HC Deb 05 December 1973 vol 865 cc1262-77
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Walker)

On 26th October I announced controls on oil exports. On 14th November, orders were made under the Emergency Regulations curbing electricity demand by restricting electric space heating in certain premises and prohibiting display and advertising lighting. I announced on 19th November measures of oil allocation to secure a 10 per cent. reduction in last year's consumption. Hoarding of petrol in cans has been prohibited. Contingency planning against the need to introduce petrol rationing has been brought to a state of readiness with the precautionary issue of petrol coupons. The Government have stressed the urgent need for voluntary economies by everyone.

In general, oil stocks are holding up and deliveries of crude oil to the United Kingdom in November were equal to the deliveries anticipated before the crisis. But, as the House knows, I had yesterday to announce the diversion of additional supplies of fuel oil to the power stations. This was made necessary by the shortfall of coal production as a result of the industrial action in the mines. This decision will provide greater insurance for electricity supply. But it must cause concern for fuel oil stocks in the future, and demand even greater economy in the use of electricity.

The Government have decided on a series of further economy measures. There will be new restrictions on the level of heating in all commercial premises and offices by any fuel. An order regulating temperature will be laid. The existing restrictions on space heating by electricity will continue. Lighting in shops and commercial premises will also be controlled. Further savings will be achieved by switching off a proportion of lights on all highways and streets, except where reduced lighting could lead to an unacceptable risk of increases in accidents. The aim is to reduce lighting by 50 per cent. Local authorities and others will be asked to achieve further economy in the use of fuel in less essential services.

Substantial savings have been made in the use of oil for shipping and aviation. My right hon. Friend the Minister for Aerospace and Shipping will be making a statement later this week on specific measures on aviation including private flying.

A 50 mph speed limit will be imposed by order on all roads, including motorways, except where a lower limit already applies.

If the best use is to be made of available petrol supplies, car sharing will have to be the accepted practice for the bulk of motoring, for journeys to work especially. All motor insurance policies now cover owners and drivers against liabilities for death of, or bodily injury to. passengers. Drivers therefore need not hesitate to offer lifts. Motor insurers have said that payments made by passengers merely as a contribution towards the cost of petrol used in a journey would not constitute use for hire and therefore would not infringe the conditions of normal car insurance policies. Additionally, the Government are examining the possibility of exercising powers to allow motorists to accept contributions from regular passengers towards the cost of lifts without the need to comply with public service vehicle licensing requirements. This facility would be consistent with the provisions of the Road Traffic Bill now before Parliament and would be of considerable help in rural areas.

Various Government Departments will be approaching distributors to ensure the greatest economy in the use of petrol for commercial deliveries. Useful savings can be made by those involved in regular deliveries of goods by reducing the frequency of these deliveries and various Government Departments concerned with the distributors involved will be approach- ing them to discuss what economies can be achieved.

In most parts of the country there have been no serious difficulties in the period since the cuts were introduced. With a combination of both the compulsory and voluntary efforts that are made, a reduction of supplies to the present levels should cause no serious problems.

The South-East in particular has created its own problem. Two factors emerge. There are adequate supplies of petrol available if people will make limited cuts in their motoring. The panic filling up of petrol tanks whereby many people have queued for ages and then bought only small quantities of petrol has created unnecessary problems for filling stations.

The Oil Industry Emergency Committee is now operating with its own control centre. Its task is to balance demand against available supply. The committee assures me that deliveries to petrol stations have been and will continue to be maintained to 90 per cent. of last year's figures. Action is being taken to see that petrol stations spread their opening hours so that petrol is available from 7 a.m. to 8 p.m. A mutual aid scheme is operaing. Appeals because of hardship, growth or from new garages are dealt with fairly. Over 1,100 appeals have already been settled. Directions and arrangements for the supply of product where major shortages are proved is now operating.

