§ Order for Second Reading read.
§ 3.35 p.m.
§ The Minister for Industry (Sir John Eden)
I beg to move, That the Bill be now read a second time.
This very short Bill deals with two separate legislative proposals. In July I announced the Government's intention to encourage mineral development in this country by contributing to costs incurred by mining companies engaged in proving our mineral resources. Clause 1 of the Bill gives effect to this proposal. Clause 2 is designed to clarify or extend certain exceptions from the abolition of investment grants.
I turn first to the question of mineral exploration. Minerals have always been worked in Britain, and during the Industrial Revolution and for much of the last century we enjoyed a pre-eminent position in world production of non-ferrous metals. A hundred years ago Britain was the largest producer of copper, but later on more easily worked deposits were discovered overseas and our own metal mining industry declined, so that in recent years we have produced less than 1 per cent. of our domestic needs.
The situation is now changing again. Access to deposits of non-ferrous ores is becoming more difficult whilst demand for them continues to rise. At the same time, new extraction and processing techniques make it possible for large low-grade deposits to be economically worked. It is widely believed that such deposits exist in this country. For this reason, and given our other advantages —for example, a readily available market and a well-developed infrastructure—the United Kingdom has once more become a potential area for mineral exploration.
Since I announced our proposal interest has developed in copper in North Wales, fluorspar in the Pennines and tin and other metals in the South-West. In Scotland a number of projects to search for non-ferrous metals are just getting under way.
I am sure that it is in our interests to stimulate this type of mining. At present
1023 [SIR J. EDEN.]
we import annually over £600 million worth of non-ferrous metals and their ores. It is conceivable that within the next decade we could produce annually £100 million worth from our indigenous resources. However strong our balance of payments, we obviously cannot afford to neglect such a possibility. Nor can we always be certain of continued political stability in those areas upon which, since our own mining industry declined, we have relied to meet our needs. If, therefore, we can foster the revival of a healthy and prosperous metalliferous mining industry in this country it is clear that we can achieve significant savings in foreign exchange, establish secure sources of supply and create new wealth.
There is a long tradition of mining in certain outlying areas to which it is relatively difficult to attract manufacturing industry. For those who live in the more remote parts of Wales, Scotland, the Pennines and elsewhere a revival of the industry would bring much-needed employment and prosperity.
On the other hand, we must keep a balance. We do not want to pursue the exploitation of our mineral resources to the point where it impairs some of the finest features of our landscape. I can, therefore, assure the House that the scheme I am introducing will in no way affect the operation of the normal planning controls under the Town and Country Planning Acts. Planning permission is always required before the development of a mine and also for some of the activities involved in exploration. When planning applications are made, full weight is given to the existing use of the land and any potential loss of amenity. Each case is looked at on its merits, and, where permission is granted, planning authorities have power to safeguard the environment against pollution while the work is going on and to take any necessary steps to secure the suitable restoration of the site.
I recently visited the new Wheal Jane tin mine in Cornwall. That project was planned in close co-operation with the local planning authority, and the mine was constructed to meet the authority's requirements, and it is most impressive to see what has been achieved there. This is a good illustration of the attitude 1024 of the mining companies, which are very anxious to minimise the effects of their activities upon the countryside. They have recently set up a study under Lord Zuckerman to examine ways in which the development of our mineral resources can be reconciled with other requirements of national policy, especially those concerning physical planning.
There is also the question of mineral rights, which was mentioned by my hon. Friend the Member for Bedford (Mr. Skeet) and the hon. Member for Swansea, West (Mr. Alan Williams) in the debate last week. This is not dealt with in the Bill, but the Government fully recognise the difficulties encountered by mining companies in gaining access to land and minerals.
Much of the existing legislation dates from 1923 and was not designed for present conditions. The subject is complex, and any legislation we put forward must be effective and seen to be fair not only to the developers but also to the owners and occupiers. It follows that the amending legislation will have to be framed with great care, and, in spite of what was said by the hon. Member for Swansea, West in the debate last week, it cannot yet be claimed that there is a consensus of views in the country. A wide variety of situations would have to be covered, and these complex problems could not be solved by a simple Bill. We are currently considering what form the legislation might take whenever parliamentary time permits.
The mining companies operate internationally and invest their resources where they can do so to the best advantage. In choosing between areas of comparable mineral potential they naturally tend to go where the conditions are most favourable. The industry has special features. For example, many expensive exploration projects fail to find economic deposits. Mining generally requires a large capital investment; a major project may involve a total investment of up to £100 million or more, while attempts to prove what turns out to be only a small mineral deposit may easily cost over £1 million. Even where successful, a major project normally takes 10 years or more from the start of exploration to the beginning of commercial production.
1025 Most metal mining companies exploring here have little or no United Kingdom profits available and, because of the long time lag before capital allowances relating to exploration can be claimed, their value in discounted cash flow terms is much reduced. It was becoming clear that, in face of the problems I have outlined, momentum in their exploration effort was being lost. The Bill is geared to their special needs and provides an additional incentive for exploration mainly in the metal mining sector.
Once the mineral has been proved, however, the decision whether or not to proceed with mining should be taken on the basis of normal commercial judgment. The construction phase is of comparable duration to that for many other major capital projects and will benefit from the investment incentives that we have made available to all such projects. Our proposals are, therefore, aimed only at those exploration and evaluation activities leading to a decision whether or not to embark on the development of a mineral source.
The first Clause of the Bill provides the financial authority for the Secretary of State to make contributions towards expenditure incurred on exploring for and evaluating mineral deposits in Great Britain or on the Continental Shelf. It does not apply to hydrocarbons. It limits the amounts that can be paid out to £25 million, with provision for a further £25 million by order, and restricts the total contribution towards an individual project to 35 per cent. of qualifying expenditure.
The Bill permits the Secretary of State to impose such terms as he thinks fit in making any contribution, and it may be helpful if I explain briefly how it is intended to administer the scheme. This will be done in a selective manner. At this stage the scheme will be confined to non-ferrous metal ores and three other minerals—barium, fluorspar and potash —where there is a good case for encouraging exploration. Within this range, contributions will be given only to approved projects. But if, later on, a case can be made out for bringing other minerals within its scope, this can be considered.
Our aim is to attract exploration effort not only from United Kingdom companies but also from abroad, but over- seas applicants will be asked to form a 1026 United Kingdom-registered company. To qualify for assistance an applicant must show that the project has a sound geological basis and that he has the financial and technical resources to carry out his proposed exploration programme, or the means to employ others to do so, and we shall need to be satisfied as to his commercial standing.
Our contributions will be in the nature of loans. Assistance will be repayable with interest if a project leads to the extraction of minerals in commercial quantities. This will, I hope, lead to the recovery in due course of a useful part of our expenditure under the scheme. Many projects that we support will inevitably fail—that is the nature of exploration—and in that event we shall not require repayment; but even under our proposals the companies still carry the major risk. Moreover, most of the failures will occur during the early stages of exploration when the expenditure is relatively slight. As costs mount the likelihood of a viable mine will normally increase and the chance of recovering our contribution will correspondingly be greater. But even where no economic minerals are found we shall have learned a good deal about the nature of our mineral resources and about their value under modern conditions. On this aspect I agree with the hon. Member for Swan-sea, West.
These proposals have attracted a good deal of interest. We have already examined 35 projects which merit assistance, and a further 19 projects are under consideration. I am confident that, one Parliament has given approval, far-ranging programmes of exploration will cover many parts of the country and that in due course these will lead to the revival of a viable metal mining industry which will make a major contribution to the country's wealth.
To sum up, the proposals in Clause I of the Bill recognises the problems faced in this country by a particular sector of the mining industry and the fact that at this moment in our history the conditions are ripe for a revival in a valuable traditional industry. They will encourage the British and international mining com panies to devote greater attention to the mineral potential of this country. The
1027 [SIR J. EDEN.]
shape of economic benefits such as I have described, benefits which have been enjoyed by many other countries over recent years, especially those which have had the foresight and good sense to encourage the development of the mineral wealth that lies within their borders.
§ Mr. Arthur Blenkinsop (South Shields)
Could the hon. Gentleman say at this stage whether there will be any general undertaking that grants would not normally be provided for proposals within our national parks or areas of outstanding natural beauty?
§ Sir J. Eden
No, Sir; not as a general sort of statement such as the hon. Gentleman is asking me to make. I emphasised this aspect in my reference to the requirement to ensure that normal planning procedures would be operated. It is very much in our interests to know the location and extent of the mineral resources of this country; this is the purpose of exploration. I understand the hon. Gentleman's concern, and, indeed, I have sympathy with it, but it is more directed towards the exploitation of what is then known to be workable reserves. Therefore, once we see where these deposits are and know their nature, the proper balance can be weighed and these other factors can be taken into account and given their full measure of significance.
I turn briefly to Clause 2—
§ Mr. Peter Emery (Honiton)
Might I pursue the point about planning permissions a little further, since it affects the South-West considerably? There are two matters which I should like to put to my hon. Friend. First, am I right in thinking that the Bill will cover the normal workings of clay, sand and gravel, which are minerals used in the building industry, and, if not, why not?
Secondly, will my hon. Friend use his powers to safeguard the position which arises from the point raised by the hon. Member for South Shields (Mr. Blenkinsop)? Planning authorities must go in for some longer-term thinking to ensure the provision of money for the necessary landscaping two or three years ahead, so that when mineral working takes place landscaping has time to develop in order to hide the resulting scars, so preventing major amenity problems to the areas in- 1028 volved. That is a matter to which my hon. Friend's influence might be directed in a very useful way.
§ Sir J. Eden
I take note of my hon. Friend's second point, which is extremely valuable. I shall see whether there is any means by which this can be furthered. The restoration of sites after working them is a very important aspect of this whole matter.
As for my hon. Friend's first question, the answer is "No". The Bill does not cover materials such as clay, sand and gravel. It is felt that there is sufficient knowledge of these resources. There is plenty of activity already in developing and exploiting them. We do not need to give further stimulus to encouraging their exploitation.
§ Miss J. M. Quennell (Petersfield)
Can my hon. Friend clarify another point? A few moments ago, in an almost throw-away sentence, he indicated that the Bill did not apply to hydrocarbons or oils. However, I notice that Clause 1(5) says:In this section 'mineral deposits' includes any natural deposits capable of being lifted or extracted from the earth.Can my hon. Friend assure me that oils are exempted totally from this Measure?
§ Sir J. Eden
The point about oils and hydrocarbons is similar to the one that I have just made to my hon. Friend the Member for Honiton (Mr. Emery) about sand and gravel. There is a very exciting degree of exploration and exploitation activity in relation to the development of hydrocarbons. However, I thought it right in this Bill to provide for changing situations in the future. If it ever came to the point where it was felt necessary to include other minerals, that could be done by means of this provision. However, this is a matter which can be pursued further in Committee. There are many aspects of it which are not just related to hydrocarbons. It is an interesting point, but I think that it would be more appropriate to discuss it in Committee.
§ Mr. Eric Ogden (Liverpool, West Derby)
Is the hon. Gentleman now saying that the Bill in its present terms covers the possibility of using the available money for oil and natural gas, since they are included in the term "mineral 1029 deposits", but that it is not the Government's intention to use their discretionary powers for these purposes? After all, they may not be looking for mineral salts in Knutsford, but the possibility is contained in the Bill.
§ Sir J. Eden
The hon. Gentleman is quite right. This is a situation which one cannot foresee accurately, but it is conceivable that it will arise.
Clause 2 is a highly technical matter, and I shall attempt to cover it briefly. It modifies in two minor respects the provisions of Section 1 of the Investment and Building Grants Act, 1971, in so far as they affect hired assets and ships. Since that Act was passed it has become apparent that, for purely technical reasons, the provisions in two respects do not seem fully to reflect the intentions of the House. As hon. Members will recall, the Act in general precludes the payment of investment grant on expenditure incurred after 26th October, 1970, unless the expenditure consists of a sum falling due under a contract made on or before that date. The provisions on ships are slightly different, and I shall refer to these in a moment. Clause 2 of the Bill in no way departs from the principles embodied in the 1971 Act.
As the Bill's provisions on hired assets and ships are of a technical nature, it would probably be more appropriate to discuss them in detail in Committee. All I say at this stage as regards hired assets is that but for this provision we should have the situation that a person hiring out equipment after 26th October, 1970, could not receive grant unless both he and the hirer on 26th October, 1970, had contracts for the supply of the same asset. It is hardly conceivable that this could happen in practice. For example, while a computer-leasing company may have a contract with a computer manufacturer for the supply of a computer and a contract with the customer for the lease of that computer, the customer will not at the same time have a contract with the manufacturer for the supply of the computer. I do not think it was the intention of the House that the Act should operate in this way.
As regards ships, the 1971 Act, in broad terms, permitted grant to be paid on the total cost of a ship, including extras ordered after 26th October, 1970. where, 1030a person was on 26th October, 1970, entitled to the benefit of a contract for the construction of a new ship.Where money is borrowed by a shipping company from a bank to finance the building of a ship, as security for the loan the borrower usually assigns the benefit of the contract for its construction to the bank, so that technically the shipping company is not entitled to that benefit. The Clause makes it clear beyond any doubt that the transfer of the benefit of the contract as a security for a loan is not to be a bar to the owner obtaining grant on expenditure that he incurs on the ship. Once again, I think the House will agree that the provisions are in line with their earlier intentions and clarify these two technical points.
