§ 1.24 p.m.
§ Mr. Dick Douglas (Clackmannan and East Stirlingshire)
Before I begin, Mr. Deputy Speaker, I should be grateful to receive your advice. Have you been notified as to the Minister who will reply to this debate?
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
As long as there is a Minister here, that is all that is the concern of the Chair. I understand that a Minister is here now.
§ Mr. Douglas
Yes. There are several Ministers present.
The Secretary of State for Trade and Industry on Tuesday, as reported at column 1275 of HANSARD, quoted some remarks which I made on 5th February 1973. He quoted my remarks completely out of context. I sought to point out that the ostensible pace of development in the North Sea has made it difficult for United Kingdom industry to break into the new market for offshore products.
1812 The Secretary of State sought to indicate on Tuesday that the Government had planned the pace of development. If they had done so, they were deficient. In fact, Governments of both political complexion have been deficient in trying to ensure that United Kingdom industry is fortified and organised to take advantage of the new market. I do not condemn industry. I acknowledge that the technology of the North Sea, especially in the northern sector, was new to everyone. An off-handed approach to the problem by a United Kingdom Government of whatever political complexion is not appropriate.
The BP Forties field was allocated in the second grant for 1964–65, but it took over three years for suitable drilling rigs to come forward to cater for the depth of water in that block. Mr. Matthew Linning, who is in charge of the project for BP, and whom I respect because he is a Scot and a proficient engineer, is reported to have said in Aberdeen this week that it may be 1976 before the Forties field oil comes ashore. That is disappointing. That will mean that 11 years will have passed between the granting of the block by the discretionary system and the oil coming ashore. Is that the Government's idea of moving at speed? The Minister had better comment on that in his concluding remarks.
There is little evidence that the Government saw fit to give the necessary assistance in terms of design or financial back-up to get into the market for equipment such as production platforms and drilling rigs. Although some semi-submersible rigs have been built in the United Kingdom, there is not one semi-submersible rig being built on a United Kingdom site. I have said before that there are approximately 60 such devices being built in the world and that not one is being built in the United Kingdom.
This is too big a subject to spend much time on the Secretary of State for Trade and Industry. I shall move on quickly to the key issue which I wish to raise. First, there is the need to design and to obtain orders for key items of equipment—for example, production platforms both of a concrete, steel and composite variety, and drilling rigs. Secondly, there is a need to provide suitable sites on which to build such structures competitively. Thirdly, there 1813 is a need to awaken the whole of the industry of the United Kingdom, both management and unions, to the nature of overseas competition and the penalties for failure.
Why should there be a need to obtain orders for the big structures? The International Management and Engineering Group's report put the total market for offshore Britain at about £350 million a year to 1985. Page 8 of its report says:The greater part of the oil companies' offshore expenditures comprises expenditures on big items of equipment such as drilling and production platforms, pipelines, semi-submersibles, drilling rigs, etc., and on the contracting services to fabricate, build and install these items. Immediately, therefore, if British enterprise can get established in these activities, a direct increase of significance will have been achieved in the percentage share of British firms in offshore work.The immediacy was announced by IMEG in September 1972. That is the date when the report was completed. Can the Minister tell the House how many of these large items have been ordered in the United Kingdom since that date and what was their value? We know that no drilling rig has been ordered, but what about production platforms? What we do know is that several companies have placed orders in Norway for such platforms of the concrete variety to be used in the North Sea, some of them in the British sector. These platforms are at present built in Stavangar.
How does the placing of such orders in Norway affect the Government's targets of obtaining 70 per cent. of supplies from the United Kingdom sources by the late 1970s? If Norway is obtaining orders for production platforms at a cost—not an installed cost—of about £15 million to £30 million a time—and the installed cost is probably about £40 million each—presumably a large proportion of the materials and equipment used in these platforms will be Norwegian.
The Government's own estimate in the paper issued to the Drumbuie inquiry indicates that if orders are placed, the best that the United Kingdom could get would be 10 to 15 per cent. in terms of equipment. If these orders are placed in Norway, how is the Government's target affected—or is this another target of the present Government which has to go by 1814 the board? Have they abandoned this target for the United Kingdom industry?
I take the view that, because of the variety of seabed conditions, we have to present to operators a variety of designs and a number of construction sites. We are relatively well placed for the making of steel production platforms, and it may be that we are well placed for the making of composite designs. Companies such as Motherwell Bridge and John Brown, and Foster Wheeler, to name two, are active in the production of the deck modules for these devices and may be active in the production of the deck modules for composite designs or concrete designs.
