§ 1.46 a.m.
§ Mr. Tam Dalyell (West Lothian)
It there were any temptation to complain about starting a debate at a quarter to two in the morning on the subject of the North Sea, we should remember that whereas we are in relatively comfortable circumstances here in the House, those who are out on the rigs may be in a force 9 gale. At the outset of what I have to say, I pay a tribute to the men and managements who work on the rigs out in the rigours of the North Sea. Until one has been on a rig, even in fairly moderate conditions, one does not, I think, realise how tough the work is.
I have had an interest in this subject ever since I served on the Standing Committee on the Continental Shelf Bill in 1963. Perhaps one would have made rather different speeches then if it had been possible to foresee what we now see with hindsight. But hindsight is an advantage in life! My first comment is that the ministerial arrangement is a little odd. I am glad to see the Minister here, and I know that within his Fisheries Department there resides a tremendous amount of expertise. On the other hand, it is a bit odd that the oil industry, the major industrial event since the Industrial 1557 Revolution for Scotland, should be the responsibility of one who has also to worry about pig prices, about the police and about a host of other matters.
The time has come to take a long hard look at the ministerial arrangements and to consider whether it is desirable to have some kind of commission to give an overall coherent strategy in these matters, and not least in the matter of harbour development, the subject of the debate tonight. What has prompted me to initiate this debate is a feeling that so many of the things we do are "itsybitsy". I want to know about the Government's strategy.
We had long, fairly detailed, and, on the whole, rather satisfactory discussions with BP about its terminal at Queens-ferry and Dalmeny. I shall not go into detail about that now. But the extraordinary feature which emerged after our talks with provosts, councillors and trade union officials, with the farmers who are to be dispossessed, and with Lady Rosebery, who is the land owner, was that we all felt the same—that the case which was put forward in a narrow context was probably very good, but the same kind of argument was going on along the Fife coast, possibly at Dundee, possibly in the Minister's own constituency at Montrose where developments are taking place, and all up the coast through Wick to Scapa and the Shetlands.
Are the Government happy that there is a coherent strategy? Are they happy that the international oil companies, which are to be the customers of the harbours, are not losing the Scottish Environment too much by competition among themselves, and should they not be required to fit into a coherent strategy? What is the strategy and who is in charge? Specifically, what is the brief given to the Scottish Development Advisory Group under Professor Nicol? What is its rôle exactly and what advice is being asked of the Economist Intelligence Unit? The Scottish Office Ministers responsible in this sphere have their share of problems. Shetland has asked for a provisional order and now we gather that in the last 24 hours Orkney has followed suit. For Caithness and Sutherland plans are being prepared separately. There is also the Cromarty 1558 Firth Authority. I should have thought that any Minister in the Scottish Office must be a little worried about all the different authorities going off at tangents. I cannot believe that a series of uncoordinated provisional orders is the way to tackle the challenge of oil in the 1970s and 1980s.
Personally, I identify myself very much with what the Shetlanders are doing. Perhaps they have hit upon a Socialist way of solving their problems, and I say that without being too party political. Of course, a Parliamentary Commission to investigate any of the Shetland channels, such as Sullum Voe will cause delay. Indeed, some delay might be a good thing. I am not persuaded that we must do everything "as urgently and as quickly as possible," as the Secretary of State is fond of telling us. Specifically, I should like harbour dues to be used for the good of the whole population and not paid only to the harbour authority, for purely harbour development. There is a problem for the communities concerned in oil exploration and it may have hit Shetland first. Shetland is almost about to be over-run unless it does something. Unlike Orkney, time is not on its side. I should be interested to hear anything about the discussions with the Ministry of Defence about the Lyness Jetty at Scapa and to hear about the contractual relationship which the Government would like to have between the Ministry of Defence and the various private interests along the east coast of Scotland. What is the pattern to be?
