HC Deb 28 June 1960 vol 625 cc1273-9

Order for Second Reading read.

Motion made, and Question proposed, That the Bill be now read a Second time.

9.40 p.m.

Mr. William Warbey (Ashfield)

It is rather regrettable that the hon. Member for Aldershot (Sir E. Errington) and his hon. Friends have seen fit to run away from the Amendment for the rejection of the Bill on Second Reading, possibly because they realise that it raises rather wider issues than they are prepared to face. Nevertheless, in the Instruction which they have tabled, and which we shall be considering later, they recognise that this Private Bill raises issues of so wide a character that the subject with which it deals ought more properly to be dealt with by general legislation rather than by Private Bill procedure.

The question of the development of pipelines for the carrying of bulk liquids and gases and, indeed, solids, such as coal, which can be floated on water is becoming more and more prominent. No one on this side, I think, would wish to suggest for a moment that the use of pipelines for such a purpose is not a very useful and valuable means of transportation. What we must recognise is that this is something which is beginning to develop on a substantial scale and involves the necessity of inquiring as to how far it is being carried out in accordance with public interest and policy. On the Continent of Europe there is already a very substantial increase in the number of projects for pipelines to carry not only crude oil to refineries, but also refined products from the refineries to major points of consumption.

In its issue of 18th June the Economist made this comment: In Britain, as on the Continent, the next decade seems likely to see a much larger development of pipelines—perhaps the largest non-Governmental development of any transport system this century, apart from the electricity grid and super grid Later, it stated: When all these lines have been constructed … some excess of transport as well as of refining capacity would seem likely to emerge Those words constitute a warning of what might well happen in this country if we do not take care to see that this new form of transportation is developed in accordance with the public interest.

So far, only rather small projects of this character have been put forward. I believe that there have been three Private Bills for the promotion of pipelines—the first in 1947, for a line from Milford Haven to Llandarcy, the second in 1958, for one from Stanlow to Parkington, and the third in 1959, for one from Waltonon-Thames to London Airport. The first was promoted by British Petroleum, the second by Shell and the third by Shell-Mex and British Petroleum. These are comparatively short lines. Now we have before us a project for the construction of two quite long lines, about 75 miles in length, running from Fawley right across southern England, in one case to London Airport and in the other case to Severnside.

It is perhaps only the beginning of what may be a still further and increasingly rapid development. There are, I understand, proposals already under consideration for a further pipeline between London and Birmingham, and for another pipeline from the Thames Estuary through Essex and Hertfordshire. If we are not careful, before very long we might see a whole network of pipelines being developed by a number of oil companies, each seeking a controlled distribution system for its own products.

The same kind of thing could very well happen as happened in the case of the early railway development in this country, namely, the haphazard construction of a network of lines, very often duplicating and overlapping, constructed at very great inconvenience to public and private interests, and not, in the end, producing a properly co-ordinated and effective system serving the public interest.

Therefore, we have now to examine, from the broad national point of view, to what extent these pipelines should be constructed, how and upon what conditions. If we look at the proposal put before us in this Bill, we have to ask ourselves two questions. First, are these two pipelines really necessary, and, secondly, if they are necessary, then should they be built, owned and operated by a private company or by some other undertaking?

There is already in existence, I understand, a State-owned pipeline from Shell-haven, on the Thames, to London Airport, and it is rented at the moment by the Shell-Mex and B.P. Company. Shell-Mex and B.P. are constructing their own pipeline for which they have obtained the authority of Parliament, from Walton-on-Thames to London Airport, so that there will be two pipelines serving London Airport.

I think that we ought to know—indeed, it is quite impossible to judge whether this new additional pipeline to London Airport is required unless we do know—far example, what is the capacity of the existing and projected pipelines, and whether that capacity is sufficient to serve the present and anticipated future needs of London Airport. It may be that the Minister of Power will be able to tell us when he intervenes in the debate, because, obviously, we ought to have information of that kind before we can pass judgment. If the Government are not able to give us this information, I certainly say that there is a case for delaying consideration of this Bill.

