We need your support to keep TheyWorkForYou running and make sure people across the UK can continue to hold their elected representatives to account.Donate to our crowdfunder
My Lords, I added my name to my noble friend’s amendment and I congratulate him on the way in which he moved it. I want to make two points. First, I was the Minister for Energy in the very early stages of our North Sea oil and gas. I was the Minister for only seven weeks when we lost the election at the end of February 1974. At that stage, no one had the remotest idea of setting up a sovereign fund. I do not remember the thought crossing my mind or my desk. As my noble friend Lord Forsyth has indicated, we did not have the slightest idea of how much it was going to be.
In a sense, I take issue with my noble friend Lord Hodgson for saying that it was a massive mistake. I find it difficult to accept that. There may have come a time when one should have seen that the prospects were going to be as bright as they have been and one might have done something to meet my noble friend’s wish. But to have expected that to happen in the very early stages when the oil and gas had scarcely begun to flow is a little unfair. At the time, when BP was investing in the Brent oilfield, which became the most important oilfield, its financial director said that he had established a law; namely, that, however much is spent in developing a North Sea oilfield, the amount still to be spent would be constant. It stands constant. It does not go down. That was the climate in which the oil industry was operating then. The Government, I think, gave it every opportunity to develop and we have enjoyed the success.
Secondly, I hesitated to put my name to my noble friend’s new clause because of the figures. My noble friend Lord Forsyth has already raised this. Nevertheless, I think the principle is sound, particularly what was said about intergenerational equity. Where you have the prospect of major wealth, is it right that it should all be spent on the present generation? It seems to me that there is a principle here that it is desirable to support. My noble friend referred at the end of his speech to what my right honourable friend the Chancellor said over the weekend about,
“making sure money is not squandered on day-to-day spending”.
When you have the indebtedness we have it is unrealistic to say that when you are spending money to keep the economy going to meet the needs of social services and so on that somehow if we spend the revenues from something such as shale gas we are squandering it. However, there may come a time, as happened in Norway, when it would be right to set up a fund. My noble friend’s new clause says that the Government “may”—it does not say “must”. I have already indicated that I have some doubts about the figures he has put in at the end but the principle seems to be very sound and I hope that the opportunity may come when we shall do something about it. Like him I look forward to the reply from my noble friend on the Front Bench.