Cromarty Petroleum

Schedule – in the House of Commons at 12:00 am on 25th October 1976.

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1.2 a.m.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

I beg to move Amendment No. 2, in page 2, line 25, at end add 'by way of long lease'.

Mr. Deputy Speaker:

With this amendment we shall also take the following amendments:

No. 3, in page 3, line 22, leave out from beginning to end of line 35 and insert— '4.—(1) Subject to the provisions of this Order, the Company may require the owners of the lands delineated on the deposited plan and described in the deposited book of reference to grant a 99-year lease of the said lands at an annual rental to the Company solely for the purpose of establishing the marine terminal facilities and crude oil refinery and associated storage facilities mentioned in the preamble to this Order or for any purpose connected therewith or ancillary thereto.(2) The terms of the lease which shall include a landscaping clause by default of agreement between the Company and the owners shall be settled by an arbitrator appointed by the Professor of Conveyancing at Edinburgh University.(3) The powers of the Company to requisition a lease under this section shall not be exercised after 31st December 1978.(4) The costs, charges and expenses of obtaining the lease shall be met by the Company.' No. 5, in page 3, line 35, at end insert— '(4) The Company shall not dispose of by any means the lands acquired under this Act prior to 31st December 1978, provided that if the powers under this section have not been activated by 31st December 1978 the Company shall return ownership of the lands to those who were the owners prior to this Act.'

Photo of Mr Roger Moate Mr Roger Moate , Faversham

Now that the House has decided that the Bill deserves further consideration, I hope that hon. Members who have taken a different line on the principles of the matter will now consider that amendment on its merits and decide that it deserves their support.

It has been maintained all along that it is not necessary compulsorily to purchase this land or transfer the freehold of the land to the company to enable the oil refinery to proceed. The whole purpose of the amendment is to provide for the company to receive the land, but on the basis of a 99-year lease.

Earlier I quoted an extract from Mr. Maycock's report in which he cast doubt on the reasons for the company proceeding in this way because they had been offered a 99-year lease by Mr. Michael Nightingale on behalf of the trustees of the estate. He was satisfied that a lease was a valid proposition. Not even the most optimistic of us expects that the lifetime of the oilfield will be as long as 99 years. One lives in hopes, but 99 years is surely far beyond the lifetime of oilfields as considered by most of us.

In the normal course of events the matter would be negotiable on the basis of a 99-year lease, and it will be argued that this was a matter that was considered by the Parliamentary Commission. My hon. Friend the Member for Fife, East (Sir J. Gilmour), who was one of the Parliamentary Commissioners, made the point that he regarded a lease as an unsatisfactory arrangement principally because much of the land would have to be dredged away and a lease would not be appropriate in such circumstances. I draw attention to the headings of a draft lease sent to the company which would have covered this point. That presented no problem. The draft lease said that if there were any variation in the plan which had the effect of reducing the solid land owned by the landlord at the end of the lease the tenant would transfer an equivalent acreage of his own land adjoining the northern boundary to the site at no charge. It may be that that is not a satisfactory offer. I make the point that the dredging aspect had been considered fully by the owner of the land and was not an insufferable objection.

In that respect I regret to say that the Parliamentary Commissioners did not give the fullest consideration to this matter. This question of the lease has been a source of great argument over the years. I cannot see why a genuine offer of a lease could not have been accepted by the company. Had it gone in with a will to negotiate a lease the whole matter could have been settled a long time ago. I believe that the company has rejected genuine offers of a lease for one reason. I have been given a considerable amount of the correspondence between Mr. Nightingale and Cromarty Petroleum or its solicitors. This suggests that genuine offers have been made and that the company has been determined from the beginning not to accept a lease. It has stated its objections, which may or may not be valid. Personally, until such time as the company advances rather stronger reasons it will seem to me that the main reason must be that a leasehold arrangement reduces in many respects the resale value of the land. That is the only overriding objection I can see. If the company accepts the lease it would strengthen its case for the acquisition of the land.

The amendment says that the land shall be acquired by lease and it lays down the terms on which it should be done. The company said that it would be hard to negotiate appropriate arrangements, for landscaping, for example. It said that it would be difficult to negotiate agreeable terms when the owner of the land was avowedly against the concept. The amendment makes it clear that these matters can be settled by an arbitrator: appointed by the Professor of Conveyancing at Edinburgh University. What could be more reasonable than that? If Parliament decides that the project should proceed the owner of the land, or the man acting for the trustees, has said that he will reluctantly accept that. He has said that he will negotiate a lease in good faith.