The entire north shore of the Cromarty Firth will be established as an expanding service and manufacturing area. Easter Ross is expected to house 6,000 workers in the next 18 months. The director of education is on record as talking about the need for at least £4 million for school building in a short time. But is a Cromtary Firth Port Authority necessary and is it wise to have turned down the suggestion by the International Machine and Engineering Group for a petroleum services industry board? I understand that it was turned down basically on grounds of urgency, in that a PSIB might cause delay. Such a decision is open to severe criticism because some of us do not think that either the development or the research is likely to be done as it 1559 should be within the framework of the Department of Trade and Industry.
Incidentally, I am not one of those who is prepared to criticise the Department's civil servants for being soft about oil. Any criticism that is made should be directed at politicians of both parties rather than to the civil servants because there is no evidence that the civil servants have been soft with the oil companies, as has often been said in the Press. I am aware that my hon. Friend the Member for East Stirlingshire (Mr. Douglas) is to raise the question of the IMEG Report in detail on Monday, so perhaps on Monday we will have an answer on this problem consequent to the rejection of certain IMEG proposals. The question of key industrial land bears directly on harbours. One thinks of the potential concentration around Sullum Voe in Shetland, and the question of servicing and processing facilities. Is the Scottish Office to grant free exercise of such powers to local authorities? The whole relationship to Onshore Investments Ltd. is, I think, a Scottish problem and not a local problem. Indeed the relationship between the Government, and any form of organisation which offers a complete land-finance package, of wharfage facilities, fabrication, and oil processing installations, is a matter of consequence. In passing, I must say how impressed I am by what is being done at Methil by Redpath Dorman Long and at Leith. Having asked about these installations, I must express the fear which is at the back of the minds of us all that the country we care about might look in 10 years' time like the coast of Louisiana. This is a real danger. It was in America that the first oil industrial revolution took place. One hopes that we may learn from the experience of Americans and do much better, avoiding their mistakes, but if we are to do better something must be done early and that means a coherent strategy now. Incidentally, I am aware that the discount flow rate is sensitive to the capital figure. I mention that because I do not want to be accused of ignoring a whole range of important factors in this argument.
I ask about the relationships between the Government and the P & O, my former employers and their subsidiaries in their project at Lerwick. I think that £1,800,000 is involved. Without being 1560 impertinent and encroaching on questions relating to the Minister's constituency, I should be interested to hear of the kind of relationship he thinks should exist between the Government and Oil Services in Montrose. Will the whole pattern be that which obtains with the Dundee Harbour Trust?
I think this a proper point at which to ask again a question of which I have given notice about negotiations going on for the establishment of a median line in the North Sea/Atlantic which may have a bearing on the siting of major installations at Lerwick or elsewhere.
As one who took part in parliamentary discussions on Peterhead, I understand that the 1,500 foot quay, the 22 acres of reclaimed land and the general service berth on the south side of the harbour or refuge is going quite well, but there is a 15-year lease for oil industries. Perhaps this interesting debate provides an opportunity to comment on how this partnership experiment between public and private agencies is working out. I should have thought an interim report worth while for all of us who are concerned in these matters. From Peterhead to Boddam in another context I think that this is a regrettable project and I would have wished that it had been nuclear.
Specifically, however, I should like to know whether there has been a complaint from Site Preparations of Barrhead that it is being squeezed out by the public initiative of the Scottish Office. This seems to me to be the kind of argument on which we should have some comment because it may recur time and again.
I turn now to the Scottish position as a whole, including the West Coast and the concessions recently allocated in the Atlantic approaches to Orkney. I understand that in total at least 10,000 ft. of new quay space for service vessels will be required in the near future. I only ask whether public and private agencies are proving themselves capable of matching the tremendous pace being set at sea with adequate shore facilities. One thinks naturally of future developments at Stornoway, because part of the difficulty has been that this has come on us so suddenly that all of us can perhaps be accused of lack of foresight. I 1561 do not pick out who have been interested for a long time and certainly as a member of the 1963 Standing Committee I feel as guilty as anyone and am not accusing others. Nevertheless, the fact is that from now on we have no excuse for not showing the kind of foresight that I should like to see, for instance, in relation to Stornoway in connection with the Western Approaches.
