HC Deb 19 November 1973 vol 864 cc948-55
The Secretary of State for Trade and Industry (Mr. Peter Walker)

In my statement to the House on 24th October, I informed the House that, in view of the potential dangers to our Middle East oil supplies, the Government had decided to take controls over the export of oil and oil products and to bring contingency plans to introduce rationing to a state of readiness. I also informed the House that we would prepare legislation to allow controls upon the distribution of petrol and oil. This legislation has now been prepared and will be introduced tomorrow.

At the same time, we urged voluntary savings to take place in energy consumption. Important actions have been taken by a number of the major users of energy, including the power stations and airlines, and on 14th November the Government made orders banning the use of certain types of space heating and advertising signs.

We now face a situation in which all our energy supplies are at risk—coal and electricity, because of industrial action, and oil, because of continuing uncertainty about production in the Arab countries.

We enjoy substantial stocks of both oil and coal. But, if we are to guarantee the minimum impact upon employment and industrial production throughout the coming winter, further action is now necessary to conserve stocks.

We are, therefore, immediately directing the oil companies to reduce deliveries of all the main oil products across the board by 10 per cent. compared with the corresponding period last year. In the case of petrol stations the figure will be 10 per cent. below last year but apportioned on the basis of deliveries in September of this year. This will be implemented from tomorrow. We have prepared a list of essential services and industries; and whilst these will also be subject to the 10 per cent. cut initially, provision will be made for adjustment to meet their essential needs. The 10 per cent. reduction will not apply to public transport.

The cuts to garages need not cause undue hardship or disruption because of the considerable scope for reducing private and non-essential motoring.

In view of the present shortage and the considerable savings of petrol which can be made, I must ask everybody, as from today, first, to reduce weekend motoring to the minimum, secondly, to cut out motoring on Sundays other than when the journey is absolutely essential, and, thirdly, to observe a voluntary speed limit of 50 miles per hour. I am introducing an order prohibiting the purchasing of petrol in cans.

I have consulted the CBI, the oil companies and the motoring organisations and they have agreed to co-operate in every way possible to see that these reductions of our energy consumption are obtained with the minimum of disruption.

Mr. Benn

Is the right hon. Gentleman aware that any arrangements made that are fair and ethical and are seen to be fair and ethical will obviously command public understanding?

First, why were there no consultations with the trade unions or with those organisations representing old people, who might very well be affected by cuts in oil supplies? Secondly, do the Government intend to assume responsibility themselves for seeing that priority in terms of production and transport are carried through, particularly in the rural areas, under their own auspices, or are they leaving this aspect entirely to the oil companies to deal with?

Thirdly, how does the right hon. Gentleman visualise that the garages, which will be applying a 10 per cent. reduction, will be able themselves to see that key categories of people, if there are to be such categories, receive the petrol they need? Fourth, what action is being taken against the possibility of a black market, which certainly developed in 1956 when we last had petrol rationing?

Finally, does this situation not indicate the need for the Government to be much more flexible in their dealings with the miners and the electrical power engineers in ensuring adequate supplies?

Mr. Walker

We have discussed the question of special categories with the oil companies. They are satisfied that, with the relatively small reduction of about 10 per cent., there will be no difficulty in keeping essential services, such as those of doctors and nurses, for example, properly supplied. They have no doubt that they are perfectly capable of dealing with this. Likewise, if reductions are made in weekend motoring and people comply with the 50 mph speed limit. the combination of these two factors alone will meet most of the 10 per cent. cut in supplies. The Government have power of direction under the emergency powers in force, and under the legislation being introduced tomorrow we shall continue those powers and will be able to introduce rationing if necessary. We have made it clear that if rationing is essential we shall not hesitate to introduce it, but at the moment it is not essential. We hope that the situation in the Middle East will improve and enable us to remove these restrictions. If the oil supply situation deteriorates and the coal and electricity situations deteriorate, further action will be needed.

Mr. Skeet

While I congratulate my right hon. Friend on introducing the legislation tomorrow, will he bear in mind that one of the principal matters he has to consider is the steepening price of oil, which will have a serious effect on the balance of payments? Will he remember that the housewife will have to pay much more for gas oil because the rebates have been abolished and for consignments under 1,000 gallons an increased price will be charged?

Mr. Walker

Obviously, the increased prices being charged by Middle East countries will have a considerable impact on prices here and on our balance of payments.

Mr. Grimond

If, as seems possible, the situation in the Middle East continues unfavourable for some time, is the right hon. Gentleman satisfied that this policy will be sufficient? Is there not some danger of having the disadvantages of rationing, such as hoarding and the black market, without curtailing demand? What about the essential service industries? Should not the 10 per cent. be more flexible, for example, for the countryside, agriculture and fisheries, which are extremely dependent on oil? Will the needs of such sectors be taken into account?

Mr. Walker

I am sure that the 10 per cent. reduction can be met and coped with in almost every sector. I point out to the right hon. Gentleman that the measures we are now taking will in combination be far greater than those taken by any other European country and by the United States and Japan. This is because we consider it advisable to con- serve our stocks so that there will be no major rundown. But the position is aggravated by the present situation in the coal and electricity industries.