If motorists will show moderation, the discomfort of queues and the difficulties of obtaining petrol should be greatly reduced. These problems are nothing compared with the personal difficulties which will arise for large sections of the population if rationing has to be introduced. Our reserve position does nothing to suggest that the Government should now take action to ration petrol. It is vital that all concerned should continue to exercise the maximum economy in the use of all our energy resources.

Mr. Benn

Is the Secretary of State aware that his statement and the measures contained in it will do little to reassure the people, who seem to be much more aware of the gravity of the oil crisis than he is?

Will he please answer these questions? Do the Government know about, and control, all oil shipments leaving this country made by oil companies, and has he power to stop them? Are oil and petrol still being exported without control to the EEC either directly or by juggernaut lorries topping up before they leave the country?

Are independent garages, which report cuts well above the 10 per cent. to 13 per cent., being squeezed out by the oil companies? Is the right hon. Gentleman aware of any hoarding of petrol by either companies or garages in the hope of price increases, as this might be contributing towards the present difficulties? How can the disabled and other categories of people be protected without direct rationing measures?

What cutbacks does the Minister expect in industrial production as a result of the oil situation and what will be the effect on the rate of growth—or does he stick to his forecasts of steady expansion in 1974? Will there be further economy measures by tax changes or in other ways to control inflation?

Is it true that today a Department of Trade and Industry mission is leaving for Japan to promise the Japanese a share in North Sea oil if they are prepared to make an investment in it now?

Mr. Walker

On the question of shipments, the right hon. Gentleman knows that I took control over exports immediately the crisis arose. That control is effective. I hope that the House realises that, basically, we act as the refiners for a number of European countries, and likewise a number of European countries act as the refiners for this country. Last month's figures showed that exports and imports between the Common Market countries and ourselves were in balance.

If I had stopped all exports to Common Market countries and they had stopped all exports to us, there would have been a considerable deterioration in the supply position of several important fuel commodities. I am perfectly satisfied that the control in this sphere is working well and will continue to work well.

It is important to realise that the oil and fuel distribution system was operated on a European basis long before the Common Market was set up, and it will continue to be so operated. Obviously, we shall keep firm control of exports in future. There will be a deterioration in our import position as a result of the difficulties in Rotterdam, but that is a point to consider in future months if the embargo on Rotterdam continues.

On the question of the independents, it would be natural in such circumstances that a number of these independent firms which buy their oil in various markets, including Rotterdam, and which have been under-pricing the sales of the major oil companies, should now find themselves in considerable difficulties. It would also be natural if some of the major oil companies were not too sorry about this situation. But I am pleased to say that the major companies have agreed to a pooling system, and independents which have run short of oil are now receiving supplies from the major oil companies, and an overall distribution system will be preserved.

On the question of companies hoarding to await price increases, I appreciate that there have been such suggestions. But, in practice, if we look at the nature of deliveries to garages, which take place at regular intervals, it would mean that if anyone pursued that type of policy, he would have to stop his sales and would obtain no further deliveries and would suffer considerable loss of turnover. Therefore, in practice there is little need for concern in that respect.

On the question of the disabled—and the hon. Member for Willesden, West (Mr. Pavitt) earlier raised the question of the disabled, as well as the situation of doctors and social workers—a directive has been sent by the oil companies to suppliers asking them to make a special issue available when they are approached by a doctor or by a particular grade of social worker or a disabled person. This will enable those people to pick up their petrol at a time mutually convenient to both parties, without the sort of problems which have been created in London in the last few days. If any doctor or other person in the categories I have mentioned finds any problem in these arrangements, if he informs the local DTI regional office we will take up the individual case. I repeat that the oil companies have sent out a directive to all distributors and it will be met.

I should like to deal with the question of industrial production and the overall position mentioned by the right hon. Member for Bristol, South-East (Mr. Benn). In November the supplies were as anticipated. As for December on past projections which I have obtained from the oil companies it looks as though in total our oil supplies could fall short of what was anticipated by as much as 15 per cent. That figure is four and a half days' stocks, and this should be compared with the size of stocks in this country.