This is not the place to go into the detail about the merits, of the underwater evaluation Ministry of Defence centre at Raasay. Since, however, many countries use their forces for what one might call socio-economic purposes one would have thought that there could have been far more co-operation between the Ministry of Defence, which I am sure would welcome it, and the oil exploitation companies, particularly concerning deep water and the use of submersibles. I therefore ask the Ministers who have responsibility for oil development precisely what discussions have taken place with the Ministry of Defence in any of their projects.
I have undertaken to be brief. In shorthand, therefore, I come to a criticism. The Wolfson Foundation has generously given a large sum of money to the Heriot-Watt University. Why has not the Scottish Office seen fit to give a matching amount? It seems disappointing that considerably more Government funds have not been put into the whole question of submarine research and underwater research. I simply say in passing that the French are spending not less than £50 million a year on this, and I am not just talking of the dramatic, well-publicised work of Cousteau and others. They have a whole programme. It seems strange that they should have a programme and that we, who are at least for the moment better endowed, are being so parsimonious in this respect.
Again, we should like to have some comment on the whole tie-up over the next 10 years between port authorities and some major corporations with new ideas. I think particularly of Lockheed and their one-atmosphere sub-sea completion systems. On another matter, some of us have met representatives of Lockheed within the last fortnight. As can be imagined, with the ending of the Vietnam 1562 war they are only too anxious to get into the European market in one way or another. When firms like that come and offer whole systems, I hope that again there will be some clear thought by the Government about what the relationship should be between the incoming firms and the harbour developments. Co-ordination in this respect is extremely important, as the advisers to the Minister will have told him.
I gather that about 275 ships are required by 1980. There is a promising market for the builders of service vessels and standby ships needed to supply the increasing fleet of rigs which will be drilling at distances of more than 100 miles from the coast. These ships are relatively small—standby vessels and chaperoning vessels with facilities for helicopter takeoffs and landings. They are of trawler size and their construction does not demand particularly large or sophisticated yards. I should like to know what the Government will do, pressed by my hon. Friend the Member for Dundee, West (Mr. Doig) and others in encouraging the building of these fairly simple and rather small vessels, which will have a vital part to play in the exploitation of the North Sea.
I cast some doubt on the question whether the emphasis that we had at Question Time today and on other occasions about the need to act urgently and quickly is necessarily right.
I end with the hope that some coherent policy can be announced fairly soon or, failing that, that administrative arrangements will be made to deal with the problem, or that some commission will be set up with powers to produce a coherent strategy, which is lacking at present.
§ 2.6 a.m.
§ The Under-Secretary of State for Home Affairs and Agriculture, Scottish Office (Mr. Alick Buchanan-Smith)
I start by thanking the hon. Member for West West Lothian (Mr. Dalyell) for the constructive and helpful way in which he introduced the debate.
This subject is of the most vital importance not only for Scotland—opening up the most exciting prospects; it is important for the whole of the United Kingdom.
1563 The hon. Member asked me many questions and I am sure that he will forgive me if, in the short time that I have, and at this hour, I do not delay too much. I apologise if I cannot deal with every one of the points that the hon. Member raised, because some involve a certain amount of detail. I want to deal with some of the more general points and also to pick up some of the particular ones.
I start with what the hon. Member said when he finished. He questioned whether the strategy of the Government was right in acting so quickly in relation to this development. He referred to this matter being raised at Question Time this afternoon. I believe that our strategy in this matter has been correct. It has been the strategy not only of my Government but of his Government as well.
It is worth reflecting that if we had not acted as resolutely and with such urgency as we did and as the previous Government did in initiating this project, some of the developments which have now taken place in the northern part of the North Sea might not have taken place at all at this time. It is fair to question whether we might not still simply be drilling for gas somewhere—perhaps off the Yorkshire coast—instead of having, in 1973, the most exciting prospects opened up for the North-East and North Coasts of Scotland. Therefore, I make no apology for the urgency and speed with which the Government have acted in exploiting this wonderful resource on our doorstep.