§ 3.57 p.m.
§ Mr. Alan Williams (Swansea, West)
As the Minister has just intimated, inevitably mineral development arouses controversy, simply because we have the difficulty, highlighted by the interjection of my hon. Friend the Member for South Shields (Mr. Blenkinsop), that minerals so often occur in beautiful areas of the country which also have the highest incidence of unemployment. There is an understandable conflict between the desire to preserve the environment and the equally strong desire to conserve employment opportunities for the people of the areas involved. No one born in a mining valley can be unaware of the scars, both environmental and human, which can arise from mineral development.
Even if we do not expand operations, we shall continue to have mining in this country. Its extent and location are open to discussion, and those matters are not being determined today. However, it is reasonable that, whatever level of exploration and exploitation we regard as appropriate, it should be undertaken against a background from which unnecessary obstacles have been removed.
When I was at the Department of Economic Affairs and later at the Ministry of Technology, I had a special responsibility for minerals. I tried to create an appropriate operational climate with appropriate safeguards for the environment. When I was first asked to look at the Whitehall end of the mineral set-up in this country I was horrified to discover that seven Departments were involved.
1031 [MR. WILLIAMS.]
Five had actual mineral responsibilities. The other two had direct interests. The Treasury always has a direct interest when money is involved. Yet, of all these Departments not one had a direct policy interest. Therefore, there was no policy lead; there was no sense of direction in mineral policy at both Government and senior official level.
I was glad that by the time we left office in June, 1970, this dispersal of responsibility had at least been restricted and that only two Departments had a direct interest. Understandably, we felt that the construction minerals should remain with the appropriate Department, with everything else concentrated in the Ministry of Technology. I believe that virtually the same situation prevails today. I am sure that the possibility of having a purposeful policy towards mineral development has benefited from this structural change at the Whitehall end.
I also discovered that there was no systematic approach to mineral development. We started a mineral by mineral analysis of the potential and of the obstacles in this country. The Labour Government prepared and introduced measures to remove many of the arbitrary obstacles. For example, there was a technical legal brake on the exploration for and exploitation of uranium and radioactive materials. This we removed during our period in office once we had isolated and seen the need for it to be dealt with.
There was a financial disincentive. I think that even the most avid redistributionist would recognise that for a land- owner to be taxed at 23s. in the pound was hardly an inducement to get him to part with his land to mineral operators. It seemed that some adjustments were necessary here if we were to secure any easing of the transference of rights between current owners and would-be mineral operators. This we did in two stages. It was generally accepted by the Country Landowners' Association that the concession which we made in our last Budget was meaningful, and the mineral operators also found it helpful to them.
Finally, we looked at the morass of mineral rights acquisition problems. We analysed these and put forward proposals 1032 with which I shall deal later. It seemed right to do that and progressively to clear irrelevant obstacles where possible without damaging essential planning scrutiny and contraint. For this reason, I believe that the conservationists, genuinely alarmed as they are, are unnecessarily alarmed by the proposals in the Bill.
Everyone acknowledges the debt which we owe to the Countryside Commission and to other environmentalists for the detailed scrutiny to which they subject every proposal which might harm our environment. On 14th July the Countryside Commission issued a Press notice in which, commenting on this proposal— it was not at that stage in Bill form, but it had been fully outlined by the Minister of State—said:It could result in large-scale disturbance, and even destruction of some of our finest landscapes.I think that this is a wrong assessment of the impact of the Bill. It is unlikely because, as the Minister for Industry rightly said in answer to an interjection, the Bill deals with exploration, not exploitation. There is no irreversible damage. There is often very little visible disturbance at the exploration stage.
§ Mr. George Lawson (Motherwell)
Does my hon. Friend agree that there is not much sense in paying out a lot of money for exploration unless it is to be followed by working? The important point is the working and what it might do.
§ Mr. Williams
I could not agree more. My hon. Friend has, in fact, anticipated my next point. When we know where the minerals are, we shall be in a better position to decide whether to do anything about them. The important proviso spelled out by the Minister is that normal planning procedures will still apply at the exploitation stage. If I read his memorandum correctly, which was distributed to industry, and his Press statement—I am an avid reader of everything which he produces; it is so witty and readable—he made it clear that there was no pre-commitment, in the event of the grant being given to help at the exploration stage, to allow exploitation. There is not pre-judging at the planning application level. This is an important point to remember. In any case, far from being seen as a step forward, this Measure is 1033 merely an attempt to retract a step backwards which the Government took some time ago when they abolished investment grants.
The mineral industry—I made this point last week in the debate on the Gracious Speech—is an import substitution industry. We must remember the past constraint which the balance of payments has imposed on our growth. The country's mineral import Bill is over £2,000 million. The bill for copper, lead and tin in 1969 was running at over £360 million, and the Minister has told us today that imports of ferrous metals and ores are running at over £600 million. This is the magnitude of the impact of the balance of payments on our mineral needs.
Last week when I alluded to this matter I made the point that in the past when we have gone for 1 per cent. of growth in our economy—an extra £400 million in our G.D.P.—by the nature of our economy we have drawn into this country between £100 million and £120 million of extra imports. So there is a close relationship between growth, which every Government want and which has eluded all of us—it is a direct relationship, not a coincidental relationship—and the balance of payments. If we assume that we are able to achieve an import substitution of £100 million—I am not saying that this is the figure which we will achieve; I am putting forward a hypothetical case—it will mean that we can go for an extra 1 per cent. of growth in our economy, an extra £400 million in real income as a nation, without harming the balance of payments.
It is against this total economic background that we have to understand the importance of developing import substitution industries wherever possible. The scope is considerable. While we are all delighted at the progress which has been made on, for example, the Continental Shelf, nevertheless, the progress which has been made there is merely scratching the possibilities of mineral development, other than the hydro-carbons, which could exist there.
I recall that before leaving office—not voluntarily—in June, 1970, one of the major mineral companies made the point that at that stage it regarded Britain as standing fourth in the world in terms of attractiveness for mineral investment. 1034 This measurement of attractiveness was arrived at by a rather interesting formula. Several factors were taken into account. Inevitably, the first was the actual mineral potential. We have had the mineral potential for some time. The second factor was political stability. Many of the countries which are competing with us for the investment of international mining companies do not have the political stability which we have tended to preserve. The third factor was the effectiveness of incentives. The combination of all these factors made us stand fourth in attractiveness to this one major company in its world investment decisions. It is because the last of these, the attractiveness of incentives for investment, was critically damaged by the abolition of the investment grant that we have this Bill before us today.
I should like to quote from an article by Mr. Alun Davies, who is not unknown to the right hon. Gentleman, of Rio Tinto Zinc, one of the foremost experts on mineral finance in this country. In a publication of the Institution of Mining and Metallurgy, dated January of this year, he said:With its high-risk, capital-intensive and long lead-time characteristics the mining industry was particularly well served by the investment grant system, which supplied a stimulus to investment that is totally absent from the new tax-related allowances which are to replace it.Perhaps it is because of that assessment by the industry that we heard from the right hon. Gentleman about a down-turn in interest, and that because of its assessment of the value of the grant that we have this Bill before us today.
On behalf of this side of the House I welcome the Bill for what it does, but I deplore it for what it fails to do, and for what it so easily could have done. I welcome it in so far as it facilitates exploration, but I regret that it contains no attempt to continue the process of removing unnecessary obstacles. I welcome the benefits which it gives to certain operators, particularly in the non-ferrous metals, but I criticise the complacency towards the problems of the sedimentary mineral operators.
I now turn to the first part of the Bill, and I ask the Minister—I assure him that I make this request in no snide way— to ensure that by the time we get to the Committee stage copies of the Act which
1035 [MR. WILLIAMS.]
the Bill amends—the Investment and Building Grants Act, 1971—are available in the Vote Office. The last time that I asked for a copy of that Measure it was not available. I wanted it so that I could refer back to the original terminology. It will be difficult for back benchers to deal with this part of the Bill unless copies of that Act are available.
§ Sir J. Eden
I give the hon. Gentleman the assurance for which he asks. I shall look into the matter at once.
§ Mr. Williams
I am grateful to the hon. Gentleman. I felt sure that he would cooperate in any way that he could.
I am not thinking of opposing the 35 per cent. grant. I realise that to the hon. Gentleman this is a politically acceptable method of admitting the error of his ways in abolishing investment grants, and I am always ready to welcome even the most reluctant conversion, despite the fact that attempts are made to conceal it. I live in hopes that it may lead to greater things, and that this may be the beginning of enlightenment.
I now propose to refer to a letter dated 27th August from the Department of Trade and Industry to the C.B.I. It said:the business activities of the companies concerned are such that very few have at present adequate eligible profits against which to take advantage of the present scheme of capital allowances.That is one reason put forward for this piece of legislation. But low profitability applies at this stage to wide sectors of industry in the United Kingdom, as was pointed out when investment grants were abolished. When we pointed it out, it led to the restatement of the Selsdon Man philosophy by the right hon. Gentleman, embodied in the immortal phrase "lame ducks". It would appear that lame ducks are acceptable in the mineral industry, but that they are not to be supported, even where doing so might mean saving jobs, in development areas. I imagine that the workers of Upper Clyde find this a rather interesting paradox in the Government's proposals.
The right hon. Gentleman cannot deny the impact of the abolition of investment grants on development areas, since even in that part of Wales which I represent the fact is that since the grants were 1036 abolished the rate of fall of total male employment has doubled, the rate of increase among those registered has doubled, jobs in the pipeline have halved, and vacancies, even in the last month, have fallen a further 9 per cent. to 10 per cent. It seems anomalous that a principle is applicable to one industry, but is completely ignored where it could create jobs in wide areas of the economy if only it were applied to industry more generally.
It may be said that it is not the intention of the Government to encourage lame ducks even in this sector of the economy, but that it is the foreign operator—the hon. Gentleman referred to this, and it is a valid point—who is to be encouraged, the operator who has no previous profit record, and has no early opportunity therefore to write off his expenses against allowances. I do not deny that that is a valid argument. I gather that that is the reason for this Measure but, in that case, if we are happy for foreigners to come here and despoil our countryside, and if we are happy for them to come here and extract our minerals, why are not we equally happy to see them come here and set up factories? If they need this form of incentive to come here to operate in the mineral field, surely they should have this form of incentive to come here and set up jobs for workers in the development areas? If grants are necessary to attract them to mining, they are necessary to attract them to other sectors of the economy, too.
In the letter to which I referred from the Department of Trade and Industry as a justification for the introduction of incentives to help those who now lack adequate eligible profits, the Government condemn their whole incentive policy and recognise the falseness of their present devotion to tax allowance fetishism. The sense of shame which the Government have in this matter is revealed in the Title of the Bill—Mineral Exploration, etc. Bill. It is significant that the etc. refers to two amendments to the Act abolishing investment grants. The etc. suggests, first, that they are ashamed of it and, second, that they were hoping to slip this through and conceal their shame en route.
I shall not now go into detail on the question of the astonishing breadth of 1037 the discretionary power in the Bill. The Minister said that that could be dealt with in Committee. But I draw the attention of the House to the fact that the definition of mineral, as the hon. Lady the Member for Petersfield (Miss Quennell) said, in Clause 1 (5) literally means anything. "Anything that can be dug up" is virtually a paraphrase of what the subsection says.
Second, the area covered is anywhere within the confines of our national waters. The discretion given to the Minister appears to be absolute. It is nowhere explained, and nowhere defined legally. There is no apparent appeal against a ministerial decision. There is no indication of what factors the Minister will take into account in reaching his decision.
When we explore this discretionary power in Committee, we shall want to know why the Government exclude the cost effects of inflation from consideration in the grant, because in their document, "Mineral Exploration Incentive Scheme, A Guide For Industry", the Department, dealing with the payment of claims, says in paragraph 10:
Payment at the rate of 35 per cent. will be made on the actual costs incurred in carrying out the agreed programme except where these are higher than the estimated costs set out in the programme. In this event they will normally be made on the estimated cost.In other words, a Government devoted to the pursuit of a galloping inflation now proceed to protect themselves from the rising cost of living in regard to grants.
But this is not only a Bill of contrition. It is also an appalling waste of opportunity. A parliamentary draftsman was available, legislative time was available and I am sure that the Government know that we on this side are always willing to be helpful in getting through reasonable legislation. If the hon. Member really cares about minerals, I am surprised that this opportunity was lost. One suspects that he has given way to a particularly strong lobby from one section of the industry.
It is clear, from the definition given in the memorandum to which I referred, that the Minister intends—he repeated this today—to exclude key sedimentary minerals from the operations of the Bill. Yet the demand for sand and gravel has 1038 increased more in the last 40 years than the demand for any other mineral in this country, and the production of sand and gravel in the next decade will exceed the production of any mineral in this country other than coal.
The reason given in the Department's letter for the exclusion of sedimentary minerals and the inclusion of the four categories to which the Minister referred is that exploration and development involve great expenditure and considerable risk. I cannot help wondering how many hon. Members from development areas, how many from steel constituencies, see here the ingredients of a suitable definition of their own industry, of steel, a major employer in the development areas. After all, it is a high investment, rapidly innovating, markedly cyclical industry. It has all the elements of risk, and if risk is the further criterion to be adopted, the steel industry obviously qualifies.