If it is suggested that the existing pipeline and the projected ones are being operated by different companies, that is, from the point of view of the public interest, immaterial. [An HON. MEMBER: "Oh."] An hon. Gentleman says "Oh", but surely we do not want to see constructed in this country duplicating and redundant pipelines. If those which exist or are already protected have sufficient capacity to supply the need, others are not required. I am sure that no hon. Member will suggest that there is one iota of difference in either quality or price between the aviation spirit which will be delivered by Shell-Mex and B.P., on the one hand, or Esso, on the other. Everybody knows that there is no difference whatever, and, therefore, it does not matter which kind of fuel is eventually delivered to the consumer. All that matters is whether the capacity is adequate for the need. That is the first thing.

The second question is who should construct and operate the pipeline and under what conditions. We are asked that it should be constructed by the Esso Petroleum Company. Who is this company? It is a subsidiary of what is probably the largest private enterprise corporation in the world, Standard Oil of New Jersey, by far the biggest of the five major American oil companies, with assets of over £2,500 million and with over 300 subsidiary companies, of which this Esso Petroleum Company is one.

These international oil companies make vast profits from the crude oil produced by their major subsidiaries. The major subsidiary of Standard Oil of New Jersey, for example—the Creole Company—in 1954 had a turnover of 719 million dollars, on which it made a profit of 240 million dollars—in other words, a profit of 33⅓ per cent. of the turnover, which is not bad going.

The oil companies make their vast profits on their crude oil. Their subsidiary companies, the refining and marketing companies, exist only to provide commercial outlets for the oil. They do not mind very much if Esso Petroleum, or Shell for that matter, makes only 3 per cent. on its turnover. What matters to them is that Esso and the other refining and marketing companies shall be able to provide continuous commercial outlets for the product on which they are making their substantial profits.

The function of Esso Petroleum Company, like the other numerous subsidiaries in this and other countries all over the world, is, in effect, to develop means of distribution and marketing to ensure that the oil which comes out of the wells is eventually sold at as large a profit to the original producer as possible.

To make sure that the oil is sold, the company seeks to get as large a control of the market as possible. That is the purpose of the building of its tanker fleets, refineries, pipelines and petrol stations, all of which serve the one purpose of establishing a chain under the monopoly or semi-monopoly control of these international oil companies so that they can ensure guaranteed sale points for their product.

Therefore, what we are being asked to do in the Bill is to offer to Standard Oil of New Jersey and its subsidiary in this country a controlled monopoly distribution chain. The establishment of the pipeline will provide a distribution system which will be solely under the control and operation of this company and, presumably, will deliver only the products of this company.

We really ought to ask whether that is in the public interest, whether it is in the interest of the consumers and in the interest of the other fuel industries of the country. We know very well the kind of pricing policy which the oil companies follow, a policy, for example, of selling their fuel oil below the cost of production so as to knock coal out of the market while compensating for their losses on the fuel oil by overcharging for their petrol and refined products, so that the motorists are, in fact, being called upon to pay for the undermining of the country's coal industry.

That is the kind of pricing policy which is quite deliberately followed by the oil companies in order to break their way into the market and gradually establish control over it. What would happen to the prices if they established a firm monopoly or semi-monopoly position in the fuel market would be very unfortunate in the end for the consumers who are at present contracting to buy fuel oil.

We must consider very seriously, therefore, whether we shall allow a private company to undertake this form of activity. The Times, in a leading article on 27th May, expressed some concern about the rights and powers which the company is seeking in the Bill. It said: The oil companies like other limited liability companies are private concerns operated for private profit. It might be thought that the nature of their operations invests them with something of the status of public utilities. They dispense products of scarcely less universal importance than electricity or gas. If that is so the question arises how far they should acquire also the de jure status of public utilities and be equipped with some of the powers of statutory undertakings, as this Bill would do, without incurring the full liabilities of the latter. namely, of statutory undertakings.

