HC Deb 08 December 1975 vol 902 cc25-31
43. Mr. David Steel

asked the Chancellor of the Duchy of Lancaster if he is satisfied with the percentage of revenues from North Sea oil that will accrue to the Government, in the light of his negotiations with the oil companies concerned.

The Chancellor of the Duchy of Lancaster (Mr. Harold Lever)

The partici- pation negotiations are intended not to increase Government revenue but to secure a greater share of the oil and closer links with development. Taxation and royalties are the means for giving the British people their fair share of the profits.

Mr. Steel

I congratulate the Chancellor of the Duchy of Lancaster on appearing before us at 3.30 p.m., but may I say that his zeal on this occasion has been somewhat excessive, in that, for the first time in my experience in the House, I received his answer before I came into the Chamber to ask the Question. Since I have the answer, may I ask him whether he has taken part in the discussions on the White Paper on Devolution? If so, will he use his agile mind to try to devise a scheme whereby some of the taxation or the royalties accrues to the Scottish Assembly, rather than its having too much dependence on the block grant, which is decided in Whitehall?

Mr. Lever

I cannot, as a member of the Government, altogether escape focusing some attention on the devolution proposals. The particular suggestions made by the hon. Gentleman would be better addressed to the future Scottish Parliament, or to other Ministers than myself in the present United Kingdom Parliament.

Mr. Dalyell

What does my right hon. Friend mean by a future Scottish Parliament?

Mr. Lever

I am sorry about that very dangerous slip of the tongue, and I must withdraw it, because it is quite obvious that I have not conveyed the somewhat lighthearted and limited connection I have with the devolution proposals. What I was really suggesting—as I thought, rather humorously; no one must take what I said seriously—was that the hon. Gentleman must address the Question to some other Minister than myself in the present British Parliament and, if he has an interesing area of debate, potentially in such assembly as may come into being in the future.

Mr. Gordon Wilson

While appreciating the Minister's "no gain, no loss" statement concerning the Scottish Parliament, may I ask if he will indicate to the House how much time he is spending on these complex sets of negotiations, when in fact no fiscal advantage at all seems to be accruing from oil revenues? Does he not think that the real advantage of participation in oil is the buy-back value which is nominally attributed to it by the oil-producing countries and the companies concerned?

Mr. Lever

It was never intended that there should be a fiscal advantage. I regret to say that the clocking-on arrangements in the Duchy of Lancaster office are not adequate for me to give an accurate answer about the exact amount of time I devote to this subject, but I assure the hon. Gentleman that I devote as much time as is necessary, and I think it is well-spent effort.

Mr. Alexander Fletcher

Will the right hon. Gentleman say what are the advantages of these very protracted negotiations? Will they speed up the flow of oil? Will they help to ease the problems of our balance of payments? Will they increase confidence in the oil companies that they can in future search for more oilfields in the North Sea?

Mr. Lever

The purposes of these participation negotiations have been stated and restated in the House, in the White Paper, and elsewhere. The purpose is to add to the Government's know-how in this area and to give them a flexible administrative control over the oil itself.

In so far as the supplementary questions are intended to be answered literally, nothing is done in these negotiations, of course, to jeopardise confidence in the developments in the North Sea. Indeed, contrary to the oratorical furore aroused by them in members of the Conservative Party here, they have aroused no furore among the oil companies, whose development expenditure has—

Mr. Patrick Jenkin

Oh!

Mr. Lever

It is no good the right hon. Gentleman saying "Oh". Development expenditure in the North Sea in the last 12 months has rapidly increased, and there is no indication whatever of any jeopardy to the oil achievement as a result of these participation negotiations. Moreover, in no case do they lessen the reward. In many cases they actually add to the speed of oil development.

44. Mr. Canavan

asked the Chancellor of the Duchy of Lancaster whether he will make a further statement on the progress of his negotiations on North Sea oil participation.

45. Mr. Cryer

asked the Chancellor of the Duchy of Lancaster if he will make a statement on the current negotiations on participation in oil extraction with oil companies.

Mr. Lever

Negotiations are continuing to make progress, and eight companies have now agreed in principle to 51 per cent. State participation in their North Sea commercial oilfields.

Mr. Canavan

Will my right hon. Friend reveal the name of the latest fish in his net? Bearing in mind that he first started fishing in the North Sea over a year ago, does he agree that a total catch of eight out of over 20 companies is not very spectacular fishing, especially bearing in mind that some of the eight are mere tadpoles? When does he expect to complete these vital negotiations and to hand complete responsibility for the oil policy to the Secretary of State for Energy, instead of leaving it to the multinational companies?

