HC Deb 30 June 1972 vol 839 cc1917-33
Mr. Varley

I beg to move Amendment No. 13, in page 5, line 22, at end insert: (2) In granting approval for such programme as referred to in the foregoing subsection the Secretary of State shall have regard to the effective national co-ordination of all fuel and energy supplies at present available or to be developed in the future. This Amendment not only is a sensible provision to put in the Bill but will permit the Government to state their views on the development of effective national co-ordination of fuel supplies. We on this side fully realise that nobody can predict with absolute certainty what each sector of our primary energy resources will take up in five or 10 years' time. That exercise has been tried before on many occasions, and we all know the result. However, we believe that it is possible to lay down a general framework of energy co-ordination. That is what we seek to focus attention upon in the Amendment.

It appears to us that the Government are prepared to let the situation drift with no attempt being made to look into the crucial area of energy supplies. On 5th June the Secretary of State for Trade and Industry told the House, in response to a question by the hon. Member for Bedford (Mr. Skeet), that energy questions are kept "under constant review". We want to know what he means by that. No doubt the Under-Secretary will tell us when he comes to reply.

The last time we had a debate on this vital subject was on 10th March when the then Under-Secretary, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), was bafflingly vague about these matters. He talked about unknown events and uncertainties as though they prevented the formulation of a fuel policy. It is these uncertainties which make it essential to frame a policy.

All informed opinion is agreed that there is a world energy crisis pending, possibly within the next decade. Consumption is eroding known fossil fuels with frightening rapidity. Projections have been made everywhere except apparently in the Department of Trade and Industry. I do not believe that no projections have been made within the Department, but at the moment the Government are being extremely coy and have not told us what their projections are.

However, if we look elsewhere we can see that projections have been made. Sir David Barran, of Shell, has quoted projections according to his knowledge. Mr. Derek Ezra last week presented his estimates to the National Coal Association in Washington, D.C.—not Washington, County Durham, where the Chairman of the National Coal Board usually makes pronouncements. It passes all belief that the Government do not have their own projections. It is essential for the Government to let us know what the protions are so that all of us can contribute to a formulation of policy. It is no good telling us that it is better to wait until the picture gets clear. That kind of procrastination can only lead to disaster. I do not use that word idly. Every hon. Member who takes an interest in these matters is aware of the factors that must be taken into account to achieve a co-ordination of fuel and energy supplies required by the Amendment.

Mr. Skeet

I do not know whether the hon. Gentleman reads the Financial Times, but he may have seen in this morning's edition the analysis by Mr. M. M. Pennell, a managing director of BP, who has made a forecast of the oil situation in the United Kingdom.

Mr. Varley

I am grateful for that intervention, because it reinforces the point that I have made. We now have the views of the gentleman named by the hon. Gentleman, Sir David Barran. Mr. Ezra and other leading people.

I know that there are many hazards attached to trying to forecast fuel supplies. There are many hazards, for example, in trying to forecast the future of oil. We know how much this country relies on imported oil. It used to be an article of faith of hon. Gentlemen opposite that all that was needed to solve our fuel problems, and, incidentally, to put the troublesome miners in their place, was simply to remove the duty from heavy fuel oil. The Chancellor of the Exchequer has had two opportunities to do something about that, but he is seized of the importance of maintaining that duty.

We have the wise counsel of Sir David Barran, and the past association of the Secretary of State for Trade and Industry with Sir David ought to make him place a lot of credence on his words. He said: The days of cheap imported oil are over", and recent events, even during the past few days, have shown that oil has become not simply a seller's market but a blackmailer's market, even when the availability of supplies can be relied upon, and the oil-producing countries know that they are on to a good thing.

All the major oil-importing countries will soon be joined by an even more voracious new customer, the United States of America. It is estimated that the Americans are running down their reserves so fast that they are down to about nine years' consumption at the present rate, and that by the end of the decade they will be importers of fuel on a large scale. They have an insatiable appetite for oil in the United States and a similar situation exists here.

