HC Deb 03 December 1974 vol 882 cc1485-514
Mr. Deputy Speaker (Mr. George Thomas)

Mr. Speaker has selected the amendment standing in the name of the right hon. Member for Battersea, North (Mr. Jay) and the names of other right hon. and hon. Members.

10.15 p.m.

The Under-Secretary of State for Energy (Mr. Alex Eadie)

I beg to move, That this House takes note of Commission Documents Nos. R/1472/74 and R/127/74. I am glad that the opportunity— [Interruption.]——

Mr. Deputy Speaker

Order. The noise as hon. Members leave the Chamber is not fair to the hon. Member addressing the House.

Mr. Eadie

I am glad that the opportunity has been found to debate these two important documents. The first— No. R/1472/74—deals with the general strategy which the EEC Commission proposes should be adopted towards energy supply in the Community over the next 25 years, and particularly over the next decade. The document has annexed to it a number of detailed proposals on certain aspects of energy policy. The second document—R/127/74—deals with one detailed but nevertheless important aspect of fuel policy.

Discussion about the development of a common energy policy had been going on in the Community for many years before we joined. It has carried on ever since with even greater emphasis following the oil crisis last year. Despite this, not a deal has been achieved so far, which is not all that surprising, given the complexity of the issues and the differences between the national positions.

The broad aims of a policy—for example, the need to reduce dependence on imported oil as rapidly as possible— have not been difficult to agree. Where difficulty has arisen, it has been in agreeing the means of achieving broad objectives. Document 1472 is the latest attempt by the Commission to analyse the problems confronting the Community, to provide objectives for 1985, and to suggest policies to be adopted in regard to our sources of energy.

The Commission proposes a strategic objective for the year 2000 of 50 per cent. dependence on nuclear energy and 30 per cent. dependence on natural gas. The objectives proposed for 1985 have been drawn up to fit within that framework. The reduction in imported oil dependence is to be achieved partly through a programme of energy conservation and partly through a rapid expansion in the use of nuclear power and natural gas and the maintenance of coal production.

Although energy independence for the Community as a whole is not attainable by 1985, the Commission says that the proportion of imported energy in total consumption could be reduced by these measures from 60 per cent. estimated before the oil crisis to about 40 per cent.

Targets have been set for each fuel source but some of these are frankly, over optimistic. We have made it clear that we have serious doubts, in particular about the target proposed for nuclear generation by 1985—calculated at 200 gigawatts. Despite the expansion of national programmes which has taken place since the oil crisis, the sum total of these programmes is even now little more than 150 gigawatts.

The target for natural gas is optimistic, too. The Government have no objection to the concept of Community targets provided that these are realistic and are used only as a guide to the formulation of programmes by national Governments. We are not prepared to accept the unrealistic targets at present proposed by the Commission. In the chapter on electricity the Commission suggests that the use of natural gas in power stations should be limited and that the construction of new oil-fired base-load plant should not be authorised except in special circumstances. These suggestions are supported by the draft directives appended to the document.

We take the view that gas is a premium fuel and that any extension of its use into electricity generation will probably be limited both by commercial and policy considerations. There are special circumstances when this is the best use. We already have two power stations in England and Wales which take interruptible supplies of natural gas to the mutual advantage of the British Gas Corporation and the Central Electricity Generating Board. Natural gas may well be the right fuel to use to deal with such special circumstances as environmental protection, to meet peak loads and to improve the combustion performance of other fossil fuel burners. Also there may be instances where, for technical reasons, some limited supply of gas to power stations may be necessary.

In discussion of the Commission's proposals in Brussels among national experts we have pressed this point, and provisional agreement has been reached on modifications to the directive to accommodate these special circumstances.

The draft directive which proposes a limitation on the use of petroleum products in power stations has the potential for causing greater difficulty and as such is unacceptable to us in its original form. This is because over the next few years new oil-fired power stations will need to remain a part of our strategy to meet our future electricity needs.

Again, in discussion with the Commission and among national experts we have made our position perfectly clear. Provisional agreement has been reached on a wording of the directive which provides the required flexibility for us to meet future electricity demand while embarking upon a prudent expansion of our nuclear generating capacity and making full use of indigenous coal supplies. We are satisfied that the final form of these directives will reflect the United Kingdom concern over the wise use of available fossil fuels and will not impede us in providing adequate electricity for our future needs.

The Commission's proposals on coal production in the Community are compatible with the Government's policy in relation to national resources. The proposals are aimed at maintaining coal production at about its present level with a free market price policy and with Community financing where necessary to achieve suitable rationalisation, for example in existing mines and to open up new productive capacities.

I turn now to the Commission's proposals for oil. These reflect the fact that, unlike the United Kingdom, the other member States of the Community must for many years remain heavily dependent on imported oil. They are thus more ready than perhaps we are to adopt objectives and procedures which offer some prospect of securing oil supplies on reasonable terms and to pin their hopes on common Community policies. The chapter, after spelling out some fairly obvious factors and a number of principles, proposes four pillars or objectives of Community oil supply. They are, a common approach to other oil consumers and to the producing countries; the development of safe sources of oil; arrangements for dealing with supply difficulties; a properly organised world market.

On the first of those little need be said. There are obvious limits to what the EEC can do, but it is clearly desirable to improve relations between oil producers, for example through the Euro-Arab dialogue, and with the other main consumers, such as the United States and Japan. It is, however, unlikely that the Community will for some time to come be able to speak with a single voice in international discussions as this section of the chapter suggests.

The second objective refers in the main to the scheme adopted in 1973, under which £10 million is being provided for each of the three years 1974–76 from the Community budget to support technical developments likely to improve the oil prospects in safe areas. The forthcoming Council meeting of Energy Ministers will be asked to approve the first allocation of funds under this scheme and to endorse in principle its extension. This is an area of Community policy which, if approached with realism, should offer modest prospects of improving supplies of oil mainly in the longer term, from which the United Kingdom should benefit.

