Eec (Energy Policy)

Part of the debate – in the House of Commons at 7:00 pm on 11th February 1975.

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Photo of Mr Frank Hooley Mr Frank Hooley , Sheffield, Heeley 7:00 pm, 11th February 1975

One of the major curiosities of the document that we are considering, R/3333/74, is that it did not emerge until as late as December 1974. It is curious that the Common Market Commission never devoted its mind to such an important matter as energy until 17 years after the Common Market began to function. It is clear that the reason is a sudden neurotic obsession with the oil crisis and some of the consequences for the Common Market organisation.

It is argued that we paid no attention to the matter. That is not true. Way back in 1967 the present Chairman of British Rail laid a document before the House in an endeavour to develop some sort of fuel policy for Britain. He was criticised for doing so.

The document that we are debating is dominated by the three classic and disastrous Common Market dogmas—namely, harmonisation, self-sufficiency and free competition. On harmonisation, in page 2 of the document dealing with oil prices we read: The fact that Member States are unequally affected exacerbates the dangers to the extent that it risks comprising the internal cohesion of the Community and its capacity to progress towards the definition of common policies. The Community is obsessed with the internal cohesion of the Community and not necessarily with the more important interests of the countries within the Community and the people who live in them. That theme runs right through the document.

Next, I turn to self-sufficiency. The Commission must accept that there is not oil within the Common Market area to supply the Community's needs. Therefore, it argues powerfully for cutting down the two-thirds' dependence on oil—that is, roughly the present figure—to a level of two-fifths. The document puts forward an extraordinary programme for electricity by nuclear generation.

Finally, free competition. There is the usual statement on page 8, which reads: Apart from the efforts of Member States, this action"— that is, energy saving— should be at Community level whenever there is the possibility that the free movement of goods or the free play of competition within the Common Market could be jeopardised. We have there all the usual dogma.

The fact is that in terms of energy policy there is an important international consideration to be borne in mind by this and every other country. If the United Kingdom ever wants extra natural gas, we shall go to Norway for it. If we need uranium for our nuclear policy, we shall go to Canada, Australia or South Africa. If we need extra supplies of oil during the next four or five years before we can exploit indigenous resources, we shall go to Nigeria, Libya or the Middle East. Not on any of those accounts shall we go near the Common Market, because it cannot supply our needs and would not pretend that it could.

I want to raise another point which is important in this concept of quasi-self-sufficiency in power as expressed in this document. Over the weekend my right hon. Friend the Prime Minister referred to the undesirability of the formation of great raw material producer cartels such as OPEC, and he mentioned the possibility of a copper cartel, a bauxite cartel, and possibly cartels for tea, coffee, tin, and so on. That is a potential danger to international trade, but it is a danger that will be exacerbated enormously if Western European industrial countries continue to gang up in various ways, as they tried to do with sugar—fortunately unsuccessfully—and as they are now trying to do on oil consumption, and arrange a position under which their interests dominate, irrespective of the interests of the producer countries.

It would be infinitely more sensible for Western European countries to join other great industrial nations, such as the United States, Japan, Canada and Australia, and enter into real, serious and genuine negotiations aimed at arriving at a mutual balance of interest, rather than produce documents of this kind which are obsessed with the necessity of cutting down oil consumption for their own economic purposes, irrespective of the possible impact of that policy on the major oil-producing countries.

It may be that through international agreement there would emerge a policy under which the sort of figures which the document has produced would prove to be relevant for consumption by Western Europe. I should not care to predict that one way or the other, but what is dangerous, because it will provoke counteraction by OPEC and the oil countries generally, is to set out deliberately to produce a policy under which we say that we dislike this two-thirds dependence on oil and, therefore, we shall cut it down.

It is dangerous to say that even if the ultimate consumption remains the same we want a two-fifths and not a two-thirds policy and that we shall pursue that policy without prior discussion with the major producing countries, without consideration of the effect upon their economies, and without, I fear, serious consideration of the possible effects on prices, production and the attitude which those countries will adopt when they see this written down as Common Market policy. There is an important case for looking at that aspect of the whole document.

The most interesting comment made by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) was that the document totally ignores the International Energy Authority and the negotiations which had gone on, but the possibility of another oil emergency—