The second general point concerns the question of ministerial responsibility for this subject. The hon. Member must appreciate that I am answering this debate because the heading of this Supplementary Estimate—under which he has rightly sought to raise this matter—concerns harbour development of those harbours which are the responsibility of the Secretary of State for Scotland and are basically and initially fishery harbours. That is why, naturally and properly, they fall within my responsibility. The handling of matters relating to oil does not rest simply with my Department. It is also covered by various other Government Departments and in the Scottish Office my hon. Friend the Under-Secretary of State for Development is 1564 particularly involved, personally and through the Department, in co-ordinating and liaising on strategy and tactics for the development of this resource.
The way in which the Government have handled this is more of a strength than a weakness, because we have mobilised the total resources of the Scottish Office. Where there was expertise and knowledge which could be used to develop this resource it was used. To say that a number of Departments with different responsibilities and expertise have been brought into this does not mean that there has been a lack of liaison or strategy. We have mobilised many Government resources to ensure that we make the best use of the opportunities presented to us.
Those concerned with oil development are by no means dissatisfied with the service given by the Government. I was privileged to be present in Montrose when P and O announced its proposals and I was interested in the tribute which officials of the company paid to the Scottish Office, the Department of Trade and Industry, the Department of the Environment and the National Ports Council, for the assistance that had been given. It is a sign of the success of the Government's activities that so many Departments are involved. The liaison and co-ordination between them has been effective. I accept that it is something we will have to watch. It would be tragic if for any reason the speed of development, and its effectiveness, should founder for administrative reasons.
The hon. Member asked me about liaison between Government Departments and harbour authorities, which is an extension of the question of liaison between Government Departments. Officials of the National Ports Council and the Ports Division of the Department of the Environment and the Scottish Office work in close co-operation on port matters in Scotland. They also keep in close touch with the various port and harbour authorities concerned. It has recently been decided to strengthen the existing link between the Scottish Office and the Department of the Environment's Port Directorate by establishing a branch of the Directorate in Edinburgh. This is under the Ports Branch, which from February this year will be located in an office adjacent to 1565 St. Andrew's House and which will be working even more closely with the various ports and the Scottish Office on the related infrastructure projects.
These new arrangements will be of particular value for North Sea oil development. A group of officials, including those from the National Ports Council, will be set up as a committee of the Scottish Economic Planning Board to keep port developments in Scotland under continuous review. I hope that this demonstrates that organisationally we are paying particular attention to the way in which we maintain proper liaison between Government Departments and port authorities.
The hon. Member asked about the Cromarty Firth. There are problems in the expansion of that area, and the rate of expansion represents a special problem, as my hon. Friend the Member for Ross and Cromarty (Mr. Gray) knows probably better than anyone. Pending the setting up of the new local government structure in the area, my hon. Friend the Under-Secretary of State for Development has appointed a co-ordinating committee of the existing local authorities which will deal with the planning and infrastructure problems throughout the area. I believe that this is the proper way to deal with it.
Returning to the general questions of liaison and strategy, it is obvious from what the hon. Gentleman has said that these arrangements inevitably require the co-ordination of a large number of departments and agencies. This is the very nature of the problem. I can sum it up best by saying that the main coordination is being achieved through the Scottish Economic Planning Board, which reports direct to my right hon. Friend the Secretary of State for Scotland.
In terms of the strategy of the development and the liaison between the different departments, I hope that I have demonstrated that we are alive to the problems and are resolving them. If we are to make the best use of the different types of expertise in the different departments, it is important that they are involved rather than necessarily centralised in some single organisation.
I turn now to some of the more detailed points raised by the hon. Member 1566 for West Lothian. I mention first Peterhead Harbour. I agree that this is an appropriate moment at which to give a progress report on developments there.
As soon as the discoveries of oil in the North Sea revealed the potential of Peterhead Bay as a base for servicing oil rigs the Government lost no time in bringing before Parliament the Harbours Development (Scotland) Bill which was rushed through all its stages last July. This enabled plans to be drawn up and offers to be taken from companies interested in leasing the £2 million quay development that was planned in the southern part of the bay.