The third objective, of dealing with oil supply difficulties, has largely been met by the establishment of the International Energy Programme—details of which were given to the House recently by my right hon. Friend—in which all EEC members except France are participating, together with the United States, Japan and other OECD members. The programme includes arrangements for dealing with reductions in oil supplies by the traditional producing countries. That is clearly the only sensible approach, as oil cut-backs and embargoes can be countered only by making arrangements which embrace all the main oil-consuming countries. We recognise, nevertheless, the need for the Community to have the best possible information on oil movements within the Community.

Mr. Albert Roberts (Normanton)

Will my hon. Friend tell the House what percentage of electricity on the Continent is produced from coal-fired power stations?

Mr. Eadie

I cannot answer that question without notice, but I assure my hon. Friend that the information will be forthcoming to him.

We recognise the need for member States to harmonise as far as practicable their measure of emergency demand restraint, and for some supervision of price movements in times of shortage. We can go along with much that the Commission proposes in this section of the oil chapter.

However, the section also proposes a regulation—at Annex III to the document —for common rules for imports and exports of oil and gas to and from third countries. This would be done by extending certain existing regulations providing for surveillance, through export-import licences, and subsequently for protective measures, the Commission making proposals on which the Council would decide by qualified majority.

We have made it clear that we are not disposed to accept this proposal. The regulation on which it is based was framed for different purposes—mainly protection against dumping—and it is, in our view, unnecessary. The IEP arrangements would, in emergencies, cover imports and exports of oil. In any case, other regulations already provide, or will provide, the information sought by the Commission.

The fourth pillar proposing an organised, properly functioning oil market in the Community calls for much detail on oil costs and prices for concentration. In this context, this means consultation and agreement between member States and the oil companies on oil supplies, investments, and trading practices. Much of this, if sensibly handled, is acceptable.

The chapter concludes with a plea for instruments to ensure compliance with the Treaty of Rome—for example, on the processes for competition, to extend the common commercial policy to oil and to avoid disparities in prices of oil products in member States.

The Government would not quarrel with much of the content of this chapter, though we doubt its relevance to the real problems of oil supply and prices now confronting the free world. These can be resolved only through concerted international efforts involving the USA, Japan, the developing countries and the oil producers.

The Commission's proposals for gas are aimed at doubling the share of this fuel in total energy consumption by 1985. This is proposed to be done by encouraging prospecting within the Community and by extending imports from third countries. The British Government anticipate using all the gas which is likely to become available from our sector of the North Sea.

I turn now to the directive on fuel stocks at power stations—R/127/74. This directive requires member States to maintain a minimum of 50 days' stocks at power stations.

When I appeared before the European Secondary Legislation Committee of the House on 18th July to give evidence on the implications of the draft directive for the United Kingdom, I pointed out that further clarification of the directive would be necessary, but the Government would not wish to see a directive which set stocking levels substantially above those planned currently by the boards. This remains our position.

Mr. Arthur Palmer (Bristol, North-East)

Does my hon. Friend agree that under British conditions, with a heavily interconnected grid system, there is not the same relevance as there would be on the continent to stocks at individual power stations?

Mr. Eadie

I must agree with my hon. Friend. That was one of the arguments that we advanced. My hon. Friend will recall that when I gave evidence before the Committee that was precisely what I said. My information is that that is the view that we shall put before the Commission, and we think that it will be accepted because it is a realistic and sensible approach.

Mr. Michael Clark Hutchison (Edinburgh, South)

Since when has any foreign country been able to tell us how many days' stocks we shall have or not have?

Mr. Eadie

The hon. Gentleman knows that I am well aware of the point that he makes. I am relating the facts of the situation to a decision taken by the House. If there is a dispute about that decision, I understand the hon. Gentleman's position and I can say that my right hon. Friend will provide an opportunity at a later date for those who wish to express their opinions but did not have a chance to do so previously.

The commercial need to maintain an adequate level of fuel stocks at power stations is accepted. The CEGB's present policy is to hold in stock fossil fuels equivalent to 50 days' average winter consumption on 1st October, and 50 days' average summer consumption on 1st April. The Scottish boards hold slightly lower levels of stocks. We consider the holding of those levels of stocks to be reasonable practice.

There has been extensive discussion of the draft among the national experts in Brussels, and there remain major unresolved objections by several member States to its original form. We have proposed amendments that would remove any doubt that our present commercial practice meets the terms of the directive. Other countries have also proposed extensive modifications. The differences may be such that there will be no agreed version before the Council on 17th December, and the House can rest assured that we shall accept any final draft only if it is satisfactory from the United Kingdom's point of view.

As the House is aware, a meeting of the Council of Ministers concerned with energy matters will take place on 17th December. The agenda has not yet been finalised, but we expect the directives and regulations to which I have referred to be considered.

Mr. Peter Rost (Derbyshire, South-East)

The hon. Gentleman has not yet referred to the Commission's recommendations on a rational utilisation of energy, which some of us regard as the most important recommendation in this document. Will the hon. Gentleman comment on that?

Mr. Eadie

I am sure that if I have a chance to catch the eye of the Chair later I may have an opportunity to comment on that but I want other hon. Members to have an opportunity to take part in the debate and I am about to conclude my remarks.

As I said, the House is aware that a meeting of the Council of Ministers concerned with energy matters will take place on 17th December. The agenda has not yet been finalised, but we expect the directives and regulations to which I have referred to be considered. It is also likely that the Council will consider a resolution based on the conclusions in R/1472/74, but the final text of this is not yet available. Our approach in the Council discussions will be along the lines that I have described.

10.39 p.m.

