§ Order for Second Reading read.
§ 11.22 p.m.
§ The Secretary of State for Scotland (Mr. Gordon Campbell)
I beg to move, That the Bill be now read a Second time.
This short Bill is being introduced as a swift response to the need to overcome a difficulty and to seize an opportunity. A short time ago companies connected with North Sea oil developments made it clear that the harbour of refuge at Peter-head was admirably placed and would be most suitable for the servicing of oil rigs. But a local Act of 1886 restricts the development of the harbour for any other purposes than as a refuge. The Secretary of State for Scotland is the harbour authority and I therefore examined immediately what could be done to remove the obstacle and positively to help the North Sea developments.
I found that legislation was needed and that it was needed immediately to enable work to be started this year. Without it the servicing of some oil rigs might have to be done abroad. I am sure the House will wish to assist the Bill in this purpose. It would be most unfortunate if the eminently suitable assets of the harbour of refuge were unavailable, because of an 1886 Act, when they could be the basis for important industrial development in Scotland.
The Bill applies to harbours where the Secretary of State for Scotland is the harbour authority. There is one other of these besides Peter head. It is at Uig in the Isle of Skye, but there are at present no proposals for similar development there.
The Bill provides the Secretary of State with powers to develop, maintain and manage harbours, authorise others to do so either on his behalf or at their own expense.
§ Dr. J. Dickson Mabon (Greenock)
The right hon. Gentleman said that only one other harbour, namely, Uig, is affected, but subsection (1) contains the phraseby virtue of powers or duties vested in him by any Act or order".I presume that there must be one other Act or Order affecting Uig. This is a 1352 rushed Bill. Is the right hon. Gentleman sure that that provision does not pick up many Acts or orders, or many parts of Acts or orders, affecting many harbours other than Peterhead and Uig?
§ Mr. Campbell
The hon. Gentleman failed to hear what I said earlier. It is not a question of Acts. What I said was clear, but I am prepared to say it again for the benefit of the hon. Gentleman at this late hour. What the Bill is concerned with are harbours where the Secretary of State for Scotland is the harbour authority, and there are two such harbours in Scotland. That is the answer to the hon. Gentleman's question.
§ Mr. Campbell
No. I am introducing the Bill, and there will be an opportunity for hon. Members to raise matters during the debate that will follow. My hon. Friend the Under-Secretary of State will answer any questions that are asked. If I may be allowed to conclude this short introductory speech, my hon. Friend will note and later deal with any points that are raised. I think that it will be better if hon. Members make their points if they are called to take part in the debate.
The Bill applies to harbours where the Secretary of State for Scotland is the harbour authority. That is the point.
§ Mr. Campbell
I shall give way to the hon. Gentleman again, because he clearly misunderstood the point.
§ Dr. Dickson Mabon
I hope that I did not. I am trying to help the right hon. Gentleman. Many speeches will not be made tonight if the right hon. Gentleman can explain the difference between the wording in the Bill and what he has said. The right hon. Gentleman defined the Secretary of State for Scotland as being the harbour master, as it were, of two harbours in Scotland and of no others, but that is not what the Bill says. Subsection (1) refers toharbours made or maintained by him by virtue of powers or duties vested in him by any Act or order".Is the right hon. Gentleman certain that harbours attached to the Congested Districts (Scotland) Act, 1897, and the harbours exclusive of the Harbours Act, 1964 1353 but included, for example, in the Sea Fisheries Act, 1951, are all unaffected by the Bill? If the right hon. Gentleman is sure about that, some speeches may not be made.
§ Mr. Campbell
I give the hon. Gentleman the assurance that the Bill applies to the two harbours to which I have referred. The Sea Fisheries Act is separate. If there are queries about any harbours, they can be raised tonight or in Committee. The intention of the Bill is to apply to harbours where the Secretary of State is the harbour authority, and there are only two such harbours in Scotland—Peterhead and Uig. If hon. Members think that the Bill might apply to other harbours, I shall be pleased to consider the points raised by them. If other harbours are likely to be affected we may have to make amendments to the Bill, but the intention is to cover only those two harbours to which I have referred and to deal with one in particular, because it is only the harbour of refuge at Peterhead which needs to be dealt with urgently.
That is the intention of the Bill, but in Committee we shall gladly deal with queries about individual harbours in Scotland if hon. Members think that they might be affected by the Bill.
The Bill provides the Secretary of State with powers to develop, maintain and manage harbours, and authorise others to do so either on his behalf or at their own expense. It also gives him powers of acquisition of land by agreement or compulsorily for the purposes of developing a harbour, subject to the procedural safeguards in subsection 1(3). Subsection 1(4) permits the amendment or repeal of existing statutes of local application by order. The main purpose here is to modify the local Act of 1886 if it proves inconsistent or unsuitable.
The Bill does not affect the fishery harbour of Peterhead, which is separate from the harbour of refuge. We intend that fishing interests, and the fishermen's right of access through the harbour of refuge, will be fully safeguarded. We are determined also to ensure that the effects of any changes on local interests will be fully considered, and to avoid any undesirable effects on the environment.
1354 A preliminary estimate of the cost of development over a period of two years is between £2 million and £3 million.
The Scottish Office Departments have had extensive discussions with prospective developers, including the companies connected with the oil industry, and organisations wishing to share in the harbour development. Urgent discussions have also taken place with the County Council and representatives of the Peterhead Harbour Trust.
§ Mr. J. Grimond (Orkney and Shetland)
Does the provision about the acquisition of land also refer only to land adjacent to these two harbours? There is a great deal of talking about the acquisition of land in my constituency. Am I right in saying that the Bill would not apply to that at all?
§ Mr. Campbell
I know the situation at Lerwick, which I imagine is what the right hon. Gentleman is thinking about. The Bill would apply to Peterhead only, or to Uig if a similar situation arose there.
The Bill allows me to authorise any suitable development, such as the construction of new harbour works, to cater for the specialised needs of the service vessels. Furthermore, the Bill also permits the Secretary of State to undertake these developments himself, if it is expedient to do so. We shall certainly use these powers if this proves to be necessary for the orderly development of the harbour in engineering, commercial and planning terms.
From the identification of the problem at Peterhead to the launching of the Bill has been a matter of a few weeks. This is an example of the way in which the Government can act quickly and decisively to give the new North Sea oil industry the important help which it needs. It is only seven months since the first announcement was made that oil had been found in the North Sea in quantities and conditions which made extraction worth while. That was the announcement by BP. But major operations in drilling exploration had been launched well before that by a number of companies. It has not been possible to foresee exactly what the varied requirements and problems of this new industry would be. But the Government 1355 have been ready to act quickly. There are plans and developments of different kinds connected with North Sea oil in progress from Lerwick in the Shetlands to the Forth. I am doing everything I can to encourage as much development and business resulting from Scottish oil to be carried out in Scotland as possible. So far we have been able to provide for all the installations and developments that have been required along our coastline, while arranging additional expenditure on roads, ports and the infrastructure needed to support the new industry.
The Bill will play its part by enabling a very suitable harbour to be used in a way thoroughly beneficial to Scotland.
§ 11.35 p.m.
§ Mr. William Ross (Kilmarnock)
The Secretary of State is right in saying that this Bill came upon us rather suddenly. I think it was the Saturday after the House had risen for the Whit sun Recess that I received a letter from him. It was marked "Private and Confidential", but since then he has told me that I can freely use any information in it as it is no longer confidential. He said that they had come across snags in relation to Peterhead and they could only be surmounted in a particular way. There was a danger, if the Bill was limited to Peterhead, that it would be construed as a hybrid Bill and could not become law this Session.
I was not very happy about the terms of the letter. Remember, we had just finished the Committee stage of the Scottish housing Bill which was very important to the Opposition and one which was subject to a guillotine. We were also in the throes of discussing the European Communities Bill, also the subject of a guillotine. These were both important Bills on which we thought there should be some discussion. It seems to be the rule of the Government that if a Bill is important to the Opposition it is guillotined; if it is important to them then there should be no discussion at all.
In that letter it was suggested to me that all stages of the Bill should be taken formally, that is on the nod, and that there should be nothing said at all. As the Secretary of State said in his letter, to get round the hybridity problem he was taking a general power, and I could not see how this could be done. As he 1356 had commissioned me to confidentiality I could not discuss it with all my colleagues and, although I readily gave him to understand that we would not hold up the Bill, I felt that he was duty bound to give Scottish Members, and any others who wished to come in, the right to comment on this matter. After all, we are spending something like £2 million to £3 million in two years, between 1972–4, and it was a bit much for the right hon. Gentleman to do that and then, having received his letter during the recess, for him to say that he would like my answer before the House resumed if not earlier. I do not know who wrote the letter; I know who signed it, but I can hardly think that he even read it because I still cannot work out what that last sentence means.
§ Mr. Gordon Campbell
I was in a hurry and I dictated that letter. I admit it was not happily worded, but I think that the urgency was clear.
§ Mr. Ross
The shortcomings of the letter are now explained. I spoke to the right hon. Gentleman on the telephone and suggested how we should handle this. I said that we should take it late at night and we would not be disposed to object if he took the Committee stage in the Second Scottish Standing Committee. We have done everything to preserve the rights of the House and at the same time have not impeded the progress of the Bill.
One other reason why I thought it essential for us to make some comments on this subject was that for a long time many of us have been anxious to have a discussion on the implications of North Sea oil and the effect on the Scottish economy of the Government's activities. While I know that this is not entirely the occasion for that, since the Bill is intended to facilitate action to be taken to support exploration and exploitation of North Sea oil, it does come into the discussion. From that point of view, I very much doubt when Queen Victoria signed the Act of 1886 that she ever dreamed that the harbour refuge that was to be built by what was termed in the original Bill "male Scotch prisoners" would ever be used for the purposes of getting oil, a new British resource, from the North Sea.
In my accustomed fashion, I spent some considerable time in parliamentary 1357 archaeology in the Library trying to find, first, the 1886 Act, which I eventually tracked down. I discovered I had to get it photographed, to be told only two hours afterwards that some copies of the Act had been issued by the Scottish Office. I had tried unsuccessfully to track down the Order in Council of 1960, under which the Lord High Admiral, to quote the original Statute, had passed over his rights in respect of the harbour of refuge to the Secretary of State. It was not available in the House of Commons Library or the House of Lords Library.