An agreement was signed in November with the Aberdeen Service Company (North Sea) Limited to use 22½ acres of quay space with a frontage of 1,500 feet. The company plans to develop an integrated base for servicing oil rigs, and construction of the quay is under way. Upwards of 200,000 ton of sand have been brought into the bay for reclamation work, and construction of the quay wall should begin in March. Contractors will have access to the reclaimed area as it is created with a view to the base being partially operational by mid-summer.
It is a tribute not only to the procedures of this House initially in getting the project off the ground but also to the speed with which construction activities have started that, within a year of the Bill being enacted, there is a prospect of this service facility at Peterhead being partially operational.
My Department is going ahead with discussions about other possible developments in the southern part of the bay, but it is too early yet to make any announcements.
On the north side of the bay, we have made considerable progress in negotiations with Arunta about its plans to construct warehouse facilities and a jetty for servicing oil rigs. This company is also planning to be in operation this summer. This is another demonstration of the way in which servicing companies and others connected with North Sea oil, in co-operation with the Government, are getting their plans into operation in a remarkably short time scale.
1567 My right hon. Friend the Secretary of State is taking steps to set up the necessary organisation for managing the developed harbour. As the hon. Member probably knows, we have appointed a small advisory committee under the chairmanship of Mr. J. C. Williamson of Aberdeen to advise on all aspects of the development, and arrangements are well in hand for appointing a full-time harbour manager. With the good offices of the trustees of Peterhead Fishery Harbour the services of their harbourmaster and other staff will also be available for managing the harbour.
One point I would mention, which the hon. Member also touched on, is the importance in relation to the environment and the importance to involve those people who are locally affected by the various developments. Regarding Peterhead, we have made considerable efforts to keep people informed of the proposals for development of the harbour of refuge. At a very early stage we held a public meeting at which our proposals were explained. I am glad to say that they received a general welcome. My right hon. Friend the Secretary of State has also stated on several occasions that the amenity of the bay must, as far as practicable, be preserved. I believe that if adequate care is exercised by all those concerned, the amenity of the lido, about which people were rightly concerned, should not be adversely affected by the developments.
The hon. Member asked about Site Preparations, a company interested in developments at Peterhead. This company, along with others, had an opportunity of offering developments on the south side of the bay, but it did not choose to offer on terms acceptable to the Government. That is the position concerning that company.
Regarding the wider aspects of the environment, this has been made very clear to the oil companies and other industries involved. For example, the standing conference which my right hon. Friend the Secretary of State established a year ago was reminded when it met recently at Inverness by my hon. Friend the Under-Secretary of State for Development about the importance which must be attached to environmental factors. The conference brings together representatives 1568 over a very wide field and there is a very useful dissemination of information about arrangements in this respect.
Regarding liaison and the overall coordination of these developments, the hon. Gentleman should remember that virtually all of the oil development projects are in areas which are not zoned for development as approved in development plans. This means that the final decision has to be made by the Secretary of State. Therefore, so far as co-ordination and sensible planning throughout are concerned, around the long Scottish coastline, there is co-ordination through the planning machinery to make sure that a coherent and sensible strategy results from it.
I have dealt with most of the general points. I shall now very quickly deal with two or three particular detailed point, of which the hon. Gentleman very kindly and courteously gave me notice.
The hon. Gentleman asked about Lyness in Orkney and Scapa Flow. The present position is that a consortium of oil and drilling companies is negotiating with the Ministry of Defence for the lease of part of the existing facilities. Firm proposals have been put to the consortium, and a reply is currently awaited. I could not say more about that at this stage. It is very much in the hands of the consortium at present to respond to the proposals put to it.