Photo of Mr Hugh McCartney Mr Hugh McCartney , Dunbartonshire Central

Will the hon. Gentleman tell the House when these alleged leases were offered to Cromarty Petroleum and what were their terms? Is he also suggesting that in these amendments the landlord and Mr. Nightingale should retain feudal rights over what should take place on the land?

Photo of Mr Roger Moate Mr Roger Moate , Faversham

I do not wish to bore the House by reading all of the leases. I shall refer briefly to them because there seems to have been some misleading of the public and the House by the company. It may even be that the hon. Member has not been as fully informed as he ought to have been if he has been in contact with the company, and I gather from his earlier remarks that he is fairly well informed on this.

Photo of Mr Hugh McCartney Mr Hugh McCartney , Dunbartonshire Central

I was one of the Commissioners.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

I did not appreciate that. I am glad that the hon. Gentleman made the point.

I said that there has been some misleading. I refer to the advertisement published in many newspapers. I quote the Ross-shire Journal of 8th October: No actual lease has been offered to the company by the landowner. It went on to quote matters that I have already dealt with.

Frankly, it is almost untrue. It is certainly a half-truth. Technically, no actual lease was offered. But when does one go into negotiations offering a complete lease? One starts with the heads of agreement and proceeds from there. That normal procedure was adopted.

Mr. Wells:

As I understood it, Mr. Nightingale offered a lease to the company immediately before the hearing.

Photo of Mr Hugh McCartney Mr Hugh McCartney , Dunbartonshire Central

On a point of order, Mr. Deputy Speaker. Is it in order for another hon. Member to intervene when the hon. Member for Faversham (Mr. Moate) is answering a question put to him in a previous intervention?

Mr. Wells:

Of course it is.

Mr. Deputy Speaker:

When I need some help from the hon. Member. I shall be prepared to ask for it, Mr. Moate.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

I give way to my hon. Friend the Member for Maidstone (Mr. Wells).

Photo of Mr Hugh McCartney Mr Hugh McCartney , Dunbartonshire Central

On a point of order, Mr. Deputy Speaker. For verification, may I ask whether you were speaking to the hon. Member for Maidstone (Mr. Wells) or to me? I was not giving you advice, Mr. Deputy Speaker. I was asking you a question.

Mr. Deputy Speaker:

To answer the hon. Member's point, I was addressing the hon. Member for Maidstone (Mr. Wells).

Mr. Wells:

I am grateful to you, Mr. Deputy Speaker. The point I was seeking to make was that I understood that Mr. Nightingale offered a lease before the hearing in Edinburgh in front of the Commissioners, in general terms, but then, as on all subsequent occasions, the company and its agents were most cavalier in their treatment of Mr. Nightingale, as they have been most cavalier in their treatment of this House.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

No doubt my hon. Friend can and will elaborate that point. I shall not disagree. However, I should like to feel at present that one could help to bring the parties together. When one tries to retread the ground in such disputes over the years, one has great problems about who started the dispute, and so on. This matter has an unfortunate history of unnecessary conflict which could and should have been re solved earlier—that is, assuming the good faith of the company, which let us assume in the absence of evidence, although the company could have produced greater evidence of its financial credibility.

The hon. Member for Dunbartonshire, Central (Mr. McCartney) asked when the lease was offered. I have one letter dated 30th April 1976, which I presume—the hon. Member will correct me if I am wrong—would follow fairly soon after the meeting of the Commissioners in Edinburgh. It is a three-page letter. It would be unfair to read the whole of the letter. However, it set out 11 headings for a lease. It offered a 99-year lease. It talked about a rental of £7,500 a year—10 per cent. of the capital sum—and said, but if this is not acceptable to you, would you accept any figure put forward by a mutually accepted arbiter. Is that unfair? Only a few weeks ago the company said that it had never been offered a lease. This letter gives the lie to that statement.

The letter mentions a rent review clause, which is again a very fair point, and a guarantee. It mentions assignment, use and plans. I quoted earlier the clause about the dredging effects on the foreshore. The letter mentions termination of lease, and the landscape—a clause that has given grounds for comment.

I suppose that technically it is not a lease. Mr. Nightingale, who is only one of the trustees, had to say that it could not be a legal offer. But those were sensible requirements that he had to put into his letter. In no way did that detract from the fact that this was a genuine and very reasonable offer.

1.15 a.m.

I think that the company has been misleading in its statements. As far back as 1974 there is a letter from Mr. Nightingale saying that should the company be successful in obtaining planning permission for this project, then under these circumstances we should be prepared to consider granting a lease for 60 years". Subsequently that offer was increased to 99 years. The letter goes on to mention that any such lease would have to exclude two areas of land which already form the subject of a lease to Highland Fabricators. The letter concludes: May I say, finally, that our reason for not wishing to sell is that this land has formed part of the Cromarty Estate for hundreds of years and we wish it to continue this way. Here are two examples where Mr. Nightingale made genuine offers to the company to arrange a lease, but the company, in response, has never come forward and said "Yes". Quite categorically, it has said "No". If anybody has prevented a lease being signed, it is not Mr. Nightingale but the company.

