Orders of the Day — ENERGY BILL [Lords]

Part of the debate – in the House of Commons at 12:00 am on 15th June 1976.

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Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock and Port Glasgow 12:00 am, 15th June 1976

I beg to move, That the Bill be now read a Second time.

The Bill, as Members will realise, was taken first in another place because of the pressure of business here at the time of introduction. It has been changed in a number of ways. In some cases I shall be able to commend these changes to the House. In others I shall later explain why the changes are unacceptable to the Government and that we aim to remedy such defects during the passage of the Bill through this House.

I should like to explain first in general terms the aims of the Bill and then refer briefly to each of the main clauses to provide the House with a little more detail of key provisions. The Bill will supersede the Fuel and Electricity (Control) Act 1973 and is required to give the Government permanent powers to meet United Kingdom obligations under the Agreement on an International Energy Programme and obligations as a member of the European Communities, and to develop the Government's policies for the conservation of energy.

Therefore, this is an important Bill from both a domestic as well as an international point of view. However if hon. Members look closely at the Bill they will see that in many important respects, notably Clauses 1, 2 and 4, it re-enacts key provisions of the Fuel and Electricity (Control) Act 1973 giving the Government powers to act in an energy emergency. As concerns the actual powers to be available for such crises, therefore, the Bill touches no new ground. I shall deal later with the "triggering" provisions in Clause 3 which differentiate between a "domestic" and an "international" crisis.

We touch new territory in the provisions affording power to conserve energy—the basic power affecting use of energy is contained in Clause 3(3)—and other more specific conservation measures in Clauses 8 to 12 inclusive. Most of the other provisions arise, as does Clause 11 on the fuelling of new and converted power stations, from our international obligations to the International Energy Agency or the EEC.

To deal first with the general background to our IEA obligations, the Agreement on an International Energy Programme entered into force on 19th January 1976 for States, including ours, which have notified consent to be bound by its terms. Under the agreement we are required to have available powers which will enable us to impose restrictions on the supply and use of energy in an emergency, to meet our obligations to hold a minimum level of oil stocks and to provide information to the International Energy Agency. Some of these obligations can be met under the 1973 Act, but that Act requires annual parliamentary approval for renewal and is therefore not a satisfactory basis for the fulfilment of international obligations.

For that purpose, the requisite powers must be permanently available, and seen to be so by other signatories to the international agreement. Furthermore, the 1973 Act was designed to meet an emergency, not to meet the requirements of a long-term programme of international co-operation. It does not, for example, provide wide enough powers in respect of information, which is an important element of the International Energy Programme.

In order to prepare for an oil emergency, we need to have permanently available powers which will enable the United Kingdom to meet its obligations as a participant in the International Energy Programme's oil-sharing scheme. Among other things, this requires the United Kingdom to be able to reduce oil demand by the amounts specified in the IEP agreement and to direct United Kingdom oil companies to reallocate supplies amongst themselves and, if necessary, to supply companies in other countries. We have decided, therefore, that the crisis management powers contained in the 1973 Act should be permanently available, but we recognise that they should be exercisable only for IEP purposes at time when the IEP agreement requires them. The IEP agreement defines these circumstances, and hon. Members will note the Government's intention that the extensive powers to control production, acquisition, supply or use by order or direction should be used only after Her Majesty has, by Order in Council, activated them as a result of an oil emergency being declared by the members of the International Energy Agency.

In another place it was suggested that the original wording of Clause 3(1) in this respect might not make this declared intention crystal clear, and the clause now contains in subsection (1)(a) a compromise formula which in the Government's view puts the situation beyond any doubt.

The IEP agreement also requires us, as part of its provision for cushioning the effect of an oil shortage, to hold a minimum level of oil stocks. We are therefore seeking powers in the Bill which will enable us to meet similar EEC obligations to hold 90 days' stocks of oil.

We have also to bear in mind the continuing need to have available contingency measures for controlling the production. acquisition, use and supply of energy, and for regulating oil prices, during a domestic energy emergency. I am sure that hon. Members will agree that it would be prudent to retain powers similar to those in the 1973 Act for domestic crisis management, subject, of course, as hon. Members will see from Clause 3, to the same degree of parliamentary control as provided in that Act. Here again the wording of the provision in subsection (1)(b) about "domestic" emergencies has been clarified after exchanges in another place.

To turn to the energy conservation aims of the Bill, the Government's objective following the 1973 oil crisis and the ensuing sharp increases in energy prices has been to encourage greater efficiency in energy use and stimulate consumers to help themselves by saving energy. Much of our effort has thus been by exhortation and example, by information and advice; but in some areas voluntary restraint is insufficient and reinforcement through the statute book is appropriate. Certain measures are already in force under the 1973 Act affecting heating levels, speed limits and advertising lighting. These will be kept under review, but the present intention is that they will be continued under the Bill.

Powers are, however, needed to permit us to introduce new measures as and when the Government consider them to be necessary in support of the encouraging efforts being made to save energy throughout the economy. We are therefore proposing that the power to control the use of energy and the power to alter statutory provisions relating to the use of energy substances, similar to those in the Fuel and Electricity (Control) Act 1973, will be permanently available; but except in emergency the power to control the use of energy will be exercisable only for energy conservation purposes, only after consultation with those affected and with suitable advisory bodies, and only by Order, which will be subject to negative resolution procedure and thus to the control of Parliament.

The Government have also decided to include a new power to subject fuel consumption in cars to a standard test, the results of which will be published, thus enabling car-buyers to make a more reliable comparison of a car's fuel consumption when contemplating buying a car. Again, I shall say more of that provision later, since recent discussions have taken place with the industry following exchanges in another place on some aspects of this clause.

We are replacing Section 9 of the Continental Shelf Act 1964 by Clause 8 of the Bill, which would thus establish the ongoing régime over the supply and use of natural gas from the United Kingdom Continental Shelf. Much of the clause is designed to remove technical anomalies in the present situation, especially in the treatment of gas distilled from North Sea crude.