It would have been appreciated if the Secretary of State—the right hon. Gentleman is anxious to get the support of all Members on a Bill like this—had sent all this information to all Scottish Members of Parliament so that the kind of questions which naturally arise in our minds when hurried legislation like this presents itself could have been obviated. If that had been done a lot of trouble would have been saved.
I am not yet entirely clear why the Bill is necessary or, if it is necessary, why it should be limited to these two harbours. The Minister, of course, has not mentioned the two harbours. There is a good Parliamentary reason why he did not do so, as it might have put the right hon. Gentleman in some little trouble from the point of view of our constitutional parliamentary procedure. However, I am surprised that he did not take further powers in respect of other harbours. In relation to many of the other harbours we are circumscribed by the activities of the Ministry of Transport, which has been giving loans rather than grants. The Minister could have taken unto himself the power to facilitate progress in respect of those.
One of the matters that has emerged—one here refers to the fact that it is only seven months ago since a strike was proved—is that there has been a considerable under-rating by everybody concerned of the real potential of the North Sea. I can remember, even from my recollection of papers which I have had to read on this subject, that there are other areas than those in which oil has been found that potentially are very valuable. I wonder to what extent this country has properly assessed the value of the potential and how to get the best 1358 out of it. I remember reading—I think it was in the Financial Times in about November of last year—an article which said that we were throwing potential resources away by the way we were letting out the areas—the article also suggested that the areas were far too big—for exploration.
No doubt there should be a different approach. There is no reason why we should rest on the fact that something was done in 1964 by the President of the Board of Trade under the previous Conservative Administration and followed by the Labour Administration. There is no reason why we should not appreciate now that it is possible to change our mind about the further licensing of areas in the North Sea. There is the question of maximising the revenue that we can obtain from North Sea oil. These things are worthy of consideration, bearing in mind that no less a person than the Chairman of the Conservative Party in Scotland has been outspoken on this subject. It is no good the Prime Minister or anyone else in the Government telling us to read on. It was specific—Scotland's Tory leader accuses Government over oil policy.Part of the reason for the Government racing in with the Bill is to show that the Scottish Office is alive and that the Government are going to make the best out of it. However, Chris Baur, the industrial correspondent of the Scotsman, was quite clear.
§ Mr. Ross
Yes. He referred to the activities relating to everything concerned with North Sea oil. We are on Second Reading and the hon. Member for Perth and East Perthshire (Mr. MacArthur) has been long enough in the House to appreciate that there are many things one cannot talk about in Committee which one can express relating to a Bill that proposes to deal with one aspect of the matter, discussing why it should or should not be given a Second Reading, and suggesting how it could be further improved. It might be further improved to take account of some of the suggestions put forward by Sir William McEwan Younger.
§ Mr. MacArthur
On a point of order, Mr. Deputy Speaker. The right hon. Gentleman is entering a very interesting sphere about the licensing of exploration rights in the North Sea, and so on. With respect, I fail to see how this relates to the development of Peterhead Harbour. I suggest that the right hon. Gentleman might return to the Bill.
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
I am sure the right hon. Gentleman realises these things and will not go too far from the subject of the Bill. Otherwise it might encourage others of his hon. Friends to go even further.
§ Mr. Robert Hughes (Aberdeen, North)
Further to that point of order, Mr. Deputy Speaker. With respect, as it may help other speakers in the debate, the Secretary of State certainly widened the issue.
§ Mr. Ross
I do not think the Secretary of State went too wide. He was quite right to express the urgency of the Bill. It certainly relates to North Sea oil and ensuring that Scotland gets the most out of it. The right hon. Gentleman was playing his little part in it. After all, the licensing is nothing to do with the Secretary of State. That is a matter for the Department of Trade and Industry, as covered by the Continental Shelf Act, 1964.
We are being asked to spend between £2 million and £3 million on this proposal. That is a fair sum of money. Therefore, we are right to ask why and what kind of return we shall get on it.
Some important points arise from the text of the Bill. When considering spending this amount of money on oil development and exploration to assist companies, which are not exactly poverty-stricken, we must take account of the criticism made of the Government by no less a person than the Leader of the Scottish Conservative Party, who said:1. That they had seriously under-estimated the real potential to the economy of the North Sea development.2. That in failing to think out the impact on the UK economy British industry had 1360 been left totally unprepared to provide equipment and services.We are dealing with equipment and services in the Bill.
§ Mr. Ross
He continued:3. That in granting exploration licences, no effort had been made to insist on the use by oil developers of domestic oil facilities.Sir William McEwan Younger, who was an opponent of nationalisation, virtually went on to talk of nationalisation and State participation in this sphere.
These questions have never been answered. If the Secretary of State is playing his little part with his £2 million to £3 million, we are entitled to ask about the conditions attaching to it. If this money is to be spent we are entitled to ask what return we may expect on it. Or is it to be given as a present to somebody or other? Are we charging for the use of the facilities, or how are we charging? How long does the right hon. Gentleman think the oil boom will last? I have never had an answer to that question.
The time that the developers will be using Peterhead surely must be related to the cost of this development. We should not race into these things in a foolhardy way. Therefore, I assume the Secretary of State will give the assurance that it is a matter which will be there not only for two or three years, but for some time, to justify the expenditure.
These are the kind of questions which people will ask and will want answered in view of the criticism which has been made. Are the Government likely to change their mind about what Sir William McEwan Younger considers their generosity in this matter and their failure to take the steps to tie up the maximising of the benefits from revenues by participation in the exploitation of the oil?
The limitation in the Bill is very strict. It is… to develop, maintain and manage …and this is to be done by the Secretary of State himself or by others whom he authorises to do so. The right hon. Gentleman never told us what is in his mind. Who are the others he is to authorise? Will it be the developing companies? Or will it be the Peterhead 1361 Harbour Trustees? Under the Peter-head Harbour of Refuge (Transfer) Order, 1960, the trustees have been acting as the Secretary of State's agents. The annual fisheries Vote includes a sum of £500 or £600 as the cost to the Secretary of State of maintaining the harbour of refuge. He should make it clear whether he is to do this work himself or tell us whom he is to authorise to do it for him. Will he, for example, hand it over, at their own expense, to the developers? He said that he had been in discussion with the county council, the developers and the trustees, and he should be in a position to give us this information.
The Bill is limited to…harbours in Scotland, made or maintained by…the Secretary of State, and here the intervention of my hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) is relevant. The words are not "made and maintained" but "made or maintained". The right hon. Gentleman should get his civil servants to make sure that there are no harbours maintained by the Secretary of State…under any Act or order…because it may be that the right hon. Gentleman is taking a wider power than he realises. I am not necessarily objecting to that, but we should know what we are doing.
Clause 1(1) says:…and to do all such things as may be necessary or expedient for that purpose.In Clause 1, the Secretary of State is being given power to acquire land. The Peterhead Harbour of Refuge Act, 1886, is very specific about land to be acquired.
§ Mr. Ross
As my hon. Friend says, there was a map. The Act itself even mentioned Mrs. Ogston's farm. Indeed, all the land was referred to by name. The deviations permitted were strictly limited. It may well be that the right hon. Gentleman is now taking a wider power, because Clause 1(4) says that…he may by order repeal, amend or adapt…limiting legislation, and that is an important power.
1362 Would such an order be purely administrative? There is nothing in the Bill to indicate whether the House will know anything about such an order if it gives the right hon. Gentleman this Bill. But he should bring these orders before the House so that it can deal with them by the affirmative or negative procedures. Such an order can include…incidental, supplementary and consequential provisions…and that is the power to legislate—a serious power.
We are also told in the Explanatory Memorandum that this exercise, in addition to the capital expenditure, will cost about £50,000 a year, together with the employment of about 10 additional harbour officials. Does this mean that we shall have a Supplementary Estimate for the £2 million or £3 million, or for the portion spent this year, which would mean another opportunity to check the right hon. Gentleman's expenditure?
I should be glad if the Minister would tell us something about the orders. How soon does he foresee that he will be able to produce them? We do not object to the Bill and I am glad that the Secretary of State, having seen the point, has brought this Measure forward.
There was another point I suggested to the Secretary of State in conversation or by letter; can we be sure that the people of Peterhead are happy about this? Unlike the position at Hunterston, where he took the powers himself, in this case I presume that planning permission remains a responsibility of the local authority at Peterhead. Are they happy, or are there likely to be objections to this development? I do not think objections are likely, but the House has a right to know.
I should be obliged for a general idea of Government thinking about changes in the way they are handling North Sea oil questions in the light of the widespread criticism in Scotland. I do not blame the Secretary of State, but he has to say whether he is entirely happy about the way things are handled.
§ 11.57 p.m.
§ Mr. Patrick Wolrige-Gordon (Aberdeen shire, East)
I do not want to pursue the right hon. Gentleman the Member for Kilmarnock (Mr. Ross) into the North Sea, but I express my appreciation of his general attitude to the Bill. I should 1363 also like to say how much I welcome the Bill and congratulate the Secretary of State for taking such speedy action to set it on its way through the House, in time, we hope, to enable the country in general and Peterhead in particular to take full advantage of the burgeoning oil industry in North-East Scotland.
The first point I wish to raise was mentioned by the right hon. Gentleman the Member for Kilmarnock at the end of his speech. It concerned the people of Peterhead. It may seem strange to have public anxiety over jobs lost in one part of the country and a similar kind of public anxiety over jobs possibly gained in another part of the country, but such is the case, and it is natural.
The colossus of a world oil company is bound to upset entirely the balance of a place like Peterhead, and they are wise to realise that. I echo the question put by the right hon. Gentleman: can we be sure that the Secretary of State, in discharging his responsibility for the development of a harbour of refuge, will keep the people fully informed on his plans?
I should like to go further and to ask whether he will be sure to consult the people so that local people may have the chance to contribute their local knowledge and to assess the future of the prosperous development of their town. Such freedom and the possibility of participation will do a great deal to allay public anxiety and possible disquiet generally.
The effects of this legislation will be to convert the harbour of refuge at Peterhead to a full-scale commercial harbour with the prime object of servicing the oil industry. This is a dramatic change, inconceivable until a short while ago, and a change in the environment of the town.
What provision will my right hon. Friend make for alternative amenity for the burgh, and when? What steps will be taken to preserve the links? What compensation is available for loss of value to the houses facing the harbour of refuge? I want only an assurance that my right hon. Friend will take amenity fully into account.
