Orders of the Day — Gas

Part of the debate – in the House of Commons at 10:38 pm on 25 October 1983.

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Photo of Mr Peter Walker Mr Peter Walker , Worcester 10:38, 25 October 1983

I welcome the opportunity provided by this debate and thank the right hon. and learned Member for Monklands, East (Mr. Smith) for his understanding of my "wet" position. I am not sure about his position in the Labour party; whether someone on the moderate wing of that party is called a "dry" and those on the Left wing are called "wets". I know that in the summer months the right hon. and learned Gentlemen took an active part in a certain campaign within his party and failed. When I last took part in a leadership campaign in my party I failed and was sacked from the Shadow Cabinet within 24 hours.

My right hon. Friend the Minister of State would have liked to attend the debate, as this is a sphere over which he has responsibilities, but I know that hon. Members on both sides of the House will deeply regret the news that a dreadful explosion in a hotel in his constituency has killed quite a number of people, and understandably he has rushed there this evening. He asked me to convey his apologies to the House for his absence.

We are tonight debating the sequence of events in August 1982 when the BGC was directed to prepare a scheme so that six North sea oilfields in which it had an interest could be transferred from the public to the private sector. I recognise that the Labour party is opposed to any such move. When we believe that it is better, if possible for a commercial activity to take place in the private sector, it is described as an ideological, extreme belief, as is the belief of the right hon. and learned Gentleman that it is much better that these events should be controlled by the public sector. I admire a great deal of the activity of and work done by the nationalised industries, and of those working in them, and I have had Cabinet responsibility for every nationalised industry except the Post Office, but I do not think that it is an ideal system on which to base commercial operations. Whether there is a Conservative or a Labour Government, one of the problems is the substantial interference of the politician and the civil servant.

The right hon. and learned Gentleman has had responsibilities in many Departments and been involved in making things happen in industry and fixing investment programmes for industry. I mean no disrespect, because the same argument applies to myself, but he has far less knowledge than those involved in the industries. There are clearly activities of an essentially commercial operation that should go into the private sector. It is good that they should do so, and I welcome the opportunity of seeing that that takes place in this industry.

I listened with fascination to the right hon. and learned Gentleman's version of events, with strange companies and organisations emerging, but the process has been simple. The advice given to the Gas Corporation on the best way to handle the scheme was to transfer the assets into a company called British Gas North Sea Oil Holdings Ltd. The right hon. and learned Gentleman asked why there were not six companies, but two. This was because the British Gas Corporation agree that the need was to transfer these assets into two companies to see that a sensible transfer took place, with no problems over participation and pre-emption rights. The participation problems were dealt with by transferring the participation arrangements into a company called British Gas (P. A.D.) Ltd. Two of these instruments provide for these two companies, into which the British Gas Corporation transferred the assets to be transferred to my control, and that transfer took place on 1 September.

As for the so-called "new" company of Enterprise Oil, it is not a new company. On 1 September, when this company was transferred into the ownership of the Department, the name British Gas North Sea Oil Holdings Ltd., was changed to Enterprise Oil. It is the same company that has existed throughout and to which the Gas Corporation transferred its assets. In doing this I transferred the ownership of the other company concerned, British Gas (P.A.D.) Ltd., to BNOC. BNOC thus owns the company and has the 51 per cent. participation rights firmly in its hands. This has been done in a smooth, sensible, well-thought-out way, through a scheme prepared by the British Gas Corporation.

I renamed the company Enterprise Oil for the purpose of preparing it to be passed to the private sector. The Government have decided that the disposal will proceed by means of a stock market flotation of all of the ordinary share capital of the company. It will be an actively managed exploration and production company, and this will have a number of important advantages.