It is, however, in the availability of sites for concrete production platforms, which are necessary as we move into the deeper waters of the northern sector, and as we encounter seabed conditions which are suitable for such devices, that we are deficient. Out of seven designs known to the DTI for concrete production platforms, only three are British. Of these three designs, Ove Arup's is of a specific nature which is geared to be built in Norway. We have one United Kingdom design which is specifically designed to be built not in the United Kingdom but in Norway. Taylor Wood-row, the second United Kingdom company, seems to have little confidence in its own design, and, as I understand it, it seeks to team up and operate with Mowlem in the construction of the Norwegian Condeep design.
The United Kingdom industry has come forward with designs which suit the availability of sites not in the United Kingdom but in other countries, mainly Norway, with its deep-water sites. Such sites are scarce in the United Kingdom, and, as I said, at the present inquiry concerning Drumbuie and the availability of a deep-water site at Loch Carron, the Department of Trade and Industry and others have indicated that if this site and perhaps one or two others are not available, the Condeep design will not be built in the United Kingdom.
This inquiry—I do not expect the Minister to respond to this point now—highlights considerable deficiencies in our planning procedures. I declare an interest here, and it is my sole interest in connection with this industry. I am a member of the Council of the National Trust for Scotland, which is a party to 1815 the inquiry. The National Trust for Scotland has pleaded with the Government to institute a planning inquiry commission under the Town and Country Planning (Scotland) Act 1972. We need even greater urgency in instituting such an inquiry in view of the fact that another company, John Howard and Co., has submitted an application for another site in this area. If the Government do not call a halt to this by using legislation which is at present available, we shall have a proliferation of planning inquiries which will be costly, time consuming and of no long-term advantage to the United Kingdom industry. They may be of advantage to the lawyers but not to our industry.
Here I agree wholeheartedly with the view expressed by Sir Andrew Gilchrist. It is not often that I agree with Sir Andrew, who is Chairman of the Highlands and Islands Development Board, but I should like to quote from a letter which he wrote to The Times on Thursday 20th December. He was referring to means of accelerating the United Kingdom contribution to North Sea oil developments, and he said:Fourth, by streamlining our planning procedures so that if specific areas are to be denied to fabricators of essential oil-related equipment (and sometimes it may be perfectly right so to deny them), the process of decision-making should not take such an intolerable time";—and, I might add, not be at such an intolerable cost. It is absolutely ridiculous that the National Trust for Scotland should be paying about £15,000 of money which it should be devoting to other activities to protect this area or to elicit the Government's views or the intentions of the fabricators in relation to the site.
There has been no evident pressure on the part of the Government to bring together the operators, designers, contractors and surveyors, the people who will eventually give their approval of the worthiness of particular designs. We have no indication how the Government will approach the matter of ensuring that the designs which eventually go into the North Sea are capable of standing up to the conditions there. The Government have not brought these bodies together to produce a design to meet the operators' and surveyors' requirements, and which can be produced in areas of labour availability in Central Scotland.
1816 The problem in the North-West is not just availability of site in physical environmental terms but, as the Sphere Consultants' Report put it, the danger is that a whole community is disrupted for 10 to 15 years, and then one moves away leaving the site derelict. One has destroyed the sociological framework of a community, and nobody has the responsibility to restore the site. We are incapable of restoring the community in sociological terms.
Therefore, pressure ought to be exerted on these operators to produce a design which can be built in central Scotland. I do not believe that this is an impossible task. I urge the Government to bring the groups together in order to back such a design study. I do not believe that it is beyond the capabilities of our engineering and designing industry to produce such a design.
It may be that in the short run it will be a little more costly, but in the long run the benefits are there for United Kingdom industry. Assuming that I am wrong and that in the national interest we have to build Norwegian or other type designs at Drumbuie and other places in North-West Scotland, I believe that the National Trust for Scotland should not lose this land. It should be allowed to lease the land to the State, or a State agency such as the Highlands and Islands Board, to be restored to the trust after the site is vacated in a period of, say, 15 to 20 years. I have already mentioned the consultants' view that we should be disrupting the community in sociological terms if a population came into the area, and that other facilities must be made available. Cuts in public expenditure, recently announced, will not make it easy for local authorities in such areas to cope.