I welcome my right hon. Friend's assurances on fishing, but at the beginning of March the Harbour Trustees in 1364 Peterhead submitted a scheme to the Department for further essential development work in the fishing harbour to cope with the tremendous growth of the fishing industry. Although assurances are valuable, actions speak louder than words, and the application has not so far yielded much fruit. The improvements are needed now; may we be told when they will come?
The right hon. Member for Kilmarnock asked about the return on the investment. I am delighted to hear that note from the Opposition benches, and it is an important point. I, too, would like to know from where the initial estimate of £2 to £3 million came, as there has not been much time in which to make the calculations.
§ 12.1 a.m.
§ Mr. J. Grimond (Orkney and Shetland)
I, too, should like to know what return the public purse will get for the expenditure of £2 to £3 million, particularly bearing in mind that we have no idea for how long the oil companies will operate. We may be undertaking works which may have only a short life for all we know.
Secondly, I ask for elucidation of the drafting of the Bill. According to the Long Title it is a Bill toEnable the Secretary of State to develop, maintain and manage, or authorise other persons so to do, harbours in Scotland, made or maintained by him for any purpose, and for purposes connected therewith.The Title seems to imply that the Bill could apply to harbours made in the future, otherwise it would have referred to harbours which have been made or which are maintained by him. I imagine that it is possible under certain Acts for the Secretary of State to undertake harbour works, and I should like to know whether I am right in that.
I am not certain whether the drafting is intended to limit the Bill to harbours and piers which are constructed in a particular way by the Secretary of State for Scotland. There must be many works in the North of Scotland made by various public authorities. Does the title impose a limitation? For instance, works in Lyness must be made by the Government although not technically by a Secretary of State. I am not certain what is the distinction.
1365 The major point to which I wish to draw attention is that in Shetland and Orkney the impact of oil raises great planning problems concerned both with the effect of that new industry upon the whole fabric of the community and with the use of land and harbour facilities. At Kirk-wall and Lerwick there are large schemes for extending the harbours. Those schemes were started not primarily in connection with the oil industry but in connection with the new means of sea transport, but they have, rightly, been expanded to take into account the supposed needs of the oil companies.
The schemes are being dealt with under the normal procedure and as far as I know, we have been able to get round many of the snags that might be expected. But it is possible that other harbour works, on-shore works and off-shore works connected with buoys, and so on, will be necessary around the coast, particularly in Shetland. I am not suggesting that the Secretary of State should cause these works to be undertaken. Probably the strongest case is that they should be primarily a matter for the local authority. The proper handling of the construction of these works, bearing in mind their probable effect upon local communities, is a matter of great importance.
I wonder whether the Bill goes far enough and whether we should not be looking at the present provisions for compulsory purchase of land for these purposes. The present procedures for undertaking harbour and pier works so far have been aimed at either transport or fishing. There are considerable differences between procedures for the two types of harbour. They are slightly out of date now. That fact, in some ways, makes for complications. It would be out of order to go too far into this question during the discussion of the Bill, but it is relevant, because the Bill gives the Secretary of State power to take land by compulsory purchase. The situation over the land near the harbour refuge at Peterhead may be duplicated in the north, although the problem of the harbour itself may not arise.
Urgent consideration should be given to the right way of handling a situation where it became necessary to create a major anchorage for oil tankers on the coast of Scotland, with its associated shore works. This is a matter primarily 1366 for the local authorities. But the Government should consider the question. The public authorities should give the subject very early attention, so that it need not be hastened through, as to some extent this Bill has been hastened, at a somewhat late period.
§ 12.7 a.m.
§ Mr. Robert Hughes (Aberdeen, North)
I should like to give a general welcome to the Bill. Once it became known there was a technical difficulty in the exploitation of the land round the harbour at Peterhead then the problem had to be solved as quickly as possible. One understands the problems experienced by the Secretary of State in getting a Bill drafted which would get through all its stages before the Summer Recess.
Nevertheless, there are many questions which have to be asked because there are problems facing harbours and ports in Scotland in relation to North Sea oil. With that rationale behind it, the introduction of the Bill became necessary, because of North Sea oil. In his introductory remarks the Secretary of State made it clear that that was so. He went on to say this was only one of a number of different actions which he and his Government were taking to try to get the benefit of North Sea oil for Scotland.
The right hon. Gentleman was trying to argue the case—as was inevitable—to answer the criticisms made of himself and his party by his own party chairman in Scotland. He told us how much he thought the Government had done to help North Sea oil. What has been done is welcome.
One is forced to ask oneself why it is that the Government has turned a somersault on their policy of six months ago. Six months ago we were told in Parliament, in answer to a Question—and in answer to letters—that there was no possibility of grants being made available for the development of harbours, for whatever purposes. We were told that the Minister had taken unilateral action, as he was entitled to do under previous legislation, to grant or not to grant moneys to harbours. The Department of the Environment decided that it was against its general policy to give grants, that the grants to harbours cease. Now we are told in the Bill that grants are to come back again. But nowhere in the remarks 1367 of the Secretary of State or in the Bill are we told how the £2 million to £3 million will be spent. We do not know whether there will be outright grants, or loans at the prevailing rate of interest plus a percentage to discourage harbours from looking to the Government for a cheap source of money. All this is dropped in this Bill, and we are bound to ask why there is this sudden change.
Why do the Government ask for these wide powers for only two harbours, Peter-head and Uig? There may be good reasons why they are not mentioned in the Bill. Nevertheless, the Bill seeks very wide powers. But is the Secretary of State satisfied that it goes far enough? It maybe that the right hon. Gentleman has been unable to change the minds of his right hon. Friends the Secretary of State for Trade and Industry and the Secretary of State for the Environment about giving grants to harbours, and therefore he may be saying simply, "Here is a way in which I can help Peterhead".
I do not object to Peterhead being helped. I know that the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) has been subjected to considerable pressure locally about the possibility of the environment being damaged and the way of life of the people of Peterhead being changed by the arrival of the oil industry. One understands that. However, I am sure that the hon. Gentleman will agree that the work is essential for the people of the whole North-East.
Neither am I being parochial and saying that Peterhead is getting the kind of assistance that Aberdeen wanted six months ago. I welcome the help being given to Peterhead. But the fact remains that Aberdeen was treated very shabbily when it was looking for £1½ million to develop its harbour for the benefit of the oil industry and to bring in new work. The hon. Member for Aberdeenshire, East mentioned the balance between the traditional fishing industry and the new oil industry. It is a little ironical that it was only when the Government decided to help fishery harbours to enable them to compete with the EEC fishing industries that that help was forthcoming to Aberdeen Harbour Board to enable it to develop the fishery side of the harbour. Even though the help has been made available, Aberdeen Harbour Board 1368 still has to find £400,000 to proceed with its development on the fisheries side. So it is essential for the Secretary of State to proceed in this way with the development of North Sea oil and the development of the fisheries harbour.
One is forced to the view that the Bill should have been about the development of harbours to deal with North Sea oil rather than being confined to two specific harbours. It should have been wider in its scope. The Secretary of State knows that the developments at Aberdeen harbour are not finished and that the Harbour Board is looking at plans for future development. Where will it get its money? Will it be told that because fingers were burned in the case of the Mersey Docks and Harbour Board, it will not get grants and loans but will have to stand on its own feet?
In my view, the Secretary of State has no idea of the way that harbours and ports should develop. He is drifting along on a tide of indecision. As problems crop up, it is a case of panic stations and a Bill is rushed through. The right hon. Gentleman thinks that the Opposition will put up with anything because it will be embarrassing for us to object to the Bill or to vote against it. He thinks that we shall let it go through on the nod and not worry about the general position. But we are concerned about the general position. The right hon. Gentleman's indecision means that we may have to go through the paraphernalia that we have experienced in the past of trying to get help for our constituencies which desperately need work and development by begging, cajoling and doing all that we can to obtain assistance.
The Secretary of State is failing to take a great opportunity. I do not expect him to be all-embracing in his attitude or to envisage every possibility. If one examines the recent history of the area and the Gaskin Report, which was supposed to be a projection of how the North-East of Scotland would develop, one will not find the word "oil" mentioned. It is very hard to find a mention of North Sea gas in that report. It is mentioned, but only as a possibility of it being piped from the north of England to the north-east of Scotland.
There have been great changes in the past five years which can distort and 1369 alter the Government's philosophy. The Secretary of State has had plenty of warning about the problems of harbours and development. He knows what he has been faced with in respect of the Aberdeen Harbour Board. I am extremely disappointed that whilst urgent action has been taken to deal with one specific problem, the Secretary of State has not taken the opportunity to prepare a wider Bill which would enable him to deal with the problems as they arise in the future. In other words, he should have taken powers which would have made it unnecessary to come back to the House again, at this hour of the night, with a panic Bill to deal with something about which he had been well warned.
§ 12.16 a.m.
§ Mr. Iain Sproat (Aberdeen, South)
Like previous speakers, I believe that this matter must be seen in the context of the overall development of the North Sea in response to the challenge of North Sea oil. In that context, I sincerely congratulate my right hon. and hon. Friends on the urgent action which they have taken in regard to Peterhead. I congratulate them not only on that but also on the whole structure improvements in the North-East, particularly infrastructure, and on the speed of planning procedure. This is very much appreciated in the North-East. Its momentum has been given added force by the Scottish Office in getting through future planning procedures at a decent speed. Unlike the hon. Member for Aberdeen, North (Mr. Robert Hughes), I congratulate my right hon. and hon. Friends on the energy and action they put into securing the loan, and later the grant, for Aberdeen harbour, about which we had so many anguished discussions.
A lot of rubbish is talked about the position of the Scottish Office vis-à-vis North Sea oil; indeed, not all the rubbish is talked in the House—[HON. MEMBERS: "Oh."] My experience in close and frequent contacts with my right hon. and hon. Friends in the Scottish Office is that they are absolutely on the ball with regard to Scottish oil.
I seek two assurances from my hon. Friend the Minister. First, in the general euphoria about oil—which we all share, and the reasons for which we appreciate—I hope that we shall never forget the interests of the fishing industry, which, 1370 after all, will still be here long after the oil has gone. Even though, in response to questions from the right hon. Member for Kilmarnock (Mr. Ross) and others, we are talking of a perspective of 20, 30 or 50 years, this is not a fly-by-night—
§ Mr. Sproat
If the right hon. Gentleman would read the newspapers with as much concern as he puts into parliamentary archaeology, he would know that.