My hon. Friend the Member for Ross and Cromarty (Mr. Gray) is not here, but I know that through his good offices he tried to arrange a meeting recently to negotiate a lease, and a few weeks later the company said quite categorically why it could not accept a lease, I do not think its reasons are very convincing.

The first reason is that no reasonable company could, except in exceptional circumstances, make itself subject to the vagaries of a lease to a private landlord who now declares himself adamantly opposed to the use to which the lease is to be put. That does not stand up, because once the landlord has accepted the use to which the land is to be put, I do not think that a properly negotiated lease will allow the landlord to be unreasonable in its operation.

In this House we are quite accustomed to objecting to something in principle, but once we have lost we try to produce more satisfactory arrangements. Once the principle of the refinery has been accepted, a lease can be negotiated.

Then the company refers to Mr. Nightingale's insistence on retaining in any lease an authority which would enable him deliberately to construct in a critical area of the project. This is just not true, because the planning conditions or any other landscaping conditions could be settled by arbitration, as offered in the amendment.

The last one is hardly an objection at all, because the company refers again to landscaping, and landscaping clauses which are not unreasonable could be settled by arbitration.

I have no wish to labour the point. The evidence is there that there have been genuine offers by Mr. Nightingale for a lease to be negotiated. Assuming that it is finally decided that the refinery should go ahead, I fail to understand why the company has not operated in what I would describe as a sensible commercial manner by endeavouring to negotiate. Apparently it has jeopardised the whole project through these parliamentary processes, and brought upon itself great publicity which cannot have been welcome to it, simply because it failed to negotiate a lease. It could have done that. The manner in which it has behaved does not create in me a very good impression of its skills in managing its affairs. If it were a subsidiary company of mine, and if I were in Mr. Ludwig's position, I should be rather displeased with the way in which the matter has proceeded. I should be wanting to ask "Why did you not negotiate a lease a couple of years ago when you could have done?"

But now the qunestion is for the House, because we are concerned with what happens to this land after the refinery has been completed—or, indeed, if the refinery should not proceed. This arrangement for a 99-year lease would allow some degree of control not over the refinery project itself—although no doubt that could be negotiated—but over what happens if the landlord does not proceed, because the landlord could say that it shall not be used for a chemical works or any other industrial project without proper agreement. At the end of the 99 years, the land would revert—

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Is not it a fact that if a lease were negotiated in these circumstances, the value of the land in the event of anyone wanting to sell it would be greatly diminished if it were a lease rather than an outright sale?

Photo of Mr Roger Moate Mr Roger Moate , Faversham

That is one of the doubts in one's mind about the intentions of the company. It could well reduce the value of the land for further industrial projects. But we are giving special powers in this case for a refinery, and it is to that that we must limit this sanction.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

On a point of order, Mr. Deputy Speaker. Is it not very unsatisfactory on these delicate and important issues that there is no one present representing the promoters of the Bill? I do not think that it is right to ask an Under-Secretary of State for the Environment to answer for this. He has no responsibility in the matter. It is very unsatisfactory that there is no one representing the sponsors of the Bill. Will you consider suspending the proceedings until they return?

Photo of Mr Hector Monro Mr Hector Monro , Dumfries

Further to that point of order—

Mr. Deputy Speaker:

May I deal with one point of order at a time, if it is a point of order? The hon. Member for West Lothian (Mr. Dalyell) will be well aware that it is not a matter over which I can exercise any control.

Mr. Munro:

Further to that point of order Mr. Deputy Speaker. The hon. Member for West Lothian (Mr. Dalyell) is being a little unreasonable. My hon. Friend the Member for Ross and Cromarty (Mr. Gray) has been away getting some papers. Having got them, he is now back with us and ready to go into action again.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Further to that point of order. I realised that the hon. Member for Ross and Cromarty (Mr. Gray) may have had to go out. That is why I asked for the suspension of the proceedings until he had an opportunity to come back.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

The views of my hon. Friend the Member for Ross and Cromarty are very important in this respect because, although the Bill has no promoter in this House, he is the man whose views count and carry a great deal of weight, apparently, with both Front Benches. I have always considered him a man of considerable influence and power. We were informed today that he was the important man in all this, and quite rightly. I regret, therefore, if he was not in the Chamber to hear me say that there had been genuine offers of leases in recent years. I shall not reiterate my arguments for his benefit, but I have the feeling that he may well decide to answer them without actually having heard them, which is rather unfortunate.