Since thousands of jobs are being lost in the industry because of the loss of £100 million in investment grants, I hope that the Minister will seek to turn his mind as positively in the direction of the steel industry as he seems to have tried to do in relation to the mineral industry.
But the sedimentary mineral operators themselves point out that the risks there are very high—yet they are excluded. For example, the only cement works in Scotland was eventually sited after 28 sites had been examined. Very detailed boring was required on many of these sites to establish quality and quantity, yet the Department's letter says what the Minister repeated again today:As with coal and iron ore, which are excluded from this scheme, the locations of these minerals"—that is, the sedimentary minerals—in Britain are broadly speaking well known".Frankly, this letter must have been written by someone with little knowledge of the geology of this country or little knowledge of our knowledge of the geology of this country. If he is by any chance referring to the date provided by the Institute of Geological Sciences, he has obviously very little idea of the limited nature of the economic evaluation work done by I.G.S.
Indeed, Dr. Thurrell, who is head of the Mineral Assessment Unit at I.G.S.,
1039 [MR. WILLIAMS.]
says, in the Quarry Managers Journal of January this year:The information now being collected"—he is referring to the information being collected by I.G.S. in relation to the minerals which the Minister seemed to feel fairly sanguine about—is less detailed or densely distributed than that needed for commercial proof of a particular deposit.In another section he says:But the variability of the deposits is probably the most difficult consideration involved in appraising their value and their workability, since it cannot be inferred from existing geological maps and memoirs.So the mere knowledge of general location still does not remove the risk, even at the early stage, for the operator in the sedimentary minerals.
While gravel and limestone occurrence may be generally known, detailed borings are still required to establish whether the deposits are in commercial quantities or whether they are merely inches thick and unusable commercially. Even where relativity testing has been carried out, one still needs further testing and expenditure to establish quantity and quality.
For example, the terrace gravels and effluvial deposits are notorious for the unpredictable incidence of sterile areas within what appear to be profitable areas for operation. Limestone is not universally suitable for manufacture into cement, and a heavy boring programme has to be followed to establish the suitability of the particular limestone in the particular area.
Finally, there is another risk which the sedimentary operators share with the metalliferous operators. That is the risk that, at the end of the day, they will have incurred their expenditure but may still be refused planning permission. Here again, the Department's letter—the only thing correct about it, I believe, was the punctuation, although I have not checked that too closely—says:… if a refusal of planning permission results in a firm and manifest decision to abandon a particular mineral exploration, S. 62 of the Capital Allowances Act 1968 applies with consequent relief in respect of the abortive exploration.In other words, what they are suggesting is that an operator can claim against tax if he does not get planning permis- 1040 sion. This is the Department's advice to the C.B.I. on 27th August this year.
On the other hand, I have a letter dated 11th May this year from Westminster District 3, H.M. Inspector of Taxes, to The Associated Portland Cement Manufacturers Limited, in which, in response to a claim exactly parallel to the type of claim referred to in the Department's letter, the inspector says:I do not think that a claim under Section 62, Capital Allowances Act 1968, applies here. It would appear that the search for the mineral deposits was completed and not 'given up'. The results will always be available to the Company and it may well be that the planning conditions will alter somewhat in future.What an anomalous situation. The Ministry says, "If you do not get planning permission, you need not worry: you can get tax relief," while the tax man says, "Since you had completed your necessary investigations before you made planning application, you cannot have abandoned it, because you have completed it." This is an utter absurdity. The Department seems to be somewhat at variance with the tax authorities.
I remember when I was nearly a political colleague of the Minister—I was a candidate for Poole in the 1959 election—I held an "Any Questions" with the then Member for Poole, whom the hon. Gentleman will know very well. During that "Any Questions", the then Member was asked what tax concessions his Government had made. He said that there had been certain concessions for the man on £10,000 with two children, and other concessions for the men on £5,000 and £3,000. Voices from the audience asked, "What about us?" He said that men on £2,000 a year had also received a reduction of such and such.
Still cries of "What about us?" came from the audience. Aghast that men in such poverty should exist in his constituency, the then Member said, "Since our Government have been in office, those people no longer pay any tax." Whereupon, there was a supplementary question from a Councillor Froude, of the Poole Council, "I wonder whether I could persuade our Member to come and talk to our tax inspector, because the tax inspector does not understand the system as well as the hon. Gentleman does." Will the Minister please talk to this particular tax inspector because he does not seem to understand the operation of the system as well as the Department does.
§ Mr. Lawson
Bearing in mind what my hon. Friend said earlier about it being a Bill concerned primarily with exploration and not with working, is he not suggesting that there must be a heavy bias on the part of the Ministry; in other words, that working should be carried out if at all commercially feasible?
§ Mr. Williams
That is a question for the Minister rather than for me to answer, and I have no doubt that he will wish to do so when he replies to the debate. I should like to think that there is no predisposition to judging these matters in advance, and I am sure the Minister wishes to be as objective as possible in this matter.
The fault of the Bill is that it has missed opportunities to do what could have been done. We recently had an important debate in which a glaring example was given of the need for something to be done. When we were discussing the Town and Country Planning (Minerals) Regulations, 1971, considerable pressure was put on the Minister to do something positive. Certain hon. Members who are present today were present on that occasion. They will agree that that pressure came from both sides of the House. As a result, the Minister had to retreat in a state of considerable confusion, and he muttered promises about the whole issue being reconsidered. However, that reconsideration has so far come to nothing.
Here we have an opportunity to remedy the problems that that set of Regulations created. The objectives of those Regulations were, in all fairness, desirable. I said that at the time, and everyone agreed that the three objectives were necessary. The first was to shake out old planning consents. There are many such consents about which it is abundantly clear that no action will be taken, but they are there blocking development. The second was to give greater security of reserves to genuine operators. The third objective, an appropriate one, was to ensure that a chance was given in respect of old consents which were going to be worked for modern restoration standards to be applied.
The standard of public expectation in restoration work has changed markedly, not merely in the last five years but, 1042 strangely enough, over the whole of the last 20 years. The method chosen by the Government has been to say that in respect of old consents—that is, consents granted before 1st April, 1969—the work must have started by 1st April, 1979. If not, application must be resubmitted for planning consent. There is, therefore, a deadline on these consents, which is that the work must have started by 1st April, 1979.
The shortcomings of this are clear, and in our earlier debate they were argued with genuine strength from both sides. On that occasion the Minister was in a minority of one and the pressure on him was equally heavy from the benches opposite, simply because the Government are not achieving what they set out to achieve, which is security of reserves.
These provisions could have been drawn up only by a Department which was not responsible for minerals or which thought it was not so responsible. Astonishingly, though, one discovers that the Department still carries the responsibility in this sphere which it carried in our last year in office.
There are completely different time spans involved in the scale of operation for different minerals. For example, with sand and gravel there must, for the operation to be viable, be a 15- to 20-year supply of resources to justify the initial investment. In cement, which is a multimillion pound operation—tens of millions of pounds are required for the initial capital provision—one must think in terms of 60 years or more.
Here are bona fide operators sitting on resources for which they have provided the capital being told that if they did not start their operations in 1969, they will have to resubmit. What is unreasonable about that, one may ask. The answer is that it overlooks the fact that there is no single planning consent for any area about which we are speaking.
The increasing scale of operations in this industry means that it is almost impossible for one planning consent to give adequate reserves. Thus, any reserve area in any part of the mineral industry normally consists of many or a multitude of existing consents. We are asking the industry either to submit, and thereby to face all the uncertainty that 1043 goes with that—there is great uncertainty in view of the large investment sums involved these sums were committed on the assumption that the battle had been won—or undertake uneconomic evasion, which is to have premature starts in every area, even though they may not wish to work those areas in the period before 1979.
The Minister must be aware that this is the opposite to good husbandry of our national mineral resources. It could also be environmentally harmful, with land being taken out of agricultural use which could otherwise remain agriculturally viable for the next couple of decades, until required. This land will be taken out of agricultural use to evade the resubmission for planning application. This will defeat the objective of the Government of getting modern restoration standards applied, for if they can evade the need to resubmit, there will be no opportunity for new standards to be applied.
It is no good saying, as Lord Sandford said in another place in April:It would be unrealistic to assume that Section 65 will be allowed to bring essential workings to a halt."—[OFFICIAL REPORT, House of Lords, 22nd April. 1971; Vol. 371, c. 902.]If it will not do that, then what is the nature of the exercise? There is bound to be uncertainty and opposition once one gets the reopening of past planning consents; and, as I say, the industry made its investment on the assumption that it had security in respect of that investment.
The solution I suggested in our earlier debate, and which I repeat today, could be accommodated in this Bill. It is that the Government should set aside the need to resubmit if work has not started by 1969 if—and it is a categorical "if"—prior agreement between the operator and the planning authority has been reached on modern restoration standards, and if the planning authority is satisfied that he is a genuine operator.
In other words, the planning authority will still have the right to say, "No, we will not give approval without application". On the other hand, it will be able to reach reasonable terms with the operator on restoration without involving all the uncertainties that occur with the present method. This would meet the amenity needs of planning authorities and 1044 the security needs of operators. A Clause could be added to the Bill in Committee to enable local authorities to have this power, and I urge the Minister to reconsider this matter between now and the Committee stage with a view to taking this step. This matter is extremely worrying to mineral operators. It is a non-political matter and is clearly a sphere in which the Minister could make a worthwhile contribution.
The other opportunity missed was to introduce mineral rights legislation, though I was glad to hear the Minister say that he is looking at such legislation. When I left office less than 18 months ago we were very near a consensus between the land interests and mineral interests on the form of such legislation, and I am surprised that such a consensus has not been arrived at.
Hon. Members who are not acquainted with the nature of the mineral industry should appreciate that when one is dealing with a large-scale mineral operation—as I have pointed out, these operations are on an increasingly large scale—it is difficult to undertake it if one is confronted with the fragmentation of mineral rights. This means that many people own the rights in a locality. Surface rights are also owned by a number of people. Further, mineral rights are frequently separated from surface rights, so permutating the difficulties, and the owners of both are often either unknown or, where they are known, are untraceable.
It is therefore a matter of high priority to all sectors of the industry that something should be done to improve the possibility of acquiring mineral rights. I hope that the hon. Gentleman will treat this matter with a greater degree of urgency than, I am sorry to say, appears to have been shown in the last year or two. In the meantime, he can give the industry a helpful gesture of good will—
§ Mr. Laurance Reed (Bolton, East)
The Institution of Mining and Metallurgy urged these changes in about 1958 or 1959. Why did not the hon. Gentleman act when in office?
§ Mr. Williams
The hon. Member should not make trivial points like that. So far, we have avoided such trivial debating points. I made it clear that when I first took ministerial interest in minerals there was nowhere in the White-hall system anyone who had a clear job of 1045 finding out the general problems and putting them right. The hon. Gentleman shakes his head, but on this occasion he must listen to those who have lived through it and have tried to remedy the defects. At least we tried to do something. The situation existed during the period of the last Conservative Government and during our period of office. If the hon. Gentleman thinks that legislation of this kind can simply be devised by a Minister saying this must be done he does not really know the nature of the competing lobbies.
§ Mr. Reed
Those problems were identified in the middle of the 'fifties, and it is quite unfair to suggest that our own Government have been dilatory in this respect when in six years of office the Labour Government failed to do anything.
§ Mr. Williams
I am amazed that the hon. Gentleman bothers to make such points. As I have said, we set out to have consultations with the various interested groups. We tried to reach a consensus. In 1969 I had prepared and the Department of Economic Affairs had published a set of proposals which themselves were the basis for further consultation. It took a couple of years to get that done, and we had not then reached the drafting stage. But we had reached the stage where there was a virtual consensus. A package agreement had been arrived at whereby financial incentives would be given to the landowner and help given to the mineral operator. That was being seen as a package. There was no reason why when we left office there could not have been a reasonable legislative proposal within the following legislative year if draftsmanship time had been available.
However, since the Minister is not able to do anything immediately, I ask him to consider the recommendations made last week by his hon. Friend the Member for Bedford (Mr. Skeet), to have a simple one-Clause amending Bill to the Mines (Working Facilities and Support) Act, 1966, which consolidates all the relevant legislation dating from 1923.
It is time we got round the irrelevant and illogical distinction between preferred and non-preferred minerals. This distinction, while illogical and impossible to justify, carries important legal debarments to operators in the non-preferred area. 1046 There should therefore be the same access to court adjudication in respect of those minerals currently scheduled as non-preferred as there is for those in the preferred sector.
It may be said that the court procedure for preferred minerals is cumbersome, slow and costly, and that is true. It is not a perfect solution, but it is a help. It is better than no solution at all. It may be said that only about two dozen cases have been brought under the enabling legislation, but the fact is that the industry is convinced that the wider availability of these powers would encourage voluntary agreement. The fact that in the non-preferred sector it was known to people owning the mineral surface rights that operators had access to the courts would lead to voluntary agreements being reached more readily. That being so, the industry sets great store by those powers.
Since the existence of that distinction is an inexplicable anomaly, I must tell the Minister that if he is not willing to add a Clause to achieve the abolition of that distinction, I shall seek to do so in Committee. If such an Amendment is then acceptable to the Chair I shall also, as I do not believe this to be a party political matter, invite some of the Minister's hon. Friends who, I believe, share my view of this outdated distinction, to sponsor that Amendment with me in the hope that we can persuade the Minister that this is something that can usefully be done in the short term.