I hope that what we are now giving to Peterhead does not mean that we shall see a transfer of attention and concentration away from the great city of Aberdeen to Peterhead.
§ 12.20 a.m.
§ Dr. J. Dickson Mabon (Greenock)
The hon. Member for Aberdeen, South (Mr. Sproat) has done a service tonight to his own party, if to nothing else. No doubt he will one day make the grade as correspondent for the Conservative version of Pravda. Certainly that loyalty is unrequited when one considers the assurances he has asked of his right hon. Friend the Secretary of State.
The right hon. Gentleman's speech did not deal overall with the question of North Sea oil. He said that the Bill dealt with two harbours. But it does not do that because it deals with one harbour only, although it could affect two.
§ Mr. Ross: It deals with only half of a harbour.
§ Dr. Mabon
Yes, only half a harbour, but we could argue about which half. Basically it deals with Peterhead harbour. The right hon. Gentleman could have introduced a hybrid Bill or he could have been part sponsor of, or could have witnessed, a hybrid Bill. I realise how difficult that is. I am glad that he did not, in view of the timescale. But the Secretary of State should have seized the opportunity in the Bill of dealing with more harbours than those he mentioned.
For example, Aberdeen harbour is subject to the most complicated legal construction. If it becomes an important port as a result of North Sea oil, any development there will require legislation. I am not acquainted with the 1371 problems of Dundee but I am quite certain that some reference will have to be made at some time in terms of public investment in Dundee and in the amount of public and private Acts dealing with Dundee harbour.
There may be a time—perhaps not far away, and perhaps even in the next Session of Parliament—when we may have to deal with matters affecting the acquisition of land and the development of harbours in tiny fishing ports in Orkney and Shetland. We are told that there may be considerable discoveries in that region such as we never expected.
I did not quite accept the Secretary of State's apologia that the Government are moving swiftly to deal with the situation. We were told towards the end of 1970 and in the early months of 1971 what a tremendous boon North Sea oil represented for the Scottish economy. It is sad that the Scottish Office did not advise Ministers of the absolute importance of being prepared, not only in financial terms but in legislative terms to take over some of the small ports of Scotland. There is doubt as to which harbours the Bill relates. If the Secretary of State is right when he insists that it refers to but two harbours, it is high time that it did not. It is high time we had an all-embracing Bill covering many other harbours also.
I understand the point that was being made by the right hon. Member for Orkney and Shetland (Mr. Grimond). In such a case, there would have to be much closer scrutiny of the Bill to see exactly what powers the Government were taking. The hon. Member for Aberdeen-shire, East (Mr. Wolrige-Gordon) has a constituency interest in the Bill. He says he is worried about the participation of the local people in the project. Every protection that his local people have in the order and in the Act which is referred to indirectly in the Bill may be dealt with by the Secretary of State without consulting Parliament if Clause 1 is un-amended. There is no affirmative Resolution procedure to insist that the Secretary of State must tell us why he is making a change in the provisions of the past order or the past Act concerning Peterhead harbour. That is intolerable, and I hope that the Under-Secretary will 1372 say that he accepts that this sweeping procedure cannot be allowed to remain in the Bill.
There has to be provision for affirmative orders. An affirmative order does not have to be spoken to. It depends upon the Members concerned, or upon the Opposition, whether the matter is raised, but there must be a right to protest and to raise matters of individual or collective need if the Government seek to amend these Acts and orders. Whether or not the Bill applies only to Peterhead now and later to Uig, this proviso ought to be in the Bill.
I realise that the right hon. Gentleman has acted quickly in the time-scale of the matter, but I am sorry that he has not taken matters a little further. When debating Clause 1 of the Industry Bill in Committee we were told that we could not have a general grant attributed to ports or harbours, no matter where they were situated or what size they were, because the Government did not think that it was proper to deal with ports because, in their view, they were service industries. Whenever I hear the argument about distinguishing between manufacturing and service industries there leaps to my mind the memory of the right hon. Member for Moray and Nairn (Mr. Gordon Campbell) who spent five or six years on these benches telling us when we were the Government about the wickedness of making this decision.
§ Mr. Gordon Campbell
I visited a number of service industries and discovered how grateful they are for what the Government have done in removing the discrimination against them.
§ Dr. Mabon
The ports are annoyed with the Secretary of State, as well as with other Ministers, for keeping them out of the Industry Bill. The right hon. Gentleman ought to speak to the Clyde Port Authority and many others to find out what they think. We have not reached the state in the Committee considering the Industry Bill to know the position fully, but we were told that under Clause 7 there would perhaps be selective investment in ports and harbours of all kinds and sizes. In other words, Mr. Dennis Kirby, the new Industrial Development Officer for Scotland, will be in a position to recommend participation of the kind mentioned in that Bill.
1373 The right hon. Gentleman seems to think £2 million to £3 million will be spent on this during the next two or three years, but that is not what the Bill says. The Bill gives an alternative. We are to vote a sum of only £50,000 for administrative expenses. We are not told who makes the choice, whether it is the proposer or the Government, or both.
§ Mr. Douglas
I wonder whether my hon. Friend would direct his attention to the Financial Resolution which accompanies the Bill. It does not lay down any figure at all.
§ Dr. Mabon
I do not want to debate the Financial Resolution, but I am entitled to refer to the financial effects of the Bill as explained in the Explanatory Memorandum, and that says that if other persons are empowered to do these approved works the cost to the State will be £50,000 per annum, but that if the Secretary of State undertakes these developments the cost will be between £2 million and £3 million. We have not yet been told who the other likely persons could be.
§ Dr. Mabon
We do not know who they are. I should be surprised if it is the Peterhead Harbour Trust. I do not know how it would raise that sum, unless it had a backer. In that case, who would be its backer? Or would the money come direct from the backer? There is nothing sinister about this. I do not see why Parliament cannot be given this information. These are not confidential discussions between the Government and a firm which, if they were made public, would endanger the firm's operations. This is a legitimate matter for hon. Members to raise, and we should be told more about it.
We should be told whether the Secretary of State is saying, "No, it looks like me", or whether he says, "I think it should be the others." I do not agree with the others participating in the investment. All investments in the development of harbours and ports for the intake of oil from the North Sea bed should be by the State, which should charge sufficient not only to repay that investment but to recoup some of the disadvantages that communities like Peterhead, and individuals in them, may suffer. I hope 1374 that the selective moneys under the Industry Bill or any future Bill will be regarded in the same light.
We return to Sir William McEwan Younger's criticism. It is not simply to play with Conservative Members to make these points. Unlike any other Conservative Party Chairman in Scotland that I have ever known, he has done a service by making stringent cricticisms of his own party. I am sure he makes them in the hope that his party will take them to heart and not regard him as a crypto-Socialist about to desert it. That would be nonsense. One of his criticisms is that the Government have not intervened sufficiently to capture for the public good the riches coming from North Sea oil. One richness is the ability to develop port and harbour installations and to charge for them, to make a business out of giving a service to the bringing in of oil and distributing of oil on the mainland.
I am rather disappointed that the Bill is so confused and rushed. I understand the need for it and the need not to oppose it. But if the Secretary of State wants the good will of Members on both sides he must equip us more readily with the information behind such a Bill. I am sure that the Second Reading will be completely unopposed, but I hope that in Standing Committee we shall receive complete assurances from the right hon. Gentleman that only two harbours are mentioned, and that we have the material to prove that that is so from his personal records. It would not be harmful for him to provide each hon. Member representing a Scottish constituency with the background to the Bill.
In replying tonight, the Under-Secretary should answer the questions posed by various hon. Members, and in particular he should tell us who is behind this development, other than the Government. Let us know who might spend £2 million to £3 million.
The Secretary of State should also seriously consider before we go into Committee whether he is making a mistake in leaving the Bill circumscribed to two harbours, and whether he might use the Bill, which is expressed in very general terms, to be the linchpin by which he can safeguard future development in the various small harbours in Scotland. That may not be possible, but he must tell us 1375 a bit more about it, and why the Bill cannot be more substantial than it appears to be now.
§ 12.34 a.m.
§ Mr. Robert Maclennan (Caithness and Sutherland)
It was natural that the whole House would welcome the Bill in so far as it has proved necessary to remove a legal impediment to the development of the Peterhead harbour of refuge. But the whole House must also have felt that the Secretary of State in introducing the Bill has shown himself to be perfunctory in his understanding of the requirements and inadequate in his explanation of needs which have brought the Bill before the House.
§ Mr. Gordon Campbell
I could have spoken about the exploration and the success in the Forties Field and the fact that Peterhead is so near to the Forties, and the way in which things would operate but I thought hon. Members had been following these events and I would not need to go into them.
§ Mr. Maclennan
There can be no doubt in the right hon Gentleman's mind, from the criticism which he has suffered at the hands of his own party chairman and of Members of this House, that the people of Scotland are following these developments with the greatest interest. They are not convinced that he is looking ahead to the potential and the problems which may face those exploiting these possibilities, if our country is to benefit from them. It is not good enough for the Secretary of State to say he has brought forward this little Measure which removes a legal impediment to the development of one harbour of refuge. There are many other places in Scotland, from Lerwick to Dundee which have different problems.
Why have we had no opportunity to scrutinise the Secretary of State's thinking on these problems? It is not good enough for him to take umbrage when hon. Members express their interest and the interest of the people of Scotland in these developments. This is a highly ambiguously worded Bill. The expression in Clause 1 (1) enabling him to take powers to develop harbours "made or maintained by him" does not on the face of it lead anyone to assume that it is a 1376 reference to the harbour of refuge at Peterhead and it is natural that we should wish to examine this in some depth.
He did not produce one scintilla of evidence to prove that what he was asserting was the position. He quoted nothing whatever in the way of statutory provisions which he alleged this Bill would amend in some way. He gave no answer to the intervention of my hon. Friend the Member for Greenock (Dr. Dickson Mabon) about whether harbours built under the Congested Districts (Scotland) Act might conceivably be affected by the Bill. He simply asserted, and repeated the statement, that it referred only to Peterhead and we had to take his word for this. He cannot really object to the fact that we wish to make assurance doubly sure.