Mr. Douglas Jay (Battersea, North)

I beg to move, in line 1, to leave out from 'House' to the end of the Question and to add instead thereof: 'declines to approve Commission Documents R/1472/74 and R/127/74 as the former would, according to the Secretary of State for Energy, have "policy implications regarding United Kingdom sovereignty over its indigenous energy resources"; and because these Regulations would remove from this House the power to determine the future energy policy of the United Kingdom.' The Minister has apparently told us that he is not wholly in agreement with the proposals of the EEC Commission, but I do not think he entirely disclosed to the House all that is involved if the proposals go ahead.

I do not think anyone would dispute the judgment of the Scrutiny Committees of both this House and the House of Lords that the EEC proposals contained in these documents are of the very first importance for this country since they threaten future control by the United Kingdom not merely over its energy policy but over its indigenous coal and oil supplies.

We are here concerned with a Commission communication R/1472/74 entitled "Towards a new energy policy strategy for the European Community", with three draft legislative instruments consequential on that which would limit the use of natural gas in power stations —that is Annex I—restrict the use of oil fuels in power stations—that is Annex II —and control the import and export of hydrocarbons—that is Annex III. Finally there is a draft Council directive, R/127 /74 of 22nd February 1974, which would lay down minimum levels of fuel stocks to be held in power stations. The main proposal in the communication, to which my hon. Friend did not refer, is for an EEC agency which would have far-reaching control over Britain's coal and oil resources.

The EEC communication says: The requisite support towards achieving all these tasks could be assigned to a Community agency having a legal personality and financial autonomy. It would be under the control of the Commission. The Secretary of State, in his previous Explanatory Memorandum, commented on the EEC communication as follows: The document has policy implications regarding UK sovereignty over its indigenous energy resources. It is the Government's intention to express any necessary reservations. My hon. Friend did not quite tell us tonight that those documents had implications for the whole future of UK sovereignty over our indigenous oil resources.

The House of Lords Scrutiny Committee's report, which I presume I am in order in quoting, made this comment: The Sub-Committee believes the question of UK sovereignty over its indigenous resources to be one of paramount importance, not least when the immediate potential resources of coal, oil and natural gas in and around the UK exceed most, if not all, of those of the other member States of the EEC. The House will need to consider whether the UK should not without the fullest explicit and acceptable guarantees concede any of its indigenous resources to any sort of Community agency. I do not think we heard from my hon. Friend that that is the issue at stake in these instruments. Those are not my words. They are those of the Scrutiny Committee of the other place.

Even more than this is at stake, because the Commission is seeking to intervene not merely with this general proposal but with immediate legislative instruments. Under Annex I, a Council directive is proposed which would control the supply of natural gas to power stations, about which the Secretary of State says in the Explanatory Memorandum: It is not possible to say to what extent this proposal would affect the policy options most appropriate in UK circumstances. It ought to be possible to say this before this House assents to any proposals of this kind.

Under Annex II of the instrument the construction of new power stations using oil fuels and the conversion of existing power stations would be permissible only according to rules laid down by the Commission. The Secretary of State, very understandably, says of this: It is not possible to say whether it will affect the policy which would be appropriate to UK circumstances. Again, until it is possible to say that, I do not think Parliament should approve these instruments.

The draft Council regulations under Annex III go even further. They propose to bring crude oil and refined products, within the existing common rules for imports and exports, within the framework of the common commercial policy of the EEC. That means, in effect, handing over a large measure of control to the Commission of the use that we make of our oil resources in the future.

Mr. Ronald Bell (Beaconsfield)

Is it not a question not merely of the commercial policy of the Commission or the Community? Is it not set out in this document that the purpose of this agency and of these controls is to establish what is called "equality of sacrifice" among the different countries of the Community, which means that we, who have more of these fuels than anyone else, are supposed to share them out to the advantage, as it is put here, of "the more exposed"?

Mr. Jay

That is true. That is one purpose of the policy. But the form of it would be to remove control from the hands of the United Kingdom Parliament.

The Secretary of State says about the proposals: The implications of these for our own control of supplies of hydrocarbons would appear to be far-reaching and certainly require considerable further examination. That is a remarkable under-statement.

I come finally to the proposal in R/127/74 to regulate fuel stocks in power stations by EEC Council directive, although the Secretary of State himself says: … the best location of these stocks must be a matter for the judgment of the generating boards' management". We have not very much time tonight. I wish that we had more. But I thought it extraordinary that proposals of this kind should be made at all in the circumstances. I would have been happier if the Government had rejected them out of hand.

There is a case and there is a need for an internationally concerted oil policy to bring down oil prices, such as the United States Government are now proposing, which could perfectly well be managed by agreement through the OECD or some such international body. But that is not what is proposed here. What is proposed by the Commission is essentially to take the control of future British oil supplies progressively out of British hands, and to do it under the cover of all sorts of rather obscure documents which are hardly known to the public at all and which probably were not known to most right hon. and hon. Members until this short debate tonight.

We were told by the previous Government that EEC membership involved no erosion of essential national sovereignty. We have been constantly told that our economic future as a nation depends on the most energetic and intelligent use of our huge reserves of North Sea oil, which other EEC nations do not share. Norway is successfully reviving her economic fortunes by her use of similar oil reserves, and doing it out of her own resources. It is now suggested that we should approve binding legislative proposals which, on the evidence of the Secretary of State and the House of Lords Committee, would take a large measure of control of these resources out of the hands of the British Parliament and the British electorate.

Mr. John Pardoe (Cornwall, North)

The right hon. Gentleman has twice used a phrase to the effect that we are being asked "to approve". We are not being asked to approve. We are being asked "to take note". The two are very different, as he should know.

Mr. Jay

I hope that the hon. Member for Cornwall, North (Mr. Pardoe) is right. I was coming to that. I hope that we shall have assurances from the Government that what the hon. Gentleman says is true.

Coal is affected as well. I do not believe that the Labour movement fought for 50 years or more to bring our coal industry under the charge of the British Parliament and electorate in order immediately to hand it over to some unelected body based outside the country.