A similar point has occurred to the National Farmers' Union which is very concerned about the effect which the Bill may have on farmers. In a letter which it has sent to hon. Members the N.F.U. says: … the Union does, prima facie question the national desirability of a private commercial concern, such as the Esso Petroleum Company, being able, by way of a private Act, to arm itself with such powers—particularly to acquire compulsorily rights over public and private property—as might be properly applicable in the case of public undertakings with a general or specific duty to provide public services. The union is coming along very nicely. I am glad that it recognises the case for the public undertakings—

Mr. John Harvey (Walthamstow, East)

The hon. Member quoted from the leading article in The Times that part which suited him best. He has not said that in the same article there appeared the words: But a policy of general obstruction to an enterprise of such obvious advantage (development in the United States offers proof of its value, if proof is needed) and to one which causes such small disturbance to existing interests is both short-sighted and vain.

Mr. Warbey

Naturally, I could quote that part of the leading article in The Times, but it is rather a long leading article and I would not bother the House with the whole of it. Therefore, I quoted the part which suited my argument best.

I said from the very beginning that there would be no obstruction from this side to the general question of the importance of having pipelines where they proved to be valuable—

It being Ten o'clock, the debate stood adjourned.

Motion made, and Question put:— That the Proceedings on any Private Business set down for consideration at Seven o'clock this evening by direction of the Chairman of Ways and Means be exempted from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Wood.]

The House divided: Ayes 148, Noes 52.