What I want to put to him, without any wish to make a narrow point, is this. I do not believe, and I think most people in Scotland take this view, that he has looked ahead to the needs of the servicing of the oil fields in the many sectors already subjected to exploration. We have new developments west of the Orkneys and he has not given any indication of his interest in the servicing of these areas. There are two or three possible sites in my constituency. There is Loch Eriboll on the north coast, the harbour at Scrabster and the harbour at Wick. I do not know whether he has even considered whether these are areas that could be developed under the existing law. It is extraordinary for him to come here tonight and deal with this massive problem in such an ad hocway. He is rushing through this little Bill which deals only with one minor part of the problem, and then brushing aside any attempts to find out what the position is regarding some of the other areas which may benefit from this development and actions which may be absolutely necessary if the exploration is to go ahead and be exploited as quickly as possible.
The Secretary of State has failed to prove to the House that he has any strategy for the development of the industry. He has shown that he has been quick to respond to the evidence of an impediment to development in a particular case, but that is not evidence of what he sought to assert at the beginning, that he has a general grasp of the problem and that he is acting with speed 1377 to bring about the exploitation of the oil industry.
I hope that the Under-Secretary, in winding-up the debate, will be able to speak at length and not feel himself under any pressure of time in answering the specific questions which have been put to him by myself and a number of other hon. Members. I, like a number of other hon. Members who have spoken, find it astonishing that we have had no explanation from the Secretary of State on the financial aspects of the Bill. There has been no explanation how the sum of £2 million to £3 million is arrived at, who is to be the beneficiary of this public money, what return there is to be on it, whether the money was being sought by a public authority, a commercial interest, an oil company or what.
It is not good enough for the Secretary of State to come to the House and brandish these figures in a general way without further explanation. It may be we shall not even find ourselves spending the money, but we should know how the figure has come to appear on the front page of the Bill in the Memorandum explaining its financial effects. We should have had a much more detailed explanation than the cursory read through the Clauses which the Secretary of State embarked upon tonight. I am sure that the whole House felt it was an entirely inadequate performance.
§ 12.42 a.m.
§ Mr. Dick Douglas (Clackmannan and East Stirlingshire)
The Secretary of State in an intervention indicated that he could have spoken for an hour on this particular measure in giving the background to the oil industry. Let me refer him, with great respect, to the last occasion when he spoke extensively on this issue which was at the oil seminar at Aviemore. The right hon. Gentleman said:I would like to thank and congratulate the Scottish Council and particularly Sir Willliam McEwan Younger for the idea of the Forum on this subject, and the very successful arrangements.I wonder whether the Secretary of State still shares the view that the forum was useful? The right hon. Gentleman seems to have learnt little whereas Sir William McEwan Younger has learnt a great deal.
§ Mr. Gordon Campbell
I said during Question Time last Wednesday that the point which Sir William was reported in the Press as raising, is rather less recognisable when one reads the full context of his speech, because it was critical of both Governments. Those points were aired quite freely in the discussion during the two days at the forum. They did not make headline news then. Sir William was the person who brought this forum together. It was a most successful forum, as the hon. Member for Clackmannan and East Stirlingshire (Mr. Douglas) knows, because he attended.
§ Mr. Douglas
I do not dispute that for one moment, but the point is still valid that here we have a sheik in Campbell tartan, a marauding interventionist Secretary of State, coming forward with a Bill that asserts, "I require Parliament to spend on Peterhead Harbour, which I own and which I am responsible for, £2 million to £3 million." Why the Secretary of State requires the Bill is beyond my ken. I do not know why the Bill is necessary. If the Secretary of State owns the harbour and if he had anticipated events, it would have been a relatively simple device to get the money that he requires on the Scottish Office Vote. Why did not he think of that device if he owns the harbour, and has done specifically since 1960?
§ Mr. Gordon Campbell
I might be able to help the hon. Gentleman. First, the Scottish Council was among those who came to the people who ran the forum only four or five weeks ago saying that this impediment was there and asking whether we could do something about it. Secondly, neither the Secretary of State nor anybody else has the power to carry out development.
§ Mr. Douglas
We keep coming back to this point. The oil forum was held not four or five weeks ago, but in February, and the knowledge of the requirement for this proposal goes back a considerable time before that. I am not cavilling at the expenditure of the money, but at the need to do it in this way.
The Secretary of State has indicated to the House that this sum is required because of the vast exploration that is taking place in the North Sea. The House does not get information about the cost 1379 of exploration and development operations comprehensively; the Department responsible estimates that the work undertaken under licences at present amounts at least to £300 million. We are about to spend public money to the tune of £2 million to £3 million to provide a service for those who will erect production platforms and use this harbour to service their drilling rigs, and so on.
I welcome an interventionist Secretary of State. My objection to this Measure is that the right hon. Gentleman is not interventionist enough. If the Scottish Office requires £2 million to £3 million, certain questions ought to be answered publicly. Will this money be subject to the same rate of return in discounted cash flow terms as the public corporations are normally expected to obtain over the life of the asset? That is a specific question which requires a specific answer.
If the sums are done, they must be related to the potentialities of the market. Therefore, the Secretary of State, or his Ministers, must have some idea of that market. Are we likely to get the low band of figure of 100 million tons of oil from the North Sea by the 1980s which would roughly equal our present needs, or will the larger figure now being quoted of about 300 million tons be the resources of that area? If it is the larger figure, perhaps this Measure is too puny and meagre. In that event we might seek in Committee to request the Secretary of State to take more extensive powers than he seems willing to take at this time.
I do not want to prolong the debate unduly at this hour, but these questions must be answered. The criticisms levelled by Sir William McEwan Younger at the attitude of the Scottish Office and of the Government generally are extremely perturbing. They go much deeper than how we dispense with licences and the returns to the nation now and in future.
The requirement to spend this small sum in terms of public expenditure compared with the totality of the potentialities of the North Sea ought to be taken out of the present context and looked at more comprehensively than the Secretary of State seems to have done.
I welcome the Bill because it seems to be an emergency Measure. I hope that in exploiting this invaluable new 1380 source of indigenous energy we shall not proceed in this hand to mouth way.
I ask the Secretary of State, once he has this Bill, to sit back with his colleagues in the Government and think out how much more interventionist he should be and to devise a public instrument with which publicly to control and exploit the resources of this area. I hope that he will not simply go on saying that the oil companies know best. I deny that assertion and a useful and valuable Secretary of State would also deny that they know how best to use these assets.
§ 12.50 a.m.
§ Mr. Harry Ewing (Stirling and Falkirk Burghs)
We on this side of the House very much regret that the Bill has not provided the opportunity for a full-scale debate on the future of the North Sea oil industry and the part it will play in the economic future of Scotland over the next 40 years. The hon. Member for Aberdeen, South (Mr. Sproat) said that a great deal of rubbish was spoken on the subject, some of it in this House. I would not want to pass judgment on that statement, but even if it were true the principal reason would be that the Secretary of State is so reluctant to allow such discussion in the House. The subject is being debated and discussed not in the House but in the country. If any hon. Member kids himself that this is not an important issue, or that the issues in the Bill are not important, let him listen to what people are saying in Scotland.
Under the Bill, £2 million to £3 million are to be spent not on two harbours but on one. The Secretary of State said that the harbour of Uig was included but that it had no prospect of being developed at this stage or even in the distant future. We are entitled to draw from that the assumption that the money will be spent on half of Peterhead harbour.
There are other developments on the East Coast of Scotland which are neither harbours nor havens. For example, there is the development in the constituency of my hon. Friend the Member for Kirkcaldy Burghs (Mr. Gourlay), at Methil, on the site of the old Wellesley Colliery, where Dorman, Redpath and Long is levelling the coal bins and building structures for the construction of drilling rigs to prospect for oil If aid 1381 is to be given, that area should certainly be considered. Then there are other developments on the East Coast, not least the off-shore terminal to be constructed by British Petroleum. That terminal and its environments should be considered also when we are discussing developments under the Bill.
I want, without straying from order, to say something about the life span of oil expected in the North Sea strike. It is something like 40 years. This is important because in essence it means that facilities for servicing rigs to harvest the oil from the North Sea will not be there for 40 years, but for some time shorter. While I welcome this Measure, it is important to recognise—and the hon. Member for Aberdeen, East (Mr. Wolrige-Gordon) made the point—that massive changes are to be made to the landscape in areas which service the rigs. It is important that when these changes are being made consideration is given to the effects which will be a long time away.
I want future consideration to be given to the time when these facilities are no longer required so that the landscape might be less scarred. The companies which disturb that landscape have a responsibility and the Secretary of State should be assured that the responsibility is exercised to be sure that the landscape is left in a state which will make the environment no worse and possibly better than it is today.
I welcome, even at this stage, the Secretary of State being converted to the idea of intervening in the oil industry, because one of the first Questions I asked when I came to the House last year was that the Prime Minister should appoint a Minister to the Scottish Office solely responsible for the development of North Sea oil. I have asked time and time again whether the Prime Minister and the Secretary of State are satisfied with the co-ordination between Government Departments on the question of North Sea oil.
I am not saying that the Bill we are discussing is a panacea, but it is a step in the right direction, and I ask at this late stage only that the Secretary of State should look closely at the oil industry in Scotland. If we do not get that, there will be no benefits to the Scottish or the British economy and, in order to get it 1382 right, it is important that the Government should play a primary part in development.
§ 12.58 a.m.
§ Mr. James Sillars (South Ayrshire)
We are all sympathetic to those who wish to speak in the debate, particularly my hon. Friend the Member for Carlisle (Mr. Ron Lewis) because the matter he is to raise is important for his part of the country, so I shall be brief.
I am in agreement with the implication of the Secretary of State's intervention in the speech of my hon. Friend the Member for East Stirlingshire (Mr. Douglas) when he seemed to imply, by the description of a length of speech as potentially one hour, that this should have been a wide-ranging debate on North Sea oil because there is an adequate precedent. This is virtually a one-Clause Bill, just as was the Rolls-Royce Bill and the Government spokesmen and all other speakers in the debate on that Bill found it necessary to argue in detail the background which led to the production of an unusual Bill. That was a one-Clause Bill with wide, sweeping powers which gave a blank cheque to the Government.