The situation can be summed up by quoting Mr. Derek Ezra's address to the Americans a week ago. The Financial Times of 21st June reported him as saying: A new oil find of Alaskan proportions would be needed twice a year by 1980 to maintain the present ratio of oil reserves to consumption, if the existing growth in world demand for energy continued. I know that hon. Gentlemen opposite will say that in this country the gap can be made up by North Sea oil scheduled to come in in greater quantities by 1975 and build up to even greater supplies by 1980, but again Sir David Barran rather plucks us out of the clouds by warning against "premature euphoria" in thinking about North Sea oil. The total reserves of companies engaged in off-shore North Sea activities of the United Kingdom and those of the companies engaged in off-shore activities in Norway and Denmark represent only 1per cent. of the reserves of the Middle East.

The technical difficulties are immense, as Mr. John Petty said in the Daily Telegraph of 5th June. His view then was: The oilfields are being found in deep water, and there is such a shortage of suitable rigs that Burmah said it will be the middle of next year before it can obtain one to drill in its latest blocks. 3.15 p.m.

That is one example of the uncertainties involved but there is also the astronomical expense. Again I quote from Sir David Barran, who was addressing an organisation of impeccable credentials—the West Yorkshire region of the Economic League—on Friday, 22nd April, 1972, when he said: Exploration costs, high as they are, will be dwarfed, however, by the huge expenditures that will be required if fields are found large enough to justify the installation of facilities to bring the oil ashore. Conditions off the Shetlands will call for production platforms standing higher than the Post Office Tower and not far short of the Eiffel Tower. It so happens that the oilfields so far proved are all out in the middle of the North Sea and may take four to six years to bring into full operation. Building pipelines of 150 miles or so to shore will cost as much per mile as a four-lane motorway on land and may take several summers to install. The total cost of developing a field of economic size—producing, say, 250,000 to 300,000 barrels a day—could be of the order of £250 million to £300 million. Sir David summed it up even more eloquently when said: If all goes well it is possible that reserves from the North Sea could support production of two million barrels a day in the mid-1980s. This would be a major contribution to the needs of this country, but only a relatively small proportion of the needs of Western Europe. But Britain will not have access to all these supplies. These supplies will have to be shared between all the countries in Western Europe which have an interest in North Sea oil. It has been calculated that the ultimate potential of the North Sea may represent no more than two years' growth in Western European oil requirements. So we on this side welcome whatever North Sea oil to which we can get access, but let us keep those supplies in proportion as a total contribution of the natural energy supplies for whose co-ordination the Amendment calls.

Again, in considering the effect of national co-ordination of all fuel supplies the Secretary of State will have to consider nuclear power. When we debated this subject on 10th March, the hon. Member for Cirencester and Tewkesbury admitted that electricity from nuclear power was terribly expensive. He said that no Magnox stations could produce electricity as cheaply as coal, oil or gas, and he pointed out that the AGR Dungeness B station was four years behind schedule. In the most valuable debate initiated last week by my hon. Friend the Member for Bristol, Central (Mr. Palmer), who will have something to say on this subject either today or another day, the Under-Secretary insisted that a decision between the AGR and the steam generating heavy water reactor and the high temperature reactor must not be rushed.

We all know that the Vinter Committee has reported on these issues to the Government, but as far as I can make out the House will be denied that information—quite unjustifiably, as I believe. I appreciate that there are commercial sections in that report, but I still think that it could be doctored to take out items of crucial commercial importance. I hope that the Under-Secretary will tell us that the Government have reconsidered their attitude.

Perhaps the most disquieting development over the last few weeks in regard to nuclear power has been the report which came out of the United Nations Conference on the Environment at Stockholm, which suggested that nuclear power stations and the waste accumulating from them might present safety hazards of terrifying magnitude. I hope that the Minister can tell us something about that as well.