I am sorry to have spoken at such great length, but I am afraid that nearly three years of study of the subject when I was in Government have left me deeply concerned about what the Minister referred to as the years of neglect—under various Governments: I do not make a particular political point about it. I recognise the need to balance conservation with economic need, but I equally believe that obstacles which provide no useful purpose should he removed where possible.
The Bill makes up in small part for the folly of abandoning investment grants, but it pinpoints, though this was not intended by the Minister, similar needs in other industries outside the mining sector. Unfortunately, the Bill misses the chance to improve the general operating environment in the mineral industry. We shall not oppose Second Reading, but 1047 in Committee we shall try to remedy the Bill's defects.
§ 4.47 p.m.
§ Mr. Simon Wingfield Digby (Dorset, West)
The hon. Gentleman the Member for Swansea, West (Mr. Alan Williams) has ranged very widely, and has spoken with the knowledge of an ex-Minister. He has no doubt been stimulated by his visit to Dorset as a parliamentary candidate into being more interesting than otherwise he might have been.
The hon. Gentleman raised a number of questions. He talked about low profitability and mentioned the shipping industry, about which I shall have something to say a little later. He spoke of the importance of import substitution, with which we must all agree. He referred to the scars left by past mineral development. Happily, we in Dorset have few of these scars, apart from a few chalk pits. I must say that the two Clauses appear to be as different from each other as chalk is from cheese, but in investment grants the hon. Gentleman succeeded in finding a connection between them.
Clause 2 corrects certain anomalies in the ending of investment grants. Unlike the hon. Gentleman, I have no doubt whatever that it was right to end those grants—they were so very liable to abuse in various directions—but, in the same breath, I must point out that they were of enormous advantage to the shipping industry, an advantage which that industry will miss very much.
It is very satisfying to note that in the last year the British merchant fleet increased by 1½ million tons to 27.3 million tons, although it is still behind Liberia with 38.6 million tons and Japan with 30.5 million tons. But the advantage of the impetus from investment grants will die out in the end. There are still a certain number of ships in the pipeline, but even without investment grants the rate of increase in our fleet was considerably less than that of Norway.
My hon. Friend will know that the Rochdale Report recommended that if investment grants were taken away from shipping something comparable should be given instead. I urge my hon. Friend, in any talks that he has with the industry in the near future on this question, 1048 to try to persuade the Treasury that further taxation concession is necessary for this very low return industry to enable it to compete not only with Liberia but with competitors in other parts of the world which enjoy enormous tax concessions, some of which are very hard to quantify. I welcome the way in which my hon. Friend has removed the two anomalies about shipping in the winding up of investment grants.
I return to Clause 1. In the light of my experience in my constituency, I find this Clause a little harder to justify. But I was extremely relieved to hear that my hon. Friend had in mind mostly metals and not oil. The House is being asked to vote not less than £50 million and up to 35 per cent. of the expense of exploring mineral resources, which is quite a lot of money, and we need to be satisfied that this encouragement is needed. My hon. Friend spoke as though only exploitation could be a danger to the environment. But exploration as well can be such a danger.
At present I am receiving many complaints from my constituency about a certain amount of research taking place in the search for oil and natural gas. This is being done by Seismograph Services Ltd., on behalf of Berkeley Petroleum (U.K.) Ltd., which I understand is a Canadian company. There is a good deal of complaint and indignation in this area, which has been designated an area of outstanding natural beauty. The Dorset Evening Echo had a recent headline:Outcry over Dorset oil probe.Fears were expressed that the discovery of oil in West Dorset would be to the detriment of our natural environment, and a survey team went round and found widespread fears about what is taking place.
At present this company, quoting in aid some authority from my hon. Friend's Department, is indulging in a lot of underground explosions which are having the effect of interfering with underground water. Only today I received details about an old lady who had not only had windows of a cottage blown in but whose well had completely dried up in consequence of what had been done. I understand that this company should not be allowed to go on to private ground 1049 without permission, but there have been allegations that trespass has occurred, and there was an attempt, even, to enter the churchyard to carry out these experiments, but the vicar refused permission.
This kind of thing is unreasonable. It does not need Government money and encouragement. There is the danger to underground water supplies and to houses which are shaken by the explosions. At the end of the day, we have to ask whether, if oil were found in Dorset, it is a suitable area—it is an area of outstanding natural beauty—upon which to inflict these scars on the environment, especially at present when everyone is so much more aware of the importance of the environment.
I ask my hon. Friend to investigate what is happening in this area of West Dorset because it is causing a great deal of alarm. I query whether it is necessary for the Bill to cover activities of this kind and to make possible the grant of public money for such activities. I also ask him whether on exploration as well as exploitation there should not be some consultation with the Department of the Environment.
I understand that these activities are not subject to any planning permission at present. But if we have explosions which interfere with underground water supplies planning permission should apply. If my hon. Friend cannot amend the Bill I hope that he will go very slowly in extending its provisions to exploration for oil or natural gas on land.
As I have said, I welcome Clause 2, but I hope that my hon. Friend will apply Clause 1 in moderation.
§ 4.56 p.m.
§ Mr. George Lawson (Motherwell)
I am very disturbed about the Bill. I do not propose to seek to divide the House upon it, but I want to stress in what way I am disturbed. I underline the point made by the hon. Member for Dorset, West (Mr. Wingfield Digby). It seems that the Minister has sought to convey the impression that the Government were primarily concerned about exploration and about knowing what the mineral resources of the nation happen to be. But for this purpose outside mineral prospectors are being brought in, and the Government are prepared, under the 1050 Bill, to spend up to £50 million to get this job done. I should have thought that if the nation wanted to know what its resources were in this connection, and was prepared to spend £50 million for that information, we could have found ways less ominous than those to be followed here.
At present there is a soil research classification being carried out under which all the nation's soils and their potentialities are being listed. This is being done not by bringing in people on this sort of basis but by Government Departments being paid to do a specific job, and the information is coming to the nation to be utilised as the nation thinks best in its interests.
On my reading of the Bill, all the signs make me feel very doubtful. I am disturbed that there is no Minister of the Department of the Environment included in the Ministers sponsoring the Bill. I know that the hon. Member for Crosby (Mr. Graham Page) is attached to that Department, but his Ministry, insofar as it is one, is the Ministry of Local Government and Development. We have heard much from the Secretary of State for the Environment about what he and his Department hope and intend to do, but there is nothing about this in the Bill. If his name were included in the Bill, I should be a little less doubtful than I am at present.
Although my hon. Friend the Member for Swansea, West (Mr. Alan Williams), for whom I have high regard, talked about the conservationists being unnecessarily alarmed, he did not settle or reduce any of my fears. I am not much of a conservationist, but I, like an increasing number of others, have a feeling for the country, our responsibilities for it and what harm we may do in the efforts to make a quick profit—I do not use the term "profit" in a derogatory sense.
When he introduced the Bill, the Minister talked of the possibility of work of this sort now being done because low grade deposits had become economically workable. Those were not, perhaps, exactly his words, but I am sure that he would not challenge me when I say that that was what he was saying. I understand that workings which till fairly recently would have been regarded as uneconomic have now become economic.
1051 [MR. LAWSON.]
I am told that because of new methods of extraction ore can be extracted to one part in 100 with 99 per cent. scrap.
This is not a question of a hole in the ground down which miners work. It is a question of huge dragnet excavators tearing up great areas, with the country being permanently destroyed. There will be despoliation beyond reparation.
The River Clyde is well known, but what is not so well known is that at one time the River Clyde was a great salmon river. Trout can still be fished in the Clyde. Many anglers have fed the river with trout over the years. Yet permission has been given for sand and gravel to be extracted from the river bed. In a few months considerable areas of a beautiful river which took millions of years to lay down were turned into something not unlike a canal.
As in the case with the exploration here contemplated, what happened to the Clyde was to be subject to the normal planning procedures. The trouble about those procedures is that those engaged in them are powerfully influenced by job prospects. Because of local pressures and because of the chance of having a few hundred jobs for a few years, irreparable damage is done. So it is not enough to say that the normal planning procedures will apply.
The Minister and my hon. Friend the Member for Swansea, West said enough to show that both of them are concerned primarily to make it easy for those who want to extract minerals. Far be it from me to deny anyone opportunities to extract minerals, but increasingly not only hon. Members but the public at large are concerned that their country be not unnecessarily despoiled. The fact that planning procedures will apply provides no guarantee.
I do not say that I have a ready answer. I have not. However, I suggest that institutions such as the Countryside Commission and the Nature Conservancy be brought into this and be charged with the duty of being satisfied, before permission is granted for exploration or exploitation to proceed, that irreparable damage will not be done. The Countryside Commission has a vested interest in preserving the country's natural beauty. We should be assured that, before decisions are taken to allow action 1052 which could cause irreparable damage to some of our most beautiful areas, the interests not only of local people, who may be concerned primarily about the provision of jobs, but also of the nation at large, and not only of this generation but of generations to come, have been adequately considered.
The time has long since passed when it can justifiably be said that because somebody can provide jobs or make money from some enterprise he should be allowed to do as he pleases. There must be some means of ensuring that irreparable damage is not caused. The damage which will be caused to any stretch of land must be weighed against the consequences of developing that stretch of land.
I expect much stronger assurances from the Minister than those that he has given us. If I am sufficiently lucky to be selected to serve on the Standing Committee I hope to hear him say at that stage that provision will be made for an organisation such as the Countryside Commission or the Nature Conservancy to be given standing. Perhaps the responsible Department should be the Department of the Environment, because the Department of Trade and Industry has a bias in favour of development such as this.
§ 5.8 p.m.
§ Mr. Laurance Reed (Bolton, East)
I am pleased that the Bill will give the Government additional powers to accelerate the development of our Continental Shelf. After all, this area covers about 186,000 square miles, which is twice the size of our island.
Since we acquired the exclusive right to explore and exploit resources in this area, there has been very rapid progress in the search for oil and natural gas. In the case of minerals other than oil and gas—the hard minerals—progress has been very slow and we know little about the mineral-bearing potential of our shelf areas. Some information has been yielded by the search for hydrocarbons. There is also a modest shelf programme directed by the Institute of Geological Sciences.
About 10 per cent. of our coal comes from beneath the sea, from 17 collieries in all. About 10 per cent. of our aggregates are taken from offshore, mainly in 1053 Lincolnshire and off the coasts of East Anglia in the southern North Sea. In addition, I understand that there are very large lime deposits in the Minches useful as a fertiliser and in the manufacture of cement. There is probably a very large iron ore body existing beneath the Wash. I am told by the Institute of Geological Sciences that the North Sea could hold as much as a quarter of the world's potash resources. We know that the heavily mineralised areas of Cornwall and North Wales extend considerably beneath the seabed and in the past tin has been extracted from those areas.
This Bill is something of a departure for the Government, in that it is a departure from the lame duck policy. We are encouraging industry in this case by Government intervention.
§ Mr. T. H. H. Skeet (Bedford)
But these are not lame ducks.
§ Mr. Reed
That is true, but it is an area where the Government are prepared to intervene, as opposed to their usual practice of non-intervention. I welcome this policy because I think it is possible to justify in the national interests an attempt to accelerate the development of our offshore areas. I would state the advantages as follows: first of all, security of supply. This country is dependent, as perhaps no other industrial country is, on imports of minerals. We are, therefore, exceedingly vulnerable to any change which may arise from political or economic reasons. It seems to me only prudent that we should make the best use of any economic mineral resources that we have.
Secondly, I suggest it can help the balance of payments. That is rosy enough at the moment but it remains to be seen whether that will be the case when we have renewed economic growth.
Thirdly, as this is a small island there are colossal pressures on a limited land area, and a number of hon. Members have already expressed their anxiety about some of the nation's national parks and other beauty areas which are obviously vulnerable to mineral workings on land. Clearly, if we can exploit the same minerals offshore in the less crowded parts of our seaways, this is advantageous and we can relieve pressure on the land.
The case for accelerating development of our shelf areas through this Bill goes a 1054 long way beyond that. In the exploitation of the sea it is not just a question of exploitation of the resources themselves. It is a question of acquiring the engineering capability to exploit them. At this moment marine science and engineering is in a very elementary stage, and if we can encourage and accelerate the development of our own shelf areas we can stimulate progress and development in this area too. This is especially important for a variety of reasons. The sale or hire of the ironmongery for exploitation of our seabed resources is a very profitable enterprise—as profitable as exploiting the resources themselves, or it can be. In the case of oil, which I agree the Bill does not touch, in the last 10 years there has been a total investment of £7,000 million in the technology for research and exploitation. This is world-wide of course. It is estimated that in the next 10 years the figure will be doubled: about £15,000 million will be spent in search and exploitation for marine oil and approximately two-thirds of this will be spent on technology. This is good business which we can stimulate indirectly by a programme of this kind. Certainly it is useful and important if we can avoid the situation that we have with oil where 90 per cent. of all technology employed in the sea is provided by the Americans.
The second reason why it would he advantageous, following exploitation and acceleration thereof of our shelf areas, is that the technology allows one to have access to and take possession of the resources outside the Continental Shelf area. Some new ocean rÉgime may be established which will reduce the proprietory rights which attach to superior technology in this field, but any country with the ability and the know-how to exploit these resources more profitably than another will always be in a position to outbid the less efficient operators when seeking concessions.