In terms of industrial production and the pattern of mobility of labour that operates in this country, particularly with the motorway system, the fact is that at the moment, with the cuts which have taken place, there is little report from industry that people are not able to get to work and carry on with industrial production. Under most rationing systems there would be difficulties of this nature.

Mr. Charles Morrison

As a further means of saving petrol and preventing waste, will my right hon. Friend consider banning the Sunday opening of petrol-filling stations? Judging by last Sunday's events, it was clear that many people used a gallon or more of petrol to enable them to go out and pick up a further two gallons.

Mr. Walker

I am considering this matter, but there would then be problems involving emergency cases with doctors, social workers and so on. Arrangements would have to be made in that respect, and, therefore, there is some complexity in that suggestion.

Mr. Pavitt

I welcome the Secretary of State's half-way step. However, does he not agree that he should go much further if local authorities and social services, which have a statutory rôle, are to be able to get on with their work? Is he aware that the shortage of petrol in the interim period has hit the mentally subnormal, the disabled—and particularly the disabled who work in sheltered workshops? Is he aware that in my borough there are 120 mentally subnormal people who may be unable to go about their business for two days each week because of lack of petrol supplies? Will he take immediate steps, first, to ensure that his suggestions are carried out by issuing immediately to local authorities and to petrol stations in their areas a special permit enabling these people to obtain petrol supplies? Secondly, is he aware that the present regulations, which date from 1959, and which in respect of Form CP1 exclude social service departments of local authorities and mental welfare officers, put at risk the emergency mental health services which operate after 5 p.m. and will he rectify this situation?

Mr. Walker

I should look into the last point made by the hon. Gentleman. I hope that the oil companies, in conjunction with the regional offices, will clear the hon. Gentleman's second point. If that does not happen, we could bring in a further measure to set up special depots in which such petrol could be acquired for certain categories of people, but I do not think that that will prove to be necessary.

Mr. Ridsdale

Is my right hon. Friend aware that many people are concerned about the situation in our ports and the effects on our exports? United Kingdom ports have been given fuelling facilities under Form 1984, but what they are much more concerned about at the moment is that when transport leaves the ports there are no facilities to refuel them, either on the way to get whisky back from Scotland to the Continent or to bring other vital commodities from the Continent to United Kingdom industries? Will he take steps to ensure that transport is given proper refuelling facilities from the ports so that the free flow of our exports and necessary imports will be allowed to continue?

Mr. Walker

I am discussing with the oil companies specific problems at a number of ports. This by no means applies to all ports. Some regular users who have their own pumps and fuel their own lorries from their stores are keeping their stores and are endeavouring to obtain supplies from other stations and depots. This is causing problems in a number of areas. This difficulty is gradually being eliminated because they cannot take further deliveries if they continue on that course.

Mr. Leadbitter

What observations can the right hon. Gentleman make on stories in the Press today that about 25 per cent. of our petrol is going to Holland? Secondly, will he comment on the situation in Hartlepool, where a ship is standing in the port taking on board 5,000 to 6,000 tons of diesel oil without, I am informed, any restrictions from the Department of Trade and Industry. Will he, finally, comment on the fact that the Hartlepool Steel Corporation asserts that it has suffered a 25 per cent. cut in its output because of a 30 per cent. cut in fuel resources in the past three weeks? Is he aware that I object very much to this?

Mr. Walker

On the latter point raised by the hon. Member for The Hartlepools, I have just heard that it has been denied by the management concerned. On the question of exports, I cannot talk about any specific shipment. I repeat what I said earlier, that we are operating a control on exports. We have been given information in terms of past consignments, and we have been told by all the oil companies that these matters are being monitored day to day. Finally, I know of no special cargo going to Holland.

Mr. Skeet

I thank my right hon. Friend for his most constructive proposals. Is he aware that in tonight's Press Sheikh Yamani has made new threats of further cuts in oil supplies in general and of probable increases in oil prices? Will my right hon. Friend seriously consider the prospect of accelerating the introduction of rationing?