Therefore, I hope that this House will approve this amendment, unless the Secretary of State can assure us that he will not accept these proposals—and they are proposals, as I am sure the hon. Member for Cornwall, North recognises—in anything like this form, and that he will bring back any amended proposals for approval by this House before he accepts them in Brussels. I hope that the Minister will be able to accept that suggestion, which did not emerge entirely clearly from the speech of my hon. Friend the Under-Secretary, who never mentioned the proposed Commission Agency to take control of these policies at all.

I very much hope that before the conclusion of the debate we can have clear assurances on those two issues—first, that the Secretary of State is not accepting these proposals in this drastic and dangerous form and, second, that in so far as they are amended, as a result of his efforts in Brussels, he will bring them back to the House and will not accept them in Brussels until they have been debated and approved in the House.

10.51 p.m.

Mr. Patrick McNair-Wilson (New Forest)

The House knows of the views of the right hon. Member for Battersea, North (Mr. Jay) on the European Community. I must say that the remark of the hon. Member for Cornwall, North (Mr. Pardoe) that we are having a "take note" debate meets the point, in that these are documents of which the House should take the most careful note because they are of the greatest significance not only to us as a Parliament but to the nation as a whole. My only criticism is that we are having to sandwich into such a very short period a debate of such importance. Unfortunately, this will mean that many hon. Members will not have the opportunity of expressing their views on this subject.

The documents to which the Under-Secretary referred are extremely complex. They are far reaching, and in some respects they are rather confusing. Their presentation leaves a great deal to be desired. In the copy which I received from the Vote Office many pages were out of order and had to be re-numbered, and some were totally illegible. However, the fact remains that these documents, particularly the document dealing with the policy for energy, represent as near as possible the corporate views of the member countries towards producing a coherent energy policy for Europe.

All of us who have been debating this subject over the years know only too well the weaknesses in any energy forecasting system. Indeed, it would not be unfair to say that energy forecasting is more of an art than an exact science. Nevertheless, in these documents we find points which require very careful consideration. They also highlight what I believe must be not only the priorities for Europe but the priorities for this country as well.

The first of these priorities must surely be to arrive as soon as possible at an independence in energy supply for Europe and for Britain as a nation. The second must be to reduce as far as we can the import bill for imported oil which is having such a devastating effect on the economy of this country. Third, we must make certain that there is a proper use of those resources that exist. Indeed, we must recognise that we are talking about a four-fuel economy which, as far as past history is concerned, relies almost exclusively upon two fuels for its base load. Finally, in these priorities we need to make sure that there is a public awareness of the seriousness of the situation and the need for real action to be taken. It is that public awareness which, I fear, has been so sadly lacking in these past critical months since the Arab-Israeli war of October last year.

As the Under-Secretary pointed out, the documents deal with two principal areas, namely, long-term and medium-term policy and coal stocks. I thought that the hon. Gentleman did not make a sufficiently clear distinction in separating the strands as between the long-term policy set out in the document and the mediumterm prospect over the next 10 years up to 1985.

Stocks at power stations are a matter which has caused many of my hon. Friends much concern in recent months, and I must draw to the attention of the House the following words which appear in the accompanying memorandum prepared by the Secretary of State: Considerable stocks have been held in normal times at United Kingdom coal-fired sations, but stocks as high as those proposed in the draft Directive would not necessarily be considered appropriate on purely commrcial grounds. Although that may be so on commercial grounds, there are those of us who recall a need for stocks over the last few years based not merely on commercial considerations but upon the strategic security of supply necessary for the people of Britain to enjoy electric light and the rest. I should like the Minister to tell us whether he feels that the proposal made in the document is both logical and sensible and is one which the Government should be inclined to follow.

The Under-Secretary dealt at some length with the question of petroleum and natural gas to be used in power stations. He pointed out that this may conflict from time to time with Government policy, but there is surely no likelihood of oil-fired power stations being constructed at this time. Will the Minister assure me and my constituents that the GECB has no plans to go ahead with the Fawley B power station, which would be another oil-fired station on the South Coast?

The matter of the import and export of hydrocarbons, to which the hon. Gentleman referred, saying that the Government did not feel that it should be accepted, turns on another consideration, namely the situation which might obtain within the Community were there to be another embargo on oil supplies in the light of another conflict in the Middle East. Will the Minister tell us how he sees that recommendation affecting that situation?

As I have said, the recommendations themselves are divided into long and medium term. As for the long term, we have the interesting though surprising statement that energy supply is to be based largely on two principal fuels. We are to have nuclear energy responsible for about 50 per cent., gas for about 30 per cent., and coal for 20 per cent. What part will the Government play in the nuclear programme? Where do they see Britain's place in the nuclear programme which takes account of these very large figures?

Is it true that the British nuclear programme at present is still almost in the experimental stage? Having spent years exploring the possibilities of gas-cooled reactors, then having rejected that concept and gone from Magnox to AGR to look at light water, finally ending up with the heavy water concept, we are still fiddling about with something which, if it had had really clear decisions from previous Governments and this Government——

The Secretary of State for Energy (Mr. Eric Varley)

Oh.

Mr. McNair-Wilson

Yes, the Secretary of State knows perfectly well that this matter has hung about a great deal too long, but that does not mean that something should not be done about it now. The announcement about nuclear reactors still does not take the matter out of the realm of what my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) described as "pilot plant". If that is so, will the Minister say when the Government intend to put their whole support behind the nuclear programme in this country? When will they announce plans for a heavy water plant and when will they move away from this timid approach, or is it that the Government, for whatever reasons, feel that they have to give more consideration to the National Union of Mineworkers than to anybody else?

There is also the question about the reliance upon gas. There are obvious advantages in this area. It is pollutionfree and easy to control and ration. But what do the Government think about the long-term plans for coal? That could have very far-reaching effects on the mining industry, which is obviously in a peculiar position compared with the coal industries in Europe. What do the Government believe, over this long term of 30 years, should be the rôle for the coal industry in Britain? Perhaps the medium term is more easy to forecast accurately, though there are uncertainties in a 10-year time scale.