The final advantage accruing from this Bill, namely, that we can accelerate development of our shelf, is the understanding that natural resources per se, do not really exist. This seems rather a curious remark, but it is true. They do not exist divorced from the technology of their exploitation. The obvious example is uranium which has always been in existence but it is only in the present century that we have acquired the know-how 1055 with which to utilise it. Natural gas in the North Sea has been there for about 140 million years, or even longer, according to which theory one subscribes to, but it is only the technology which we now have which allows us to exploit it. Bearing in mind that between now and the end of the century the total consumption of metals in the world will exceed all that consumed in the last 2,000 years, it seems to me altogether sensible for a country like ours to accelerate the development of the technology and the know-how that will allow us to enlarge our base of usable resources in this country and in the world at large.
With those observations I will close, pointing out to the Minister that when he uses his discretionary power under the Bill he will have the difficult task of deciding where to invest the money—in land metals or in seabed metals—and I hope he will consider some of the advantages that will accrue to this country and to the world in general if he makes the decision in favour of development of the Continental Shelf.
§ 5.16 p.m.
§ Mr. Eric Ogden (Liverpool, West Derby)
The hon. Member for Bolton, East (Mr. Laurance Reed) has taken a keen interest in mineral and mining matters since he came to the House. He began his remarks disarmingly by saying that the Bill presents something of a departure from the previous policies of the Conservative Government over the last 12 or 18 months. Something of a departure! I think that is possibly the understatement of the year so far.
The hon. Gentleman went on to argue that the Bill should be supported for reasons of security of supply, balance of payments, costs and the ability to use our own engineering techniques, with all of which I wholeheartedly agree. He and I both come from the County Palatine of Lancashire. Our two cities are not too far apart. Bolton, east or west, is in the heart of the Lancashire coalfields. The hon. Gentleman must know that his own Minister is at the moment allowing and encouraging the importation of foreign high-priced coal. Will he join us on these benches in arguing against his Ministry allowing the importation of minerals on precisely the grounds that he has mentioned this afternoon—namely, 1056 security of supply, cost and the use of British resources? After what he said, he should join us in asking his Minister to cut down imports of foreign coal.
§ Mr. Laurance Reed
Yes, but only if it is economical to do so—not at any cost.
§ Mr. Ogden
The import price of South African or Polish coal to Thamesside is from £225 to £250 per ton delivered. The price of British coal is £140 to £160 a ton. In terms of cost or quality—any way one likes to look at it—British is still best.
There is a tradition that Second Reading debates are allowed, rightly, very wide limits. I make no complaint of this, although there were times when I thought the limits were being stretched very wide this afternoon. I was humming a little tune on the lines of "Land of Hope and Glory". I am sorry to paraphrase it, but my version went something like this:Wider still and widerShall the limits be set.Good Lord, give me patience,He has not sat down yet.With that in mind—I pick out nobody in particular, but we have not a lot of time for this debate—I intend to speak about the Bill, the whole Bill, and nothing but the Bill.
We should support any legislation which will encourage the proper use of British resources and increase our balance of payments. The Minister referred to £100 million as his hope. We should support anything which will help to provide employment, whether it be in the Scottish Highlands, the Welsh Valleys or the Lakes, the East Country or the West Country. These are intentions that we should support. We may criticise the ways in which it is hoped to effect these intentions, but we should certainly support them.
The Minister pointed out that the Bill makes no change in the existing laws regarding the protection, conservation or security of the areas in which there is to be drilling, exploration and, possibly, mining later on. So the conservationists on both sides—not the Conservatives, for no one would ever suggest that my hon. Friend the Member for Motherwell (Mr. Lawson) is a Conservative, though he is 1057 a great conservationist—need have no fears.
However, it is implicit that exploitation will take place, if the potential is there. No one would ever suggest that we should put Government money and private money into exploring and finding natural resources and then say, "That is fine. We shall leave them lying there, we shall not use them, we shall carry on importing". So the implication is that it is exploration for the purpose of exploitation, and we shall have to watch how matters stand in relation to that end product.
Like my hon. Friends, I give a cautious welcome to the purpose and intention of the Bill, cautious because it must at the same time be said that, only a few months ago, the Government were insisting that their policy was one of non-intervention, that they would not interfere in the normal market forces, that Government expenditure and Government investment must be curtailed, that subsidies would be kept for the farmers and no one else, and that everyone else had to stand on his own feet.
My curiosity in this respect is enhanced when the Bill is introduced by the Minister for Industry, although his name does not appear on the back of it. The hon. Gentleman has left the Chamber for a moment, and now the Under-Secretary of State, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), has taken over his duty and is watching the progress of debate. His name is on the Bill. I am curious, as I say, when I recall that, at the time when we were being told that the Government were non-interventionist and were determined to cut Government expenditure and subsidies, it was at least reputed that the Minister for Industry and his hon. Friend the Member for Cirencester and Tewkesbury were the hardest of all the hard-liners. We were given to understand that this was their policy, and, indeed, their actions confirmed it. Yet today it is these two Ministers who are concerned in introducing a Bill which completely reverses their previous policies and opens the way for a subsidy.
There are reports of policy changes, and there are reports that there will be changes of Ministers. I do not want to help or harm either of the two hon. Gentlemen. From my point of view, if 1058 we are to have a Conservative Government, I prefer to see true-blooded Tories on the Government Front Bench, and one could hardly find two better examples of that than the Minister for Industry and his hon. Friend. The sooner people outside realise what they stand for, the sooner we can get rid of them. I do not want any "Lib-Labs" on the Treasury Bench.
I accept the intention of the Bill, as I say, though I must comment that it is not spelled out in any great detail. If a Labour Minister had been bringing forward this kind of subsidy Bill, what roars of protest, what cries of, "Blank cheque" and, "Giving away the taxpayers' money" we should hear from the Conservative benches. They have been remarkably quiet so far this afternoon.
In my view, the Long Title could well be expanded, difficult though it usually is to expand a Long Title. It may be simply enough to drill, to explore, to put down, say, 200 bore-holes in a given area, and assume from one's results that there are mineral resources underneath, but only when one actually goes down and starts looking in the earth itself does one find out whether there are geological faults and so on and what the situation actually is. So it may not be enough just to explore and to test. The provisions of this Bill, or a parallel Bill, should, I suggest, follow through the first few years of the working life of a mine, if that is what we are really talking about. If the real purpose is to be carried through, it will not be sufficient simply to stop at testing and not allow for a transitional period covering exploitation in controlled circumsances.
Clause 1(3) is the ultimate in providing for discretionary payments. If Ministers concerned with the environment and with housing had a Clause like this, they would be delighted. Every grant is subject to some kind of regulation. There are discretionary grants and standard grants, but under Clause 1(3) the Secretary of State may make payments or may not. The only limit is a payment up to 35 per cent. of expenditure incurred. He may charge interest or he may not, he may defer it, and so on. He can do almost anything.
I take it that what the Minister does will depend on viability and other considerations, cost increases and so on.
1059 [MR. OGDEN.]
There must be some sort of standard. For example, we do not want one company exploring in one part of the country to have better terms or advantages over others. This, to take up the Minister's words, would not be fair competition. So there must be some guidelines stated for our consideration in Committee and at later stages showing what the conditions might be.
Within the limits of £25 million, and then £50 million, however, the Minister has absolute discretion as to how he uses that money. It may be decided that he will use the £25 million over the first five years. Perhaps he could tell us in what phases it might be done. Does he envisage a large drawing in the first year or two, or will it be spread over the five years, £5 million in each year? Further, what is the demand which he expects for the first £25 million?
I take it that the Order covering the second £25 million will be subject to affirmative Resolution. That is how I read the Bill. That would be the normal procedure, and it would give us an opportunity to examine the matter again.
To whom are these moneys expected to go? The Minister mentioned foreign companies. In view of our engineering and mineral working skills, our drilling techniques and the resources which the National Coal Board has, I do not much welcome emphasis on the possibility of foreign companies coming in, even though they will have to establish British-based companies. I have in mind here what was said both by my hon. Friend the Member for Motherwell and by the hon. Member for Bolton, East. Let us do it ourselves if we can. Let us control it ourselves if we can. If we had a Labour Government, I should be asking for our own public corporation so that we could direct it, but with a Conservative Government that would be a waste of time.
The Minister gave some idea of where and for what the exploration might be— fluorspar in the South-East, was it?— with a mention of Yorkshire and Wales. I noticed that one of my hon. Friends eagerly pricked up his ears when Wales was mentioned, because he has some connection with exploration for gold in Merioneth.
1060 We were told yesterday that, as a result of the efforts of Ministers and a change in Government policy over the past six months, credit facilities are readily available. Apparently, apart from my own bank manager, everyone is eagerly trying to lend money to everyone else. If companies have valid schemes, if they have done their preliminary exploration, and if they are financially sound organisations with good expertise, why should they have to come to the Government for money? Why should they not go to one or other of the finance houses which, we are told, are more than eager to pour their money into the pockets of others and draw back their profits?
Why should the Government compete in this business? True, they have always said that they were in favour of competition, but I had not thought that they would be guilty of wanting to give subsidies. It was never suggested that they would ever subsidise private industry or that they would compete with the merchant and private banks. So why does the Minister expect that, in this free credit era, a company will have to come to the Government, unless, of course, he expects that only those companies which cannot get the money from the banks will be the ones coming to the Government? If that is it, it can hardly be called sound finance.
Now, the question of "lifted or extracted". The Minister covered this point partly in answer to a question from his hon. Friend the Member for Petersfield (Miss Quennell). We take it now that hydrocarbon oils are included, but it is not the Minister's intention to use the Bill in that connection. Next, the question of ships. I imagine that somewhere in the mind of those who drafted the Bill is the thought of provision for drilling off the Continental Shelf for natural oil and gas. Are we to take it that the word "ship" would cover a drilling barge, a drilling rig or an exploitation rig, not just a ship? I do not want to go into the mysteries of the last Bill dealing with matters of this sort. Hon. Members here present will well remember it and our discussions—I shall not use the technical term—of the man who would be the rig manager. I take it that they are the chief whatever it was that he was 1061 pushing, and that they will include ships, drilling barges, drilling rigs and exploitation rigs.
Clause 3(2) says:(2) This Act does not extend to Northern Ireland.That is not an unusual phrase to find in a Bill, but whilst in normal circumstances we might expect the Northern Ireland Government to be able to introduce equivalent legislation, most tragically in the present circumstances it would be very surprising if they had time to carry a similar Bill through Stormont. Is not it possible to consider the exclusion of that subsection, or is it, perhaps, that they already have similar legislation?
§ Mr. Alan Williams
It is an interesting paradox that the investment grant scheme has been retained in Northern Ireland, where there is a Conservative Government. It has been debarred only for Wales, Scotland, the North region and other development areas in Great Britain.
§ Mr. Ogden
That answers my point extremely well. They know how to hold on to the good things in Northern Ireland at times.
I raised that point because we were reminded in the newspapers some time ago that the island of Rockall had been claimed once again for Her Majesty and is part of the United Kingdom of Great Britain and Northern Ireland. If the Bill is to apply to the Continental Shelf, and if, as we are told, there are great mineral resources in one form or another around the island of Rockall, that question is important. I wanted to make sure that the island fell within our sovereignty.
I have asked many questions. The answers will be important, and we shall want to study them. Subject to our receiving helpful information from the Minister, the House should give the Bill its Second Reading. No doubt it will do so, and then we shall give it close consideration in Committee. We have almost a Committee here now. I hesitate ever to volunteer for a Committee, but being on the Committee to consider this Bill might keep me off some others on which I do not want to serve in the near future.
This is a good Bill in its intention. It is a major piece of legislation representing 1062 a major change of Government policy. It comes rather late, but we welcome it none the less.
§ 5.34 p.m.
§ Miss J. M. Quennell (Petersfield)
The hon. Member for Liverpool, West Derby (Mr. Ogden) will forgive me if I do not take up all his very interesting arguments. When I intervened in the opening speech of my hon. Friend the Minister for Industry, my hon. Friend suggested that my intervention was more appropriately to be made in Committee. He may now have some inclination of the kind of Committee stage he will have if the hon. Member for Liverpool, West Derby has the good fortune to serve on it. The hon. Gentleman will see from yesterday's OFFICIAL REPORT that the Selection Committee has been appointed. I will say no more than that.
I intervened to ask for clarification of the position of hydrocarbon oils under the Bill, quoting Clause 1(5), which says quite simply:In this section 'mineral deposits' includes any natural deposits capable of being lifted or extracted from the earth.That has given the key to many problems that beset hon. Members who do not have the experience of those who represent mining constituencies, such as the hon. Member for Motherwell (Mr. Lawson) and the hon. Member for Swansea, West (Mr. Alan Williams), who spent three years in the Department of Trade and Industry. My constituency has not contributed, and is not likely ever to contribute, much to the fluorspar, copper and nickel resources of this country. But the chalklands of the southern half of England are widely thought to have substantial oil deposits beneath them.
I accept all my hon. Friend's arguments in introducing the Bill. Obviously, it would be to this country's advantage if we could assure ourselves of home stocks and supplies of the base metals and minerals that we have to import, which come from areas of political uncertainty. Moreover, it would help our balance of payments, and they should be cheaper, since freight and transport costs would not be such a factor. There is also the employment prospect.