Mr. Walker

I do not think my hon. Friend the Member for Bedford (Mr. Skeet) would expect me to comment on a report in this evening's newspapers in relation to what a particular sheikh is supposed to have said. I repeat that stocks in this country are at a reasonably high level and that deliveries here have not so far been shut off. When my hon. Friend speaks of rationing, I believe that he and other people should realise that petrol comprises only about 15 per cent. of our energy supplies. I do not believe that people have given enough thought to the unfairness and difficulties that any rationing system would create.

Mr. Cyril Smith

Is the Secretary of State for Trade and Industry seriously asking the House to believe that there are at present no serious problems? May I ask whether he realises that in some parts of the country the cuts made in supplies to garages are 40 to 45 per cent. and not 10 per cent? I am prepared to provide figures to prove that statment. Is he aware that in my constituency this week—and I sent him the details of the case on Monday longdistance lorry drivers are being laid off because of the inability of transport firms to obtain diesel oil to carry essential cargoes to the docks? Does he not think, in the light of these circumstances, that there is a case for the immediate introduction of rationing of petrol and diesel fuel?

Mr. Walker

I do not. Dealing with garages, it may be that in the early stages of these cuts before the oil companies were able to re-organise the distribution of supplies, certain specific garages were affected more than others. At the beginning, for example, it may be that some of the independents were getting no supplies at all. However, these problems are being dealt with efficiently by the industry itself.

As for supplies of diesel, there has been a difficulty created by the fact that a number of firms which would normally fill their lorries from their own diesel supplies decided to retain them and go elsewhere. This created an extra burden. However, that will become less of an influence on the scene because they will not be able to take further deliveries of diesel until they start to use their stocks. Already there has been an improvement.

It is very easy to say that it would be better to introduce rationing. I ask the hon. Gentleman to think of his constituency and the number of people who now travel quite long distances to work. The only system of rationing which would not have an enormous effect on production would be a system whereby everyone's ration was tailor-made, and that would be impossible to do for 13 million motorists. We shall have to introduce rationing if the situation deteriorates, but it will not solve all the problems.

Mr. Normanton

While I welcome my right hon. Friend's decision to present to this House the proposals which he has just listed, may I ask him to consult his right hon. and learned Friend the Secretary of State for the Environment about the urgent need for detailed proposals concerning the introduction of very much higher standards of thermal insulation in all future construction projects, whether they be in industry or in private or public works?

Mr. Walker

I know that my right hon. and learned Friend is considering the building regulations and the contribution which they can make to this problem.

Mr. Jay

Is the right hon. Gentleman aware that, although there may still be plenty of petrol in official cars, in London the Government's failure to introduce petrol rationing is leading not merely to chaos but to outright profiteering and fraud? Is it true that the Government's refusal to introduce rationing is based on the fact that they are unable at present rates of pay to recruit sufficient clerical staff to work a rationing system?

Mr. Walker

The latter comment is quite untrue. I said that I was bringing forward the distribution of petrol coupons. That is taking place quite smoothly, as is the recruitment of the staff necessary for making supplementary allowances. There is no difficulty.

The right hon. Gentleman refers to a black market, and so on. He will recognise from his previous experience in days gone by that rationing schemes do not eliminate black markets or profiteering. These are aspects which apply whether we ration or do not ration. As a result of the introduction of the voluntary 50 m.p.h. speed limit and the restraint upon Sunday motoring—this was reported not by the Government but by the AA and the RAC—the reductions created by these measures were far greater outside the South-East than in the South-East. The fact is that the South-East can cure this situation itself.

Mr. Maude

Is my right hon. Friend aware that most people in the rural areas well appreciate that any conceivable scheme of rationing would cause very serious inconvenience to those who rely on their cars to get to work where there is no public transport? Is he also aware that they would consider it a very serious matter if rationing were introduced simply because of the selfish and hysterical behaviour of motorists in London and the South-East?