The very great merit of North Sea gas is that it is a clean fuel. It is pollution free. As Mr. Ivan Fallon has pointed out in the Sunday Telegraph, it is available in politically safe areas. Furthermore the cost differential with oil is narrowing rapidly. So it makes every kind of sense to give all due weight to natural gas in the national co-ordination of fuel and energy supplies.

Mr. Skeet

I have been following the hon. Gentleman's argument very carefully. He has spoken about the cleanliness of natural gas. Would it not be more suitable, therefore, to consider not merely its primary use in general distribution but also its use as a fuel for power stations? A very high percentage is used in Holland for that purpose. Should we not so use it here and should not the Minister give some sort of lead of this matter?

Mr. Varley

I am grateful to the hon. Gentleman. I am coming to that point. I do not share the hon. Gentleman's enthusiasm for using natural gas in that way. He will probably wish to take up my arguments about that. I do not see it in that way. There is increasing discussion about the use of natural gas to generate electricity in power stations. But while I am ready to assert the importance of the maximum use of natural gas, it would be unwise to disregard its limitations. It has its problems; it has problems in exploration, for example.

Mr. Skeet

The hon. Gentleman wants maximum use of natural gas. But one must have a high load factor. Does not consumption by a power station give the high load factor which is essential for profitability?

Mr. Varley

I accept that, certainly. But there are international examples which show that we must go extremely carefully on this matter. Natural gas has its problems in exploration. We all know, with a good degree of sadness, what happened to the onshore gasfield at Lockton in Yorkshire. While, happily, new fields are being reported, and we welcome that, it is necessary to bear in mind that in some respects, as far as we know, natural gas is of limited duration. I come directly to the point made by the hon. Member for Bedford about using it in power stations.

Mr. Emery

The hon. Gentleman will be talking about North Sea natural gas of limited duration, and not natural gas in a world context.

Mr. Varley

I have not been talking about it in a world context. But there has been a great deal of anxiety about natural gas and supplies of it in a world context. I should like to read a section from a paper given by Mr. C. E. Mills, Member for Economic Planning of the Gas Council, to the Institution of Gas Engineers: In the summer of 1970, engendered by the growing natural gas shortage in the United States of America, interest began to be shown in the Gas Council's gasification processes by U.S. contractors and utilities. The U.S. gas supply market had been traditionally based almost entirely on natural gases and up until the late 1960s supply had always exceeded demand. In 1968 serious official doubts first began to be expressed about the future availability of natural gas and by1969 the life of U.S. gas reserves was down to an all-time low of 12 years. The regulatory authorities began to prohibit the sale of new industrial loads and in some cases utilities were even unable to cater for increased domestic demand. The situation has worsened considerably since then, and more-widespread restraints have been imposed. That is the sort of situation that has happened in the United States. There were reports in the Financial Times only a few weeks ago about anxiety in France concerning the future availability of natural gas. There is no doubt that at present natural gas is a valuable component in the co-ordination of a fuel policy. We need to settle this problem and this anxiety about the short-term availability of natural gas.

Environmentally, natural gas is a superb fuel. It is also a superb domestic fuel. If we were now to rush in willy-nilly with a general application of natural gas to generate electricity in power stations, without considering fuel supplies or taking into account everything that is happening, it would be extreme folly. I want to know much more about the availability of future supplies of natural gas before I want there to be a general application of natural gas to generating electricity.

Mr. Skeet

Would the hon. Gentleman approve, therefore, of the CEGB going direct to suppliers such as Sonatrach of Algeria and Phillips Petroleum Co. of Norway and buying its own gas independently of the Gas Corporation?

Mr. Varley

All these possibilities have to be explored. In view of the situation which has developed in America—as Mr. Mills said in his paper to the Institution of Gas Engineers—and in view of the anxiety in France about the availability of natural gas, it would be ludicrous to have massive conversion programmes or to have power stations burning natural gas.

I do not fully understand the calorific value and whether the gas would be fully used in power stations or whether it would be an extremely expensive use of the gas. We must have much more information before we move into that field.

