HC Deb 17 July 1972 vol 841 cc23-5
24. Mr. William Hamilton

asked the Secretary of State for Trade and Industry if he will now introduce amending legislation concerning the exploitation of North Sea gas and oil.

Mr. Tom Boardman

No, Sir.

Mr. Hamilton

Does not the hon. Gentleman recognise that there has been a dramatic change in oil and gas exploration since the original legislation in 1964 and that the royalties that will accrue to the British Government and therefore to the British people will be less than those accruing to most other oil-producing countries? Is he aware that Scotland is in grave danger of not getting the benefit from its own natural resources to which it is entitled?

Mr. Boardman

The hon. Gentleman is not right in saying that the royalties that will accrue are less than those in all other countries. A variety of royalties is fixed and a variety of terms is put forward. One of the most material factors in granting licences in the last round was the contribution that the successful applicants would make to the United Kingdom economy. That I believe to be an important factor which the hon. Gentleman would support.

Mr. Strang

Does not the Minister agree that the major issue with North Sea oil is to ensure that British and Scottish firms make a substantial contribution towards the hundreds of millions of pounds worth of materials required by oil firms, bearing in mind that many of the contracts which should be going to British industry are going not only to American but to Dutch and French firms whose industries were built up by Government support? Will he look at the possibility of giving development contracts to British firms so that they can acquire the expertise needed for off-shore industry?

Mr. Boardman

It is for that reason that I stressed in replying to the hon. Member for Fife, West (Mr. William Hamilton) that one of the criteria in the last round of licensing was the contribution that applicants would make to the United Kingdom economy. I am sure the hon. Gentleman will be aware of what has been done by the Government in introducing consultants, in promoting the Standing Conference on North Sea Oil and in other matters to ensure that industry in Scotland and the United Kingdom is able to take full advantage of the opportunities being provided for it.

Mr. Skeet

Is my hon. Friend aware that the royalties payable are comparable to those in the Middle East and also that the oil companies, Shell and Esso, pay extremely large amounts of taxation in the United Kingdom?

Mr. Boardman

I am obliged to my hon. Friend. He is absolutely correct on both those matters. It must not be overlooked that the companies have already invested about £300 million in exploration, and that there is probably another £1,500 million or £1,700 million to be found.

Mr. Varley

Is it not about time that we began to maximise the national interest in this vital area of the North Sea? Is any study being made of what is taking place and of the action of the Norwegians in this vital area of their economy? Are there not many lessons Britain can learn from Norway in this matter?

Mr. Boardman

We are watching carefully what is being done in other countries. Policy is kept under review and all the relevant factors are being taken into account. The pattern changes, and it is our responsibility to be aware of those changes and to anticipate them.