HC Deb 31 January 1973 vol 849 cc1333-7
3. Mr. MacArthur

asked the Secretary of State for Scotland what latest assessment he has made of the effect on the Scottish economy of the discovery of oil in the North Sea; and if he will make a statement.

Mr. Gordon Campbell

North Sea oil activities have already given rise to some 3,000 jobs in Scotland, and projects announced so far have potential for a further 7,000 jobs over the next three to four years. Scotland will also benefit substantially from the supporting infrastructure investment being provided. The measures announced on 16th January, including the establishment of a Scottish Petroleum Office, will provide an effective base for stimulating industrial development in Scotland related to the new discoveries of oil.

Mr. MacArthur

That is encouraging progress, but does my right hon. Friend agree that current estimates and comment are based too much on prospects until 1980 and too little on what may be large untapped reserves still to be explored to the north and west of these islands?

Mr. Campbell

Yes, Sir. The Government have made no attempt to estimate beyond 1980, seven years ahead, because beyond that there are too many unpredictable factors. But there could be a great deal more oil flowing in the years beyond 1980, because there are large areas still to be explored around the north and west as well as in the North Sea.

Mr. Grimond

Has the right hon. Gentleman made any geographical estimates, for instance, of how many jobs there might be in Shetland? As it is the Government's policy to get offices out of London and to increase employment in Scotland, why is not the whole of the new office concerned with petroleum in Scotland?

Mr. Campbell

If the oil companies move their headquarters out of London to Scotland—and I would do anything to encourage them—the headquarters of the new petroleum body could be moved north, but to meet the present situation we have set up a Scottish Petroleum Office in Glasgow. We should not under- estimate the effectiveness of that office in the future.

As regards the right hon. Gentleman's first point, it is impossible to estimate accurately the number of jobs in Shetland and areas where exploration is now taking place, but it is clear that there will be a lot of activity there.

Mr. Doig

Is the Secretary of State aware that by 1980 275 supply vessels will be needed for the North Sea oil companies? Will he treat that need in the same way as the Government treat advance factories and authorise the building of advance supply ships for the area, keeping in mind that in my area and other areas on the East Coast there are likely to be large-scale redundancies within the next week or two?

Mr. Campbell

I am very much aware of the growing market in the oil rig servicing sector, including new vessels. It was for that reason that we acted so quickly last summer to enable the harbour of refuge at Peterhead to become a servicing harbour for the purpose. I am doing everything I can to encourage Scottish shipbuilders as well as other industry to tender for that kind of work where appropriate. The hon. Gentleman's point is one for my right hon. Friend the Secretary of State for Trade and Industry, and I shall make sure that note is taken of it.

Mr. Wolrige-Gordon

Has my right hon. Friend studied the IMEG report, particularly its proposal for licensing agreements and partnership arrangements between British firms, and, in particular, American companies to gain experience of the new technologies required in the North Sea? Will he tell us more about that?

Mr. Campbell

I and my right hon. Friends who are responsible are considering the recommendations in the IMEG report. My right hon. Friend the Secretary of State for Trade and Industry has already made an initial announcement about our reactions to it.

On technology, I have said before that there is no reason why we in Scotland should not before long ourselves become the experts in the technology needed in North Sea conditions and then be able to export it overseas as new areas come into exploration.

Mr. Robert Hughes

Why did the Government dodge the main recommendation of the IMEG report about the establishment of the petroleum service industries? Why did not the right hon. Gentleman go further and set up a State holding company to deal with services and provisions for the industry?

Mr. Campbell

The hon. Gentleman has already had the matter explained to him in a statement by my right hon. Friend the Secretary of State for Trade and Industry. But one more reason is that it would have required legislation, which would have competed with other legislation passing through the House.

Dr. Dickson Mabon

We will give the Government time.

Mr. Campbell

We were told that the small Bill concerning Peterhead would go through quickly but we had considerable difficulty in this House. I can assure the hon. Member for Aberdeen, North (Mr. Robert Hughes) that there are many different views, even on the Opposition benches, about what kind of agency there should be, the kind of powers it should have, and what kind of money it should have to spend. Any idea that that kind of Bill could be found an early place in the legislative programme, or go through quickly, surprises me. We have acted quickly, without the need for new legislation.

Mr. Ross

The whole House, certainly those Scots who are interested, will agree with the point of view expressed by the hon. Member for Perth and East Perthshire (Mr. MacArthur) that the potential of North Sea oil is tremendous. It is essential that our policies at this stage should be right, otherwise we may find ourselves compromised later. Will the right hon. Gentleman think again about setting up an agency of the kind my hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) mentioned? The Secretary of State will have little or no trouble over legislation which is beneficial to the people of Scotland.

Mr. Campbell

I must ask the right hon. Gentleman to read again what my right hon. Friend has said about the matter. He has already explained how the Government immediately translated the recommendations into the setting up of a body and a Scottish Petroleum Office. Many suggestions have come to us for boards and agencies covering the oil industry, and possibly covering many other industries as well, and what sort of powers they should have. Naturally these are still for consideration. We wanted to be able to act quickly and set up a new system as soon as possible, and we have done it.