Needing that information, it is here that I think that coal most sensibly comes in. There have been criticisms, but we know that there are guaranteed coal reserves for about 100 years at present rates of consumption. Coal supplies are not at the mercy of temperamental sheikhs or throat-cutting price rings. Coal is mined by men who have been involved in only one official dispute in 46 years and its supplies are secure in that sense. People who talked during the coal miners' strike about miners holding the country to ransom did not want to realise that there had been only one official dispute and that coal supplies had been disrupted only once in 46 years. The disruptions of oil supplies in 1956 and again in 1967 have been seen in perspective. Since the dispute in the mining industry, productivity has risen to a record level. It is an indigenous fuel which adds no debt to our balance of payments and provides employment in the region where jobs are most needed.

Two other factors which are essential to a nationally co-ordinated fuel policy as set out in the Amendment are the balance of payment problems and the problems of regional policy. Hon Members on the Government side raised their eyebrows when, during the fuel debate on10th March, we on this side warned of the impending balance of payments trouble. Those troubles are now upon us.

However those troubles are to be solved—we trust that they will be solved soon—increasingly the balance of payments must be taken into account in formulating a fuel policy. As recently as Tuesday, 27th June, the Prime Minister, when talking about import figures at Question Time, said that the largest single item in the import bill was imported fuel for manufacturing industries. Foreign exchange costs are as crucial as the cost per therm, the cost per unit or the cost per ton.

3.30 p.m.

There is also the regional argument. A week ago last Thursday the Prime Minister was euphoric about the fall in unemployment, and we join with him in rejoicing in that good news. But unemployment is still extremely high—the highest in 30 years—particularly in areas where coal is produced, in Scotland, the North, the North West and Wales. We should not forget that three-quarters of our coal is mined in what we describe as the assisted areas—the special development areas, the development areas and the intermediate areas—and the exploitation of North Sea gas and North Sea oil can have a beneficial impact on the assisted areas. There may well be a time when the old traditional coal areas will benefit from exploitation of the onshore or bringing-ashore development of North Sea gas and oil.

These are some of the considerations that we would like taken into account in framing a co-ordinated fuel policy as the Amendment suggests. Without an adequate fuel supply, life as we know it would be virtually unsupportable in these islands. We do not think these crucial energy questions can be left to the free play of the market. It would be absolutely ludicrous to allow that to happen. We need a comprehensive national fuel policy. We believe that the security of supply demands a much greater emphasis than ever before.

Amendment No. 13 provides a good opportunity for the Under-Secretary to state the Government's thinking on this matter. It need only be interim thinking; we know that the matter is kept constantly under review. If the Government refused to confirm a fuel policy, they would be shuffling off their obligations and it would be an act of abdication and irresponsibility. The Amendment imposes on the Government an obligation to formulate such a policy, and I urge the House to accept it.

Mr. Emery

I respond immediately to the hon. Gentleman's remarks. It would be right and proper if I dealt first with the Amendment which has been used as a coat-hanger for a much more general speech by the hon. Gentleman on fuel policy.

I do not believe that the Amendment would improve the Bill, because the Secretary of State has to bear in mind fuel policy considerations, where relevant, as well as many other things in performing all his functions which are concerned with fuel policy under this Bill and under other Measures relating to energy supply.

Other functions where fuel policy considerations might be particularly relevant are the giving of consents under Clause 2(4); natural gas operations—which could be abroad—or the exporting of gas; or, under Clause 29, the direct supply of by-product gas. It would be undesirable to single out this function— that is to say, the approval of capital development programmes in the gas industry—to imply that this alone, amongst all the other functions, was the one in which there should be exercised decisions in the light of fuel policy considerations and so as to imply that those other considerations are the only or main ones to which the Secretary of State has to have regard. I hope, therefore, that the Amendment has been put down purely for probing purposes so that I could respond to some of the suggestions which have been made.