Division No. 122.] AYES [10.0 p.m.
Agnew, Sir Peter Bennett, F. M. (Torquay) Bourne-Arton, A.
Atkins, Humphrey Bidgood, John C. Bowen, Roderic (Cardigan)
Barlow, Sir John Biggs-Davison, John Box, Donald
Barter, John Bingham, R. M. Boyle, Sir Edward
Batsford, Brian Bishop, F. P. Bryan, Paul
Bell, Ronald (S. Bucks.) Black, Sir Cyril Bullard, Denys
Butcher, Sir Herbert Hope, Rt. Hon. Lord John Proudfoot, Wilfred
Campbell, Gordon (Moray & Nairn) Hornby, R. P. Ramsden, James
Carr, Compton (Barons Court) Hornsby-Smith, Rt. Hon. Patricia Redmayne, Rt. Hon. Martin
Channon, H. P. G. Hughes-Young, Michael Rees, Hugh
Collard, Richard Iremonger, T. L. Roots, William
Cordle, John James, David Ropner, Col. Sir Leonard
Corfield, F. V. Johnson Smith, Geoffrey Russell, Ronald
Costain, A. P. Joseph, Sir Keith Scott-Hopkins, James
Coulson, J. M. Kershaw, Anthony Shaw, M.
Critchley, Julian Kirk, Peter Skeet, T. H. H.
Crosthwaite-Eyre, Col. O. E. Lancaster, Col. C. G. Smith, Dudley, (Br'ntf'rd & Chiswick)
Currie, G. B. H. Leavey, J. A. Smithers, Peter
Dalkeith, Earl of Linstead, Sir Hugh Spearman, Sir Alexander
Deedes, W. F. Litchfield, Capt. John Steward, Harold (Stockport, S.)
Donnelly, Desmond Longden, Gilbert Stewart, Michael (Fulham)
du Cann, Edward Loveys, Walter H. Stodart, J. A.
Duncan, Sir James Lucas-Tooth, Sir Hugh Studholme, Sir Henry
Farey-Jones, F. W. MacArthur, Ian Temple, John M.
Finlay, Graeme McLaughlin, Mrs. Patricia Thomas, Peter (Conway)
Foot, Dingle Maddan, Martin Tiley, Arthur (Bradford, W.)
Fraser, Ian (Plymouth, Sutton) Manningham-Buller, Rt. Hn. Sir R. Tilney, John (Wavertree)
Freeth, Denzil Matthews, Cordon (Meriden) Turner, Colin
Gammans, Lady Mawby, Ray Turton, Rt. Hon. R. H.
Gardner, Edward Maydon, Lt.Cmdr. S. L. C. van Straubenzee, W. R.
Gibson-Watt, David Morgan, William Vane, W. M. F.
Glover, Sir Douglas Morrison, John Vickers, Miss Joan
Glyn, Dr. Alan (Clapham) Mott-Radclyffe, Sir Charles Wakefield, Edward (Derbyshire, W.)
Glyn, Sir Richard (Dorset, N.) Neave, Airey Ward, Dame Irene (Tynemouth)
Goodhart, Philip Nicholls, Harmar Watts, James
Goodhew, Victor Nicholson, Sir Godfrey Webster, David
Gower, Raymond Noble, Michael Wells, John (Maidstone)
Grant-Ferris, Wg Cdr. R. (Nantwich) Orr, Capt. L. P. S. Whitelaw, William
Green, Alan Orr-Ewing, C. Ian Williams, Dudley (Exeter)
Gresham Cooke, R. Osborn, John (Hallam) Wills, Sir Gerald (Bridgwater)
Hall, John (Wycombe) Osborne, Cyril (Louth) Wilson, Geoffrey (Truro)
Hamilton, Michael (Wellingborough) Page, John (Harrow, West) Wise, A. R.
Harrison, Col. J. H. (Eye) Page, Graham Wood, Rt. Hon. Richard
Harvey, John (Walthamstow, E.) Pannell, Norman (Kirkdale) Woodhouse, C. M.
Harvie Anderson, Miss Pearson, Frank (Clitheroe) Woodnutt, Mark
Heald, Rt. Hon. Sir Lionel Peel, John Worsley, Marcus
Hendry, Forbes Percival, Ian
Hill, Dr. Rt. Hon. Charles (Luton) Pike, Miss Mervyn TELLERS FOR THE AYES:
Hill, Mrs. Eveline (Wythenshawe) Pitman, I. J. Mr. Chichester-Clark and
Hirst, Geoffrey Pitt, Miss Edith Mr. Sharples.
Holland, Philip Pott, Percivall
NOES
Blyton, William Lee, Frederick (Newton) Randall, Harry
Cronin, John Lever, L. M. (Ardwick) Rankin, John
Davies, Harold (Leek) Loughlin, Charles Redhead, E. C.
Davies, S. O. (Merthyr) McCann, John Short, Edward
Edwards, Rt. Hon. Ness (Caerphilly) McInnes, James Slater, Mrs. Harriet (Stoke, N.)
Fernyhough, E McKay, John (Wallsend) Soskice, Rt. Hon. Sir Frank
Fitch, Alan Mackie, John Spriggs, Leslie
Fraser, Thomas (Hamilton) Mahon, Simon Stones, William
Gourlay, Harry Manuel, A. C. Symonds, J. B.
Griffiths, W. (Exchange) Mapp, Charles Wainwright, Edwin
Hale, Leslie (Oldham, W.) Mendelson, J. J. Warbey, William
Hannan, William Millan, Bruce Whitlock, William
Howell, Charles A. Noel-Baker, Francis (Swindon) Wilkins, W. A.
Hoy, James H. Noel-Baker, Rt.Hn.Philip (Derby, S.) Willis, E. G. (Edinburgh, E.)
Hunter, A. E. Oswald, Thomas
Jones, J. Idwal (Wrexham) Parker, John (Dagenham) TELLERS FOR THE NOES:
Kelley, Richard Peart, Frederick Mr. Fletcher and
Kerby, Capt. Henry Price, J. T. (Westhoughton) Mr. J. P. W. Mallalieu.
Lawson, George Pursey, Cmdr. Harry