The hon. Member also asked about various developments at Raasay. I take note of what he has said about coordination with the Ministry of Defence. I shall look further into that matter. The interesting thing about Raasay is perhaps not so much in relation to the Ministry of Defence but to the particular physical facilities which the entrance to Loch Carron and the Sound of Raasay offer. Interest has been shown in the area by a number of firms, at least one of which has shown serious interest, as an area in which it would be possible to build offshore oil production platforms in concrete. This is perhaps the most dramatic development which has been mooted so far as the Sound of Raasay is concerned, but I take note of the hon. Gentleman's point about co-ordination with the Royal Navy and about other developments in deep water technology.
1569 The hon. Gentleman also asked me about the negotiations on the median line north of Zetland. No formal negotiations are in progress at the moment in respect of the waters north of the designated areas, but both Britain and Norway are looking at the possibility of extending the median line and designating blocks in more northerly waters.
I hope I have dealt with at any rate most of the points the hon. Gentleman raised. I do not know whether there is any particular point I have not answered.
§ Mr. Dalyell
I do not, I suppose, accuse the Minister of being complacent, for he has given me a very full answer, but if all this co-ordination is as good as he says it is why is it that we have Shetland going off for a provisional order, Orkney going off for a provisional order, Caithness setting up a study for good planning, Sutherland following suit, and Cromarty Firth wanting something else? They all have very genuine worries. Further south, there is concern about Queensferry and the Dalmeny terminal. How does all this fit in, coherently with the general planning? I am still rather uncomfortable about all this.
§ Mr. Buchanan-Smith
I am sorry that the hon. Gentleman should still feel uncomfortable about it, but he must realise two things. First of all, as to the developments in different areas, obviously, in planning, there are procedures which in some places it may be necessary to go through, as, for example, in Shetland in relation to a provisional order; in other areas, the procedures will be the simple planning procedures. One has to look for a solution which is appropriate to the particular problems of the area concerned. Therefore, it is inevitable to some extent that the answers will not be uniform, and that orders which are put forward will not be all put forward at exactly the same time.
Secondly, and more important, many of these proposals are arising on different time scales. In just the same way as the development of exploration started in the southern part of the North Sea and there is a natural progression northwards, as technology develops the boundaries of exploration can be pushed farther out. It is for such reasons 1570 that one is bound to get a varied rather than a uniform pattern in these developments. I can assure the hon. Gentleman that through the Development Department of the Scottish Office we are keeping a very strict co-ordinating line throughout all this development.
In conclusion, as I said earlier, it is Government policy to promote this exploration and the resources of the North Sea as rapidly as possible because, of course, those resources are so important to our balance of payments, so important to our economy as a whole. We simply must proceed as quickly as we can. I am not being complacent about it but I believe we have already achieved a considerable measure of success. We have already attracted to work in Scotland a very substantial proportion of the international expertise in this very difficult work of offshore drilling, and in only a few years we have established the existence of four commercial fields with six more fields under investigation.
It is as a result of this impressive record that we are seeing in Scotland the growth of important new industries and sources of employment. Already we can see firm prospects of over 7,000 jobs, with more to come. At the same time, we require, as I said a few moments ago—and it is very important—to keep a proper balance between these desirable industrial developments and the proper protection of the environment. My right hon. Friend the Secretary of State has made clear his determination to do this. For example, in the Moray Firth projects we have demonstrated how coordination can be achieved through the instrument of the Town and Country Planning Acts, and how the Acts can be used flexibly and sensibly. We have done this without too much frustration and without undue delay, which could be fatal if Scotland is to benefit from the enormous potential off our shores. I remind the House that we are investing all this money before a penny flows from the oil revenues and before any oil comes ashore. We have shown in our preparations that we are alive to the challenge and are taking advantage of it for the good of Scotland.
I thank the hon. Gentleman for the way he introduced the debate. I apologise for dealing speedily and perhaps slightly superficially with some of his comments. 1571 I shall read with great care the report of his speech in HANSARD. I take to heart what he said about the need for coordination and a proper approach. These are the very aims which we in the Scottish Office are determined to carry out.
§ Question put and agreed to.
§ Bill accordingly read a Second time and committed to a Committee of the whole House.
§ Committee this day.