HUNTERSTON (DEVELOPMENT) (Hansard, 9 July 1974)

§ The Secretary of State for Scotland (Mr. William Ross)
I begin by apologising for the length of the statement I wish to make.
With permission, I would like to inform the House of my proposals for Hunterston. A fuller statement of the strategy the Government will adopt, together with the conclusions I have reached on the planning applications now before me, has been placed in the Library.
My principal concern is to ensure that the limited area of flat land at Hunterston is used by industries which both require access to exceptionally deep water and will make a substantial contribution to the Scottish economy. Nothing less would justify the serious environmental sacrifice which is inevitably involved. Three major industrial uses have so far emerged as candidates for the use of the site: steel, oil refineries and gravity platform construction for North Sea oil development.
I deal first with steel. Present plans envisage the expansion of the steel industry in Scotland by some 25 per cent. over the next 10 years. I am glad to tell the House that the British Steel Corporation has now decided to build a direct reduction plant at Hunterston, the first of its kind in Britain, which will produce 400,000 tonnes a year of iron feed for the electric are furnaces in Scotland and elsewhere.

§ Mr. Teddy Taylor
When?

§ Mr. Ross
The cost of this will be around £15 million to £20 million. In addition, work has started on the construction of the iron ore terminal at Hunterston, and together these two projects amount to a commitment of £55 million to £60 million in steel industry development on the peninsula. Hunterston is also one of the sites in the West of Scotland under consideration for the corporation's new electric are plant announced in the White Paper on the Ten Year Development Strategy for Steel, plans for which are nearing completion. Together with the developments at Ravenscraig, these new projects will give Scotland a total steelmaking capacity in modern plant of 4½ million tonnes.
1145 I consider it essential that sufficient land remains available at Hunterston for longer-term steel development additional to these projects. The continued growth of this industry is essential to a large part of Scotland's industrial economy, and Hunterston is without doubt one of the best sites available for future steel development in North-West Europe. Not to safeguard sufficient space for this purpose would be a serious failure to accept our responsibility for the future.
The next category of industry is oil refineries. Following a public inquiry in 1970 my predecessor decided against zoning land for a refinery at Hunterston on the application then submitted by Chevron. I now have before me revised applications by both Chevron and ORSI. My predecessor's memorandum of 30th May last year indicated that although a refinery on its own was unlikely to be acceptable, the case for one could be considered if it was associated with other developments which would bring substantial benefit to the Scottish economy.
In particular it was suggested that a refinery might be associated with steel development if refinery gas were supplied on attractive terms to meet the requirements of a direct reduction plant. However, the British Steel Corporation has now told me that it no longer sees any significant advantage in this form of energy supply as compared with the natural gas which will shortly be available from the North Sea. Furthermore, I am now advised that future steel developments, particularly an integrated basic oxygen plant and the finishing processes that might be associated with it, could need some of the land which is now the subject of the refinery applications.
I have also had to pay special attention to the conclusions now reached by the Nuclear Safety Advisory Committee after a very lengthy and thorough study. The committee's report suggests that provided certain stringent safeguards on siting, design, construction and operation of the installations were strictly observed a refinery would not be incompatible with requirements to safeguard the two nuclear power stations already on the peninsula. My concern is first for life and property in the area, including any risk to a major source of electric power supply to the Scottish economy: and. secondly, to permit no development at 1146 Hunterston which could subsequently constitute an unduly inhibiting effect upon further development of land for which the site is specially suited. I have therefore concluded that I should be justified in permitting refinery development, with all the safeguarding requirements that this would entail, only if there were over-riding reasons for the Hunterston site being chosen for such development. I am not persuaded that such reasons exist.
I therefore have it in mind to reject both applications, but I do so with regret, and in full recognition of the scale of the developments themselves, the substantial projects associated with them and of their potential for future development in the economy.
Finally, I come to the question of oil platform sites. The rapid growth in the volume of proven North Sea oil reserves and the urgent need for the United Kingdom to reduce her dependence upon imported supplies have created a pressing demand for gravity production platforms for this new industry. Substantial benefits would be derived both for Scottish industry and employment and for the United Kingdom balance of payments from suitable construction sites. I have already a planning application for the construction of these platforms at Hunterston and other projects are expected to follow.
This type of development is not incompatible with the long-term use of land for the steel industry and recent studies indicate that Hunterston could well provide good sites for gravity platform construction. Accordingly, I have decided that land should be available for this purpose at Hunterston, and further work is in hand to settle the detailed siting and appropriate scale of development.
Those who get orders for platform construction must do so on their merits and not simply because they have access to a site. I intend therefore to ensure that the Hunterston sites will be available only to firms who obtain orders, and I propose to enter into consultations with Ayr County Council and with the Hunterston Development Company to discuss these matters.
I have reached these conclusions on the most careful examination of all the evidence now before me. I am to meet Ayr County Council on 26th July to receive 1147 its views and to consider action before further planning decisions are taken. My Department is writing to Chevron and ORSI today informing them of my conclusions and inviting their comments prior to my finally deciding their applications.