I turn to the awakening of United Kingdom industry. I have on previous occasions indicated that the administrative structure that the Government are devoting to this sphere of activity is completely wrong. We should have a Minister of Fuel and Power of Cabinet rank and certainly that Minister should be in this House. I have no personal criticism of Lord Polwarth, but he is operating outside and his responsibilities, such as local government and industry, are outside this special task, which needs a special Minister.
1817 I reiterate that we should create a petroleum supplies industry board or an oil development agency. The sense of urgency that the Government seek to generate has no engine to respond. Shortages of materials and labour disputes have already delayed existing orders for production platforms. Perhaps the Minister would indicate the estimated delay for the Forties field and the Auk production platform at Methven. I understand that for the latter a delay of two years is likely. These delays will be exacerbated by the energy crisis and the three-day week.
Will the Minister give an assurance that everything will be done to assist the operators and the constructors of North Sea equipment? The danger in the present desperate situation is that while trying to hurry on activities to bring North Sea oil ashore, the Government will be met with the response that the only way in which to achieve their objective is to buy abroad. I do not believe that that is necessary or desirable, and I renew the call that the Government should bring together not only the operators and the designers but both sides of industry to ensure that the maximum advantage comes to the United Kingdom from these indigenous oil finds.
Those hon. Members from both sides of the House who recently, rightly, probed the Government about fears that the European Economic Commission might gain control over this country's indigenous natural resources—and I welcome the statement yesterday by M. Simonels indicating that the Commission has no intention of embarking on such a project and that the resources are indigenous, and I hope that the Minister will comment on that—would do well to spend a little more time seeking ways to bring oil ashore by the use of United Kingdom equipment in order to avoid the domination of our industry by others and to give us a chance of speedily taking the lead in providing a European Economic Community energy policy.
§ 1.45 p.m.
§ Dr. J. Dickson Mabon (Greenock)
I should like to raise one matter which concerns the Scottish Office rather than to underscore everything so adequately 1818 and clearly stated by my hon. Friend the Member for East Stirlingshire (Mr. Douglas). It is the matter of planning procedures, which have been adopted with the consent of both political parties.
It was the 1963 Planning Advisory Group, set up by the present Secretary of State for Social Services and the then Secretary of State for Scotland, the right hon. Member for Argyll (Mr. Noble) that in 1965 gave us the report, put into practice by the 1969 Scottish Planning Act which is consolidated in the 1972 Act, Civil servants can do no more than observe the Act laid down by Parliament, although they may wish with changing circumstances to do many other things.
I readily accept that as Scotland's planning Minister the Secretary of State for Scotland, often in a quasi-judicial capacity, as he now is over Drumbuie, cannot say anything about these matters, but I want to discuss whether the actual procedures are adequate and expeditious.
For instance, the Financial Times today says that Sir John Howard, Chairman of the British company which is part of the Anglo-French group, has suddenly come out with proposals to seek a site near the Drumbue site. Sir John was reported as saying thatit was in the national interest that United Kingdom sites should be made available in carefully selected areas. After a six-month search for suitable deep-water locations in North Scotland, the Outer Isles and in Northern Ireland, the consortium had chosen a site north of Bergen for its Frigg contract, because planning consent there was available' within two weeks.We all know that the Norwegians are not careless about their environment. Norway has always been a well-governed country and as far as I know not subject to such strictures as being neglectful or allowing pollution of its beautiful coastline. Perhaps Sir John Howard was exaggerating and it is longer than two weeks, but I cannot understand why there should be this difference between the Norwegian procedures, which seem to be effective, and the British procedures which seem so dilatory.
The Secretary of State is now at Drumbuie in a terrible dilemma. Objections are being made by the Council of the National Trust, for instance, which is saying that the Drumbuie inquiry 1819 should be turned into one by a planning inquiry commission. But if the Secretary of State were to set up such a commission, the planning not only for Drambuie but for the whole of North-West Scotland would have to start all over again, more time would be lost and the position would be somewhat prejudiced by what has happened so far.
I appreciate the view that we should have had a planning inquiry commission set up a long time ago. The civil servants did a good job when they coaxed Ministers to take a step forward in planning by having the consultative survey on potential fabrication sites. This is a step towards comprehensive positive planning rather than the kind of passive system that we now have by which the Secretary of State has to sit back and await applications. It would be better if he could say, as the consultative study suggested, "Here you may develop a proposal; here you may not". Industry would know where it was and would not waste its time because it would find out whether an application was likely to be turned down in the first instance.