Perhaps I might reiterate for my hon. Friend's benefit the simple point that a genuine offer of a lease was made, not technically a lease but the fair headings of a lease, and I quoted the date of 30th April 1976. It is because of that that this latest statement by my company is way off the truth.

In my view, a lease would not prevent the refinery going ahead. A satisfactory lease can be negotiated between Mr. Nightingale and the company. In fact, if this amendment is passed, it will have to be negotiated, because the amendment lays down the arbitration conditions, and so on, on which it can be done. In this way, the House would be producing a satisfactory conclusion to this matter which would meet the needs of all the parties. It would give back to this House that degree of control which is necessary because of the many anxieties which must exist in the minds of opponents and supporters alike.

In the interests of the people of the area and those of all the parties, I hope that this amendment will be supported.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

In unvituperative terms. I wish to ask the hon. Member for Ross and Cromarty (Mr. Gray), since it should be addressed to him, one question against the background of what appears to some of us to be the fact that Mr. Ludwig and Cromarty Petroleum are putting very little, if any, of their own money into this project. My question is this: Is it not a fact that in the event of something going wrong about the project and a refinery not materialising, if there is not a 99-year lease—and I have no brief for Mr. Nightingale—the value of the land at sale would be significantly more than if there was a 99-year lease and that it could be said to be a financial encumbrance in the event of the sale of the land in certain circumstances? The hon. Member for Ross and Cromarty has an obligation to comment on that, if not to answer the question.

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

I shall give the hon. Gentleman the best answer I can. I am advised that it is a clearly established principle of compulsory purchase law that where land is authorised to be compulsorily acquired by statute for some particular purpose it cannot be used for a purpose other than that for which it was acquired.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

Let us get the matter absolutely clear. If that is the case, if a refinery for some reason or other did not go ahead the land could not be sold for other purposes. Is that what it amounts to?

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

As I understand it, yes. But I must make it clear that I am not an advocate or solicitor. I have been advised by the Parliamentary Agents in this instance because I raised the same query myself.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

The hon. Member for Ross and Cromarty should not have been put in the position of having to answer such a question. Whatever one's view on the subject, I refuse to believe that the Private Bill procedure is the way in which the House should deal with such an issue. The Minister might say that he has no responsibility for the matter, and I accept that that is probably true, but heaven knows that Governments of all parties have access to all sorts of legal advice and one of the Law Officers should be on the Front Bench to advise on and answer such questions. I invite the Minister to comment on what I have said. He may say that he has none to make, and in the present circumstances I cannot quarrel with him if that is his attitude.

Mr. Wells:

I rise with a degree of sorrow because the only defence for Mr. Ludwig and the company during the debate on the amendment has come from the hon. Member for Dunbartonshire, Central (Mr. McCartney) who has left the Chamber. He was unwilling to give way, unwilling to answer questions and followed the tradition of Parliamentary agents in such matters in that he was totally unforthcoming with information. My hon. Friend the Member for Ross and Cromarty (Mr. Gray) was lucky to acquire some information. The hon. Member for Dunbartonshire, Central was most discourteous in his unwillingness to give way when other hon. Members have given way. It appeared to me that he was speaking for the company from a company brief and, like the company, he lacked the courtesy and common sense to give way.

1.30 a.m.

Ministers have shrugged their shoulders, or perhaps I should say that they have drawn them in to try to appear a little more slender and less responsible in the matter, saying that it is private legislation, that they know nothing about it and so on. Yet they have forced it upon the House.

It is my faint hope that even at this hour the House may come to its senses and support Mr. Nightingale's plea that there be a lease. He offered that from the beginning. My hon. Friend the Member for Ross and Cromarty said that he understood that land compulsorily purchased could be used only for the purpose for which it was compulsorily purchased.

I know that the cry "I told you so" is seldom popular, but I believe that in a year or two, or perhaps three, those of us who have opposed this matter will be saying to Ministers of the day "We told you so". We believe that Ministers have been taken for a ride by a £100 company trying to expropriate a substantial land owner, a man of good taste and good sense who has offered leases and has offered to meet the company in any way. The hon. Member for Dunbartonshire, Central has exactly exemplified the company's attitude—dictatorial, unwilling to meet us, unwilling to listen to the arguments, and then going home or whatever.

This is a late hour to be arguing. I sincerely hope that the House will accept the amendment in favour of a lease. I hope that the amendment will be pushed to a vote, because I believe this to be our last chance to make some common sense out of this very sad measure. If we are carried away by the crass folly of the Scottish Office, and if the payroll vote comes in yet again to vote down common sense, I hope that in two or three years' time those Ministers on the Front Bench tonight will look as silly as I think they are now.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

I wish to address a few remarks to my Amendment No. 5. I must declare no interest. I have never met Mr. Nightingale or had correspondence with him or discussed with him or his agents the content of the amendment. It is on the Order Paper for the reasons given by the hon. Member for Maidstone (Mr. Wells) and my hon. Friend the Member for West Lothian (Mr. Dalyell).