My hon. Friend has introduced what is virtually an umbrella Measure. Any 1063 national deposits are susceptible to its provisions.
I have great sympathy with the points made by the hon. Member for Mother-well in his very effective speech. There will undoubtedly be public disquiet at the prospect of mineral development in the south of England—Hampshire, Kent, Dorset and East and West Sussex. There is tremendous pressure on the land in the area by the sheer weight of population density there. The area has a relatively high level of employment, so the unemployment argument is diminished. No one can pretend that my town of Petersfield is a depressed mining town. But the downland and chalk areas are mainly areas of outstanding natural beauty. They are recreation areas of great scenic beauty for large masses of the population. Their ponds, streams and rivers provide recreation, as does the Clyde, for vast numbers of anglers.
My hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) spoke of seismographic explorations for oil deposits in his constituency. Some of the side effects are extraordinary. The vibrations travel along the substrata of rock, and a dwelling built over a sub-stratum half a mile away from the explosion can suffer the shock just as violently as it is felt at the centre of the explosion.
I was rather perturbed to hear some slightly pejorative remarks by the hon. Member for Swansea, West on the conservation lobby. The hon. Member for Motherwell was absolutely right: exploitation will follow exploration. As sure as night follows day, the walking drag lines will follow the seismographs. The exploration would not take place except to discover whether subsequent exploitation would show a worthwhile commercial return.
I am perturbed that the names of the seven sponsors of the Bill include only one who conies, slightly tenuously, from the Department of the Environment. We see the names of my right hon. Friends the Secretary of State for Trade and Industry, the Secretary of State for Scotland and the Secretary of State for Wales, and my hon. Friend the Minister for Industry, my hon. Friend the Under-Secretary of State for Trade and Industry 1064 and my hon. Friend the Financial Secretary to the Treasury. With them, there is only the name of my hon. Friend the Minister for Local Government and Development, yet this is potentially one of the biggest environmental problems the House has had before it for a long time. It is a quite different matter from the planning permissions necessary for each mining operation. Some exploration activities require no planning permission at all. Heaven help any planning committee suddenly confronted with the news of a substantial oil deposit in one of its areas of outstanding natural beauty! Most of my constituency, happily, is such an area. My right hon. Friends will have to think seriously about the problem that such a situation could create in the South of England. I urge him between now and Report stage to consult his right hon. Friend the Secretary of State for the Environment with a view to concerting their common departmental views on the environmental problems that this Measure could create, not now, not for us, but in 10, 15 or 20 years' time.
§ 5.40 p.m.
§ Mr. J. T. Price (Westhoughton)
I rise briefly, not to introduce a discordant note into this more or less consensus debate, but because I am conscious that the purely economic argument for exploration or industrial activity is the need to find employment and resources, regardless of the natural heritage of our country, which is one of the most precious things we have and which cannot be replaced if it is destroyed.
All my life I have had the pleasure of wandering about the mountainous and wild parts of the country, and I hope I know my country as intimately as most hon. Members. I do not wish to make any reflection on what my hon. Friend the Member for Swansea, West (Mr. Alan Williams) said, but, by inference, he made an aspersion about the conservationist lobby. If I considered that any area of great natural beauty was under threat from ill-advised or capricious industrial development I should always be in the conservationist lobby—
§ Mr. Alan Williams:
In case my hon. Friend misunderstood me, I ask him to read my words carefully tomorrow. I stressed at every stage the need for adequate safeguards. I said that I did not expect that the results of this Bill would 1065 be those feared by certain spokesmen for the conservationists.
§ Mr. Price:
I am much obliged to my hon. Friend. When we are making such a large amount of Government money available, not only to our own nationals but to foreign nationals, we should be well advised to spell out what we have in mind.
The hon. Member for Petersfield (Miss Quennell), who has addressed us so charmingly, referred to her own beautiful part of the country and the apprehensions of the people living there in case there should be the desecration which has occurred in my part of the country, where there are many slag heaps and desolation of a bygone generation of uncontrolled mineral extraction, and where it will take generations to clear away the rubbish left behind.
We have already seen what has happened all over the world with oil exploration. Oil is the most universally demanded product to maintain modern technology and transport, and every nation is trying to stake a claim to oil resources. With geologists and explorers, I have gone round the desert areas in the Middle East and the Persian Gulf. In spite of seismographs and explosions underground, every oil company spends at least £1 million on average on each drill that is sunk. Many of those dulls do not yield a drop of oil. The oil companies take the commercial risk of exploration in areas which they cannot spoil, areas of desert.
There has recently been an important reaction in Wales to the prospective activities not of a poverty stricken little company but of the Rio Tinto Zinc Company, a great international concern. The company has made preliminary investigations in a most beautiful part of Wales, the Mawddach Estuary and the mountains east and west of the Estuary, including Cader Idris. This company, which is just as able as the Shell Oil Company to spend £1 million or £10 million on exploration, by the munificence of the Conservative Members of the House, aided by their counterparts in the Labour Party, will be able to go to the Government and get money from them for the most risky and capricious part of their activities, the exploration, before any raw material is produced.
1066 There should be a little brainwashing on this. If the Rio Tinto Company conducts a preliminary exploration of the old gold mine area of these valleys in Merionethshire, and if deposits are found, either of gold or of other rare metals which are often found in association with gold, the Government will pay the bill for the exploration work. If that exploration is followed by exploitation, will the Government claim a share in the profits of that company? I am not satisfied that it is possible to justify the use of Government money raised by public taxation for the private exploitation of wealth if the Government do not have a comparable share in the control of the industry which has been created by the expenditure of that money.
If vast areas of the country are turned into a stone, cement and concrete jungle at the cost of destroying our most beautiful heritage, this will be to the detriment of the happiness of future generations.
The hon. Member for Petersfield spoke about the draglines following the explorer, and my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) inferentially referred to the same point in another way. There is nothing new in this, except that in the modern world of science things happen more quickly and the job is done more efficiently. I know the Peak District of Derbyshire very well since it was my stamping-ground when I was a young man. Many parts of Derbyshire are being defaced not by the extraction of coal but by the search for lead and other base metals, particularly in the Central Derbyshire areas. According to the world price of lead at any given moment, those mines can be shut or opened capriciously depending on the play of the market.
In a situation where Government money is being made available as some kind of basic support cost to the industrialist who wishes to search for metals—which may be for the economic good of the country, but incidentally will also be for the welfare of private company shareholders—I would ask the House to be extremely cautious in widening the powers, even planning powers, for people who are often so powerful behind the scenes.
1067 [MR. PRICE.]
Although facilities are available in the form of public inquiries and protests from people offended by what is being done in defacing the countryside, it is well known that the industrial forces are often controlled by financial machinery, both in this country and internationally, with great pressure being brought to bear on Governments, whether they be Conservative or Labour. The man in the street is often powerless to contest these forces except by going through the motions of public inquiry, which often produces disappointing and negative results.
I hope the House will be well aware of the fact that there are people in this House who will always be willing to stand up and make a reasonable protest against any haphazard, reckless or ill-advised intrusion into areas of our country which ought to be preserved for future generations.
§ 5.52 p.m.
§ Mr. T. H. H. Skeet (Bedford)
The conservationist argument advanced by the hon. Member for Westhoughton (Mr. J. T. Price) and others overlooks the important fact that without these materials no roads or houses would be built in the United Kingdom. Therefore, one has to try to reconcile some of the problems of devastation of land on the one hand and the construction of roads and buildings on the other hand. The hon. Member for Swansea, West (Mr. Alan Williams) has said that conditions must be laid down and, indeed, such matters have been firmly laid down in terms of planning control.
I should like to mention one other matter which was raised by the hon. Member for Liverpool, West Derby (Mr. Ogden), who said that a blank cheque was being given by the Government. This is not the case. At least 65 per cent. of the money must be found by the company itself and only 35 per cent. will be advanced by the Government. If the mine is subsequently successful, the money will have to be repaid.
§ Mr. J. T. Price
Will the hon. Gentleman tell the House where that is said in the Bill?
§ Mr. Skeet
If the hon. Gentleman will look carefully at the earlier part of the 1068 Bill—I do not know whether he has read it—he will see in Clause 1(3):including terms providing for repayment in whole or in part of the amount paid.I should have thought that would provide sufficient control partly in terms of repayment of the sum and partly in terms of effective planning control.
A few months ago a circular issued by the Department of Trade and Industry stated:In order to promote the economic development of our mineral resources the Government are ready to consider meeting 35 per cent. of qualifying costs incurred by companies exploring for and evaluating for commercial purposes the deposits of certain minerals in Great Britain. The scheme is confined to non-ferrous metal ores, barium minerals, fluorspar and potash.That argument has been confirmed today by my hon. Friend the Minister for Industry, and it can be seen that Clause 1(5) states:In this section 'mineral deposits' includes any natural deposits capable of being lifted or extracted from the earth.The Minister was right to say that this will be a discretionary matter, but surely a court of law would look at the matter in much broader terms. This will include all sedimentary materials and at a later date it may well include oil and natural gas. I believe there are arguments for saying that these other minerals should now be included.
My hon. Friend the Minister said that he would not cater for activities which do not require a special stimulus. I should like to ask what is to be the order of priority. Are we to provide some of the non-ferrous materials at a time when commodity prices are falling, or are we to meet the requirements of the market which are essential today to get major roads built in the United Kingdom and also to put up schools and public buildings? Unless we are able to undertake this activity at the right time, taking advantage of the requirements of the market, we shall be in great difficulty. It is well know that heavy sedimentary materials cannot be carried very far and the expense involved in shifting such material is very high. Therefore, if minerals are too highly priced this will be reflected in the final cost of buildings.
There is one other argument which should be borne in mind on the question of sedimentary materials dealt with in 1069 Section 62(2) of the Capital Allowances Act, 1968. A company applying for planning permission must put forward certain geological information. Therefore, if planning permission is refused, all the work which has been undertaken and the money spent on it are rendered futile. When application is made to the income tax authorities to bring Section 62 into effect, the argument then is that the company has not given up the search because at a later date the planing permission might be reversed and it could then go on with the work. There is, however. the prospect that planning permission may not be reversed, and in this age of conservation it is more likely than not that all development wil be completely ruled out. Therefore, there is a growing need to consider sedimentary materials such as sand, gravel, granite and limestone, which are probably less important in terms of our balance of payments but extremely important in respect of the number of structures they create in the United Kingdom which in turn lead to an advancement in our general living standards.
There are two other matters which I wish to mention. What criteria will the Minister exercise in granting these payments? Is the matter to be left to regulation? If conditions are to be laid down, it would be useful for the House to know what they are to be. I believe that these conditions should be specified now or certainly should be stated later in Committee.
My hon. Friend the Minister also said that these provisions will be applicable to the United Kingdom and the Continental shelf as defined by the Continental Shelf Act, 1964. This is interesting because, leaving aside oil, no company is mining on the Continental Shelf other than one corporation, the Marine Mining Corporation, which is mining alluvial tin off the Cornish coast. In 1959 sand and gravel production totalled 92 million cubic yards, 8,744,000 tons of which came from the Continental shelf —about 10 per cent. The 1970 figure was much higher. It must be remembered that work on the Continental shelf is very expensive.
I should like to quote from an article in Hydrospace in October, 1971 entitled, "Undersea Mining of Aggregates". In a section devoted to the North Sea the article stated: 1070Due to market considerations, the main gravel deposits dredged are in the southern Bight of the North Sea. The southernmost part of the North Sea is bounded by the coasts of England, France, Belgium and the Netherlands.A large part of this area is in our own sector and this is where money could be most usefully spent. However, we are told by the Minister that money is not to be allocated for this purpose but will be utilised in the chance of finding some extra tin in Cornwall—and I am only too glad to encourage any development in Cornwall—or gold or lead elsewhere in the country which may help our balance of payments, since this may contribute as much as £100 million.
Surely, however, one of the problems is that any proposal involving sand, gravel, lime or limestone could consume a very substantial part of the £25 million which is to be allocated over a period of five years. I ask my hon. Friend again, what is the purpose of including the Continental Shelf when no work is going on there at present, apart from sand and gravel, and when it is said specifically that the oil industry is to be left outside the terms of the Bill?
One other important matter concerns mineral rights to which I referred in the debate on the Address. I am grateful for my hon. Friend's observations today. He said that there is a non-consensus here since this matter has not been adequately discussed with mineral undertakers and with the owners of mineral property. However, as I understand it, there is more of a consensus here than my hon. Friend envisages, and it may be appropriate to mention that when the Bill reaches its Committee stage, it will be my desire and, I hope, that of the hon. Member for Swansea, West to move an Amendment to include such a Clause in the Bill. This can be done very simply and, in my view, it would be advantageous to get matters right from the start.
I want now to refer to one very serious problem. It is that sedimentary materials are very badly treated. A number of non-ferrous metals are highly regarded and were put in a privileged position under earlier Acts of Parliament dating back to 1923 and the consolidating Act of 1966. Reserves of clay and so on are running out for many companies, to the extent that they may have to lay off labour. Others are looking ahead and 1071 trying to get additional reserves. In doing so, they are running into difficulties. One problem is the limitation imposed on planning permission under the Town and Country (Mineral) Regulations, 1971, which for minerals is only 10 years. Another problem is the absence of coherent legislation on mineral rights. These difficulties are leading to a serious lack of reserves sufficient to support expensive plant and to meet the requirements of the market.