There are certain important considerations. The first is that we should get a clear indication of the size of the economic wealth of the country, because this will determine the amount of energy that is required. The document seems to suggest a growth figure across the 10-year period of 4½ per cent. I should like to know the Government's view on that and whether they accept that growth figure as being sensible and attainable.

Mr. Ronald Bell

Is not the point of this debate that it will not matter what the Government think of the long-term energy requirements of this country because that will all go over to Brussels? We need not bother with what the Government think.

Mr. McNair-Wilson

I recognise that my hon. and learned Friend has a somewhat jaundiced view of what goes on in Brussels, but I regard these figures as being of great significance for the Community and for Britain as a member of that Community.

Mr. Norman Buchan (Renfrewshire, West)

The hon. Member has been dealing with long-term questions, but can he deal with a short-term one? Since he started by saying that we are merely taking note, does he intend to end his speech by advising us to accept the amendment?

Mr. McNair-Wilson

The hon. Member must wait one moment for that because there are matters contained in the document which are significant and which simply cannot and must not be brushed aside. I realise that the hon. Member has already signed the motion in the name of his right hon. Friend and his position is therefore clear. The arguments require to be considered, however, in a logical manner.

The objectives for 1985—the medium-term objectives—mean that there should be a reduction of 25 per cent. in high-risk energy supply, an estimated reduction in consumption of 10 per cent., a limit on oil to 40 per cent. of the consumption, the maintenance of coal production at 250 million tonnes and a substantial jump, even in a short period, in the generation of nuclear energy. Tucked away on pages 61 and 62 is a matter which was referred to by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost), namely the objectives for the rational utilisation of energy policy. Here we find many many areas that require urgent consideration—savings in the domestic area, in transport, and in industry, including the energy industries themselves.

The Government must produce answers. When shall we have a statement on energy conservation from them? We have been waiting patiently for it, and there is no sign of it yet. The people are aware that there are serious energy problems. We have seen over the past 12 months the shattering of many assumptions, including the assumption that energy was plentiful and infinite. We live on a globe that is finite, and its resources are finite, too. We must make sure that those resources are properly used. We must create in people's minds an awareness of the situation and of the fact that we shall never return to the happy days of cheap energy which can be squandered at people's whim. We must realise that the old ways of doing things have changed dramatically in those 12 months.

In this situation it is essential that the Government give a lead and play their part. The document, complex and perhaps even confused, but certainly far reaching, is a faltering step in the right direction. It is not in itself a complete answer. What we want to know from the Government is their reaction to it and what part they intend to play in bringing it to fruition.

Several Hon. Members rose——

Mr. Deputy Speaker (Sir Myer Galpern)

Order. I remind hon. Members that the debate must conclude by 11.45 p.m. The two winding-up speeches will begin at about 11.28 p.m. Hon. Members do not require to be senior wranglers to make a rough calculation of how much time is left for debate.

11.7 p.m.

Mr. Nigel Spearing (Newham, South)

I am sorry that the hon. Member for New Forest (Mr. McNair-Wilson) spent such a long time dealing with the necessary points of energy policy as a whole, and raised matters that do not directly arise from the regulations. If my remarks are therefore less measured but rather more punchy, I hope that the House will forgive me, in view of what you have just said, Mr. Deputy Speaker.

Energy policy is not necessarily the same to everyone. We must recognise that in the document it is essentially an energy price policy. The two are different. Clearly, under the document there is to be competition not only between sources and countries but between fuels, in order to meet the dictates not only of the Common Market but of the market in energy as such. Would it be possible, for instance, for any United Kingdom Government dealing with a coherent fuel policy for this country to put on an oil tax, as was done some time ago to cushion the coal industry? Thank heavens that happened when it did! Without it we should have less of a coal industry than we have now.

Secondly there is the question of tariffs. The hon. Member for New Forest asked, "What about energy conservation?" Differential tariffs for different sorts of use might be a good way to achieve it. But if energy prices, including electricity prices, are to be related to the economic cost of production, as the regulations hint, we could not even do that. I think that at present the Central Electricity Generating Board sets the tariffs for different users in relation to the cost of transmission and so on, because the cost of generation is less than the cost of transmission. Would it be free still to do so?

Mr. Rost rose——

Mr. Spearing

Time does not permit me to give way.

Should we be able to balance the national energy account as a whole in financial terms in the way in which we have done it before? I rather doubt it.

While we are renegotiating the treaty, it would be wrong for any Minister to go to Brussels on 17th December and do other than to say, "We reserve our position on these regulations", despite the fact that the document says that they must be decided by 31st December. I know that the hon. Member for Cornwall, North (Mr. Pardoe) is emphasising that even if we take note of the documents—I hope that we do not; I hope that the motion will be withdrawn if the amendment is not accepted—that does not imply acceptance. Unfortunately, because the House has discused this motion—and not because we have "taken note" of it—it may well be that people elsewhere will assume an implied acceptance. I hope that when my right hon. Friend gets to Brussels he will make it clear that the feeling of the House is totally against these documents.

I turn to the document itself—namely, R/1472. It is said that 50 per cent. of total energy requirements could be covered by atomic energy. There is nothing to suggest that that is a practicality. I understand that if production of an atomic power station is to start in five or seven years it is necessary to begin the project now. I do not think that that is realistic.

Coal is referred to in page 19. It is said that coal will be a stop-gap source of energy and that we shall have limited dependence on it for the next 30 years. It is said that there will then be diminishing support for the coal industry. Is that something that we can accept?

The oil-producing countries are referred to in page 26. It is implied that the EEC needs a concerted foreign policy to deal with the supplying countries. That has important implications which the House should not accept without comment.