There is great doubt about whether the company intends to proceed, or will be able to do so, once it has the powers in the Bill. If it does not, what happens to the 47 acres in question? The powers to acquire the land expire on 31st December 1978. That is a very short time for such a project, which has now been going on for about four years. My amendment says that if the powers are not used by then the land should, in all equity, be returned to the present owner. That does not seem a matter to argue about.

It might be said that it will be easy for the company to proceed in the next two years. If it proceeds, that is fine, but here we come to the nub of the problem. My hon. Friend the Member for Dunbartonshire, Central (Mr. McCartney) said that the project was like any other project of a large company. He is wrong. Built into the order is a requirement that the company must obtain all the required capital of £180 million before moving on to the 47-acre site. This requirement is buried in Section 16 of the Land Clauses Act 1845.

Mr. Wells:

I do not wish to quarrel with the hon. Member for Birmingham, Perry Barr (Mr. Rooker) about Amendment No. 5, but may I put to him the problem which Mr. Nightingale will face if his land is returned having been bought from him for a sum on which he will have had to pay capital gains tax? With inflation at its present rate, Mr. Nightingale would have to buy back in 1978 at a new district valuer's valuation when the money which he had received had been eroded. Amendments Nos. 2 and 3, which propose leasing, are surely more attractive because Mr. Nightingale would be on all fours. Taxation and inflation would put him in grave danger if we followed the procedure outlined in Amendment No. 5.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

Many of my amendments were probing amendments to give me the chance to make points which I have not been able to make during our other debates. If nothing else, the hon. Gentleman has shown that there has been no collusion between me and the hon. Members opposite—although we may have discussed the sort of amendments which could be moved, having been told originally that it would be difficult to table amendments which would be selected. I could not find a form of words to enable the guy to get his land back without being financially crippled for the rest of his life.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

If I read the hon. Gentleman's amendment without any special interpretation, it seems that on 31st December 1978 the company would have to return the land to Mr. Nightingale without any payment at all. There is no reference in the amendment to an offer back to Mr. Nightingale or to anything relating to compensation.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

Perhaps I drafted it better than I thought. My intention has been to highlight the fact that the company must, before December 1978, have secured all the capital required and have certified it with a sheriff in Scotland as being available.

There is a good chance that this may not happen. Mr. Nightingale will be fully protected because even when the Bill has gone through Parliament, it has no effect until the company has secured the capital and obtained the certificate.

The company may say that it is unable to meet the requirements of this legislation which is more than 100 years old. Therefore it seems reasonable that if the company does not or cannot proceed it should not be left owning a large block of land, including 47 acres giving access to the foreshore.

Acquisition of an access point always makes land more valuable. Sometimes a piece of land just wide enough for a lorry can increase the value of a whole site by 10 or 20 times. I do not believe that this company should be put in that position because it has not been able to raise the necessary capital.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

I should like to draw my hon. Friend's attention to a point which he made earlier regarding the Ludwig Institute for Cancer Research. I have this on the authority of Mr. Phil Durham, of Scotsburn, Ross-shire, who says: Apart from the incorrect assertion on the company returns that this institute is incorporated in Liberia, it is most interesting that the articles of the institute in Zurich allow the funds to be used only for cancer research with the one notable exception that it can buy land. It is not allowed to rent land, nor, as far as can be discovered, can it become the holding company for Cromarty Petroleum Company Ltd. I think that someone ought to clear up this matter, because it pertains to the issue being raised by my hon. Friend. Perhaps the hon. Member for Ross and Cromarty (Mr. Gray) will clear up this point which has been made before in the House.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

Clearly the hon. Gentleman has no intention of doing that. I am surprised, considering some of the accusations that I made last Thursday, that, before the debate, that charge, notwithstanding all the others that I made about the structure and articles of association of the organisation in Zurich, has not been refuted in any way, shape or form by the promoters of the Bill. There has been no letter, circular, or statement to the Press.

I pointed out on Thursday that the articles of association of the Ludwig Institute for Cancer Research in Zurich enable it to carry out medical research and to buy and sell land, not to run a tankship company or an oil refinery. Therefore, that organisation cannot be operating legally under either Swiss or British law.