I am not convinced that we are merely talking about one and a half harbours or half of Peterhead harbour. My reading of the Bill does not tell me that, but that there is a future commitment in certain parts of Clause 1 for extensive and wide-ranging powers. I have a natural inclination to grant the Secretary of State the powers he seeks, but we are entitled to much more information than the Secretary of State gave in his brief introduction to the Bill. It is not good enough for him to say that we can all read the information in newspaper articles—
§ Mr. Sillars
The Secretary of State virtually said that. He chastised one of my hon. Friends on the grounds that much of the information we complained about not having been given was available in articles, and so on.
§ Mr. Gordon Campbell
That is not what I said. It was suggested that in introducing this short Bill to deal with one particular impediment in one part of Scotland with which we had to deal 1383 quickly, we could have had a long debate on North Sea oil. I said that if that had been the case I could, naturally, have given a long description of everything that is happening, but I did not think that that was what was wanted tonight.
§ Mr. Sillars
Because the Secretary of State insisted that the information was available to hon. Members from other sources. Someone did a basic article on North Sea oil some time ago. Many people have followed that article and there has been repetition but not much new detailed information, and little from an authoritative source such as the Government. It is not good enough for the Secretary of State glibly to pass by the background which gives rise to the Bill.
The Secretary of State said he could have spoken for an hour, but he chose to speak for much less. Many people in Scotland will regard that choice as reinforcing the suspicion that neither the Government nor the oil companies are providing the necessary information on North Sea oil.
In a leading article in The Scotsman on 13th June Sir William McEwan Younger was said to have hinted—that is the word used by The Scotsman—that there might be deliberate encouragement grossly to underestimate the potential of North Sea oil. That has never been rebutted by Sir William or by anyone close to him.
§ Mr. Gordon Campbell
The hon. Gentleman will know that doubts are sometimes expressed, as they were from the Front Bench tonight, that North Sea oil might end in 10 or 20 years' time. That is the kind of underestimate which I understand Sir William to be saying should not be made.
§ Mr. Gordon Campbell
It is partly that. No one can precisely assess the duration, and this is being discussed in public—rightly so.
§ Mr. Sillars
I have no doubt that Sir William will be making another speech in the near future in which he might take the opportunity to clear up the point.
§ Mr. Douglas
I have the article here. Does my hon. Friend agree that this is a correct quotation? 1384…that the potential of the North Sea field had been and still was 'grossly underestimated' and he hinted that the major oil companies might have encouraged this deliberately.That is a statement which Sir William had an opportunity to rebut. Does my hon. Friend agree that that is the sense of what he said?
§ Mr. Sillars
Sir William McEwan Younger is a man of many affairs. It follows almost automatically that if there has been an underestimate, say, of the amount of oil in the North Sea, then the estimation of the duration will also have been underestimated. I take that to be the point which Sir William was making, but the Secretary of State obviously does not. The right hon. Gentleman has more opportunities than I for conversations with Sir William. I prefer they keep their row inside the Tory Party.
§ Dr. Dickson Mabon
The Secretary of State has interrupted my hon. Friend. I should like to read this:Even todaysays Sir William—official estimates, and I mean Government estimates, seem to be of a possible annual production rate of 75 to 100 million tons by the early 1980s. But many experts consider that double that figure would be a highly conservative estimate for the British sector 'of the field' alone.I hope my hon. Friend will challenge the Secretary of State on this subject by pointing out that he is responsible for the official Government Estimates.
§ Mr. Sillars
I noted that intervention. I have no doubt that the Secretary of State has also noted it. It may be that I have a suspicious mind. Perhaps the Secretary of State tried to curtail the discussion on this point after a very short introductory speech because he did not want to open up the argument put forward by Sir William McEwan Younger.
§ Mr. Gordon Campbell
There was a time only a few months ago when the hon. Member for East Stirlingshire (Mr. Douglas) said I could not make a speech anywhere without speaking of the potential of the North Sea oil industry. I was doing everything in my power to aid it. That was three and a half years ago, before I came into office.
Seven months ago the first announcement was made that North Sea oil had 1385 been discovered in commercial quantities. I made those speeches. I said earlier that hon. Members, I knew, had been following these events. I did not think that a complete history of the whole of the North Sea oil exploration was right. My speeches are usually short.
§ Mr. Sillars
A lecture to a group of people at Aviemore is no substitute for a detailed statement in the House of Commons, which would then be subject to analysis and debate.
The Secretary of State has considerable support on this subject within Parliament. He has missed a golden opportunity tonight. His performance tonight will lend itself to the widespread belief in Scotland that somehow or other we are being done out of our important potential wealthy natural resource in our country because of Government negligence in handling the giant oil companies which are exploiting the North Sea. That is a widespread belief in Scotland. The right hon. Gentleman's performance helps to reinforce that belief.
This Act does not commit the Secretary of State to expenditure either in 1972 or 1973 or during the years thereafter. We shall have no opportunity to obtain the detailed information we seek on behalf of the people we represent. The right hon. Gentleman's performance does not help to dispel the suspicions—it only reinforces them—that the Secretary of State is somewhat insensitive to Scottish opinion.
There is the growing feeling that, properly handled, this can assist us to climb out of the unemployment depression which the Scottish economy has now settled well into in the middle of 1972.
The Secretary of State must know of the view that it makes doubtful sense for the Government to construct a regional policy based on bribery and persuasion—that is what the present regional policy is—when they seem to ignore wilfully a situation which, sensibly handled, could ensure and guarantee positive results within Scotland in terms of investment and employment. On the one hand, there is a regional policy which hopes to create jobs. However, when we come to North Sea oil we have got a natural resource the management and control of 1386 which is certain to produce results if the Government apply the correct techniques and policies. By that, I mean using the oil revenues in the development areas, the control of production, demanding guarantees about where the oil taken from the North Sea shall be refined inside the United Kingdom, and setting conditions on companies to ensure the stimulation of investment by insisting that they purchase a percentage of their material needs in the development areas, preferably in Scotland.
In the past, Scotland has often suffered as a result of geological conditions. I come from a mining area, and we have to pay a surcharge on our coal because of difficult geological conditions. My constituents see nothing wrong in saying that for once God has been kind to Scotland geologically speaking, and that we should reap some benefit from the North Sea. But, when faced with the choice between hope and something positive, this Government turn their backs on the latter.
While I support the Second Reading of the Bill, I do so with less than enthusiasm. We seem to be getting a piecemeal response from the Government to a potential which, if treated comprehensively, could regenerate the Scottish economy and its employment situation. I hope that this is the last time that the right hon. Gentleman introduces a one-Clause Bill which is in fact an ill-defined Measure.
§ 1.11 a.m.
§ Mr. Norman Buchan (Renfrew, West)
While we on this side of the House are willing, eager and wanting to give every support we can to help this great industry, it is clear that there is a good deal of dissatisfaction among us about the Bill and its lack of information and about the way in which the Secretary of State introduced it.
I refer to the point made by my hon. Friend the Member for South Ayrshire (Mr. Sillars). The Secretary of State intervened several times to correct my hon. Friend and he made the situation worse each time. He said that he could have spoken for an hour, and we all agree about that.
§ Mr. Buchan
He said he had not done so not simply because of the lateness of the hour but because hon. Members were following these events and therefore he did not need to. That was the right hon. Gentleman's point. He said we had been reading about it in the Press and, because of that, he did not need to speak about it at any great length.
That was an extraordinary statement for the Secretary of State to make. We are concerned to know whether he is following some of the events and, even more, whether he is leading some of them. That is what we wanted to hear. The right hon. Gentleman should not come forward with this mouse of a Bill and the minimum of introduction on one of the most important industrial developments to have taken place in Scotland.
The right hon. Gentleman feels that he has done well. He has introduced the Bill. He has acted quickly. He sounded almost as though he considered himself the embodiment of the "at a stroke" policy. But in fact he has not moved quickly.
What was even more horrifying was to find, almost by accident, that the right hon. Gentleman moved when he did only because the matter was brought to his notice by the Scottish Council. Other people are telling him what to do. But it is his job. What is he doing about the oil industry if he cannot recognise some of the problems and complications which will arise on the shore installations and has to leave it to those who organise conferences at Aviemore to tell him what he should be doing?
That is why the right hon. Gentleman should have made a longer speech and why we are worried not only that he is not leading but that sometimes is not even following what is going on.
§ Mr. Gordon Campbell
I said in my opening remarks that it was those connected with North Sea oil developments in this area who had come up against this difficulty and brought it to our notice. That was only a short time ago. I began by saying that. Then I said that it also gave us an opportunity to make this harbour a really good place for the servicing of oil rigs.
§ Mr. Buchan
This is an extraordinary situation. It means that within the Scottish Office the Secretary of State 1388 has made no effort to set up a special team to look into all the difficulties, possibilities and potentialities of the oil industry. That is what the right hon. Gentleman is suggesting.
§ Mr. Buchan
Yes, legislation was needed, and that is why for the first time we have got something done about oil. Someone has shown up a particular legal problem. The Secretary of State gave no indication that he sees the kind of problems involved in the question of the life potential, and so on. I sympathise with him. I know he came to the House feeling that he was doing rather well for everyone, but that only suggests that he was completely out of touch with Scottish feeling on this issue. We want him to be seized of the importance of this matter to Scotland.
It has been left not to a Minister but to the Chairman of the Scottish Conservative Party, Sir William McEwan Younger, to try to—[HON. MEMBERS: "Oh."] Yes, another reference to Sir William McEwan Younger. I want to correct some of what has been said about this matter. I must apologise to my hon. Friend the Member for Carlisle (Mr. Ron Lewis) who is waiting for the Adjournment debate. We are all sympathetic towards him. He wants to deal with the State Management Scheme. Some may find it curious that Sir William McEwan Younger is so keen to nationalise oil while at the same time trying to denationalise beer.
§ Mr. Buchan
We should be clear about what Sir William McEwan Younger was saying. The Prime Minister and the Secretary of State keep saying that people did not mean what they said. Sir William McEwan Younger clearly meant it when he said that the Government were not doing well enough. He called for a fundamental change in the Government's approach.
He said:Time is not on our side.He is reported to haveurged the Government to jettison yet another free enterprise principle by taking a controlling hand in the exploitation of the North Sea resources.1389 He admits that he is not a Socialist. That is something for the Chairman of the Tory Party. That is what the Tory Party has come to.