§ Mr. Buchanan-Smith
I welcome the Secretary of State's statement, and particularly his confirmation that Hunterston is to be used for the development of the steel industry. I believe that that is a sensible use of the very special assets which we have at Hunterston and which have important implications for the whole of the Scottish steel industry.
I have some questions to put to the right hon. Gentleman. First, will he confirm that the total Scottish capacity—I believe that it is a total of 4½ million tonnes—is no greater than that which was proposed by his predecessor in the Conservative Government in December 1972? Therefore, the Secretary of State is going no further with the capacity of the Scottish industry than the previous Government in December 1972.
Secondly, I find it significant that no decision has yet been taken on the new electric are plant and that no date has been given for the start of the direct reduction plant. Hunterston is an asset which is far too important for Scotland as a whole. We cannot afford to allow the site to be sterilised any longer because of delays on the part of the British Steel Corporation. Therefore, I ask the right hon. Gentleman to give us an undertaking that he will inform us of when the work will start.
Thirdly, what is the position of the ore pelletisation plant which has been proposed by private enterprise interests, involving private funds, and which makes good sense in terms of strengthening the Scottish steel industry as a whole?
Has the right hon. Gentleman come to any decision on Stewarton? That is particularly important because of the known lack of capacity in Scotland to cope with the refining of North Sea oil when it comes ashore. Will the right hon. Gentleman give an assurance that we shall know without delay the Government's whole refinery policy? It is a matter which has very important planning implications throughout the whole of Scotland.

§ Mr. Ross
I thank the hon. Gentleman for what he said about the importance of Hunterston. The location of deep water at Hunterston and various other matters saw the conception of steel development in the area.
We are, of course, making no change in capacity. What we are doing—and this is the first decision that has been taken—is in relation to certain probables and possibles that were in the White Paper of the previous administration. One thing has now been decided—namely, the decision to go ahead. That is the first step that can be taken and I think that it should be welcomed.
I now deal with the ore pelletisation plant. I received the private enterprise application yesterday from Ayr County Council. It is, of course, too early to say exactly what will happen. I have accepted the recommendation of the Reporter that Bloak Moss should not be specially retained for refinery or for petrochemical installations. I have, however, decided that 1,400 acres should be rezoned for clean industrial purposes.

§ Mr. Buchanan-Smith
Will the right hon. Gentleman say when the work will start on the steel plant? That is what matters to people in Scotland.

§ Mr. Ross
I cannot say when it will start. It could not start until a decision had been taken. That decision has now been taken.