No one seems to be bothered about finding an answer to that assertion. It may be thought not to be a serious point. But I think that it is a serious point. For example, by the end of December 1978 the company, for reasons beyond its control, may not be able to build the oil refinery. Therefore, it is not fair or equitable that, because of a vast increase in land value, the effect of inflation, a drop in the value of sterling, and having an access point to 47½ acres of foreshore, it should make a fantastic profit. I do not care whether the owner of the 47½ acres is a co-op, a trade union or an absentee landowner. The fact remains that it would not be fair if that situation were to arise.

That is why I put down Amendment No. 5. I accept that in many ways it is defective, if put into the Bill, could cause considerable problems. Therefore, if there is to be a Division on Amendments Nos. 2 and 3, I shall gladly vote for them as alternatives to my suggestion.

No one has given any answers to the questions which I have posed. The company is not prepared to make a statement. Ministers have kept far away from the Bill. Indeed, I should be the first to ask for their heads on chargers, because, when this proposal fails—there is a good chance that it will—they will not be able to say that they were not warned about all the problems which would arise.

If there had been no history of companies being formed and going defunct in connection with this land and different personalities becoming involved, there would be no basis for the charges that I have made. But we need go back only 10 years to see the personalities involved. If this project fails it will show a high degree of incompetence on the part of the Parliamentary Agents, the company, the managers, the people in the area who support it and the Government. No Minister has said that the Government will support the objects of the Bill or that the facilities to be provided are required in the national interest. An amendment which has not been selected would have required them to do that as part and parcel of passing the Bill.

1.45 a.m.

The Government will not be able to get out of it in future if the project collapses. I hope that it does not. I hope that the oil refinery is built and that it is of benefit to the national economy, but all the evidence suggests that there will not be a refinery and, if there is, that it will not benefit the economy. If the project does not materialise there will be a hell of a row. Ministers will not be able to say that they were required to do nothing but bring this private legislation before the House. More than 18 months ago the Scottish Office was warned of certain matters behind the Bill, before it reached the House, but they took no action. Ministers from the Scottish Office, the Department of Energy and the Treasury have all been warned, but no action was taken.

It is nothing short of a scandal that this legislation can be passed by the House without a Minister saying that he approves of it. If a Division is called I shall have no alternative but to vote to insert in the Bill a safeguard to ensure that it is fair to the people in the area, land owners and the House. The people who are sitting around in areas I am not supposed to mention regard the House as a laughing-stock because of what happened here tonight. They will continue to laugh as the Bill passes through the House of Lords and becomes law.

One day there will be an outcry when the company collapses because it cannot get the capital to go ahead, but, bingo, the company has the land. It is incumbent upon the House to accept the amendments, which contain nothing to wreck the Bill's aims. The oil refinery will last for only 40 to 50 years. How can an amendment providing for a 99-year lease be said to be a wrecking amendment? If my amendment is not accepted I shall seriously question the motives of those who promote and support the Bill inside and outside the House.

Photo of Mr Gregor Mackenzie Mr Gregor Mackenzie , Rutherglen

I would not have intervened but for the criticism of the Government for their attitude to this private legislation, made by the hon. Member for Maidstone (Mr. Wells) and my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker). In my intervention on Thursday I tried to make clear the nature of the Government's stand. The Bill comes to the House under the Private Legislation Procedure (Scotland) Act 1936. My hon. Friend and the hon. Gentleman may not like that, but we are all presumed to have an intelligence and can make our own judgment. The simple duty of the Secretary of State for Scotland is to lay the Bill before the House after it has been fully examined by the Commissioners—two from each House. My hon. Friend and the hon. Member may not like the procedure—I must confess, having endured all of this over the last few months, that I am not sure that I am wildly enthusiastic about it myself—but that is the procedure under which this Bill comes before the House of Commons.

Amendments Nos 2 and 3 seem to be the whole purpose of the Bill itself. We have had a wide ranging discussion about refinery policy, money, and everything else. I suppose that if the promoters of the Bill had found it acceptable they would not have found it necessary to go before the Commissioners and object. It is therefore for the promoters to say whether or not they regard such amendments as acceptable.

The whole purpose of the Bill is concerned with the way in which land is to be obtained. The arguments for compulsory acquisition have been examined fully by the Commissioners from both Houses. I can only conclude by suggesting that the Commissioners, having found these arguments acceptable, have put them forward through the form in the Bill.

Hon. Members are also concerned about what will happen if the company does not carry out its intention to build the refinery. Would it be able to sell the land with the benefit of planning permission? It is an argument that I well understand from my own days in local authorities. However, I am advised that the conditions attached to the planning permission ensure that if work on the refinery does not start, and is not continued steadily, the planning permission will lapse—the company will still have the land but it will have no planning permission.