They are problems which have been brought about in several ways. The first is the inability to persuade the owners of mineral properties to grant mineral rights to applicants except at exorbitant prices. The outcome is that the person at the end of the list has to pay an exorbitant price for building materials, which cannot be in the public interest. The other is the inability to persuade local planning authorities of the need to amend development plans so that land may be used forthe winning and working of mineralsas required by the Town and Country Planning Act, 1962, and all the Statutory Instruments made under it.
Many applications, with the procedural requirements involved, take up to three years to be granted. Often there may be a complete block. It may be that a mine or quarry has reserves of two or three years, and most companies will be reaching the end of their normal existence if they cannot get reserves in time. Certain planning authorities do not wish to grant applications, with the result that one sees the collapse of certain industries.
Another difficulty facing sedimentary materials is the inability to cope with a condition, imposed by the Mines (Working Facilities and Support) Acts, 1923 to 1966, that anapplicant has an interest in the minerals or minerals adjacent thereto".A happy answer would be to delete this condition, and it could be done by bringing in a modification which I hope to advance later and by repealing the town and country planning provisions of the 1962 Act.
Having said all that, I must congratulate the Government on making this money available, and they are to be encouraged. My hon. Friend imagines 1072 that he will induce a number of overseas operators to come to the United Kingdom simply because he holds out the bait of £25 million over five years. I do not think that that will be a great inducement. After all, an operator will first have to register a company here. He will receive only a very small part of the £5 million a year which is to be allocated. It will not be much of an inducement when it is set beside the tax concessions and cash grants offered by other countries. An operator will have all the difficulties with local planning authorities, and all the difficulties of public inquiries to surmount. We have the case of a potash company in the North run by I.C.I. and Chartered Consolidated which has had impossible conditions imposed on a pipeline which it proposed to build out to sea. If it is found that it adds to the pollution of the sea by adding salt to it. the operation must cease and all the money invested will go down the drain.
When we talk about non-ferrous metals or sedimentary materials, we must have a new approach. The sum proposed by the Government is insufficient for requirements. When considering these matters, one has to look at market conditions and at what is required by the State at present. The State requires granite, stone and other materials for building roads, schools and homes, Unless these construction materials come on to the market, the country will be in constant difficulty.
I ought perhaps to have said earlier that I have an interest in this matter. However, I think that I have discussed it on previous occasions.
§ 6.6 p.m.
§ Mr. David Clark (Colne Valley)
I wish to begin by commenting briefly on the speech of the hon. Member for Bedford (Mr. Skeet). He made the very fair point that we badly need building materials. Those of us who live in the northern part of the country see fine motorways driving through the countryside, for which more and more construction materials are required, yet we have to live in close proximity to spoil heaps, relics of the Industrial Revolution and of the dying coal industry. It is a curious anomaly when one considers that whenever subsoil is needed for motorway construction, all too often planning permission is given to extract materials from 1073 good agricultural land. I fully accept that not all materials in spoil heaps are suitable for this purpose, and that there are certain rating difficulties in using spoil heap materials. The fact remains that, to people living amidst spoil heaps, it seems that this is so much administrative hoo-ha.
§ Mr. Skeet
Has the hon. Gentleman considered a third item, which is the transport costs involved? There may be good reasons why a slagheap should be used if it contains slate, material suitable for hard-core, and so on. But if it has to be transported over long distances, it is not appropriate for the job that the hon. Gentleman has in mind.
§ Mr. Clark
I accept that. However, in many parts of the country spoil heaps are in such close proximity to projected motorways that that argument does not have validity.
I want to take a little further the argument put forward by the hon. Member for Petersfield (Miss Quennell) and by my hon. Friend the Member for Westhoughton (Mr. J. T. Price), both of whom referred to difficulties and dangers to the environment. They ask what is to happen after the exploration. I live in and represent a constituency in a part of the country which takes in a section of the Peak District National Park and some of the Yorkshire coalfield. I am perhaps more conscious than most of the dangers involved, and I want to put forward one or two points arising from this difficulty.
Government money is to be made available for the exploration of mineral wealth. I accept the need to balance economic requirements with environmental factors. However, I am worried constantly by the thought that more attention will be paid to economic arguments than to environmental reasons. I find this point particularly worrying because, once Government money has been given for exploration, it may be used as a reason to pressurise local authorities into giving planning permission.
I should like to cite an example from a slightly different sphere. Earlier this summer the Denby Dale Urban District Council, which lies at one end of my constituency, received a letter from mining experts, Mackenzie, Lehane and Shand, asking for planning permission to 1074 excavate four sites in the urban district. They stated in their letter that they were acting with the full knowledge of the National Coal Board. Certain of the local councillors read the letter and were of the opinion, "Because the National Coal Board is backing them, because they have Government support, perhaps we should accede to planning permission". But the majority of councillors did not accept that interpretation. And a good job, too. When I took up the matter with the National Coal Board I was informed that it had never heard of this planning application. This private firm, which was out to exploit the resources of private property, was using the good name of the National Coal Board to try to further its own case. This is a danger which could arise from the type of power which is being given in the Bill.
There is another danger. We are constantly finding that in the same area we have what the hon. Member for Bedford calls sedimentary materials. We have a great deal of clay. We make bricks. We need the bricks. We also make pipes, and so on. I have no grumble about the excavation of clay, nor have the local councillors. Some of the local firms come in and do a tremendous job. They extract the clay and put the land back. It is a superb operation. What worries me is that some firms, not all, get, planning, permission to extract the and, having, extracted the clay, then go beyond, the planning permission and extract further pieces of land. This has happened on numerous occasions. They then go to the West Riding County Council, the planning authority, and say, "We have taken over another two or three acres. Will you give us retrospective planning permission?" They do this time and again. One has sympathy for the West Riding County Council. But what else can it do? There is a huge hole in the ground. It is a fait accompli. The council can hardly persuade the company to go back and fill it in. Obviously in law it could, but in practice it is a difficult problem.
This is why so many people feel very wary when they see encouragement being given to mineral exploration. It is not so much that they oppose it in principle; it is that they are concerned about the practical operations of particular 1075 endeavours. It is for this reason that, really as the voice of caution, I intervene briefly to point out what could possibly happen after the exploration if it was felt that the subsequent excavation and exploitation had the support of the official bodies.
§ 6.14 p.m.
§ Mr. David Mudd (Falmouth and Camborne)
In an endeavour to be brief I shall not take up many of the valid points which have been made by previous speakers, beyond expressing my regret that there seems to have been a certain inevitability in many speeches that so-called exploitation automatically follows exploration. I reject the word "exploitation". It is an emotive and inaccurate word. The correct word is "development". But it is not inevitable that development of a prospect should follow exploration. Indeed, in Cornwall possibly the most dangerous industry of all to the environment is the tin industry. Yet, despite great exploration, only one project has so far reached the stage of development. Indeed, in terms of environmental responsibility, the landscaping of this particular project is a masterpiece and a credit to industrial thought and responsibility.
Having the honour to represent the Cornish constituency in which is to be found both the cradle and the heart of our great traditional tin-mining industry, I cannot but congratulate the Government on this vital Bill and wish the legislation speedy enactment both in its application towards assisting our balance of payments and with respect to the additional employment which it must surely generate.
But here, regretfully, my eulogy must end, for it is my contention that the Bill is totally out of sequence in the order of priorities for answering the legitimate demands of the mineral industry. The Bill may, and indeed does, offer generous financial means, but means in themselves are useless in this context without the associated legalised ways. Here we have the enigma, to which I direct the attention of the Minister, for it is indeed an enigma, on the one hand, to be given, money to make exploration possible while, on the other hand, continuing to be denied legal powers to make exploration possible. It is about as logical as 1076 burying £25 million in Hyde Park, saying that it is for the use of the public, and then promptly passing an order banning the use of shovels and forbidding the disturbance of grass in a public place.
Let me further try to explain my submission that mineral rights legislation must be either a prelude to or run parallel with the expansion of exploratory financial assistance. For without concurrent legislation, it is possible and, indeed, probable that the take-up of monies made available and subsequent development will be both low and sluggish after the initial demand.
We accept that minerals are a basic raw material and that a free flow of minerals to British industry is vital to the economy and to sustained and growing employment throughout industry. Minerals, however, can be worked only as and where they occur and can be located. If a known occurrence is sterilised it may not be possible to find an alternative at an economic price; thus, natural resources are wasted.
Again, we know and accept that planning controls are becoming tighter, with the result that the number of deposits available for working which would be environmentally acceptable are being gradually reduced. This makes it even more important that deposits in environmentally non-contentious areas should not be sterilised in any way.
A mineral deposit, as has been explained by the hon. Member for Swansea, West (Mr. Alan Williams), is often split into several ownerships. At present we have a situation where one greedy or uncooperative owner can totally sterilise or prejudice the development of the whole deposit although perhaps being the owner of only a minimal, but crucial. area.
Let me give some definite examples of the type of situation which is arising throughout the West Country. A clay company wishes to obtain rights over 40 acres of land in Cornwall. The owner refuses to grant a lease and demands nothing less than the purchase of a very poor agricultural holding. The realistic price of that holding is £35,000, excluding mineral values. He is demanding £150,000, which is exactly three times the total value of the holding and mineral rights.
In Devon another company wishes to acquire 16 acres of stone-bearing land 1077 for limestone workings. Neighbouring land has been sold to the company at £950 an acre. The owner in question is demanding between £4,000 and £5,000 per acre in the knowledge that his 16 acres form the key triangle between two adjoining developments and that inability to purchase will completely sterilise the project.
In Devon a major gravel project, which would provide increased employment and improve local prosperity, may have to be abandoned as a minority land holder, who is totally opposed to mineral workings under any circumstances, refuses to sell or lease the land at any price.
In Cornwall up to a dozen promising mineral sites remain sterilised due to the difficulties in tracing mineral owners, and due to various technical and legal matters which ought never to be allowed to hold up mineral exploration. All too frequently the would-be explorer or developer finds himself confronted by some bloody-minded solicitor or land agent who is a darned sight more obstructive than the principal whom he is supposed to be representing.
It is common knowledge in Cornish mining circles that there is one wealthy landowner who demands, and gets, a prince's ransom whenever he sees fit to grant mineral rights, and it is my genuine fear that the legislation which we are debating today will, in the absence of mineral rights legislation, do little more than, through the availability of exploration grants, enable him, and owners like him, to get a still higher premium for their rights, with the result that money which should benefit the industry will go instead to already overfilled private pockets.
May I, therefore, ask my hon. Friend when he replies to the debate to answer four specific questions. First, what is the anticipated annual take-up rate of these grants, spread over each of the first five years? Second, what safeguards will exist to make sure that the grants are applied to exploration, and not to paying higher premiums to landowners? Third, will he discuss with his right hon. Friend the Leader of the House the possibility of accelerating the bringing forward of mineral rights legislation? Fourth, if it is not possible to include such legislation in the 1971-72 Session, will he consider a simple Amendment 1078 to the Mines (Working Facilities and Support) Act, 1966, to make paragraph 1 of the Table of that Act applicable to all minerals?
On a personal note, I recall my joy when on that glorious October day about six weeks ago Wheal Jame came into production. My hon. Friend the Minister for Industry proudly proclaimed, and we cheered him, "Cousin Jack is back". I suggest to the Minister that we now utilise our joint energies and joint attitudes to keep Cousin Jack back in mining, to draw his family back as well and, above all, to give him and his family increasing and secure employment now that at long last he is back.
§ 6.23 p.m.
§ Mr. Arthur Blenkinsop (South Shields)
I propose to intervene only briefly, chiefly to follow an intervention which I made earlier during the Minister's speech.
I join my hon. Friends on this side of the House in welcoming the conversion of the Government, which is shown by the provisions of the Bill, to the necessity for Government intervention in dealing with problems of this kind. We are anxious that this should be taken much further and should be seen as a step towards the restoration of investment grants which we so badly need, particularly in our development areas.
I share the anxieties which have been expressed this evening, from both tides of the House, about the possible effects of exploration and, later, development, particularly in areas of which we are especially proud. As one who has been concerned for many years with the development of our national parks and the whole campaign for their establishment, I am disturbed about the way in which some of our national parks appear almost to have become invitations for development, and particularly invitations for this kind of mineral development.
We are naturally all the more anxious because of recent proposals for exploration in North Wales and the Snowdonia National Park. That is happening in other national park areas, too. Indeed, there is hardly any national park which has not been subjected to this kind of development.
Proposals for development in the North Yorkshire Moors National Park led to 1079 protracted public inquiries which ended with the potash development being approved, subject to strict controls. One development was approved in the northern part of the North Yorkshire Moors, in which I.C.I. was involved, and, unhappily, two other applications were approved further south in the national park area.
The extraordinary situation has arisen that the companies concerned have said that after reconsideration of the international trade position they consider it unlikely that they will go forward with those projects, at any rate at present. That argument was raised by many objectors at the time of the inquiry and I regret that my right hon. Friend who was then at the Department approved those applications.