§ Mr. Lambie
When we consider that the whole saga of the Hunterston development started in 1969 and that Ayr County Council's original proposals included detailed planning application for an oil terminal, an oil refinery petro-chemical complex, an iron ore and general users' terminal and green-field integrated steel works involving 20,00 jobs, this is surely a mouse of a statement—namely, an iron ore terminal, many promises and nothing else.
What guarantees has my right hon. Friend received from Dr. Finniston, chairman of the British Steel Corporation, of a starting date for the pelletisation plant and the electric are furnaces? Is this not an attempt by the BSC to pre-empt the whole of the Hunterston site until the year 2000? What guarantees will the Government give in their oil refining 1149 policy that the projected production of North Sea oil by the year 1980 of 150 million tons will be refined in Scotland at Hunterston for the benefit of the people of Scotland and that it will not be refined as some Opposition hon. Members want, in England and in Europe?

§ Mr. Ross
My hon. Friend must appreciate that there was an inquiry into Hunterston. The Hunterston business started before 1969 and the inquiry was one of the longest ever held. The decision about the Chevron refinery was given by my predecessor. I believe there were two statements, one in December 1970 and the other in February 1971. Many of the points he has raised were dealt with then.

§ Mr. Lambie
What is my right hon. Friend going to do? Never mind the past.

§ Mr. Ross
My hon. Friend has had plenty to say about this over a long time.

§ Mr. Lambie
Five years.

§ Mr. Ross
I can appreciate much of his concern. Let me tell him this: the unique facilities of Hunterston were always foreseen, specifically and especially, as a safeguard for steel production in Scotland. It would be quite wrong for anyone, bearing the importance of that in mind, so to use that limited area of land to prevent such full development. My hon. Friend must appreciate that we have now made a start. There is the iron ore terminal and we now have the British Steel Corporation actually deciding to produce there.

§ Mr. Lambie
Nonsense.

§ Mr. Teddy Taylor
When?

§ Mr. Ross
The hon. Member for Glasgow, Cathcart (Mr. Taylor) was a member of the previous administration. He must appreciate that this or any other decision could have been taken a long time ago. For reasons best known to themselves, the last administration did not take any decision. Let him not ask me "Why?" and "When?" and all the rest. The fact is that we have made a start at Hunterston and we are not prepared to see the sterilisation of the land on the lines my hon. Friend suggests. I have specifically mentioned this question of 1150 the platform siting, which is of considerable importance at the moment.

§ Mr. Corrie
Is the right hon. Gentleman aware that I probably stand alone in the House today in congratulating him, representing, as I do, the people of the area in question? Does he appreciate that this has been a sore point and a tremendous talking point for the last few months? Is he further aware that I am pleased to hear that he has come out against petro-chemicals on that site, particularly in view of the safety angle? I am certain that people in the area will accept that steel will now go there because the terminal is already there. I sincerely hope that all the environmental problems which arise with this industry will be taken care of. The right hon. Gentleman has already given me a promise on that and I am sure he will hold to it. The ore terminal has made a tremendous mess of the area—

§ Mr. Speaker
Order. The hon. Member must put his remarks in an interrogative form.

§ Mr. Corrie
Will the Secretary of State assure us that the environment will be looked after?

§ Mr. Ross
We are doing this at present. Ayr County Council has been passing to me the comments of the local population about the developments presently taking place there. I am sure that that will continue. The hon. Gentleman mentioned safety. This is one of the most important things. People cannot shrug it off. There are already two nuclear power stations on this peninsula. We have just had a report from the Nuclear Safety Advisory Committee. I can tell the House that this is one of the things that I had to weigh most carefully. I had to take into account the power presently available and that which will be available from those stations in future, and the risk to other industries. There are considerations which apply to industries not necessarily tied to this site.

§ Mr. Sillars
Is my right hon. Friend aware that there will be some concern in many quarters of Scotland about the decision to sterilise part of the land at Hunterston for the British Steel 1151 Corporation—with which I agree—without having obtained a target date from the corporation for the ore reduction plant or the integrated plant? Will he accept that there are many who believe that it is the correct strategy to leave a seaboard site for the Scottish steel industry in future? Nevertheless, will he convey to the BSC the view that there is a limit beyond which no one in Scotland can retain that site for ever without some definite proposal for development? Is he aware that everyone welcomes the decision about the building of oil platforms at Hunterston because many of us believe that it is time that West Central Scotland got a share of the developments associated with North Sea oil?