The price of petroleum products is dealt with in page 34 in the usual bureaucratic way. It is said that the importance of price structures is not as great as is the difference between the levels of the prices. The document reads: For this reason the Commission believes that the objective to be pursued in this connection is a greater degree of uniformity (which does not imply standard prices) in these price levels rather than in the price structures. This objective can only be attained by successive stages and to a reasonable timetable. Does that mean that when the Chancellor announces petrol price increases he will have to pay attention to Community policy? The only interpretation of that quotation is that in future my right hon. Friend must take that course.

I conclude on a point of procedure. The former Procedure Committee has suggested that we take note or at least debate these documents, and others that I understand are to follow, in the form of a take-note debate. That poses severe difficulties. I hope that the present Procedure Committee will offer a superior recommendation.

The present recommendation means that we have only an hour and a half to debate matters which would normally be the content of two or three White Papers. I see that my right hon. Friend the Secretary of State for Energy nods his head. I am glad that he does. If we had three White Papers each would be published at least three weeks before a whole day's debate in the House. I understand that the Select Committee's report which my right hon. Friend has quoted was not in the Vote Office before Friday. I happen to know that the original issue with the accompanying memoranda did not include the main document before us today. I checked and it was not in the Library on Monday. It did not reach the Vote Office until 4.30 to 5.0 p.m. yesterday afternoon. That is the document which my right hon. Friend quotes.

We have had enough difficulty in dealing with EEC legislation and I think that the points that I have brought to the attention of the House indicate that we can do no other than express our disapproval of these document and ask my right hon. Friend to express that opinion in no uncertain terms in Brussels on 17th December.

11.15 p.m.

Mr. John Pardoe (Cornwall, North)

The hon. Member for Newham, South (Mr. Spearing) made selective use of the document we are debating. He quoted from page 19 some words about coal playing a stop-gap role in electricity production. He said nothing of the following sentence which talks of the production of coal-fired power stations being increased by 30 per cent. to 50 per cent.

If the hon. Gentleman looks at page 23 he will see set out there a programme for the expansion of coal production which goes far beyond anything the Government have suggested this country should have. There is a manpower policy which encourages recruitment and training of labour of high calibre through attractive remuneration and secure career prospects Is not that what Labour Members want? There is provision for financial intervention, should the need arise, to guarantee the competitiveness of consumers using Community coal under long-term contracts. We have not got those kinds of guarantees from this Government. We can look to the Community for them. There is administrative and financial action to promote the construction of coal-fired power staions It is all there, and it is a magnificent programme for the extra use of coal.

Mr. Spearing

Does the hon. Gentleman not agree that the programme to which he is referring runs until 1985 but that there are other matters dealing with the long term, to the end of the century? Does he further agree that the reason for the appearance of this document is the present energy difficulty and that the EEC, up to this time, was doing the opposite with coal mines and did not have a very good social policy?

Mr. Pardoe

If I understand the question aright, that is exactly the opposite of the truth. The words "stop-gap" were in reference to the short and medium term. The proposals I read out referred to the long term and are of far more fundamental importance.

As I have pointed out, we are not being asked to approve the document; we are being asked to take note of it. In any case, the proposals are not in any sufficiently final stage for us to approve them tonight or in the near future. It is an interesting and worthwhile document. Of course it raises the issue of sovereignty, and that is inevitable in any discussion of Community proposals. From the speech of the right hon. Member for Battersea, North (Mr. Jay) one might never have thought that we in the Western economies now face the prospect of total economic collapse, very largely as a result of the energy problem.

The situation is a result of what took place last October and what has happened since. We are in the most dangerous phase I can remember. We are in the phase where a miscalculation, by the West or the producer countries in the Middle East, could leave us with the stark choice between total economic collapse in the West or war in the Middle East.

That is why it is so necessary to have a common energy policy. There never was a time when we needed such a policy more. Such a policy necessitates the pooling of sovereignty and such pooling is a matter of give and take. Page 2 of the document spells out clearly what the give and take is. It is no good hon. Members believing that this country has got everything stacked against it in its negotiations with the Common Market.

It says that different countries face the problem in different ways because of the impact of the previous balance of payments situation, before the oil crisis. We were among those worst placed to face the oil crisis through our balance of payments situation before the crisis arose. But there are many other things in which we shall clearly have the advantage over our Common Market partners.

We ought to look upon our North Sea oil discoveries as a means of giving ourselves a better bargaining hand rather than thinking that our partners will thieve it from us. The idea that we can solve our energy problems on our own is based on a combination of faded nationalism, prejudiced anti-Europeanism, and a hopelessly optimistic view of the importance of the saving grace of North Sea oil.

Mr. Jay

All that is just verbiage. If a common energy policy means handing over control of our North Sea oil to other authorities to use it for the benefit of other countries, is that in the interests of the United Kingdom?

Mr. Pardoe

I will come to that in a moment. There is a clear answer to that, as the right hon. Gentleman knows, but he will use any stick to beat a dog.

Our North Sea oil supplies are hideously vulnerable to attack, and they will always remain so. On the day when we have had a statement from the Secretary of State for Defence, the right hon. Gentleman cannot ignore that fact, because the Secretary of State did not ignore it. There is desperate need to get our energy policies together. But the right hon. Gentleman, as always, suggests that some other international organisation should do that. He talks about the OECD and says that we do not need the EEC to do it. A common energy policy by the OECD countries would require considerable pooling of sovereignty and surrender of our rights if it were to have any effect on the producer countries.

The answer to the problem is contained in a speech made by the right hon. Gentleman's erstwhile right hon. Friend, although I doubt whether the word "friendship" can be applied now. Mr. Commissioner George Thomson is reported in the Scotsman of 16th November, as follows: It is absolutely clear from the Treaty that oil and gas reserves belong entirely to the country concerned, and that the country is completely free to derive the economic benefits by taxation or by nationalisation. The right hon. Member for Battersea, North has again raised a hare which will not run. We shall be able to use our energy reserves in the interests of this country, but if we want to protect the future of our economy along with the other Western nations we shall have to take common action, and we might as well admit that the only international organ that is likely to be able to make common action effective, and likely to be able to get it together, is the EEC.