Mr. Walker

My hon. Friend is right when he says that any rationing scheme would of necessity create considerable difficulties in the rural areas. He will be aware that the announcements which I have made about public vehicle licensing can, if quickly applied, help considerably in some of the problems of the rural areas.

Mr. Elystan Morgan

Although the Secretary of State made a very fair point about the need for car owners, especially in rural areas, to give lifts, does he appreciate that the courts would not be bound by any agreement between himself and the insurance companies? There could be very fine points of definition. In view of that, will he consult the Law Officers on the advisability of bringing in a short Bill to clear up the matter?

Mr. Walker

If any such measure were needed, I should not hesitate to do so. But I am advised that the receipt of payments as contributions towards petrol costs will not be taken amiss by the insurance companies. Certainly lifts without payment are totally safe.

Mr. Tapsell

While appreciating the serious problems facing the multinational oil companies in the present situation, does my right hon. Friend recognise that there will be strong support in this House and in the country for any action that the Government may feel it necessary to take to ensure, particularly with those companies which have British directors on their boards, that the fruits of British diplomacy in the Middle East in recent years are not frustrated by them?

Mr. Walker

There have been advantages from British diplomacy affecting the delivery position to this country in November and the continued possibilities of our oil supply. In both the problems created by the reduction that I had to bring in a few weeks ago and the problems of distribution of certain grades of fuel oil, I have received considerable cooperation from the companies.

Mr. Carter

Being aware that approximately one in five of those engaged in British industry works in or is associated with the car industry, may I ask the right hon. Gentleman whether, in view of the very serious implications in his statement for employment in the industry, he will enter into a series of talks with the industry to ensure its long-term future?

Mr. Walker

We have regular meetings with the major British companies to discuss all aspects of both the short-term and the long-term problem. There is virtually a monthly meeting with British Leyland, and one of the topics being discussed is the implications of the present energy position.

Mr. Kimball

Is my right hon. Friend aware that the steps that he has announced today, including the 50 mph limit, have wholehearted support since we know that one thing which would be grossly unfair is any Socialist system of rationing?

Mr. Walker

On the basis of present levels of stocks and the supply position, certainly there are considerable advantages in avoiding any rationing system. Should it become necessary because supplies drop further or if the total energy situation deteriorates further, we shall be able to take action as a result of having distributed coupons. But I repeat that it is impossible to create a system of rationing which will not cause individual hardship.

Mr. Harold Wilson

First, may we have a debate in Government time?

Secondly, in view of the complacency in the right hon. Gentleman's statement that in most parts of the country there have been no serious difficulties will he comment on the report broadcast by the BBC at one o'clock that on the M6 from North Lancashire to the Midlands there were no diesel supplies at all and that the same had been true last weekend?

Thirdly, we are grateful to the right hon. Gentleman for what he has just said about the multi-national companies. However, will he clear up the situation a little more? A couple of weeks ago the Government were putting out the view that the multi-national companies were to blame for the situation. Then there was an apology from the Government. Today the Government are peddling the story that the multi-national companies are at fault. May we know whether they are or whether they are not?

Finally, will the Secretary of State represent to the Prime Minister that since the situation is completely out of the Prime Minister's control, his right hon. Friend should appoint a Minister of Cabinet rank to be responsible for oil and energy?

Mr. Walker

In terms of complacency, the right hon. Gentleman's contribution to trying to assist the energy problem has been noted for being not just complacent but positively unhelpful.

The matter of a debate on this subject is for my right hon. Friend, but I will mention it to him. I should certainly welcome one.

We shall obviously look into the specific case of diesel supplies on a particular motorway. I have already stated that there are some immediate diesel shortages, but nothing compared with the difficulty that would arise if, as seemingly the right hon. Gentleman wishes, on the basis of no drop in our supplies in November and a 15 per cent. drop in December, we were to ration all forms of fuel, including diesel. Presumably that is the right hon. Gentleman's view about not being complacent.

I did not today say that there was any criticism of the multi-national companies. Therefore, the right hon. Gentleman must have misheard me. I said that they have collaborated and cooperated with us in many spheres. We have no criticisms of them in this country.

