starts before 10 o'clock. The Leader of the Liberal Party used a hovercraft during the October election.

When it comes to questions of energy saving it is abundantly clear that there are faults on both sides of the House, and it is always possible to find contradictions in the policies that have been adopted. But it ill behoves Conservative Members to suggest that attempts are not being made to conserve energy supplies. Today's measures represent one such attempt. We may argue about whether this is the programme that we want, but a useful attempt has been made to save energy. We shall probably have to take stricter and sterner measures before the job is completed, as my hon. Friend the Member for Keighley (Mr. Cryer) said earlier.

My hon. Friend also raised the question of minibus operators using routes covered by public transport undertakings, such as the National Bus Company, and so on. During the bus strike in my constituency at the time of the election one of the grouses of those concerned—apart from the wage issue—was over the fact that the Secretary of State had the power to allow minibus operators to operate on normal service runs and to pick up passengers at normal bus stops. They were operating as blacklegs, and that is something to which my right hon. Friend should be alerted. I hope that he will deal with the matter in due course.

There is nothing in the order that refers to the European Economic Community as such. I have been trying hard to put my finger on what troubles me about these provisions. One thing I notice is that the order might well be subjugated to the energy proposals issued by the Commission during recent months. Some measures, such as the one which we discussed last week and which has been adjourned till tomorrow, may well be overruled by other proposals. It is therefore important that the decision which the British people will take ensures that any other emergency measures introduced by the Government are not ditched as a result of the overall policy of the Common Market.

I said at the outset that I wished to say a few words about my right hon. Friend's statement. He referred to the question of having discussions with the local authorities and with other public bodies about the use of coal and energy saving. That is fine, and I agree with it. I know that my right hon. Friend is an ex-miner and that he understands the position, but it needs to be spelled out even more forthrightly than perhaps he would have spelled it out had he had the opportunity to reply to me earlier today.

In all my right hon. Friend's discussions, I hope that he will say, "Use coal more efficiently and do all that can be done to save fuel, but do not pursue the exercise which was followed in the late 1940s and early 1950s when great pressure was put on public bodies and local authorities to utilise coal while those in the gigantic, powerful oil lobby were always waiting round the corner, like pimps waiting for prostitutes". They are waiting there again. Even though there may be an oil shortage and it may be much dearer—five times dearer, I am told—than it was 12 months ago, if my right hon. Friend pushes local authorities too hard he may push them into the trap. I want him to ensure, as I am sure he will, that the advice he gives does not lead to wrong decisions being made by public and local authorities.

11.3 p.m.

Photo of Mr Edwin Wainwright Mr Edwin Wainwright , Dearne Valley

Listening to my hon. Friend the Member for Bolsover (Mr. Skinner) gives me the impression that this is a very serious debate. It is one of the most serious debates that we could have. I am wondering what business people will think when they read reports of this debate. The impression which is given is that industry is indifferent to the use of fuel and that it uses much more of it than is required to run industry. In fact, the purpose of the order is to control the use of fuel by people who are using it carelessly.

It would seem that fuel is far too cheap. It worries me that we should be so inefficient in our use of fuel that that impression should be given.

People use power carelessly. They may switch on an electric light which they do not need and have lights blazing in four or five rooms, but that happens at night when the needs of industry are not so great. It is the daytime misuse of power that is of importance to industry.

We are going through a period when power is in short supply, but when I listen to Opposition spokesmen I wonder whether there is an oil crisis. We have had an oil crisis for 12 months, and the Conservatives brought in restrictions which were of no avail. When I remember the three-day week and how it hurt industry I wonder whether the Conservatives are concerned about the needs of the nation or are pursuing some capitalistic policy against the Labour Government.

My right hon. Friend the Chancellor of the Exchequer is in Saudi Arabia trying to ease the oil supply position, which is the main cause of the crisis. Increased oil prices such as we have had in the last 12 months cause havoc in countries which have no oil supply of their own. Many under-developed and developing countries are in a worse plight than we are.