Sir William McEwan Younger said:I am no Socialist, as some of you know.He continued:But it would be quite illogical if a Government, which has departed from its principles—perhaps rightly, probably inevitably—to subsidise industry which may well never be really viable, should largely leave the development of North Sea oil and in particular what is done with that oil and natural gas when extracted, to the complete and unhampered discretion of those who are responsible for its extraction.It is like a chapter out of "Das Kapital." He is absolutely right. We welcome the conversion. We only wish that we could see a similar response from the Government.
In the face of that clear and correct demand, which has fired so many of the people of Scotland, we get this mouse of a Bill dealing with—possibly dealing, because we are not satisfied about this yet—two harbours in Scotland.
I have a very soft spot for one of the harbours. I played over all the ground around the area which I know extremely well. I have much sympathy with what was said by the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) when he spoke about the amenity aspect. The kind of point made by Sir William McEwan Younger is also the kind of point of some of my hon. Friends, especially my hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Ewing) who referred to the amenity aspect.
If exploitation is to take place, not only do we want a proper return to the community, as of now, but also we want the amenities preserved for the future. We want no more derelict areas on the coast such as we have had in the interior areas of Scotland in the last century. We are right in demanding this. That is implicit in Sir William McEwan Younger's demand.
I was reminded of an old song of which I have only one verse about the situation in 1886—
§ Mr. Buchan
No and, since I shall not sing it, it will not scan particularly well. I believe it is correct, although I could not check it with an authoritative source tonight. It goes:Fan the harbour o' refuge wis first talked abootRoonheids and Buchanhaven were fair pitten oot.Queen Victoria said oor convicts will get better farin'If they're fed on gweed Buchan tatties an 'Peterheid herrin'.That is the reason for the harbour of refuge at Peterhead and we think this is what the Bill is about.
This is only a small Bill. It is not only an administrative change but the first direct involvement of the Government with a specific figure—£2 million to £3 million—set down. This is a very large potential investment and a major public investment. The moment it is implemented, the question is raised about public participation in the oil industry. What will follow from the acceptance of public responsibility and public cost? This will be our cost and we have a right to know what public participation will be involved and what public return will come from the exploration. Most people agree that errors have been made in the past. In the initial stages, long before exploration showed any indications of success, the Labour Government left the position open to permit private exploration, except for gas. We recognised from the beginning that gas would be dealt with through the Gas Council.
In the initial stages, however, ways were left open for increasing public participation which have been closed by the Tory Government. The way was open for public participation to give a public return in the way most other countries have done. Britain alone has been giving away the concessions like a succession of Green Shield stamps. At the last bidding one concession went for £21 million. But hundreds or other plots were given for the rental only. In other words hundreds of millions of pounds may have been lost directly to the British people because of the kind of concession granted by the Government.
The question of reversion of these plots to the public is also involved. The amount of land that was given out in these plots was far too big and the wrong 1391 method was adopted. We should have employed the chequer board method. The Government have permitted the companies to return a proportion of the land that they do not wish to continue to explore, instead of the random return system which is employed in other areas.
We should be considering royalty bidding instead of direct cash bidding so that those companies which return more to the people will get a better chance of winning the concession. The granting of the concession should be linked to assurances that the necessary work will be done in Britain. None of this has been written into the Bill. When the Scottish Council comes running the Secretary of State is willing to assist, and in the same way even the present reactionary Government should be ready to insist upon the proper writing in of public involvement and public return from North Sea exploration.
These are the kind of points that are implicit in the Bill. I remind the Secretary of State of the points that have been raised by almost everyone who has spoken. We are not satisfied with the assurances about what the Bill deals with. We have had little proof that only the two harbours mentioned by the Secretary of State are affected. There is dissatisfaction that the opportunity has not been taken to deal with other harbours. This was the point made by my hon. Friend the Member for Greenock (Dr.Dickson Mabon) who referred to the complexity of the Aberdeen situation. My hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) referred to the small harbours in Orkney and Shetland. The opportunity has been missed to get these matters into the right form.
One would have expected the Government to do that. Doing so would not have delayed the proceedings. In fact it may have helped them, because one thing that is clear is that while we want to do all we can to get the Bill through as quickly as possible, it looks very much as though it will have a very lively Committee stage.
§ 1.26 a.m.
§ The Under-Secretary of State for Home Affairs and Agriculture, Scottish Office (Mr. Alick Buchanan-Smith)
The importance which Scottish Members attach 1392 to North Sea oil development is shown by the fact that so many of them have stayed here for this late debate.
The debate has been useful in some respects and I do not want to appear to be carping in closing it. Some hon. Gentlemen on the Opposition side have given the Bill a general welcome but they have been slightly grudging and carping in some of their comments. The hon. Member for Greenock (Dr. Dickson Mabon) in particular asked some probing questions and I shall endeavour to answer them, just as I shall endeavour to deal with the matters raised by the right hon. Member for Kilmarnock (Mr. Ross) and others.
I thought that the carping comments of the hon. Member for Aberdeen, North (Mr. Robert Hughes) bore no relation to my personal experience of what is going on in Aberdeen, and I am sure that my hon. Friend the Member for Aberdeen, South (Mr. Sproat) will agree with me on that.
§ Mr. Deputy Speaker (Mr. E. L. Mallalieu)
Order. The Minister is not giving way. The hon. Member for Aberdeen, North (Mr. Robert Hughes) must not persist in trying to intervene.
§ Mr. Buchanan-Smith
In the first half of his speech the hon. Member for Caithness and Sutherland (Mr. Maclennan) attacked my right hon. Friend for what he was doing, but then he said that the Bill was a good Measure and he welcomed it.
The hon. Member for Renfrew, West (Mr. Buchan) several times called this a mouse of a Bill but then said that it was not just a little Bill. I do not know what kind of mice the hon. Gentleman has in West Renfrew. The hon. Gentleman said that this was the first time something had been done about North Sea oil development in Scotland. He should visit the north-east of Scotland. He should talk to my hon. Friend the Member for Ross and Cromarty (Mr. Gray), my hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) and my hon. Friend the Member for Aberdeen, South. The hon. 1393 Gentleman should discuss the matter with his relatives. Or perhaps he cannot because his family relationships are not all that good. Perhaps they do not want to talk to him because they know that it is not worth while doing so.
Any hon. Member who is actively concerned with the development of North Sea oil knows that what the hon. Gentleman has said is not true. I am sure that the right hon. Member for Orkney and Shetland (Mr. Grimond) will agree with me on that. It is most exciting for those Members who represent constituencies in the north-east and north of Scotland to see how much is being done and how much it is appreciated by those who live in those areas.
Like the right hon. Member for Kilmarnock, I too enjoyed my archeological researches into the Bill. They made interesting reading. I must correct the right hon. Gentleman on one matter. It is not Mrs. Ogston, but Jane Ogston or Mackenzie, and I am sure that my hon. Friend the Member for Aberdeenshire, East knows her successors. I am sure they follow with interest what is going on with these new developments.
In the same way references to Scotch convicts, Scotch prison commissioners and so on make interesting reading.
The main point was the question of the extent of the application of the Bill and precisely why it refers only to the two harbours which my right hon. Friend mentioned, the harbour of refuge at Peterhead and the harbour at Uig. The position is perfectly clear. The Bill applies to harbours that are vested in the Secretary of State by Statute or by order. That is why there is the reference in Clause 1 to those made or maintained by the Secretary of Stateby virtue of powers or duties vested in him by any Act or order".In the case of Peterhead we have a harbour made by the Secretary of State under Statute and in the case of Uig a harbour maintained by him. Other harbours, other fishery harbours and estate harbours elsewhere in the north of Scotland, are either not vested in the Secretary of State, full stop, or are not vested by Statute or order. Some of the others are held simply by the Secretary of State as the proprietor of the estate or whatever 1394 it may be. Therefore, I assure the House that we are absolutely clear that the Bill and the legal definition given in it refer strictly speaking only to the two harbours I have mentioned.
§ Dr. Dickson Mabon
Is it because of the dangers of hybrid legislation or some other inconvenience to the Secretary of State that line 10 of Clause 1 does not specify the Act and orders involving the two harbours? I could readily understand such an explanation, but if they were specified the Bill would be much clearer.
§ Mr. Buchanan-Smith
We followed the form we did because of the problems of promoting a Bill that could have been of a hybrid nature if the harbours had been specifically mentioned. When so few harbours are involved, it is right for hon. Members to question why we drafted the Bill as we did.
This begs the question, which I asked my advisers, and which the right hon. Member for Orkney and Shetland raised, of the adequacy of the powers in relation to development at other ports. The right hon. Gentleman raised it particularly with regard to Lerwick, where oil developments are taking place. Several hon. Members have suggested that the Bill should be extended to remove any obstacles that may exist elsewhere. But harbour authorities in general have powers under their local Acts to develop their ports for any commercial purpose.
If in specific cases these powers need to be extended this can be done by order under the Harbours Act, 1964. It is only in the case of the Peterhead harbour of refuge that the harbour authority is specifically limited to maintaining the harbour only for refuge purposes. This is something which cannot be put right under the Harbours Act, which is why we need this Bill. As for the question of whether other harbours, such as Lerwick, can use powers under local Acts, we are prepared to look into this problem with any other local authority or harbour board. This is outside the scope of this Bill. I understand that the Lerwick harbour authority is promoting a provisional order for a new harbour scheme at an estimated cost of more than £1¼ million. I hope that this procedure will not be too much of an obstacle.
§ Mr. Grimond
The hon. Gentleman is right in saying that the procedure is going through for Lerwick, and there may be problems. I was also referring to the fact that Lerwick has only a certain depth of water and it may be necessary to construct an anchorage or oil terminal in a different part of Shetland, offshore. It is there that certain new problems may arise which will need attention at some point.
§ Mr. Buchanan-Smith
I am grateful to the right hon. Member. This is certainly something we will take into account. We are prepared to look at this with the interests involved.
One or two hon. Members have suggested that Measures like this are simply plucked out of the air. There have been continuing consultations between ourselves and those involved in industry, whether developing oil companies, servicing companies or bodies such as the Scottish Council. These problems are dealt with as they arise and this Bill is a prime example of that. This ensures that we move forward properly with the exploitation of oil.