It is a matter of real concern to many of us that nearly all the areas which were specifically selected as being important to the country because of their scenic beauty should prove to be the areas which almost inevitably attract major industrial and defence developments of one sort or another. I regret that there is not present on the Treasury Bench a Minister from the Department of the Environment who is responsible for this part of the problem and who has the responsibility of trying to ensure that these heritages are fully protected. I am putting in a warning at this stage. Many of us believe that the powers now available for the protection of national park areas have proved to be inadequate. The powers of the Countryside Commission and those proposed by the Government must be shown to be really effective. That has not been the case so far.
It is almost impossible to weigh the long-term heritage value of areas of that sort to the country and to visitors to it against the potential economic value of the development of whatever material we may be considering. One realises that there has to be a balance but, alas, it is still true that the balance is almost inevitably weighted, in each major case that arises, in favour of the economic development even though, as our experience has shown, that decision may often be proved to be based upon utterly inadequate information.
We welcome the general principle of the Government's proposals but we hope 1080 that the Minister, when he replies, will at least indicate that there will be still further examination of the possibility of tightening up the protection of the areas about which we are particularly concerned, for the sake of the enjoyment which they are intended to provide.
§ 6.30 p.m.
§ Mr. Jasper More (Ludlow)
I should like to add a few halting words on Clause 1. As they will be almost entirely critical, I should like to begin by saying that I warmly support the Bill. This is what one calls consensus legislation. When my hon. Friend the Minister uses a word like "exciting" and the hon. Member for Swansea, West (Mr. Alan Williams) uses words like "purposeful" and "meaningful", it is clearly necessary for the tribunes of the people to be on the alert about what is being done.
Strictly, the Bill is concerned only with exploration. We have heard a lot about exploitation, some of which rather alarms me. My hon. Friend the Minister said that he thought there would be a 10-year gap between the initiation of any legislation and any practical results. I was alarmed by the conclusions of the hon. Member for Swansea, West in regard to what he thought was the ultimate profit of these operations. He invited us to view the general economic scene in terms of gross national product, balance of payments, increases of income and so on. He appeared to leave out the most relevant item: what we might lose by these operations, which, of course, is our minerals.
I suggest respectfully to the House that it is time that we tried to enter a new era of economic thinking and thought about our resources in terms of what we need to conserve—not in the sense in which conservation has been talked about today, but in the sense of preserving our capital assets.
When hon. Members deplore the fact that we are spending £600 million on importing minerals, I think I am sorry that we are not spending £700 million. It is far better to import them and keep some reserves in our own country for as long as we can. These are irrelevant thoughts which it would be nice to develop at another time.
There is a nearby area where some of these things might easily be put to the test—that is, in the Republic of 1081 Ireland. About 10 years ago, some bright Canadians discovered, on the eastern side of the Galway Blazers country, underneath one of the bogs which exist in those parts, an unsuspected deposit of lead. This has since been worked in a big way. The same is now being done in the Tipperary country and in the northern part of the Meath country. In all these enterprises, it would be easy to assess what the Irish public have gained in financial terms and in employment and what they have lost in terms of mineral reserves.
I move to the specific object of the Bill—exploration. Perhaps I should declare an interest. I am, in a small way, a mineral owner, although everything that I am saying appears to be contrary to my interests.
I was rather concerned to see, in a very small Press item this morning, which my hon. Friend the Minister may have seen, a little report from "Our Environment Reporter" that the executive of the Council for the Protection of Rural England had decided not to give evidence to the Zuckerman Commission on mining and the environment. That seemed to me a bad augury for the coming together of people who should come together on this issue.
The importance of the Bill, and the reason why I support it, is surely that it gives us the possibility of making an assessment of the country's resources. That must be valuable. I repeat that having assessed them, we do not necessarily want to dissipate them. It would not be very sensible to improve our balance of payments by cutting down all our trees and exporting them.
I do not know whether any other hon. Member has referred to this point, but it would be of value to the country if, in the process of making use of public funds which the Government have allocated, we pay attention to improving our know-how. I am referring now to the science of geophysics. I speak with deference on a technical matter, but this science has been developed in a big way in countries tike the United States and Canada. It has made a small start in this country, but only a small one.
Might it be possible, as part of this operation, to see that some or all of the exploration envisaged is done by English professional firms engaged in this line of 1082 business? Quite apart from making an assessment of our resources, it must be for the long-term benefit that we should build up in this profession a large body of know-how both in the means of discovery and in the knowledge of where our riches lie.
§ 6.35 p.m.
§ Sir J. Eden:
With leave of the House, I will try briefly to reply to some of the points made in this very interesting and, for me, very helpful debate.
I was in substantial agreement with the first part of the speech of the hon. Member for Swansea, West (Mr. Alan Williams) but the second part did not really seem to fulfil the hopes that it had encouraged in me. I shall come later to some of his substantial points, but first I should like to refer to one or two separate matters. The hon. Member asked me about the extension or retention of consents, which originally came up in discussion of the Town and Country Planning (Minerals) Regulations in May this year.
I will certainly bring the hon. Member's remarks to the attention of my hon. Friend the Minister for Local Government and Development. The hon. Member will, however, recollect that towards the conclusion of his speech my hon. Friend said that he would look into the matter in the spirit of moving towards the object that I understood the hon. Gentleman himself had in mind, of tryingto get a settlement as early as possible for the mineral undertakers on the renewal of their planning permissions and to see whether we can sort out the matter on that basis.The hon. Gentleman will recollect that he then said:May I thank the Minister for that concession?"—[OFFICIAL REPORT, 4th May, 1971; Vol. 816, c. 1332.]It is possible that I have misunderstood the point that the hon. Gentleman was making tonight, but whether I have or not, I will in any case ensure that my hon. Friend takes note of what he has said on this matter.
§ Mr. Alan Williams
I think that the Minister has misunderstood. On that occasion, as on this, I waived the right of reply in order to allow more back benchers to participate in the debate. I
1083 [MR. WILLIAMS.]
was thanking the Minister for his early concession that he would be willing to look again at the proposals which I put then and which I have put again today. 1 am afraid that the spirit of goodwill which he felt as he left here dissipated rapidly when he got back to the Housing Department.
§ Sir J. Eden
I see. I thought that the hon. Gentleman would recognise that my hon. Friend was still looking at the matter in the spirit in which he said he would.
In answer to the hon. Member for Liverpool, West Derby (Mr. Ogden), I confirm, of course, that any step to move towards the second tranche of the £50 million will be subject to an affirmative Resolution.
The hon. Gentleman also asked me about drilling rigs. I am informed that they will be included under Clause 2(b) if they take the form of ships but not if they are static platforms. Several drilling rigs take the form of ships—and "ship", for the purposes of the Bill, includes any vessel used for navigation.
In mentioning investment grants, hon. Members have misunderstood the very major and essential differences between investment grants and the Bill's proposals. First, the provisions in the Bill are comprised in the form of aid which is to be given only to programmes approved in advance; second, this aid will be given only to a small element—that is, exploration and evaluation, of a mining company's total capital outlay on a project; third, where a project is successful, the Government's contribution will be repayable together with interest—which answers the point put by the hon. Member for Westhoughton (Mr. J. T. Price); fourth, the scheme will be applied to a specific and limited range of minerals; fifth, there is no regional differentiation; and sixth, there is a limit on total Government expenditure under the scheme. These are substantial differences which I am sure the hon. Member for Swansea. West will recognise.
§ Mr. Alan Williams
Again, the Minister misses the point. The fact which I was endeavouring to establish was that when dealing with firms of low profitability and high risk, as stated in 1084 the letter from the Department, the grant system had to be used because the allowance system was not able to provide the required incentive.
§ Sir J. Eden
The hon. Gentleman refers to "low profitability". He should also recognise that we are dealing with firms with no eligible profits simply because many of these are firms whose principal trading takes place overseas. They are not, therefore, in a position to have eligible profits in this country, and that is why the scheme has been devised in this way.
It should also be recognised that we are in every sense competing with the special provisions which are made in other countries. These are stimuli directed towards the special circumstances of the mineral industry and, this being an international industry, firms tend to go to those areas not only where they are likely to find resources to exploit but where the inducements to exploit are most encouraging, and it is to match these that we must make these special measures available.
The hon. Member for West Derby asked about the position of Northern Ireland. He will be aware that Northern Ireland is responsible for its own legislation in this matter. We must recognise, first, that there are these essential differences and, secondly, that we are competing against real inducements in other countries.
§ Mr. Wingfield Digby
is my hon. Friend saying that in the case of all successful schemes the Government grant will not be repayable, however large the company?
§ Sir J. Eden
The money will be repayable in circumstances where the assistance advanced during the course of exploration leads to the successful extraction of minerals.
My hon. Friend the Member for Bed-ford (Mr. Skeet) asked me about the Continental Shelf. This is included in the scheme because of the evidence we have of considerable interest in the possibility of the extraction of these minerals from the sea bed. As he knows only too well, there are many difficult technical problems. These still remain to be solved before economic extraction can be envisaged. However, it is right 1085 to judge that the possibilities are sufficiently good to justify including exploration of the Continental Shelf.
My hon. Friend the Member for Bed-ford and others asked about the position of sedimentary minerals and why these, as well as other minerals, were not included in the scheme. The object of the scheme is to be a stimulus to exploration where there is evidence that such stimulus does not now exist. There is clear evidence that it does not exist in respect of non-ferrous metals.
§ Sir J. Eden
I will not give way, if my hon. Friend will forgive me. I am speaking, with some diffidence, for a second time. I have no doubt that we shall have an interesting Committee stage and I anticipate that many of these points will be debated then.
We must remember that the risks encountered in metalliferous mining and exploration are very different from the sort of risks encountered in sand and gravel extraction, in which a substantial trade is already taking place of the order of some £200 million a year. On the other hand, the comparable figure for non-ferrous metals is only about £3 million. When one compares £200 million with £3 million one recognises immediately the degree of imbalance which exists. If we can rectify this it will be worth doing in our overall national interest and this is what we are trying to achieve both through the Bill and by the scheme I have announced.
A more detailed point was raised by my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) and others. They asked whether I could give any information about the phasing of expenditure which is likely to take place during the five-year period. I can- not be specific about this. Hon. Members will recognise that this obviously depends on the rate of application. However, I can say that the amount of assistance already applied for is just under £million. I expect this to build up rather slowly in the initial stages but I think it will gather momentum later. In any event, the costs incurred in the earlier stages of exploration are comparatively lower than those incurred in subsequent stages.
I should emphasise that we are not paying and do not intend to pay con- 1086 tributions towards the acquisition of mineral rights. Assistance will be governed by safeguards written into the terms under which money will be made available for the purpose of exploration.
I said that we were looking carefully at the question of legislation for mineral rights, about which I was questioned by the hon. Member for Swansea, West and several other hon. Members. I recognise the force of what my hon. Friend the Member for Falmouth and Camborne said on this score, and he well illustrated both the complexity of the matter and some of the problems that are likely to arise. Although my hon. Friend spoke with great eloquence and feeling on the matter, he will recognise that there are many who take a totally opposite view and who can speak with as much feeling and, no doubt, with similar eloquence.
To sum up the purpose of the Bill, it is to stimulate exploration in this important area of non-ferrous metals, of which we believe there is a considerable abundance in this country. The fact that some of them exist in national parks is not directly relevant to our consideration of this Measure. What we need to know is the extent of our resources. I am sure it is right that we should find out whether these resources exist in our national parks.
My hon. Friend the Member for Peters-field (Miss Quennell) and my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) spoke movingly about the areas of outstanding beauty, as did the hon. Member for Motherwell (Mr. Lawson) in an interesting speech. I found myself in considerable sympathy with many of the points they made. These we must weigh in the balance as the nature of the resources and their value become known. I take the point made by my hon. Friend the Member for Ludlow (Mr. More) in this connection.
It may be that we will decide that the value we attach to certain areas of beauty will outweigh the value of their available minerals and their development. It is for this purpose that the planning procedures are established and will be enforced. I shall certainly examine the points that have been made in this regard to see whether there are any other safeguards which could be written into the Bill to meet the views of the House in this respect. 1087 I have noted the special references to the Countryside Commission. As hon. Members know, we are under an obligation in the light of the Countryside Act to have regard to the desirability of conserving the natural beauty and amenity of the countryside. That is an obligation resting upon every Minister, not least a Minister for Industry. So far as it is possible to discharge one's responsibilities in both of these apparently competing directions, I shall do so. It is a matter of balance, but before we can achieve the right balance we must do so on the widest knowledge we are able to acquire both of the location and of the extent of our mineral resources.
§ Mr. Laurance Reed:
But should not those decisions be taken by a body independent of the Minister, bearing in mind the pressures on him? Will he not consider submitting these schemes to the Royal Commission on Environmental Pollution, for an environmental impact report?
§ Sir J. Eden
My hon. Friend is the expert and knows the extent to which the established planning procedures allow for independence of judgment and view. He knows that the environment is very carefully safeguarded and protected.
As I have said, I shall take careful note of the points made in the debate in that regard and consider whether it is possible to make provision in relation to consultation. It might not be possible. I am not trying to confuse or to mislead the House. I shall genuinely consider the position, because I greatly sympathise with the views that have been expressed.
We must achieve a balance, but I am equally confident that we should know the full extent of the potential natural wealth of these islands and that we ought to encourage exploration in order to do so. I believe that this scheme would be a sound investment of the public 1088 money allocated through the means of the Bill, to which I invite the House to give a Second Reading.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).