We are all pleased that the Minister for Industrial Development is here, for this is a matter of great importance. He and the Secretary of State for Scotland should not be satisfied—none of us will be satisfied—with the present planning procedures. Even if the Drambuie inquiry is resumed and sanction is later given, there may still be a new application, and many of us fear that each of these great developments will have to go agonisingly through the same extended and tedious procedure. If we are to deal with the North Sea oil situation, which is an explosion in planning terms, we must consider present procedures. If a short Bill is needed, let us have it so that we can get the procedures right and running as well as they are apparently running in Norway.
The decision letter issued by the present Secretary of State on the Chevron application, processed when the Labour Party was in power, concluded the longest planning inquiry in Scottish history. I do not blame anybody in particular—lawyers, the reporter, the Secretary of State or the Scottish Office—but it was a disgrace that cumulatively we took so long to make up our minds.
1820 I realise that the argument at Hunter-ston was contentious, although it seems now to have resolved itself, albeit 3½ years late. But that sort of time is not available to us. The Department of Trade and Industry has told us that it is estimated that there are about £400 million worth of orders for concrete platforms. The Department should be saying to the Scottish Office, "Get ahead with your planning procedures but get a move on so that we can obtain the largest part of this market", because if it does not the Government's aim of obtaining 10 per cent. of the market will certainly not be realised.
I end with a constituency but important point. In order to carry out a comprehensive exercise in a positive planning sense, we should be paying attention to possible sites near West Central Scotland. If these are to be temporary exercises of, say 10 or 15 years' duration, we should be able to use the existing reservoir of labour in West Central Scotland to service sites on the coast of Scotland nearer Glasgow than the sites mentioned by my hon. Friend the Member for Clackmannan and East Stirlingshire.
We lose a certain sense of stability in Scotland in seeking to get the whole or nearly whole, so it seems, of our population trekking north to isolated Highland communities or to Aberdeenshire. This must disrupt people's lives. Would it not be better if we were to adopt a more positive approach and created some of the sites on the West Coast of Scotland nearer the heavily populated areas which, alas, still suffer from some unemployment? There is still a reservoir of skilled and semi-skilled labour there which could be used.
I urge the Minister, even though he cannot say much today about this matter, to talk to the Secretary of State for Scotland and to persuade him to review and revise the planning procedures urgently, even if that means legislation.
§ 1.54 p.m.
§ Mr. Gavin Strang (Edinburgh, East)
There can be no argument that recent international oil developments have created a new urgency in the work being carried out to bring North Sea oil ashore. The Secretary of State for Trade and Industry, in concluding Tuesday's 1821 debate on the energy situation and the economy, dwelt on the arguments which have been adduced about the rate at Which we should bring the oil ashore. A number of hon. Members, including myself, have argued that, in order to maximise British participation, there was a case for considering the rate at which we were conducting this operation.
I accept—and I think that here I speak for everyone in the House—that, given the present situation, the policy of bringing the oil ashore in significant quantities as quickly as possible is right. But, once we have started to get the oil ashore in significant quantities, that still leaves open the question of how quickly it should continue to flow and to what extent we should speed up or slow down the flow.
The Opposition have repeatedly criticised the Government for not intervening in the question of maximising British industry's contribution in this matter. We have said on numerous occasions that the Government's response to the IMEG report was inadequate. I still believe that the Offshore Supplies Office is not large enough and is not based in the right place to do the job which we should like it to do. However, I do not wish to concentrate on general issues. We have discussed them time and again and we are well aware of the Government's position.
People have criticised British industry many times for seeming cautious in the way in which it has gone about the North Sea oil business. I realise there has been a change, and there is no question but that in recent months more British firms have involved themselves in this matter. I have no doubt that the share of the market coming to British industry is rising substantially. But everything should be done to make the share even greater. The market is huge and we want a high level of investment in it. We also want a large number of jobs created in this country as a consequence.
The debate is specifically on the question of production platforms. May I say in passing that in the Sub-Committee of the Select Committee on Science and Technology, of which I am a member and which is considering the subject of underwater engineering, the point has 1822 been made from time to time that it is perhaps too late for us to go full out in relation to the present demands of the oil companies and that we should be looking ahead and perhaps concentrating on the new techniques which will be required to win oil in deeper water. As I have said on many occasions, the Government should be doing much more in terms of supporting research and development and co-operating with companies or one company and considering how best we can put British industry in the forefront of these new techniques.
There is no doubt that we shall need production platforms for some considerable time. No one in industry thinks that in two or three years new sub-sea techniques will be such that the demand for production platforms will no longer exist. We must do everything possible to get into this business in a much bigger way. There can be no argument about the demand for production platforms. It has been suggested that by 1980 between 30 and 50 are likely to be required.