The hon. Member for Derbyshire, South-East (Mr. Rost) talked about nuclear power, but he said nothing about nuclear waste, which might greatly harm future generations. In years to come I believe that nuclear power will be the world's main source of energy, but we must do more research on nuclear waste. Unless we do, we shall pass on to future generations terrible harm which we shall not ourselves experience.

Photo of Mr Bob Cryer Mr Bob Cryer , Keighley

Does my hon. Friend accept that both peaceful and warlike uses of nuclear power produce fissionable material which has these dangers?

Photo of Mr Edwin Wainwright Mr Edwin Wainwright , Dearne Valley

Yes, there is great danger unless more research is done. We talk glibly about nuclear power without considering its effects.

The debate is depressing. It suggests that we do not appreciate the need for the best utilisation of fuel and energy. Business men should be examining their plants and factories to ensure that they are run efficiently, without waste.

The Minister in reply should say how much will be saved by motorists having to keep their speed down to 60 mph on some major roads and to 50 mph on other roads. I believe that at the end of the day we shall find that very little saving will result. At the same time I believe that we should appeal to industry and to people in their everyday lives to save as much fuel as possible to ensure that Britain gets over the present fuel crisis.

11.10 p.m.

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

One of the most daunting things about the statement made this afternoon by my right hon. Friend the Secretary of State for Energy was that he admitted he did not know the extent of the savings that were to be made. There was a revealing piece in one of the Sunday newspapers to the effect that the Central Policy Review Staff—the "think tank" as it is sometimes called—had looked at the savings and estimated that they would be no more than a token figure. It leads one to think that this is all no more than a public relations exercise.

I ask hon. Members to cast their minds back a year to the time when the then Secretary of State for Energy and his colleagues in the Conservative Government announced a "Switch off something" campaign. That campaign cost £2½ million and resulted in very little saving in real terms. Floodlighting was turned off at football matches and there was no dog racing, but cinemas were allowed to continue to use energy. Action of that kind can only upset and antagonise the public and can sometimes result in a backlash.

This is the danger of the present action. It is an "Austerity Cripps" attitude, an attitude embodied in the phrase "We know what is good for the public. We are the nannies. You have to take this bad medicine because it is necessary for you to take it".

However, one has only to look into the matter to see how negligible the savings are. For example, my right hon. Friend the Minister for Transport this afternoon announced a lowering of speed limits. That action will save £10 million—£10 million out of an oil deficit of £2,500 million, or one-third of 1 per cent. Such action antagonises the motorist and makes more work for the police. The public constantly have the feeling that they must go around in sackcloth and ashes and that they are having to pay for the sins of the politicians. All this follows a week without bread and a period when there has been no sugar on the shelves. We have built up an atmosphere of despondency, and we shall get less and less public response because people feel that the politicians do not know what they are doing.

What will be the effect of the switching off of neon signs during daylight hours? What will be the effect if members of the public switch off the odd electric light or read by candlelight in bed? How does one enforce a limit of 68 degrees Farenheit? Will inspectors go into shops and public places, and if a thermometer shows 69 degrees will they prosecute the offender for wasting one degree of heat from electricity?

If the Government mean what they say and there is a need to conserve energy, why do they not have the guts—this certainly applied to the Conservative Government when a similar situation arose last year—to bring in petrol rationing? If there is a need to conserve energy, is it really right that somebody should be able to drive around all week in a Rolls-Royce with no restriction at all? In some rural constituencies where there are few buses and no stations, a worker in many instances has to have a car to get and keep a job. In these days the right to work often depends on a man having a car. That is certainly the position in Bassetlaw in regard to the Trent power station.

This is a serious matter. The "Scot Nats" are making a great deal of political capital out of it in their part of the country because they feel that workers are being penalised since an ever greater proportion of their wages is spent on simply getting to work. When they ask for a pay rise to pay for this, they are told, "You are breaking the social contract." No one says that the Government are breaking it by raising their cost of living or their costs in getting to work. It is apparently only the trade unions which are breaking the social contract by asking for more money. All of us who represent poor rural areas of working-class people know of the letters we receive asking why we do not remove the vehicle excise duty or take other action to give some sort of tax relief.