Mr. Lever

My hon. Friend's achievements as a fisherman must have been more satisfactory than those of most others, if he imagines that so large and complex a task can be accomplished in a matter of a few months. Enormous progress has been made. These are not tiddlers; they include some of the greatest oil companies in the world, and some with the biggest holdings in the North Sea, like BP itself. The companies concerned are very large-scale operators. What my hon. Friend does not realise is that these negotiations, which I have announced as being successful, in principle, already, are only the tip of the iceberg, and that many important companies are in discussions with us—discussions which have reached a very promising stage. I assure the House and my hon. Friends that if they will show a little patience they will get delivery of the Cabinet mandate in a manner that will be to their satisfaction and, I am sure, to the complete satisfaction of the oil companies, because that is necessary, as well.

Mr. Patrick Jenkin

We are always too glad to welcome the Chancellor of the Duchy of Lancaster to the Dispatch Box to answer questions on this issue, but may I express the hope that he will spare a few minutes of his precious time to hear the debate that will shortly take place on this issue, so that he may realise just how wrong are some of the points that he has made in his answers so far?

He said a moment ago, in reply to the hon. Member for Edinburgh, North (Mr. Fletcher), that it was never the Governments intention that participation should add to the Government's revenue take from oil. What did his right hon. Friend, Lord Balogh, mean when he said, in the House of Lords, a month ago, that we are in this for the money? Will he explain that remark?

Mr. Lever

Concerning the first part of the question, the right hon. Gentleman must be jesting in seeking to invite me to change my opinion on the basis of arguments in a debate that has not yet occurred. I have no doubt that the right hon. Gentleman has a great deal of confidence in the cogency of his own argument, but he is carrying matters a little far if he wishes me to share it in advance of hearing it. I shall read the right hon. Gentleman's argument when he has made it.

With regard to Lord Balogh's reply to a question, I would have to see to which question the noble Lord was replying. I was answering a question addressed to me and the answer was full and accurate.

Mr. Cryer

Will my right hon. Friend say whether he feels that the negotiations are proceeding with more or less success than the negotiations for British representation at the forthcoming Paris energy conference?

Secondly, will he say what proportion of our future output the eight companies represent, and when he expects the outstanding negotiations to be concluded? Will he assure the House that these highly important negotiations are in no way affected by his other considerable responsibilities, such as supervising the arts and advising the Chancellor of the Exchequer?

Mr. Lever

On my hon. Friend's last point, any judgment on my ability to discharge the range of duties placed upon me must be left to my right hon. Friend the Prime Minister. However, my hon. Friend is free to make his own judgment and to make appropriate recommendations to the Prime Minister. I can only tell him, on the achievement, that I am very satisfied with the way in which the negotiations are proceeding. I have every confidence that the result will be to the entire satisfaction of everyone. I am equally satisfied that to show any impatience with and lack of concern for the anxieties and problems of the different oil companies would be to risk the achievement in the North Sea itself. I am sure that my hon. Friend would not want that.

Mr. Tapsell

Is the right hon. Gentleman in a position to give a firm assurance to the House that it is not his Government's intention, either now or in the future, to sell off any part of North Sea oil to the Government of Iran or the Government of Saudi Arabia?

Mr. Lever

The hon. Gentleman must not expect the same rashness in generalisations of future intentions by this Government as was common with the previous administration.

Mrs. Bain

Will the right hon. Gentleman convey to his hon. Friends the Members for West Stirlingshire (Mr. Canavan) and Keighley (Mr. Cryer) that it comes as no surprise to us to learn that little real progress has been made by the Government in their negotiations with the oil companies, since we are very much aware of the failure of this Government and their predecessors to negotiate greater returns from those companies when they were seeking exploration licences in the first place, and that the licences were handed out like Kojak's lollipops to those companies? Will the right hon. Gentleman give further consideration to the suggestion of the Scottish National Party that instead of responsibility being handed over to the Secretary of State for Energy it should be handed, on an interim basis, to the Secretary of State for Scotland and eventually to the Scottish Assembly? What part has the right hon. Gentleman played in trying to ensure that Scottish interests are represented at the forthcoming energy conference?

Mr. Lever

I do not accept the hon. Lady's premises. Therefore, not surprisingly, I cannot go with her in her conclusions. The Secretary of State for Energy is not altogether unaware of these negotiations. He is very much concerned with them, and we are all working closely in ensuring a satisfactory outcome.