There is general acceptance in the oil industry that there will be a movement towards gravity-based structures as opposed to conventional piled platforms. I understand that the primary reason for this is that it is much easier to install a gravity-based structure as there are no difficulties about assembling the platform offshore. There are substantial facilities for storage and treatment. There is less danger of corrosion. It is also accepted that it is easier to train people to work on concrete platforms and that, given the pressure on our steel supplies and the sophisticated steel required for conventional platforms, we are more likely to make speed using concrete gravity-based structures.
A great deal has been said about the first platforms having been ordered from Norway. The Government had far-reaching discussions with the oil companies before the platforms were ordered, and considerable pressure was put on the companies to meet the requirement from within this country. Although the platforms are being built in Norway, much of the sophisticated engineering equipment such as pumps, compressors and so on, is being manufactured in this 1823 country. Norway's capacity to produce the platforms is severely limited, particularly in terms of its labour force. The oil companies will be forced to go elsewhere, but that does not mean that they will come here. They are looking around the world. There can be no question that that market is ours for the taking and, if we can provide what the companies require, we shall get into the platform market in a big way.
I want to concentrate on what the Government should do to increase our chances and make it easier for British industry to enter this market and to acquire resources and skills so that it can provide the vast majority of the platforms which will be ordered not just for the British sector but also for the Norwegian sector.
§ Mr. Douglas
I am intrigued by my hon. Friend's remarks about the Norwegian sector. How does he justify what he says in view of the Norwegian Government's policy that nothing will be set up in the Norwegian sector of the North Sea unless Norwegian bases, men, equipment and materials have preferential treatment?
§ Mr. Strang
Norway is doing everything possible to maximise Norwegian participation, but there is a limit, and the Norwegian Government will have to recognise that. According to discussions I have had with oil companies, given the demand for oil and the likely rate at which the Norwegian sector will be developed, it is extremely unlikely that Norway will be able to provide the resources—particularly the labour resources—to enable all those platforms to be assembled in Norway.
The basic issues are design, the urgent need for sites and the capacity to construct the platforms. I want to address myself to the question of what the Government can do to help.
I will take sites first. In May 1973 the Scottish Office published its guide to the companies on sites which were likely to be suitable for the building of production platforms, but since then other studies have been carried out. On 10th December the Minister for Industrial Development referred to a study that had been commissioned with a view to locating areas in the United Kingdom where concrete sites might be constructed. He 1824 went on to say that the consultants were also looking into the related question of platform design.
It would be helpful if the Minister would say a little more about what the Government are doing. We know that the Offshore Supplies Office is looking at platform design, but it would be useful to have a clear statement about what is on the go at present.
I accept that the Government are not likely to be forthcoming on the question of Drumbuie. As the Under-Secretary of State said this week, the Government have not yet made any judgment of the economic, social and environmental issues involved in this proposal. I accept that. This is a difficult decision because at the present stage of the evolution of platform design a tremendous premium is put on a deep-water site. The monolithic designs—such as the Condeep design—require deep water, and the companies see great advantages in a platform which can be constructed completely before it is towed offshore.
My hon. Friend the Member for East Stirlingshire (Mr. Douglas) stated that the Drumbuie argument rests solely on the question of platform design. It is right, therefore, that we should urgently look at alternative suitable designs which could lead to platforms being built in more appropriate places. There would be immense advantages to our economy if we could build platforms in places which already have the infrastructure, the labour force and unemployment.
We must look to the hybrid designs that are available. The oil companies' main concern about the hybrid structure is that there are three separate parts which have to be assembled offshore. When the consultants are looking at potential sites, I hope that they will consider an arrangement of three yards producing three separate pieces of equipment situated on the coast where there is sheltered deeper water where the assembly could be done. The requirements for deeper water are much less stringent than with the Condeep design. We must look for a site where the hybrid type design can be assembled in yards which are suitable from an economic and employment point of view. This would get over the disadvantage of the assembly having to be done offshore.
1825 The third area in which the Government can help is in providing construction facilities. Once we have a site the Government should do everything possible to provide the necessary infrastructure. The Government might also make clear in advance that they will ensure that the adverse impact of development on local environment is minimal. The Government must be prepared to spend public money and to use their powers to ensure that the infrastructure is provided quickly and that the adverse impact on the local environment is minimal.