11.26 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

The key sentence in the document appears on page 32. I make no apology for quoting it again. It reads as follows: The requisite support towards achieving all these tasks could be asigned to a Community agency having a legal personality and financial autonomy". The implications of that sentence for our future energy policy are serious.

The document goes on say that the agency would be under the control of the Commission, which means that we shall be in the same position with energy as we are with agriculture. Every time we wish to act on the control or development of our indigenous power resources, my right hon. Friend the Secretary of State will be sent to Brussels to seek permission, just as my right hon. Friend the Minister of Agriculture, Fisheries and Food has to negotiate in Brussels on beef, chickens and Heaven knows what else.

The document assume that the EEC as a whole can work towards self-sufficiency in power resources over the next 10 years, but that is a nonsense. It is abundantly clear from the figures that we shall be dependent, in the Community, on imports of oil for many years yet. My right hon. Friend the Secretary of State is right to say in his observations that the oil problem as it has developed in the last nine months transcends the confines of any single country or continent and, therefore, demands action beyond the framework of the Community. I believe that that is right.

I believe that my right hon. Friend is right to suggest that, to deal with the oil problem—which is serious, certainly financially—requires international negotiations on a wide scale, involving the major industrial countries and not merely the EEC countries, and also involving detailed consultations with the developing countries.

I believe that this House would make a very serious mistake if it gave the slightest indication that it was prepared to accept the concept, enshrined in the documents of a European Community agency which, in effect, would have control over our energy and power resources, with all the consequences, not only for our own physical resources but also for the implications in taxation and the management of our economy. I hope that my right hon. Friend the Secretary of State will accept the amendment.

Several Hon. Members rose——

Mr. Deputy Speaker

Mr. Normanton.

Mr. John Davies (Knutsford)

On a point of order, Mr. Deputy Speaker. Is it in order, in a debate which will have been far too short for such a subject, that there will have been five speakers from the Labour benches but, as far as I know, apart from the Conservative Front Bench speakers, only a single back-bench speech from the Opposition benches? There must be something wrong.

Mr. J. Enoch Powell (Down, South)

Further to that point of order, Mr. Deputy Speaker. May I inquire whether, in this debate, you have the power which, I understand, the Chair has in other, similar one-and-a-half hour debates, to come to the conclusion that the matter has not been sufficiently debated and to decide that it should be adjourned?

Mr. Deputy Speaker (Mr. George Thomas)

I have the power, but I am not saying that I am coming to that decision. With regard to the point raised by the right hon. Member for Knutsford (Mr. Davies), as the House is aware, I have just come to the Chair, and whoever is in the Chair tries to have a balanced debate. There is an amendment, moved by the right hon. Member for Battersea, North (Mr. Jay), and no doubt that has disturbed the balance of the speeches.

11.28 p.m.

Mr. Tom Normanton (Cheadle)

It falls to my lot at this stage of our extremely brief debate to sum up for the Opposition. I need not remind the House that there has been a total lack of time for hon. Members on both sides of the House to deal adequately with the whole range of extremely important points which arise on these documents. But three points in particular have been highlighted.

The first is the concern about the inadequacy of energy policies promoted and sought for in the United Kingdom and Europe over a long period. The second is the sluggishness of all Governments, both here and on the Continent, in responding to the realities of the energy situation. This point was well underlined by the hon. Member for Cornwall, North (Mr. Pardoe) when he spoke of our vulnerability. Europe's future, indeed her very existence, is literally over a barrel, and the barrel is, metaphorically and literally, empty of energy resources with which to maintain a viable community in this country. Let us not forget that no energy is as costly as that which is not available when it is required.

The third concern is the panic reaction of all Governments. They have tinkered about with solutions. They have thought and acted only in the short term. They have adopted measures which one can only describe as expediencies. Instead of concentrating also on long-term replacement investment, as they should have done, their policy will keep the pawnbrokers in business and the cupboards bare rather than promote economic growth and solvency. That applies equally to Britain and to every other member State of the Community.

The proposals in Document No. R/ 127/74 on fuel stocks at primary power stations are realistic when considered in the round. It is not inappropriate for me as a member of the delegation from this House to the European Parliament and a member of the European Parliament's Energy Research and Technology Committee to advise the House—there is no record of it in the records of the House —that we who have played our modest part in the European Parliament firmly believe that 50 days is a realistic period and that it should be increased progressively as the years go by.

Stocking is a subject that is not adequately dealt with in the document. I remind the House that stocking relates to those power stations where total output is 100 megawatts or more. I ask the Minister to consider whether by adopting a similar kind of stocking policy for generating stations of less than 100 megawatts, recommending, if not persuading or forcing through that policy, he would make a significant contribution to reinforcing the viability of our energy resources in periods of crisis.

The arguments of the right hon. Member for Battersea, North (Mr. Jay) were rolled out day and night during the course of the great debate, and this is not the occasion for a repetition of the arguments that were then unfolded at such length during that debate when the issue was comprehensively and finally decided by the overwhelming will of the House. If the right hon. Member has so little faith in the tenacity, courage, conviction and negotiating capability of Britain's delegates in the interests of the Community, he belongs to a very small group. The House has the courage to have the conviction that we have a role to play, and play it we shall.

I turn to Document No. R/1472/74. We have to recognise that the House has repeatedly called on one Government after another to produce proposals for an energy policy. For the first time, we now have an honest attempt to produce a policy for this country and for all the member States of the European Economic Community. The keynote of the policy is cooperation. Unless there is co-operation among all the elements involved in that energy policy, there can be no effective solution to the problem of providing and establishing a permanently strong indigenous system for Britain and for Europe as a whole.