I emphasise that energy policy is under continuous review. Energy prospects have to be kept in mind by the Secretary of State when coming to decisions in this context, not with reference only to the gas industry but generally.

The energy policy review referred to in an earlier debate by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has made good progress. I have to say that it is not yet complete, but the House will realise, I am sure, that the study deals with extremely complex and extensive issues over the whole range of matters involved.

Security of supply vital to our economy and to our domestic life is of major importance. What is more, we must carefully consider not only price factors as such but the variability of price factors, and, beyond the question of security, the availability of supplies and the reserves of hydrocarbon and other energy. All this has to be taken into account as well as—and rightly so—the balance of payments problems involved.

Mr. Skeet

When one takes into account the reserves of British companies, not merely on the Continental Shelf in the North Sea but also the BP half-interest in Kuwait and its 40 per cent. interest in Iran, considering all these as British reserves, do we not have ample?

Mr. Emery

It would be a foolish Minister who said that we had adequate reserves of any source of energy. Even the coalfields are not inexhaustible. The reserves vary in different degree. Moreover, I think that my hon. Friend is too old a hand on the subject of oil and hydrocarbons not to realise that there may be problems in transporting some of the reserves to which he referred, as well as problems of permanent security of such reserves. We have already seen actions in certain parts of the world which have not necessarily ensured that some companies have been able always to maintain their present ownership.

Mr. Skeet

I am sure that my hon. Friend appreciates the helpful arrangements made by the Shah of Persia.

Mr. Emery

My hon. Friend refers to the arrangements which have been made between the oil companies and the Shah. I think it right to say that these arrangements, so successfully come to, are of considerable significance for all the participants.

I turn now to the social effects and the matters of judgment which have to be balanced in considering the use of North Sea gas and of coal. One has in mind, also, the availability of atomic power and the growth of atomic power stations, to be judged in relation to the requirements of the electricity industry and in the light of the problems which these developments may involve for the electricity industry's coal burn.

What I would hope would go out from this debate is that, while it is easy for us to make demands for consideration and demands for a balanced programme, when it comes to the highly involved considerations the number of variables is very great indeed. I am not trying to hide behind the degree of variability, but it is essential for the Government and the Secretary of State to be quite clear on them in taking policy decisions which are necessary for the benefit of energy industries throughout the country.

There are two or three factors concerning the gas industry— —

Mr. Palmer

The real point here is that one appreciates how difficult it is to co-ordinate energy supplies. But surely there should be no waste of resources. The load factor on all the resources should be as high as possible, and that is the principal motive behind the Amendment.

Mr. Emery

I accept the desirability of having a non-waste factor of resources. While the hon. Member was interjecting I was thinking that the difference between the first generation of nuclear power stations and the fast breeder pos- sible in years to come is a variation from 1 per cent. in thermal efficiency to about 70 per cent. So there are great differences in the waste factor in the electricity industry. In theory I accept immediately the desire projected by the hon. Member but he will realise, with his experience in the industry, how difficult this is in practice.

On natural gas absorption factors and the conservation of reserves, there are problems in the use and the rundown of North Sea gas. The present absorption policy was based upon analytical work begun in 1967 and has been reviewed much more recently. Because an optimistic view was taken of future prospects these studies favoured rapid depletion to encourage further exploration. They took account also of the risk of possible misuse of gas in markets where the net benefit is low or perhaps non-existent. The outcome was a policy of rapid depletion, together with a marketing policy aimed at expanding sales in markets where gas has a high value—obviously this includes the domestic market—but a more cautious approach was adopted to markets where gas has a comparatively low value such as crude heat.

Existing contracts were agreed on the basis of that policy and will allow an expected take of 4,000 million cubic feet a day to be achieved in the mid-1970s. If there are no further discoveries production will begin to decline from plateau level towards the end of the decade and supplies from other sources—synthetic natural gas or liquid natural gas will be needed. The aim of policy remains the same—to strike a balance between the advantages to the nation of using gas quickly and the disadvantage of not having it available for future use. Whether this will mean continuation of the present absorption policy or a move towards longer depletion periods to conserve resources depends upon how much gas is found and how much gas is contracted for outside the British Continental Shelf.