On the question of a separate Ministry, I should point out to the right hon. Gentleman that in developing our energy policy there are a whole range of activities—for example, the application of the Industry Act to the rapid development of resources in North Sea oil and international relationships—and there are considerable advantages in dealing with that range of problems in one Department.

Mr. Hugh Fraser

Will my right hon. Friend and the Government as a whole get down to the root of this question, which is the Arab denial of supplies to the West? I am sure that this is the problem that we must face. Surely my right hon. Friend the Prime Minister will agree that our main interest is to remain close to the Americans and Europe on this subject. Will my right hon. Friend the Prime Minister seriously consider in this situation, which is almost certain to deteriorate, the elision from the Department of Trade and Industry of the old Ministry of Fuel and Power which was eaten up in 1969 by the right hon. Member for Bristol, South-East (Mr. Benn)? There seems to be a clear case for the establishment of a separate Ministry dealing with fuel, power and energy independent of the DTI.

Mr. Walker

If my right hon. Friend feels strongly on that matter, I suggest that he studies some of the successes of the old Ministry of Fuel and Power.

Several hon. Members rose—

Mr. Speaker

Order. Questions on this subject cannot go on for much longer.

Mr. Eadie

Is the right hon. Gentleman aware that his statement today characterises many of the statements that he has made in the past on fuel and power—that is, the attempt to apportion some responsibility to the miners?

Secondly, does he agree that there is a need for an immediate investigation into allegations that hoarding is taking place on the expectation by some companies that they will make a killing by increased prices of petrol and oil? Is it not his responsibility to carry out an immediate investigation and to report back to the House?

Mr. Walker

There is no doubt that the miners' dispute is having a considerable impact on supplies of fuel oil. Without commenting on the dispute, I suggest that it is having a considerable impact.

The hon. Gentleman will have noticed in the legislation that is currently going through the House the special powers that the Government are taking to control prices in every sphere, at retailers' and other levels. Those powers will be used to make sure that nobody exploits the present situation.

Mrs. Kellett-Bowman

My right hon. Friend will recall that the North-West was the first and at one time the only area that was observing the voluntary 50 mph speed limit. People in that area will be glad that others, particularly in the South-East, will now be obliged to follow their example.

Will my right hon. Friend accept that his great concern for the problems of rural areas will be much appreciated? May I ask him to assure the House on two matters: first, that diesel oil that is available for tractors is evenly distributed throughout the country so that vital farming operations are not held up; and, secondly, that petrol is made available for farm implements that are run or started on petrol, such as the old-fashioned TVO tractors, band saws, and so on?

Mr. Walker

If, after consultation, the normal distributor cannot guarantee reasonable delivery the people concerned should contact the regional office of my Department and we shall see what can be done.

Mr. Benn

Will the right hon. Gentleman answer the questions that I put to him on three matters? First, will he confirm that there is a DTI mission going to Japan to offer the Japanese a share of the North Sea? Secondly, will he tell us the date on which he expects to make up his mind and to make a statement about rationing? Thirdly, will he tell us when we may expect economic measures to deal with this situation?

Finally, since right hon. and hon. Members on both sides of the House are clearly anxious, will he add his weight to our demand for an early debate so that we can go into the matter in greater detail?

Mr. Walker

We had a debate on energy only a short time ago, but I am always willing, if both sides of the House wish, to try to find further time for a debate.

I hope that I shall never have to make a statement on rationing, but if the time comes when I must do so, I shall make it at that time.

There is no intention of the mission to Japan selling part of the North Sea to the Japanese.

Several Hon. Members rose—

Mr. Speaker

We must get on.

Mr. David James

On a point of order, Mr. Speaker. I recognise that you have had a great deal of difficulty in calling all hon. Members who wish to put questions on this matter, but is there time for a question about the bunkering of overseas merchant ships?

Mr. Speaker

This is a matter for my discretion. There is no time for that question.