Mr. Rost

Is there not evidence that a minority of greedy and selfish consumers have deliberately chosen to ignore the Government's request for voluntary restraint? What assurance can we have that they will now do so? Furthermore, what depletion of the nation's strategic reserves of oil has taken place in the past days by this hoarding?

Mr. Walker

The total effect of such hoarding will have been relatively small because only 15 per cent. of our total oil supplies is distributed through the garage system. Therefore, the total impact on oil resources is relatively the same. The combination of the Home Office regulations already in existence on hoarding and the banning of the supply of petrol in cans in the order I am making today will prevent such abuse.

Mr. Ewing

Is the right hon. Gentleman aware that his statement is very old news? Can he explain how it was that in the middle of last week the oil distribution companies were sending out letters almost word for word the same as the Minister's statement? Does he appreciate that I read one such letter on Saturday morning telling my local garage that distribution was to be cut by 10 per cent.? Is he so divorced from the discussions that take place that he does not know that there has been a rationing scheme worked out by the oil companies and that they are issuing discs to their own customers and will serve only those customers? Is it not dishonest for him to come here and pretend that rationing is not in effect? Why do not the Government take responsibility for this?

Mr. Walker

The hon. Gentleman has got it all wrong. The situation varies considerably from one oil company to another. Certain small companies have had to stop deliveries entirely. Others have continued supplies at the normal level, and one sent out a note to its customers on Saturday stating what its future intentions would be. The Government are now taking the action that is necessary to direct the supplies of the oil companies. This is now under Government direction, and the Government have the powers to direct further supplies to where they are needed. The Government are taking the responsibility, in collaboration with the oil companies. We know that pooling arrangements have been made between the oil companies to ensure that those who have been hard hit will get further supplies.

Mr. Walters

Would my right hon. Friend not agree that the most recent statement by the Middle East oil-producing countries was reasonably favourable and encouraging towards Britain? Does this not give further support for the Government's decision, taken on purely political grounds, to state their policy on the Middle East situation three years before any oil policy was evolved by the producer countries?

Mr. Walker

While the news yesterday that further cuts would not be imposed on this and other countries is welcome, it means that there will be a considerable drop in oil supplies to Europe and the world at large during December. It would be the Government's hope that the cuts at present in force will be dropped and full supplies renewed.

Mr. McBride

Is the right hon. Gentleman aware that I have had representations from my constituents about the energy saving scheme as it affects chapels and churches? To remove any doubt or sense of disquiet, may I ask the right hon. Gentleman to exempt from the ban on space heating churches and chapels in Wales so that these places of worship may be properly heated, at the very least on Sundays?

Mr. Walker

There is provision for special application to be made in such circumstances. I would have thought a much better answer would be large congregations and more noisy hymns.

Sir J. Rodgers

Will my right hon. Friend consider imitating the example of Belgium and closing the petrol pumps on Sundays if the situation deteriorates?

Mr. Walker

No, Sir, because I think that creates many impossible situations, for example for people in the medical professions, nurses and others. I do not think it is a sensible method.

Mr. Douglas

Will the right hon. Gentleman give the House details of the deterioration in our stocks position since this crisis began? Will he not accept that a 10 per cent. across-the-board reduction in supplies will be detrimental to the rural areas of England, Scotland and Wales? Ought there not to be some weighting to take this into account?

Mr. Walker

There will be no great problems or handicaps as a result of reducing to 90 per cent. of normal consumption. It is difficult to give day-by-day estimates of stocks, but the latest estimate I have is that the stock position in the United Kingdom is still over 70 days. There has not been a massive deterioration in the position.

Mr. Costain

Will my right hon. Friend bear in mind the need to help certain categories, especially the disabled, to get to work? Will he make sure that the arrangements available for such people are fully explained?

Mr. Walker

Yes.

Mr. Strang

Is it not high time that the Government set about encouraging local authorities to provide a better public transport system instead of discouraging them as they are doing at present? Will the Minister take urgent steps to enable them to employ the number of workers they need, to subsidise fares and to provide a better service?

Mr. Walker

There has been a whole range of measures taken by the Government in terms of subsidies and financial help to British Railways, local authorities and infrastructure grants designed to improve the public transport system.

Mr. Benn

Will the right hon. Gentleman please tell the House whether he intends to publish details of the Government's plans, priorities and intentions so that members of the public know what the Government intend to do? Will he say whether members of the public or hon. Members can bring to his attention cases of difficulty that will come to light? Will the Government have the powers in the legislation to allow them to deal with such problems as are almost certain to come to light in a voluntary arrangement?

Mr. Walker

I am using Government powers to make a 10 per cent. cut. The powers exist already. I shall be publishing in full this afternoon the details of the special categories, and I am grateful to the right hon. Gentleman for mentioning that. I advise those in special categories or those who wish to be considered for such categories to make an application to the regional office of the Department of Trade and Industry. That is the best and quickest means of making the application.

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