I want to refer to some of the conditions. A master plan of the development showing its phasing, must be submitted within six months, but because of delays caused by the Bill the company has had to seek an extension of this period from the local authority. When the master plan has been approved a contract for the design and construction of the refinery must be placed within four months. Plans and elevations showing the details of the buildings, jetties, piers and the process plant must be submitted within 10 months and final details showing exterior finishes and so on, within a further nine months. Work on the underground storage—an important feature of development—must be started within 12 months of planning permission and the construction work must be continuous.

A breach of any of these conditions would result in the lapse of the planning permission. It is therefore not possible for the company simply to sit on the land, do nothing and resell it with the benefit of planning permission.

I intervene only to indicate what I understand are the facts of the matter.

Mr. Deputy Speaker:

Amendment proposed, page 2, line 25—

Mr. Deputy Speaker:

Order. If the hon. Gentleman wishes to speak again he will have to ask the leave of the House.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

On a point of order, Mr. Deputy Speaker. Do I understand that the Question was being proposed by yourself and that it was too late for any other hon. Member to take part in the debate?

Mr. Deputy Speaker:

I had not, in fact, completed putting the Question. If I see any hon. Gentleman wanting to speak before I have taken the voices it is my duty to call him. If the hon. Member for Faversham (Mr. Moate) wants to speak again he will have to ask the leave of the House.

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

The Minister dealt with the points fairly well. I want to answer the point raised by the hon. Member for West Lothian (Mr. Dalyell). I have been able to get the answer on this. The situation, as I understand it, is that the institute is permitted to buy and own land in order to enable it to set up whatever laboratory and technical establishments are necessary to conduct its medical research. But it must, by definition, also be able to raise and have access to funds to carry out its research. That is implicit in its purpose as a medical research body.

The institute draws its funds from the beneficial ownership of shares in a large international company—Universe Tank Ships Incorporated—as do many charitable bodies and trusts in this country and elsewhere. The Ludwig Institute does not operate a tank ship company any more than the Nuffield Foundation or the Ford Foundation operated the car firms when they were set up in a similar way.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

I appreciate the hon. Gentleman's courtesy, but may I be clear on one thing? Is it right or wrong to say that no Ludwig money is going into this project of Cromarty Petroleum? I am genuinely hazy about this. As I understand it, no Ludwig money is being put into this project. If I am wrong, I should be told so.

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

That is a difficult question to answer. As I understand it, some money from Ludwig companies is going into the project. In other words, Universe Tank Ships is certainly putting money into the project.

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

I am not in a position to say exactly how much, but I think that the original amount was about £62½ million. I am not in a position to confirm that at the moment. The company is providing a large amount of the capital and the remainder is being arranged in the way that the hon. Member for Dunbartonshire, Central (Mr. McCartney) described, and in a way common to merchant banks in this country when arranging a package of this nature.

The Parliamentary Agents have given me information or guidance on the amendments. It has been pointed out that Amendment No. 5 could not be accepted. Perhaps the amendment proceeds on the assumption that the powers under this provision are powers for the construction of the marine terminal facilities, but that is not the content of paragraph 4 of the order, which is not directed to authorising this development. The company is already authorised in the main by the grant of planning permission empowering it to acquire compulsorily the 47½ acres of foreshore land which it has been unable to acquire on such terms by agreement. If the powers under this provision have not been activated by 31st December 1978, the company will not have any land to return to the ownership of those who were the owners prior to the order becoming law.

The hon. Member for Birmingham, Perry Barr (Mr. Rooker) spoke with strength, but in these matters we have to be guided by the parliamentary draftsmen, who can interpret the amendment and advise us whether it is a practical proposition.

2.0 a.m.

Amendment No. 2 is a lead-in to Amendment. No. 3.

The company would not be prepared to accept such an amendment. I am in considerable sympathy with the company on this point. It is to invest a considerable sum, and there will be a great deal of Government money attracted as well. It feels that it could not invest this kind of money without ownership of the land.

The company could not enter into a lease with the present owner, for several reasons. First, in his petition to the House earlier this year the landowner said that he was strongly opposed to the concept of an oil refinery or oil storage of any kind at Nigg Point. He later qualified that by saying that in the event of planning permission being granted he would try to procure the granting of a lease. But the company feels that the conditions that he would insist upon would not be acceptable to it. Except in exceptional circumstances, no reasonable company makes itself subject to the vagaries of a lease with a private landlord who declares himself adamantly opposed to the uses to which the land will be put.

