HC Deb 24 November 1965 vol 721 cc517-21
The Minister of Power (Mr. Frederick Lee)

With permission, I will make a statement.

I told the House on 21st July of my proposals for a further round of production licences to search for and get oil and gas on the Continental Shelf, and applications were subsequently invited in August. I have decided to grant 37 licences to 18 companies or groups. The licences will comprise 127 blocks cover-in in all about 10,000 square miles, about 500 square miles in the Irish Sea and the rest in the North Sea. I am placing details in the Library.

The minimum work obligations to be incorporated in the licences will involve the expenditure of about £30 million on survey work and drilling during the next six years.

The arrangement will increase the nationalised industries' stake in this enterprise. The Gas Council, which will participate with its existing partners, is to increase its share in the group's new licences to 50 per cent., compared with approximately 31 per cent. in the present licences. Two companies, Gulf Oil (Great Britain) Ltd. and Allied Chemical (Great Britain) Ltd., have given the National Coal Board options to participate in any licences granted to them, subject to the necessary powers being conferred on the Board by Parliament.

If the options open to the Board are fully taken up, the British share in the licences will amount to about 37 per cent. overall, compared with about 30 per cent. in the licences granted last year.

Mr. Peyton

May I ask the right hon. Gentleman if he is aware that, generally speaking, we have some satisfaction that the Government are following so closely the course set by their predecessors? On the Coal Board's participation, may I ask him whether he does not really think that in present circumstances the problems of the coal industry are quite sufficient fully to absorb the abilities and attentions of the Coal Board? May I also ask him whether he has considered the effects upon morale at the prospect of Coal Board participation and the Coal Board being actively concerned with the promotion of a competing fuel? May I further ask him, in view of the remarks made recently by his right hon. Friend the Minister of Aviation, whether partnerships between nationalised industries and private enterprise concerns are permissible so long as the latter are foreign-owned? May I ask him, too, whether this arrangement was a shotgun marriage or whether it was voluntary?

Mr. Lee

I am surprised that the hon. Gentleman is critical of the increased participation of British enterprises in the North Sea.

Mr. Peyton

I am not.

Mr. Lee

There is no question of any shotgun marriage. The National Coal Board and the organisations that I was talking about are making mutual arrangements which will increase the British participation from about 30 per cent. to 37 per cent. It also means that, so far as the nationalised industries are concerned, there will be about an 11 per cent. participation by the nationalised industries; that is, 5 per cent. by the National Coal Board and 6 per cent. by the Gas Council. I am not saying at this stage that there is finality between the National Coal Board and the companies with which it is having discussions, but if the full options open are taken up, it will mean a participation of about 5 per cent. by the Board.

Mr. Warbey

Would my right hon. Friend agree that the present failure of the oil companies to co-operate in carrying out national policy is making a strong case for the further extension of public ownership and control?

Mr. Lee

There are times when Press announcements are more colourful than accurate.

Mr. Tilney

May I ask the right hon. Gentleman if he can say how much of the £30 million that he mentions will be spent in the Irish Sea?

Mr. Lee

I could not, no.

Mr. Dalyell

Is it realised that those of us who represent mining areas adjoining the North Sea thoroughly welcome the National Coal Board's participation, but may I ask for how long these options will be kept open?

Mr. Lee

There is no immediate urgency about it. There is a question of legislation which the House will be invited to accept. I could not quote a date, but there is no immediate need in the next 18 months for a final decision on the case.

Sir Ian Orr-Ewing

To return to the point put by my hon. Friend the Member for Yeovil (Mr. Peyton), could the right hon. Gentleman be more forthcoming? On Monday we heard from the Government Front Bench that it was highly undesirable to have B.O.A.C. making arrangements with a private enterprise company, and it was said from the benches opposite that the shareholders ought to be deprived of their assets. Can this now be denied, and can it be realised and appreciated that there is some security for the equity capital of private interests in this enterprise, as well as the public interest?

Mr. Lee

When I refer to this arrangement with the National Coal Board and other people, I am not talking about a shotgun marriage. I am talking about a voluntary arrangement. I hope that the hon. Gentleman will take it from me that I know a little about the B.O.A.C.Cunard agreement, and it has nothing to do at all with this kind of arrangement.

Mr. Wainwright

May I impress upon my right hon. Friend the need further to encourage the nationalised fuel industries to participate in the North Sea venture? Has he invited the Central Electricity Generating Board also to participate? May I also ask him if he will do whatever he can to make certain that all the nationalised fuel industries make efforts in this participation so that we can have a co-ordinated fuel policy?

Mr. Lee

My hon. Friend will remember that we have said in the course of the Queen's Speech that it is essential that diversification should not be confined to private enterprise. This is one of the cases that we have in mind.

Mr. Costain

Will the right hon. Gentleman resist the request from his hon. Friend to get electricity from electric eels in the North Sea, and keep the nationalised industries in the jobs that they know best?

Mr. Frank Allaun

Is the Minister aware that public participation will be warmly welcomed, and not only in the mining areas? Will he go further in this direction, as many of us do not see why the country's natural resources should be handed over to private profit-makers?

Mr. Lee

I would doubt whether the country's natural resources are being handed over in this way. I would remind my hon. Friend that the party opposite decided to nationalise the North Sea some years ago. We are insuring that as far as may be, British participation rises as against the kinds of licences issued last year.

Sir J. Rodgers

In view of the failure of the nationalised industries to have enough plant to supply ordinary consumer demands for fuel, may I ask whether the Minister is quite satisfied that his statement today will not add to those difficulties by bringing them into research work which they are not capable of undertaking?

Mr. Lee

There are now five rigs in operation in the North Sea, and we expect that those will be increased to 13 during the course of 1966. The premises upon which the hon. Gentleman's question were based are entirely wrong. The nationalised industries are not the ones which failed to get the generating plant necessary. That was guaranteed by the heavy electrical power industries, and I am afraid to say that they fell down on their guarantee.

Several Hon. Members rose——

Mr. Speaker

Order. We must proceed.