HC Deb 22 January 1973 vol 849 cc8-13
5. Mr. William Hamilton

asked the Secretary of State for Trade and Industry if he will take steps to ensure greater accuracy in the statistics relating to North Sea oil production.

The Minister for Industry (Mr. Tom Boardman)

I am satisfied that estimates of future production are the best that can be calculated from current information. They will be updated as more information becomes available. Actual production will be stated in the annual report to Parliament.

Mr. Hamilton

Is the Minister aware that there is a constant and almost universal suspicion that the Government and the oil companies are deliberately under-estimating the enormous potential of these natural resources? The Minister in the other place recently announced a miscalculation as to public participation in this effort of about 50 per cent. Why should that error be corrected in another place rather than in this House? Will the Minister undertake to ensure that there is an increasing element of public participation and that we get more realistic estimates of the potential than we have had hitherto?

Mr. Boardman

I suggest that the hon. Gentleman's criticism might be better directed to his right hon. Friend the Leader of the Opposition who gave, in a speech on Saturday, more misleading statistics about North Sea oil than anything previously published. With regard to specific percentages, the hon. Gentleman will be aware that what matters is the share of the oil reserves and that in those the British participation is great, much greater than the hon. Gentleman has represented. Indeed, the British participation in the forecast of the reserves and the four fields that have been proved commercially is 58 per cent. The hon. Gentleman should not be misled by such statements as what his right hon. Friend said about the action that the Opposition had taken, which was completely misleading.

Sir G. Nabarro

Notwithstanding the strictures put upon indigenous oil production by the Leader of the Opposition so mistakenly on Saturday, will not my hon. Friend understand that the two principal sources of fuel production in this country are coal and oil and that we ought to have in the House of Commons a statement comparable to the synopsis of weekly coal production in the context of the oil industry, so that we can all tell, week by week and month by month, what progress indigenous oil production is making?

Mr. Boardman

Yes, Sir, I understand my hon. Friend's point. I think lie will agree that we have made considerable progress. The annual report to Parliament published the other day is a step in the right direction, because we believe that Parliament should be given as much information on this as practicable.

Mr. Benn

In the light of the hon. Gentleman's last comment, is it not time that we had much fuller information made available to Parliament and a full-scale debate rather than a Press conference during the recess? There was no reason for the Press conference to be given before the House returned. The information could have been given in the House. As the Minister in the House of Lords, no doubt inadvertently, made a grave error in the account he gave to my noble Friend in answering his question, is there not now a case for a much wider disclosure and a fuller debate in the House of Commons?

Mr. Boardman

The right hon. Gentleman will be aware of the pressure there was that the information which became available from the International Manage- ment and Engineering Group report should be published as soon as possible in order that industry could move on it, and this action was taken.

Mr. Redmond

Will my hon. Friend say whether the Leader of the Opposition was correct in saying that the Labour Government would have required a 50 per cent. participation in both the North Sea and the Irish Sea?

Mr. Boardman

No, the Leader of the Opposition was again short on facts.

Mr. Heffer

How do you know?

Mr. Boardman

Instead of insisting, as the right lion. Gentleman claimed on Saturday, that they would require a 50 per cent. participation, they required sonic participation only in the Irish Sea and they made no requirement for public participation in the North Sea.

Mr. Mason

The hon. Gentleman must get his facts correct. I was responsible for the licences in 1969–70. If the hon. Gentleman reads the record aright he will see that we intended in the northern sectors of the North Sea to expand all nationalised industries' interests and, secondly, that in the Irish Sea no private interest at all would be allowed unless there was a 50 per cent. interest by public industries.

Mr. Boardman

The right hon. Gentleman said that that was his Government's intention, but in practice they made no such requirement with regard to the North Sea, and in the case of the Irish Sea, where they required a 50 per cent. participation, the result was that only eight applications were received.

9. Mr. Strang

asked the Secretary of State for Trade and Industry what reaction he has received from industrialists to the report of International Management and Engineering Group on the market for goods and services required for the exploitation of North Sea oil and gas.