On the question of training labour forces, a great deal more must be done to provide more men who are skilled workers in concrete and steel. I am the first to recognise that the British Steel Corporation is doing a great deal and has responded to the IMEG Report, but, at the same time, there will be a shortage of steel. Industry feels that the British Steel Corporation should do a great deal more and should look at the possibility of establishing a tubular steel mill for North Sea purposes. There is an enormous demand for steel in that respect—and I am not talking about a 10-year period but much longer.
The Government must do everything they can to prevent bottlenecks. I am glad that a Government reply yesterday shows that the Government are seeking to make sure that even in the current emergency situation and in face of short-time working, the companies involved in the production of equipment for North Sea operations will be exempt from restrictions. I hope that the Minister will make clear that all companies providing equipment for services in the North Sea will be exempt and will be able to apply to regional offices for licences. Even as late as yesterday complaints were made to me that local DTI offices had not been able to give very much help in this respect. I hope that the Minister will insist that these companies will be exempt.
In conclusion, I wish to summarise the areas in which I believe Government action is required. First, they must do a great deal more—and act a great deal more quickly—about sites. I take the point already made that we have to get over the delays in planning applications. 1826 Secondly, the Government have a rôle to play in platform design in recognising that different fields require different designs. One field will require one type of design and another a quite different type of design. The Forties field, for example, is not suitable for any type of gravity design.
There can be no argument about the urgency of the situation and the Government must make every effort to reduce the delay. There need be no conflict between doing everything to reduce the delay and maximising British participation provided that, wherever possible, the Government are prepared to intervene to achieve this end.
I accept that many decisions can be taken only by industry, but it is also true to say that there are many areas where the Government can intervene, spend money on research and development, and expedite planning decisions so that we can get oil ashore quickly. At the same time we must maximise British industry's participation, for we want to see the maximum benefit for the British economy in terms of new jobs and fresh investment.
§ 2.12 p.m.
§ The Minister for Industrial Development (Mr. Christopher Chataway)
I congratulate the hon. Member for East Stirlingshire (Mr. Douglas) on raising this subject today and indeed on the way in which he introduced it. We have up to this point had a useful debate, and I recognise that there is a value in being able to tackle at some length the subject of concrete production platforms. It is difficult in exchanges during Question Time to get to the bottom of such a technically complex issue.
It is probably appropriate that a Minister from the Department of Trade and Industry should be dealing with North Sea oil on the last parliamentary day of 1973, because a major feature of the past year has been the efforts made to bring to bear the full weight of the Department to tackle the problems of offshore oil.
The implications of these discoveries for British trade and industry go so wide that most industrial sections of the Department have necessarily been involved—those dealing not only with oil but also with the very wide range of industries which are, or could be, offshore oil 1827 suppliers, with research and development on a broad front, with trade and credit questions and with industry in most regions.
My right hon. Friend the Secretary of State for Trade and Industry has from the beginning been determined that this task must range over the whole Department and he has been insistent that the resources of the Department as a whole should be mobilised. He and other departmental Ministers, including myself, have in 1973 fulfilled over 50 visits, conference speeches or other engagements to do with offshore oil. This is one small indication of the degree of priority we have given this subject.
At the centre of this activity is the Offshore Supplies Office. I do not want to deal at length with the wider issues and I recognise, as the hon. Member for Edinburgh, East (Mr. Strang) said, that there is still a difference of opinion between us as to the best way to organise matters. They believe—I think wrongly—that there would be advantage in trusting the larger part of this responsibility to some kind of hived-off agency or commission. In view of the spread of the importance of North Sea oil, it is essential that all the resources of the Department should be engaged.
The Offshore Oil Office has been working closely with the Scottish Office and there is no doubt that the OSO, with a staff recruited from industry as well as from the Civil Service, is beginning to have a major impact. British firms are being given an opportunity as never before to compete for offshore orders. Millions of pounds of business has already come to the United Kingdom as a result of OSO's insistence, not on any beggar-my-neighbour protectionist policy, but on the fact that British firms must be given a fair opportunity to compete. If anyone believes that this sort of pressure from the Government does not exist, they have only to talk to the oil companies to be disabused.
We have introduced interest relief grants to help with the problem of credit terms; we have acted in both education and training. An enormous amount of hard slogging work has gone into the encouragement of new ventures, identifying new opportunities and bringing together new partnerships. At the moment, moreover, every effort is being made— 1828 and I give this assurance to the hon. Member for Edinburgh, East—to ensure that essential North Sea work is licensed for a full working week. Any firm that believes it is in difficulty should contact the local DTI office. I believe that it will get a quick response.