We are penalising one section of the community with these powers. We are not penalising those who ride to work on at tube train or a bus. There are no buses and no tube trains in my constituency. Travel to work depends on the petrol that is put into the car's tank at the pump. As the hon. Member for Conway (Mr. Roberts) mentioned, more and more rural petrol stations are going out of business. We shall soon reach a situation in which a man who cannot afford a car or who cannot drive on will be on the dole. We are heading that way all the time.

If there were an emphasis by the present Government, or if there had been an emphasis a year ago by the previous Government, to make specific savings by fuel rationing, which would be fair to everyone, or perhaps by staggering hours in industry, even by only an hour or two daily, many people would be prepared to accept it. It would also help in relation to the rush hours. They would accept it if there was talk of dispensing with aircraft carriers and thus burning less fuel, or if we cut the number of flights to Paris or New York and reduced the business man's choice to six instead of 10 flights. Anyone who has taken a night flight to New York will know that they are usually only half full.

But only one section of the public is being made to have cold offices and to switch off neon signs. Their floodlit football matches are being stopped, while they cannot reach work or afford to get to work. The present Government are doing this. They are building up an atmosphere of gloom and despondency, which will continually make the man in industry fight back. It is the "thou shalt not" attitude.

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

Will my hon. Friend tell me where, in the energy conservation measures which I announced today, there was mention of switching off floodlights at football matches?

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

When he announced these measures the Minister said that he had not finished, and that he would return with another package deal, and he may well do so. In case he does, I am warning him now that it is this sort of interference with the little pleasure and leisure of the working man that gets his back up. If there was one thing which caused the Tories to lose the February General Election, it was the switching off of television at 10.30 p.m. I stand to be corrected about what was said earlier today, and I shall check it in HANSARD, but I am fairly certain that the Minister said he would come back later with another package. Only he knows what he will return with.

I conclude by warning my right hon. Friend, who knows working-class people as well as we do—

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

I thank my hon. Friend very much.

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

—that he ought not to take the advice of "think tanks" or civil servants with their slide rules. He ought to remember a little more the political impact on ordinary workers who are getting a little fed up with seeing the rich getting away with using all the energy they like and the poor being rationed by price.

11.18 p.m.

Photo of Mr John Smith Mr John Smith , Lanarkshire North

With the leave of the House, perhaps I may conclude the debate by referring to some of the points that have been raised.

Quite understandably, a great deal of the contributions have referred to the energy conservation programme announced by my right hon. Friend the Secretary of State this afternoon. He has been criticised for what it contains, and he has been criticised by my hon. Friend the Member for Bassetlaw (Mr. Ashton) for what it does not contain. May I make clear, however, as my right hon. Friend made clear this afternoon, that the Government will consider carefully any practical suggestions on energy conservation, from whatever quarter they come. For example, some of the matters raised by my hon. Friend the Member for Keighley (Mr. Cryer) will be considered carefully by the Government.

The hon. Member for New Forest (Mr. McNair-Wilson) asked how many times the authority under Section 4(2) of the Act had been used. That is the authority which permits the giving of lifts on an expense-sharing basis. The answer is that, as this is a general authority, by definition it is not known how many vehicle owners have made use of it.

The hon. Member for Conway (Mr. Roberts) raised the question of increases in the price of oil. He will know that the oil companies have recently made applications to the Price Commission, and these will have to be considered by the commission before the Government can reach a view on them.

A number of criticisms were made of the statement made by my right hon. Friend this afternoon. Some were made by the hon. Member for Derbyshire, South-East (Mr. Rost), who has not seen fit to wait to listen to the reply to the debate. In his and other contributions it was noticeable that, although some Opposition Members were prepared to criticise the measures proposed by my right hon. Friend, there was little inclination on their part to suggest the measures he should have taken. That was noticeable in the response of the Opposition today. There was not much in the way of constructive suggestion.

On a matter like energy conservation, on which the Government have to reach a conclusion in a balanced way, the obligation is on those who criticise what is in the statement to suggest what alternatives it should contain. Until that task is undertaken and the critics of the Government's policy shoulder that responsibility, not much credibility can be attached to the attacks they make. That point was driven home forcibly in the contribution of my hon. Friend the Member for Oldham, East (Mr. Lamond).