The other question of substance raised by the right hon. Member for Kilmarnock and the hon. Member for Greenock dealt with the orders which are obviously important and to which we may well return in Committee. We were asked whether they would be referred to Parliament and when they would be made. In accordance with precedent orders that have to be made amending local Acts are not always subject to presentation to Parliament or to the affirmative or negative procedure. We will certainly consider this and the matter of presentation to Parliament if it is desired. No orders are likely to be needed until constructional works are well advanced. The orders are likely to be concerned only with amending Sections of the 1886 Act dealing with the operating arrangements in the harbour of refuge. Therefore there is no desperate urgency about this.
§ Dr. Dickson Mabon
I am glad that this is to be looked at. I strongly urge the hon. Gentleman and his right hon. Friend to examine this and confirm that the affirmative procedure is highly desirable. The hon. Gentleman referred to the Harbours Act, 1964. I have had a quick glance at it. Under 1396 Section 14 there is reference to the orders he mentioned, namely harbour revision orders. The harbour revision orders in these cases are all subject to special parliamentary procedure. I will not go into the details, which contrast with what we are discussing.
My second point—if the Under-Secretary cannot answer now, perhaps he will think about it for Committee—is that there is no provision in the figures to sustain these orders. The Under-Secretary must think about this with the Secretary of State. If we have a problem at Aberdeen or at any of the harbours mentioned in the Harbours Act, 1964, and we require a harbour revision order, under what arrangement are we to vote that money? How is that to be achieved? Perhaps this should be looked at again in a wider context.
§ Mr. Buchanan-Smith
I am grateful to the hon. Gentleman for raising these matters. They are the kind of difficulties to which he referred earlier and which I acknowledge. I should not like to answer those two specific points off the cuff, but they are matters we should look at in Committee. We shall study these matters closely before we reach the Committee stage. I know and appreciate the concern that has given rise to this debate.
I have dealt with the two main points in the Bill and I now turn to the wider implications. The third main area specific to the Bill is the question of finance. That is a matter which has concerned many hon. Members and is one which has been raised generally. I may be trespassing slightly on the Money Resolution which we will be dealing with later. As is indicated in the Financial Memorandum attached to the Bill, however, the expenditure resulting from the Bill is likely to be in three general forms. First, it is likely to involve harbour administration costs which we estimate may increase by up to £50,000 per annum. The present costs are minimal. Repair costs amount to about £1,000 annually. Future costs might also include harbour staff, office expenses and the operation of a harbour vessel.
The second main group of likely expenditure is capital expenditure on the construction of harbour works. If it were found expedient for these works to be undertaken, the Secretary of State might 1397 increase total costs to £3 million in the two-year period 1972–73 and 1973–74. The right hon. Member for Orkney and Shetland asked where this estimate came from. It is the best estimate our technical advisers can make of the costs of the sort of facilities which will be needed and which will be practicable. Of course I at once accept—I do not make any pretence about this—that it is a flexible figure and a figure that may well change as our consultations continue and the various oil developments change or move in certain directions. However—I will return presently to this point which was raised by the hon. Member for Greenock—depending on the extent to which these works could be undertaken by developers, these capital costs could be correspondingly reduced.
The third general category of expenditure could be other increases attributable to expenditure under other Acts. That is a general category. We do not envisage any significant expenditure of that kind. I was asked the question by the right hon. Member for Orkney and Shetland in relation to a Supplementary Estimate in the current year. That will be taken into account.
Relating to some of the other financial aspects that were mentioned, I shall deal first with the question of who might undertake this. Whilst it is possible under the Bill—we are maintaining at this stage a flexible attitude—that if the expenditure is undertaken by the Secretary of State it could amount to the figure in the Bill, it is possible under the powers in the Bill that a developer could be given authority to undertake this.
The hon. Member for Greenock asked what developers we had in mind. All I can say to the hon. Gentleman at this stage is that there are certain commercial negotiations taking place which are of a confidential nature. In relation to those already known publicly. Site Preparations Limited, for example, submitted to Aberdeen County Council on 26th May an application for planning permission. It is also public knowledge that Arunta Ltd. has already obtained planning permission for the construction of warehouse facilities on land which it has leased from the Peterhead Harbour Trustees. So here are two examples of developers taking part in the North Sea oil develop- 1398 ments who could be amongst those who in certain circumstances could undertake some of the developments for which the Bill gives power.
§ Mr. Buchan
The Arunta company is not involved in the area which we sometimes call "over the Queenie" around the fishing harbour. What is the precise relationship between development there and what is envisaged?
§ Mr. Buchanan-Smith
I understand that some of the shore installations are scheduled for planning permission, but any developments within the harbour of refuge will be covered by the Bill. A jetty or a pier which impinged on the harbour of refuge would be covered by the Bill. I have a map of the harbour of refuge. I do not know it as well as the hon. Gentleman, who spent his earlier years there, but I am aware of the developments which are proposed for that part.
§ Mr. Buchanan-Smith
Yes. It is not a big map but it gives a better understanding of the situation. I willingly give the right hon. Gentleman the assurance that copies of the map will be available to members of the Committee.
Other financial matters were raised by hon. Gentlemen opposite. The hon. Member for Aberdeen, North referred to grants and so on in relation to Aberdeen Harbour. I was disappointed at the tone of some of the hon. Gentleman's remarks, which were completely out of keeping with the response I have met in Aberdeen where a loan of £1½million has been provided for a tidal harbour scheme. I found no resentment in Aberdeen about the loan and the conditions attaching to it. Equally, I found nothing but the warmest welcome for what the Government are doing about the fisheries development there. Therefore, I found the hon. Gentleman's remarks tonight somewhat strange.
In July last year my right hon. Friend the Minister for Transport Industries explained why grants were discontinued. If the Secretary of State undertakes this work, it involves a direct investment by him and it is undertaken on the same 1399 commercial basis we should expect from anywhere else. This was precisely the point raised by my hon. Friend the Member for Aberdeenshire, East when he asked what return we would get on any investment. We expect the return to be at the full commercial rate. The income will be derived from rents for the leases and from harbour dues.
§ Mr. Robert Hughes
Will the hon. Gentleman accept from me that although the various people interested in the harbour development showed a sense of relief that at last a decision was made to lend the money, there was widespread concern at the way it was done and the fact that the fisheries harbour was to be abandoned in favour of oil. There is a great deal of resentment in the City of Aberdeen about the way the whole matter was handled.
§ Mr. Buchanan-Smith
We want to get the position clear. The hon. Gentleman is not giving the whole story. I do not want to get involved in a long argument but this is important. If the hon. Gentleman does not understand, the people of Aberdeen do. First, it was the harbour authority itself which decided, on its own initiative, to put back the fisheries harbour development, and I do not argue with its reasons. Now, however, because of the special grants being made available, it has altered that decision. Secondly, loans cannot just be plucked out of the air for general purposes. The hon. Gentleman knows as well as I do and as the harbour authority knows that every loan application must be assessed on commercial viability. The moment the authority put its plan forward, together with its commercial viability assessments, they were dealt with urgently. I am sure that the authority would not deny that.
§ Mr. Buchanan-Smith
No, I cannot give way again. The hon. Gentleman has made his speech and I have answered his point.
§ Mr. Deputy Speaker
Order. The hon. Member for Aberdeen, North (Mr. Robert Hughes) must sit down since the Under-Secretary of State is not giving way.
§ Mr. Buchanan-Smith
I turn to the other financial question raised by the hon. Member for Aberdeen, North, a perfectly fair point about the relationship of the Peterhead development with the development of Aberdeen. I assure him that the Aberdeen tidal harbour scheme received Government approval and support under the Harbours Act only after being strictly scrutinised for its commercial viability. I reassure my hon. Friend the Member for Aberdeen, South that any development proposal at Peterhead will be judged by exactly the same tests. The fact that the Secretary of State is to be the harbour authority there will make no difference to the tests which will be applied to any proposals to be made.
§ Mr. Douglas
The hon. Gentleman is talking in general terms about tests. I asked about the rate of return involved. Can he answer now or does he prefer to write to me about it?
§ Mr. Buchanan-Smith
I have detailed notes of many aspects but not of that. I would like to go further into the question of the way these applications are assessed.
My hon. Friend the Member for Aberdeenshire, East raised a number of specific questions relating to the developments at Peterhead and the way they might affect his constituents. He is right to raise the matter because the developments could have a major effect not only on the economy but on the whole environment of the area. Proposals for the fishing harbour development are under consideration and we expect to be able to give an answer in the not too distant future, but there are one or two difficulties which must be cleared out of the way first. In particular there is a slight problem over the statutory powers of the harbour trustees in relation to the North Harbour which must be settled first. They are going into it now with their legal advisers. We recognise the case for an extension at Peterhead, but the scheme they are putting forward is for the biggest inshore fishing harbour development ever to be presented in Scotland. It is enormous in size—indeed, it is quite unique in its size—and it must be considered alongside many other schemes from other areas. I assure my hon. Friend that we are seized of the 1401 urgency with which harbour trustees view their own application.
On the question of safeguards for fisheries, the Bill does not affect the fishing harbour, and the right of access through the harbour of refuge is not affected. Fishing interests will be safeguarded. I am glad to be able to give my hon. Friend that assurance.
The hon. Member for Stirling and Falkirk Burghs (Mr. Ewing) and my hon. Friend both referred to the necessity not to leave behind modern industrial development the kind of thing from which the present generation suffers because of past industrial development, particularly in central Scotland. We appreciate the need to preserve amenity. It is an important element which we must bear in mind in discussions with potential developers and with Aberdeen County Council, the planning authority. I know that that council is very much aware of the issues involved, because this is not simply an industrial development but a community development, as my hon. Friend said, because there is a community in Peter-head and this must be recognised in any industrial and commercial development.
I have been encouraged by what has happened already, which is known to my hon. Friend. At one level there have been talks with the education authority and the town council about making the swimming pool at the new academy a general civic facility. That is one example of how the authorities involved in Peterhead are making sure that the amenities are preserved. From the next county, I know how Aberdeen planning authority works and that it is alive to what is involved.
I apologise for speaking at some length but a number of right hon. and hon. Members have spoken at some length. It shows how important is this issue. The Bill may be narrow in referring only to Peterhead but in another sense, in the way it refers to people affected, it sets a certain pattern. As my right hon. Friend said at the beginning, the Bill demonstrates that for the people of Peterhead, for the oil companies and development companies and for the finance houses which are backing some of the developments and which welcome the Bill, it is proof that the Government are on their toes in oil 1402 development and are ready to act where action is needed.
§ 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).