The present situation has imposed tremendous burdens on a number of officials in my Department, some of whom have been working a 16- or 17-hour day, to get out authorisations, and many of whom will be working on Christmas Eve and until very late on Boxing Day. We are in no doubt about the importance of ensuring that these firms to the greatest possible extent are insulated from difficulties. We are also trying to ensure that they get the necessary priority for fuel and for steel supplies. I receive a great number of unsolicited testimonials from firms, large and small, to the energy and enterprise being shown by the Offshore Supplies Office.
In tackling the problems associated with platform construction, as with offshore oil supplies, we have a threefold concern. First, we must speed the flow of oil; secondly, we must help to build a competitive British supply industry; and, thirdly, we must try to minimise damage to the environment. The hon. Member for Edinburgh, East fairly recognised that there can now be little argument about the supreme importance of speed. We must all recognise that there is some difference in balance between the objectives we have had before us.
I do not accept, though, that the necessity of achieving speed necessarily means that there has to be a greater reliance upon overseas producers. There may be occasions when, because it is necessary to get materials in time, we should go abroad and give up the opportunity of a contract going to a British supplier. But there will be other occasions when it will be very much in the interests of speed that we should be giving additional encouragement to British suppliers.
All four of the main United Kingdom platform builders were called to a joint meeting at my Department early in November and asked to let us know of any problems which might hinder production on which the Government could help. I shall be visiting Redpath Dorman Long 1829 at Methil next Thursday, and having talks with other North Sea suppliers in Scotland to ensure that we are doing everything possible to enable this work to go ahead as fast as possible.
The speed of production of platforms is extremely important because of the size of the market. Leaving aside the large amount of equipment on them, the platforms themselves are the biggest single purchases by the operating companies in the development of offshore fields, and their value will amount to hundreds of millions of pounds. This presents British firms with a double opportunity—no one in the world before has built platforms on this scale and of the strength needed to cope with the deep waters and stormy weathers of the North Sea. The North Sea provides us with a chance to be first in the field and to prove ourselves capable of tackling markets throughout the world.
Until now the practice has been to build platforms in steel. The first six platforms for the United Kingdom sector of the northern North Sea are all-steel platforms, and they are being built in the United Kingdom, in the north of Scotland. These have represented major business for United Kingdom firms. A further one is being built mainly in Scotland and partly in France. Two have gone overseas. This is a welcome change from the position in the Southern Basin gas fields, where all the platforms came from overseas. The oil platform business, therefore, already means many millions of pounds worth of business, thousands of jobs in areas where they are needed, and savings in foreign exchange.
Of course there have been problems over their construction, but I do not accept that the major part of the delays which have occurred in supplies for the North Sea has been due to labour disputes. A study which we carried out some weeks ago suggested strongly to us that the major single cause was probably changes in design on the part of the oil companies necessitated by the fact that in the North Sea they are dealing with a totally unprecedented situation.
The problems referred to today by hon. Members are relatively recent, and concern a type of platform ordered for the first time only this summer—platforms 1830 built in concrete. The deeper the water in which the oil field is found, the more likely concrete is to be the cheaper and more reliable alternative. After our initial success in securing the orders for steel platforms, two orders for concrete platforms were placed in quick succession, both of the same design, and subsequently a further one of a different design. A characteristic of the successful designs is that they need very deep water at the place where they are constructed. All three ordered so far are being built in Norway, because no firms have suitable sites approved for building in the United Kingdom. Such sites as exist are in a small area of North-West Scotland of very considerable beauty. A public inquiry is now being held into a joint application by two firms—Taylor Woodrow and Mowlem—to develop a site on land belonging to the National Trust for Scotland at Drambuie on Loch Carron. Only yesterday another application relating to a site six miles across the water from Drambuie was made by John Howard.
Hon. Members have expressed their concern about this situation. The hon. Member for East Stirlingshire argued with some skill that we should call together the constructors and designers to ensure that the platforms were built in areas where development is generally to be welcomed and if possible to avoid the risk of intrusion into places of natural beauty. It is an idea which at first sight seems an attractive way round the dilemma. But I am afraid that the attractions are more apparent than real and that the practical objections at present are overwhelming——
§ Mr. Chataway
I will try to explain to the hon. Gentleman the nature of the problem that we face. First, there is no question that one design of platform can be suitable for all the locations in the North Sea where oil is found. A great variety of factors are involved, all of which affect the final decision on the type of platform for which to go. The depth of water is critical. The conditions on the seabed can rule out some types of platform. Different sizes are needed, depending on the function that the platform is to serve. We should be chasing a dream if we tried to search, by bringing all these people together, for one, two or even three types of platform.