The landlord does seem to chop and change on this subject. At one stage we hear that he is totally opposed to the project, at another that he accepts it on the terms of a lease, and on yet another that he might be interested in participating. My hon. Friend the Member for Maidstone (Mr. Wells) rightly defended his constituent, but he was less than fair in some of the things that he said, and certainly some of the things that he insinuated, about the company.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

The hon. Member has said something very important—that the company is putting in massive sums of its own money. He knows me well enough to know that I would never laugh at anyone's name—heaven knows, my own is complicated enough—but on 1st October, in the Daily Telegraph, whose political views I do not share, one read this: A fund-raiser sent from New York is working 'semi-permanently' in London to raise the other £144 million required.He is Mr. Steve Stavrides, described to me last night as 'a financial expert'.He is employed by Universe Tankships, the American parent company of Cromarty Petroleum, set up by three Americans three years ago with the sole purpose of building and operating the refinery in Scotland. If this is inaccurate, and he is not raising the £144 million, it would be useful to be told that.

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

It is not my job to outline the company's financial policy on this project. I have merely said that the company is putting a substantial amount of its own money into the project and that a package is being arranged through merchant bankers, as every other similar project over the years has been arranged. The hon. Member knows how these matters are financed in the City.

The company has made it clear to me that it would obviously like to own the land. That is its first object. Second, it is not prepared to accept a lease from Mr. Nightingale because it does not consider that relations in future would be such that it would be possible to operate without continual interference. The company and the landowner are not likely to come together and we are wasting time thinking that they might.

But the company has told me that the third possibility would have been the regional authority acquiring the land and then arranging a lease with the company. The company would be prepared to accept that. Naturally, its first desire is to own the land in which it is to invest its money.

I have tried to represent the case fairly. I wanted merely, as politely as I could, to explain the relationship between the company and the landowner.

Mr. Wells:

My great anxiety in this is simple. Mr. Nightingale and his friends and neighbours, who take a view similar to his, have been at pains to let every hon. Member in any way interested have all the paper help and support required, while the company has done absolutely nothing except send out a very inadequate circular last Thursday. I am glad to know that my hon. Friend has received some useful information from the company in the last 20 minutes, but no other hon. Member has had any communication whatever from the company. It is this extremely cavalier treatment of the House by the company that has aroused my suspicions.

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

It was not in the last 20 minutes that I was given this information. I accept that I went to the Official Box for some clarification.

Any hon. Member who cared to ask the company for information would have been able to get it. I certainly had no difficulty. I did not have to visit the

offices of the company. It was to suit my convenience that the company came to see me at the House. I went to the company's offices to see whether there was any truth in the allegations in some Press articles. I found the company in an extremely attractive office block—modern but modest. Indeed, the Department of the Environment could do worse than have a look at those offices and see how they are furnished, inexpensively compared with some of its offices. I was very impressed. I got satisfactory answers to all my questions and I am sure that other hon. Members would have done so.

These amendments would not be acceptable to the company.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

The hon. Member has again said something very important and new. Do I understand that if the project were allowed to go ahead and the regional council became, in a sense, the company's landlord, the company would enter into a leasing arrangement with the regional authority?

Photo of Mr Hamish Gray Mr Hamish Gray , Ross and Cromarty

The hon. Member has misunderstood. I said that the company wished to proceed with this order to enable it to purchase the land. However, in the event of the House refusing to allow the company to have this compulsory purchase order, if the Highland Regional Authority decided compulsorily to acquire the land, the company would be prepared to enter into negotiations for a leasing contract with the Highland Regional Authority.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

By leave of the House—

Hon. Members:


Question put, That the amendment be made:—

The House divided: Ayes 2, Noes 28.

Division No. 342.]AYES[2.09 a.m.
Canavan, Dennis
Skinner, Dennis
Mr. J. W. Rooker and
Mr. John Wells.
Bain, Mrs MargaretCocks, Rt Hon MichaelDoig, Peter
Biffen, JohnCook, Robin F. (Edin C)Douglas-Hamilton, Lord James
Brown, Hugh D. (Provan)Craigen, J. M. (Maryhill)English, Michael
Buchan, NormanCrawford, DouglasFaulds, Andrew
Buchanan, RichardDempsey, JamesGray, Hamish
Harrison, Walter (Wakefleld)Monro, HectorWhite, James (Pollok)
Hughes, Robert (Aberdeen N)Reid, GeorgeWilson, Gordon (Dundee E)
McCartney, HughRoss, Rt Hon W. (Kilmarnock)
MacCormick, IainSummerskill, Hon Dr ShirleyTELLERS FOR THE NOES:
MacKenzie, GregorWelsh, AndrewMr. Jim Lester and
Millan, Rt Hon BruceMr. Ian Campbell.

Question accordingly negatived.

It appearing on the report of the Division that forty Members were not present, Mr. DEPUTY SPEAKER declared that the Question was not decided, and the business under consideration stood over until the next Sitting of the House.