Mr. Peter Walker

As the report was published on 16th January, I have not as yet received a wide range of comments from industrialists.

Mr. Strang

Does the Minister support the IMEG recommendation that British industry's share in the United Kingdom offshore market should be increased from 25–30 per cent. to about 70 per cent.? Is he aware of the dismay in Scotland resulting from his decision not to establish an independent member for Scotland to sponsor the North Sea oil industry? Is he further aware that there is a feeling that under the present Government Scotland has no chance of maintaining its fair share of new jobs and investment arising from the exploitation of North Sea oil and gas?

Mr. Walker

Compared with the complete inaction of the previous Government in this respect, I am surprised at those comments. I want to see 70 per cent. and above if possible of the investment programme in the North Sea oil industry placed with firms in this country. We shall use the Industry Act. The creation of the new petroleum office in Glasgow will play a very important part, as the new office in my Department will play an important part nationwide.

Mr. Tugendhat

What proportion of the allocation of licences in the North Sea made by the present Government in the last round went to the public sector? Can my right hon. Friend compare that proportion with the proportion which went to the public sector in the last round under the previous Government?

Mr. Walker

In the last round, 34 per cent. went to British interests, 9.6 of which went to the public sector. As to the last round of the Labour Government, I find the remarks of the right hon. Member for Barnsley (Mr. Mason) rather surprising. In the round which was completed 10 days before polling day, rather than on the basis of fifty-fifty, 80 per cent. was with the private sector and 64 per cent. of it was with foreign interests.

Mr. Benn

Is it not a fact that the Industrial Expansion Act was repealed by the present Government, thus denying them an instrument by which support could have been given to British industry in the two years before their own Act was introduced? Can the right hon. Gentleman say how much money is now budgeted for in his own forward forecast under his Industry Act?

Mr. Walker

This depends upon the range of opportunities. The Industry Act of the present Government is a far better instrument to help than the legislation of the previous Government, and will be used as such. The last Government did not even go to the point of having a report on the potentialities involved.

23. Mr. Douglas

asked the Secretary of State for Trade and Industry what proposals he has for early discussions with both sides of industry in Scotland regarding the implementation of the International Management and Engineering Group Report.

Mr. Peter Walker

Ministers from the Department will be having a number of discussions with both sides of industry over the coming months. The first should take place on 9th February.

Mr. Douglas

Will the Minister make clear to the industrialist Press the disparity in the estimate produced by IMEG of 150 million tons and the Government's estimate of 75 million tons? Before undertaking discussions will he produce a statement to the House showing how he will finance the high-risk protect spoken about in the Press release? Will he make clear that industry not only in Scotland but in the rest of the United Kingdom will get a fair chance to bid for all contracts in the North Sea?

Mr. Walker

Any discrepancies between IMEG and the Government on future estimates are not of the proportion the hon. Gentleman has stated. He is using different dates. The only difference is purely a matter of timing. On the best information available to as with the finds so far discovered, this is the volume of oil which can be obtained by 1980. There is no dispute between us and IMEG other than on the question of timing in terms of extraction.

Mr. Leadbitter

Will the right hon. Gentleman bear in mind that the action following the IMEG report has been well received but that in practical terms there is considerable concern? Is he aware that when firms in my constituency have approached companies involved in the exploration of oil and gas, they have not been able to get anywhere near the decision-making areas, nor have they been able to break through the accepted lists of suppliers? Does not the right hon. Gentleman agree that further Government intervention would be desirable?

Mr. Walker

That is why I am setting up a special office to see that the maximum contact is made between British industry and the oil producers to exploit this market to the full. If the hon. Gentleman wishes to send me details of any examples in his constituency, I shall see that they are looked into.

Mr. Douglas

In view of the unsatisfactory nature of the reply, I give notice that I shall seek to raise the matter on the Adjournment at the earliest possible moment.