Hopes for the future are still high. Exploration is proceeding rapidly. It is right for the House to note that the general Government policy of licensing and encouraging many firms to take part in exploration in the North Sea has been immensely successful.

The key to this strategy is the degree of flexibility that we have been able to obtain. The gas industry has largely met its absorption targets because current prices are sufficiently attractive to produce the required sales. It would have been impossible for the industry to achieve anything remotely resembling its present rate of expansion without natural gas. I hope to say more about that when we come—at some time in the future—to the Third Reading. The present rate of expansion has been achieved because prices have been right.

3.45 p.m.

I do not know how many people realise that in money terms the average price per therm paid for gas by the domestic consumer was slightly lower in 1970–71 than in 1966–67. Its price in real terms was, of course, considerably lower in 1966–67, and that will certainly remain true for 1971–72, in spite of the further 5 per cent. increase. With the increasing use of gas by industry and other large users, who can be supplied much more cheaply on a per-therm basis than can smaller users, average prices in these markets have fallen significantly, even in money terms. That is of considerable importance in the overall consideration of the rôle that the gas industry has been able to play in the total energy policy.

Mr. Skeet

My hon. Friend will realise that gas might have been produced more cheaply by the oil companies in the first place.

Mr. Emery

My hon. Friend and I seem to be having a running commentary—a sort of "nip and tuck", or whatever it might be. I do not intend to become involved in the question of the pricing structure of the industry other than to say that I believe that it has been beneficial to the companies, the industry and the consumers. If we can negotiate that sort of deal we are doing fairly well for everybody concerned with gas. The proof of this is the amount of work still being done in the North Sea to find more gas.

I accept the general thesis of the Opposition. It must be the general thesis of any Government that the Department which is in control of fuel and power must have a general concept of an energy policy at all times in order to be able to assess the position and make judgments for the future. The variables are so many and so great that it is very difficult to publish an absolute assessment of the way in which the policy is working. That problem was experienced by the Socialist Government when they were in office.

I end by repeating that the review is being carried on. My right hon. Friend the Secretary of State has said that he wants, in whatever way is possible, to bring the House into his thinking the moment that the present stage in the review has been formalised.

Mr. John Cronin (Loughborough)

I support the Amendment which has been so ably moved by my hon. Friend the Member for Chesterfield (Mr. Varley). I am surprised that the Under-Secretary of State is not prepared to accept it. It produces no substantial change in the Clause but simply asks the Secretary of State to take into consideration effective national co-ordination of fuel policy. Why does the Under-Secretary feel that that cannot be imported into the Bill? Clause 5, which deals with capital reconstruction, is surely the most appropriate place to insert the Amendment. Is it the Government's intention when they consider capital programmes not to take into account effective national co-ordination of fuel policy? If it is their intention to take it into account, why cannot this simple Amendment be accepted? One might feel that there are sinister implications in the Under-Secretary of State's obstinacy.

My prime concern is with the coal industry. Like all my right hon. and hon. Friends, I am concerned that the coal industry should be looked after in the best possible way, but I also have constituency interests as I have the good fortune to represent the South Derbyshire and Leicestershire miners, who work with exceptional efficiency and energy and are the cream of the coal industry. I cannot expect my hon. Friends who represent other mining constituencies to agree with me on that point.

The coal industry has had an unfortunate time in recent years as a result of Government policy. It has certainly been run down too much, and Lord Robens' original warnings on the subject should have received more attention than they did. We are all aware of the effects of the coal strike. If ever there was a totally unnecessary strike, it was the last coal strike. It was an example of absurd ineptitude on the part of the Government and it is incredible that it should have happened. Nevertheless it has happened and it has had unfortunate consequences.