§ Mr. Ross
I am glad that my hon. Friend takes this attitude. I can readily appreciate the concern felt by people as a result of the delays. One of my tasks in recent months has been to bring the British Steel Corporation to the point of deciding that the pelletisation plant would be there. This was said clearly in the White Paper produced by the previous Government. As for the are furnace plant, there are three suitable sites in Scotland—Hallside in Lanarkshire, Glengarnock in Ayrshire—in the constituency of my hon. Friend the Member for Central Ayrshire (Mr. Lambie)—

§ Mr. Lambie
It is not going there.

§ Mr. Ross
My hon. Friend has not asked very many questions about that. The other site is Hunterston. I appreciate the difficulty concerning the social aspects of such decisions and I agree that we do not want to wait too long. I should like to get a commitment about this major plant as early as possible—a commitment to the new generation of steel plant for this area. But we cannot let the land go and lose the opportunity. I know that the British Steel Corporation considers this site as one of the best, the best probably, in North-West Europe. Because of that I am confident that we shall get that final decision.

§ Mr. John Davies
Does the right hon. Gentleman realise that what he has announced today has most disquieting aspects for the future of industry? Is not the truth that this quite exceptional 1152 site, as I understand it, is to be frozen, made immobile, until such time as the British Steel Corporation in its own good time—and now it is assured that no one else will use it—takes some distant decision on it? Does the hon. Gentleman realise that it represented one of the great potential industrial sites? Is he aware that what he has done is to cut across the whole question of the environmental characteristics of Hunterston and given to it an uncertain industrial future which is totally unsatisfactory?

§ Mr. Ross
The right hon. Gentleman might well have said that to the Secretary of State for Scotland in the last administration. He was a member of that administration and I suppose had considerable influence at the time, in addition to having experience in one of the industries concerned. It is not for him to tell me anything like that when we are actually making a start. I have already given a pledge that I am not prepared to see Hunterston sterlised in this way.

§ Mr. David Steel
Will the right hon. Gentleman accept that, subject to seeing the details of his plans in the Library, this statement will be widely welcomed in Scotland and for reasons quite contrary to those put forward by the right hon. Member for Knutsford (Mr. Davies)? Does he agree that his decision ends much of the uncertainty surrounding the development of this site? Presumably he has some forecasts of employment prospects for the area in the fairly near future. Presumably there will be housing requirements. Has he any plan to increase the resources of the Scottish Special Housing Association so that it can cope with these as well as with the Northern oil developments and its traditional programme elsewhere in Scotland?

§ Mr. Ross
The hon. Gentleman will appreciate that at this particular site, which is an isolated site, a certain infrastructure is already available and housing can easily be coped with by the local authorities. If they require help we shall be able to give it. There is considerable male unemployment in the area, around 5 per cent. There will be a considerable number of jobs, in the first instance in construction, some of which is going on at the present time. We have to bear in mind the balanced development of this 1153 site. I appreciate the feelings of some of my hon. Friends about nothing being done until the end of the century. That is something we are not prepared to accept.

§ Mr. Speaker
Mr. Stewart.

Mr. Lawson
On a point of order. As a Member who represents most of the steel interests in Scotland—

§ Mr. Speaker
Order. I intend to call the hon. Member.

§ Mr. Donald Stewart
Would the hon. Gentleman accept that, given the inequalities of the site, the announcement he has made today will be greatly welcomed in Scotland? Will he accept that had there been a Scottish Regional Department it would have been much easier to force the two corporations to start development earlier than they might have done? Will he also accept that his decision about the oil refinery will also be welcomed since that can be placed in another part of Scotland, as it is not essential that it should go to Hunterston. Can the right hon. Gentleman say whether he has made any assessment of the number of workers who might be engaged in due course as a result of steel development and the oil platforms?