The Minister should spell out his interpretation of what the policy is meant to achieve, and I hope that he will make it clear that he recognises that in energy as in monetary policy salvation for Britain as for Europe lies in co-operation.

It cannot and must not continue to be a case of cut or be cut and of conflict between the various member States, especially when the situation is grave. The ultimate objective for an energy policy, whether it be for Britain or for Europe, must be to give greater independence from interruption of the existence and supply of all sources of energy. That is what these documents are about.

I assure the Minister that he can count upon the support of most of my right hon. and hon. Friends—I should like to think of all of them—both in resisting the amendment and in taking note of these documents.

Mr. Deputy Speaker

Before calling on the Minister to reply, I should tell the House that I am in possession of greater knowledge now than when I answered the right hon. Member for Down, South (Mr. Powell). I do not have the power of discretion applying to this motion.

11.36 p.m.

The Secretary of State for Energy (Mr. Eric G. Varley)

I very much welcome the opportunity to debate these documents. Although I realise that this has been a short debate, I am tempted to debate and answer some of the points made by the hon. Member for New Forest (Mr. McNair-Wilson), who led for the Opposition, because he embarked upon the long-term energy strategy of Britain rather than the documents before the House.

The hon. Gentleman talked about strategic supplies of coal stocks, energy conservation, British nuclear power, and matters such as that. I do not think that such matters are relevant to the debate. However, I point out to the hon. Gentleman that we have not got the stocks that we would like—at least the coal stocks—because of the confrontation policies pursued by the Conservative Government earlier in the year. If it were not for that, we would have been much better supplied with coal at our power stations. The result of that industrial dispute earlier in the year, which was totally unnecessary, meant that essential development and maintenance work did not go ahead. I sincerely hope that this time next winter we shall be much better placed than we are now.

The hon. Gentleman suggested that we had been very slow in coming to a decision on nuclear power. I must remind him that in three and a half years the Conservative Government fudged or did not take a decision. They continually put it off. However, I want to be fair to some right hon. Gentlemen opposite who had responsibility—for example the right hon. Member for Knutsford (Mr. Davies)—who recall the difficult decision that the then Government had to take. But, within five months, the Labour Government were able to reach and take the decision to go forward backing British technology in the form of the steam-generating, heavy-water reactor.

I hope to be in a position quickly to announce to the House energy conservation measures. Again, we had no energy conservation measures from the previous Government if we exclude cleaning our teeth in the dark and shaving by candle light with an electric razor.

The documents that we have been discussing tonight are some of the most important documents that have yet been produced by the Commission. The Scrutiny Committee was right to draw the attention of the House to the valuable opportunities and some of the drawbacks for British energy policy.

My right hon and hon. Friends will know that I have to go to the Council of Energy Ministers on 17th December. I shall find this debate most useful and shall have in mind the comments made by my right hon. and hon. Friends. I must tell the House that we do not yet have a final agenda for that Council meeting, but almost certainly there will be a resolution based on the conclusions of document R/1472/74. There may possibly be separate resolutions on coal policy, oil policy, gas policy, electricity and the rational use of energy. However, these discussions have yet to come.

The amendment moved by my right hon. Friend the Member for Battersea, North (Mr. Jay) quotes the Explanatory Memorandum which was sent to the House by me. Under the procedures of the House, this Explanatory Memorandum submitted the formal Commission documents that were available. It is clear that the document has policy implications. There is no doubt about that, and we do not deny it. I said so in the Explanatory Memorandum, and I shall say so when I go to Brussels.

Already, in Brussels we have sought, with some success, to have the proposals modified, but there are still aspects of the document that we do not like, and I frankly say so to the House. We do not like some of the proposals, and I shall not be prepared to accept them at the Council of Ministers' meeting on 17th December.

Some hon. Members have referred to the effect that the Commission's proposals will have on our North Sea oil reserves. I am in full agreement with those who say that it is essential that the United Kingdom should continue to exercise full rights and control over these resources, because when it comes to such vital matters as exploration, depletion, disposal and taxation policies it is right that we should decide these in this House. I accept that these matters must remain in the hands of the British Government.

The proposals that we have been discussing are concerned mainly with ensuring effective consultation between member States and the co-ordination of national energy policies. I, for my part, while respecting the provisions of the treaty, will continue to resist any proposals by the Commission that could interfere with our ability to carry through our Continental Shelf policies in accordance with the overall energy and fiscal objectives that have been laid down by the House.

There has been comment on the suggestion in Document R/1472/74 that the objectives proposed could be assigned to the Commission's energy agency—this was referred to by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley)— and that it could take legal and binding decisions and have financial autonomy over the United Kingdom Government. I must tell my hon. Friend that the Government see no need for such an agency, and we shall say so quite frankly. We see the EEC energy policy at most as the harmonisation of national policies, with control exercised by national Governments.

I think that the Commission's proposals on coal production present us with problems, but, as the hon. Member for Cornwall, North (Mr. Pardoe) said, not overwhelming ones.

I hope that I have dealt with some of the matters raised by my right hon. and hon. Friends. We shall certainly take into account what has been said tonight in deciding our final attitude to these matters and in the discussions that I shall have at the Council of Ministers' meeting on 17th December.

Mr. Jay

My right hon. Friend has made clear that he does not accept the proposals as now put forward by the EEC Commission. As we are anxious to strengthen his hand in his forthcoming adventures on the Continent, may I ask him to assure us that in so far as there are amended or modified proposals he will not accept them unless and until they have been debated in the House?

Mr. Varley

I can agree with my right hon. Friend—in fact, I have already said —that we do not accept some of the implications of this document. We have some reservations on the stock-piling and power station policies. We do not accept some of the implications of the North Sea oil policy.

I give the assurance that the House, in taking note of these documents—

It being one and a half hours after the commencement of proceedings on the motion, the debate stood adjourned.

Debate to be resumed tomorrow.