The National Coal Board this year will have a loss of between £60 million and £65 million, in spite of the £100 million grant given by the Government. All these financial troubles are superimposed upon the accumulated deficit of £100 million. So the National Coal Board is clearly in serious financial difficulties.

Great damage has been done to industrial relations in the coal industry. Miners are very forgiving people and often have short memories for the injuries they have received, but there is still some outstanding bitterness for the hardships to which the miners and their families were subjected by the Government's attempt to reduce their standard of living in order to keep down the general trend of wage settlements. Serious damage has been done to industrial relations in the coal industry.

We must remember—it is no secret—that there is a great deal of restiveness among back benchers on the Government side of the House. There is a feeling that the miners are being treated softly and that the Government should be tougher with them. I hope that the Under-Secretary of State will reassure us that he will not give way to these backbench pressures.

Mr. Skeet

Does the hon. Gentleman want coal production of about 140 million tons, or is he prepared to have production reduced to 110 million tons?

Mr. Cronin

We want no less than 140 million tons, but this must be effectively worked out.

Mr. Skeet rose

Mr. Cronin

The hon. Member for Bedford (Mr. Skeet) has been emulating a jack-in-the-box throughout the debate but we must get on without constant interruptions.

What are the Government's intentions for the coal industry in future? The first thing to know is what kind of financial reconstruction is intended by the Government to cope with the coal industry's financial difficulties. What will be the Government's policy on coal imports? It is absurd that coal imports should continue on such a substantial scale.

Furthermore, we should also know the Government's policy on the size of the coal industry, which is a very important matter. Are they expecting it to contract or to remain the same? Finally, the most important consideration for the House to know is the Government's policy on the payment of miners' wages. May we have some reassurance that there will be no further attempts to reduce the standard of living of coal miners to assist the Government's unannounced wages policy? These are things about which we have been given no clear indication.

With regard to the competitiveness of coal, my hon. Friend the Member for Chesterfield pointed out in his excellent speech that oil would become less competitive, partly as a result of a reduction in oil resources throughout the world, partly as a result of political difficulties in the Middle East and partly because of the increasing voracity of the Middle East sheikhs on the question of prices. We have also heard about the expensive nature of nuclear power and, indeed, about how unsatisfactory it is compared with coal. Again, there are the uncertainties associated with natural gas supplies.

I am afraid my speech will have to be truncated in view of the very short time that is available. Serious as our reservations are about entering Europe, one thing that seems certain is that if we are to enter the EEC there will be a greatly increased market for coal. It would be pleasant to have from the Under-Secretary a reassurance that the Government do not intend to bring about any contraction of the coal industry and, most important, that they intend to make sure that miners have the best possible conditions of work and wage payments consistent with their importance to the national economy.

Mr. Skeet

I was interested to hear my hon. Friend the Minister say that fuel policy is kept continuously under review. From time to time we should like to see the interim results. I tabled a Parliamentary Question some time ago on this matter. I appreciate that we had some sort of fuel policy in 1967, but it was based entirely on the wrong grounds. We have now reached 1972, however, and I am certain that my hon. Friend will soon be advancing a fuel policy to cover the entire field.

I am concerned to discover how much gas there is in the Continental Shelf. I have been told that there is about 55 trillion cubic feet in the entire North Sea, and a lot of that would be available to the United Kingdom. This morning's Press tells us that there has been an assessment by BP of reserves and the managing director of BP has said that vast quantities are coming forward. The Middle East has 18.5 times as much oil as has so far been discovered in the North Sea and for North Africa and West Africa the quantity is about three times that figure. Therefore, we have to be relatively cautious. If we are at the beginning of a great opportunity in the North Sea, we should know whether Shell, Esso and the other companies which are making discoveries in the North Sea will be moving to other locations.

We find this morning that yet another company has made a discovery. Hamilton Brothers, in block No. 1324, has found—

It being Four o'clock the debate stood adjourned.

Debate to be resumed upon Monday next.

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