My hon. Friend the Member for Keighley raised the question of the powers in Section 4 of the Act. The way in which the Act was framed—as my hon. Friend knows, it was introduced by the Conservative Government in 1973—was such that if we seek to perpetuate it we must perpetuate it as a package. We cannot pick and choose which of the sections between 1 and 8 we would like to continue in operation, because Section 10 of the Act makes it quite clear that it must be taken as a package. Therefore, it is not possible for the Government to say "We will have Sections 1 to 3 or Sections 5 to 7". We must have Sections 1 to 8 as a whole.

My hon. Friend will recall the purposes which I outlined in introducing the order. The Government have no intention of widening the use of the powers open to them under the Act. This is a convenient method readily to hand to fulfil some of the purposes, in particular measures for energy conservation.

Photo of Mr Wyn Roberts Mr Wyn Roberts , Conway

What sort of percentage increase in price is envisaged for motor spirit when the applications come before the Price Commission?

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I do not think that the hon. Gentleman seriously expects me to anticipate amongst other things the findings of the Price Commission. I will not be tempted by him into doing that.

The general lines of the Government's policy were made clear in the Budget and in my right hon. Friend's statement this afternoon. A great deal of criticism was directed at the Government by the hon. Member for New Forest about their alleged inactivity in energy conservation. The Government have today put forward a wide measure of proposals. As the right hon. Member for Wanstead and Woodford (Mr. Jenkin) conceded in an interjection, it is a proper energy-saving programme. Of course it is. That is why the right hon. Gentleman did not manage to say much by way of criticism this afternoon.

The question of energy conservation is of paramount importance to the whole nation. It should not be a matter of partisan or party political debate in the House. That is why my right hon. Friend said that he would listen to practical, constructive suggestions, from whatever quarter they emanated.

Under the Labour Government the Department of Energy has been engaged in a wide-ranging review of the problem which has led to these proposals. The Department has been active on other fronts as well. One would have thought from the criticism which has been levelled at us that the Department of Energy did nothing but concern itself with energy conservation. That is not the case. We are at the moment engaged in renegotiating with the oil companies the matter of existing licences. In the New Year we shall be introducing legislation to put into effect the Government's proposals. My right hon. Friend has taken major decisions which had been dodged for a long time on nuclear energy. He is engaged in extensive consultation on the coal industry. These are all measures designed to make better use of our indigenous resources.

We have approached the matter from two points of view. We must develop our new resources, particularly those in the North Sea, and the Government will make sure that they are used for the benefit of and that the profits will accrue to the people of this country. We must adopt all reasonable measures to save energy and not return to an era of doom and gloom with quota cuts such as we had under the previous administration, but follow a reasonable and sensible policy of energy conservation, which will last not in a gimmicky way for six months but for four or five years.

The announcement made by my right hon. Friend is designed to achieve that effect. As he has indicated, the matter will be kept under review and if other successful measures can be adopted the Government will not be slow to do so.

Photo of Mr Bob Cryer Mr Bob Cryer , Keighley

My hon. Friend has been very kind in answering the various points which have been raised in the debate. Can he assure us that the Department of Energy will prepare its own legislation? The order is for 12 months. Can he give an assurance that during that period he will prepare special legislation? I do not like to see this sort of thing under Section 4 which could be used in the way described by my hon. Friend the Member for Bolsover (Mr. Skinner).

Photo of Mr John Smith Mr John Smith , Lanarkshire North

I take the point that this method of doing it is far from ideal. It is extremely convenient in the present circumstances, but we are giving consideration to other legislation, not only in the Department of Energy but in other Government Departments, to achieve some of the objectives which we may want to keep in force. I take my hon. Friend's point.

Question put and agreed to.

Resolved,That the Fuel and Electricity (Control) Act 1973 (Continuation) Order 1974 (S.I., 1974, No. 1893), a copy of which was laid before this House on 20th November, be approved.