§ Mr. Ross
It would be very difficult to make a definite estimate of the number of workers to be involved since that would depend entirely on the number of platform sites made available. I visualise that there will be more than one, as there is capacity for more than one. There could be as many as 400 jobs per site. There were 800 people working at a site I recently visited at Methil although we must not suggest that there is continuous work there. In relation to his general welcome, I entirely agree that this is a balanced and sensible approach; and it is time the uncertainty was ended as far as the two oil companies are concerned.
On the hon. Member's attitude to an independent steel corporation, I hope he will turn his mind back to what happened when Colvilles were on their own and Sir Andrew McCance told them he could not find the money for his own developments, far less go ahead with the steel strip mill that we were pressing for, so that the hon. 1154 Gentleman's comment is not justified by his experience.

Mr. Lawson
May I compliment my right hon. Friend on what I regard as the wisdom with which he has approached this matter and particularly on the fact that he has treated this unique site as a site which should be reserved for the type of development most suited to this area, ensuring that the site is not built up with forms of development that might very well take place elsewhere? May I ask my right hon. Friend, however, to bear in mind, in considering where the steel industry is to be sited, that we must ensure adequate development in the area? May I ask him to think particularly of Hallside, to recognise that most of the steelworkers are still to be found in Lanarkshire and that we want adequate development of the steel industry there? In the meantime I support the right hon. Gentleman entirely and so will all who have looked closely at what he has done at Hunterston.

§ Mr. Ross
I thank my hon. Friend. He will recall that he and I were very much concerned with ideas about Hunterston at the start, seeing it as of unique value to Scotland and the Scottish steel industry in the long term. He is quite right that we have to be careful about what we do because it has unique facilities. It was laid down by the previous Secretary of State that the industry to be put there should be dependent on these unique facilities—and there are other places for the oil refineries. I admit that there were times when, because of our desperation, we in North Ayrshire would have welcomed any such proposals. If we can get balanced and really good development of the steel industry, that is the right way in which we should proceed.

§ Mr. Teddy Taylor
Is the right hon. Gentleman aware that he has thrown away a glorious opportunity to revitalise the West of Scotland and that all he has done is to put up a notice at Hunterston saying, "Private steel developers keep out"? The only specific thing he has said is that there is to be a £50 million direct reduction plant, with no guarantee of jobs or of a date when it may be coming. Secondly, another plant has to be reserved for Hunterston but no decision has been made by the British Steel Corporation to build there. Has he not 1155 thrown away several private development opportunities including one of £200 million involving 2,000 jobs?
Would he not agree that his hatred of private enterprise has compelled him to sterilise this site for the nationalised British Steel Corporation without one specific promise of date or jobs?

§ Mr. Ross
The hon. Gentleman is full of surprises. He spent the last weekend telling us about the mistakes his Government made. His Government could have taken a decision on this. He was a member of it, but they did not take a decision. What he says now surprises me—or perhaps it shows how little influence he had with the previous Government, and that may be just as well. I should like to think his influence is continuously declining because most of what he has said is absolute nonsense and not in accordance with the facts.

§ Mr. Harry Ewing
Is my right hon. Friend aware that had it been left to the Scottish National Party there would have been no development at Hunterston at all because at the public inquiry in 1969 the Bute and North Ayrshire constituency party of the SNP gave evidence against any development at all taking place there? Would my right hon. Friend accept that there is now a need to pressurise British Petroleum into expanding its refinery capacity at Grangemouth? Could I advise my right hon. Friend that the only thing visible to the people of Scotland is the terminal which is the point at

§ Mr. Ross
I am sure my right hon. Friend the Secretary of State for Energy will be interested in my hon. Friend's supplementary question. I understand that at one time British Petroleum put forward certain proposals for increasing output at Grangemouth, and that may come about.