1831 Then the engineers in the different oil companies will have different views about the merits of different designs. That is not necessarily a matter of bias or prejudice. It is simply the fact that judgment has to be exercised in decisions of this kind, and genuine differences of opinion are bound to exist amongst the experts. In the end, it is the companies which have to take responsibility for the platforms, and therefore they must be free to make the final choice on the type or types of platform that they will use.
Then again, ideas about designs are developing and changing all the time. Even if it were possible to get general agreement that on today's evidence one or two designs were the best, there is no guarantee that that judgment would be the same in, say, six months. Redpath Dorman Long has recently come forward with a hybrid design using both concrete and steel which the company hopes will prove to be a winner. A few months ago it was not possible to consider that design, and it is only one of many approaches being taken. I do not think that it is practicable to expect to get the best answer simply by fastening on to what seems to be the best available design at any one time.
If there seemed to be any unjustified block in the thinking of the companies concerned on all sides, cramping the development of ideas, there could be a case for an initiative from the centre to promote the development of new designs and approaches. But manifestly that is not the case today. There are about 15 companies building or wishing to build these platforms in the United Kingdom and others overseas, with about as many different designs, some in steel, some concrete and some hybrid. Platforms are being built at four sites and another six have been approved, all but one without the need for a public inquiry. There is no question but that the opportunity exists for a wide variety of types of platform to be built at sites where industrial development is shown by the planning decisions to be generally welcomed, and the incentive is there for companies to build in such places, not least because it is easier to get planning permission.
§ Mr. Douglas
Will the right hon. Gentleman comment on the Government's target in relation to IMEG? 1832 Secondly, how is it that, although we have a variety of seabed conditions, the three platforms at present are all of the one design? Is not that an unusual occurrence?
§ Mr. Chataway
No. As I have explained the majority of the steel platforms which we have were built in this country. As to concrete platforms, the hon. Gentleman will find considerable differences of view as to the kind of platforms which will be required in future——
§ Several hon. Members rose——
Mr. Deputy-Speaker (Mr. E. L. Malla-lieu)
Order. The Minister has already had more than his time and, in the interests of those who are to follow, I must ask him to allow this debate to be concluded.
§ Mr. Chataway
I will attempt to do that, Mr. Deputy Speaker. Before leaving that point, I would simply say that I believe that it must be accepted that different conditions will require different designs. I would not contest the view that at this moment in time it would seem that the concrete platform, requiring very deep water, will have a substantial future. Whilst talking to oil companies yesterday I was left in no doubt about that.
My right hon. Friend the Secretary of State for Scotland has an important and, as the hon. Gentleman said, a very difficult decision to take about Drambuie. I will relay to my right hon. Friend the points which have been made about planning and the importance of speeding up planning provisions. I do not believe that many people in this country would be prepared to see a situation in which an answer was given on a question like this within a fortnight. Indeed, I am ready to believe what I read in the newspapers—that there may be second thoughts in Norway about some of these matters. Incidentally, it is not the case that Norway pursues a protectionist policy. Of the five steel platforms for the Ekofisk field, none has been built in Norway.
To conclude on the question of the Drumbuie inquiry, I fully understand the hon. Gentleman's fears, though I hope that those who are interested will take the trouble to examine all the evidence available, particularly through the public 1833 inquiry and the impact study that my right hon. Friend has commissioned. Among other things, people want the fullest possible assurance that, if my right hon. Friend finds it possible to give planning permission, any development would be responsibly handled, that there would be no unnecessary damage to the environment, and that to avoid unnecessary proliferation of sites the fullest possible use should be made of any that are approved. This is an area where I realise that the Government might be able to help, by themselves clearing the site concerned and so taking overall responsibility for the handling of developments. This is something that we are certainly considering in case it could help to promote the proper development of the site and to assuage some of the fears which have been expressed by objectors to the planning application. I stress that nothing that I have said today should be taken as in any way pre-judging the decision that is to be taken by my right hon. Friend the Secretary of State for Scotland, who has responsibility for these matters.
We are anxious to ensure as large a participation for British industry as possible in the 1970s. I assure the House and the hon. Member that that remains our objective and one that we shall pursue with all vigour.