EEC (ENERGY POLICY)

HC Deb 11 February 1975 vol 886 cc233-336

Mr. Speaker

Before calling the right hon. Gentleman the Secretary of State, I have to inform the House that I have not selected the amendment in the names of the hon. Member for Southampton, Test (Mr. Gould) and his hon. Friends.

4.36 p.m.

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

I beg to move, That this House takes note of EEC Commission documents Nos. R/446/74 and R/3333/74 and the Government's intention, whilst co-operating in the development of a Community energy policy, of ensuring that such a policy is consistent with the aims, of the United Kingdom's domestic energy policy. At the outset, Mr. Speaker, I should like to clarify the situation in which these documents are being considered by the House today.

I know that some of my hon. Friends are concerned that in all our dealings with the Community we should not commit ourselves to action which would be irreversible even if our membership of the Community were to be brought to an end by the referendum decision later this year. I know that others of my hon. Friends are equally anxious that we should not at this stage disengage ourselves from activity within the Community which it would be difficult to resume if the referendum decision goes in favour of our continued membership of the Community. I should, therefore, like to assure all of my hon. Friends that none of these documents pre-empts the referendum decision one way or the other. All of them deal with long-term issues which cannot possibly be decided in [...]e few months between now and the referendum.

The approach I have adopted—I think it is the approach that the House will want to adopt—can be set out in a moment or so. That is the approach I adopted at the Council of Ministers last December, in fulfilment of the undertakings I gave to the House in our earlier debate on Community energy policy, and the approach that will he followed by my noble Friend the Minister of State when he attends this week's Council meeting.

We, of course, had no difficulty in accepting any Community attitudes which conformed to the policies of this Govern- ment, as set out in our manifesto and in statements to this House. We are perfectly ready to discuss constructively other proposals which, while not forming part of our stated energy policies, do not conflict with them. But, equally, we are unable to accept Community proposals which conflict with our policies or national interests, or would prejudice them, or undermine them.

It is against this background that we should examine these documents. I am anxious that the House should debate them fully and frankly, so that my noble Friend will be able to reflect the views of the British Parliament. I would also hope that the House would regard this full day's debate as a vehicle not for discussing the merits, one way or another, of British membership of the Community—we shall have ample opportunities for discussing that in the months ahead—but to focus our attention on energy policy in a way that will leave the Community in no doubt about the views of this House.

I hope it will be for the convenience of the House if I take each document in turn, summarise it, and then state the Government's views on it. I hope that in that way it will be possible for us to turn this paper mountain—although I have always thought about the Community in terms of a butter mountain—into something more manageable.

I wish to turn first to COM(74) 1960, "Community Energy Policy, Objectives for 1985". This document is one of a number stemming from the Commission's main energy policy document "Towards a New Energy Policy Strategy for the European Community", which we debated last December. It contains the Commission's objectives for 1985 for each energy sector, and an outline of the specific measures for their implementation.

Annexed to the document is a draft Council resolution calling upon member States to take account of the objectives in formulating their national policies, and approving the methods and guidelines to be adopted for achieving them. The document repeats much ground previously covered.

These policies and proposals were debated in the House on 3rd December. We regard some of the objectives—particularly those for gas and nuclear energy—as unrealistic. But they have now been overtaken by those contained in the objectives resolution agreed at the Council on 17th December. The guidelines have also been revised and Ministers will be considering more realistic ones at the Council on 13th February.

The second document is COM(74) 1950. "Community Programme for the Rational Use of Energy". This is a report of a working group, set up by the EEC Energy Committee, to define a programme of action for the Community on the rational use of energy. It contains the group's recommendations on priority conservation measures. It also recommends the setting up of panels of experts, to be drawn from member States, to examine in detail the conservation measures suggested.

We support this exercise, and we are co-operating fully with the studies recommended in the report. In the light of the results, we will consider which of the proposed measures to adopt. I announced some of our own measures to the House on 18th November and a further package on 9th December.

A revised text of the draft resolution annexed to the report was agreed by Ministers at the Council of 17th December last. This committed us to an overall target of 15 per cent. reduction of energy consumption by 1985 for the Community as a whole. Each member State will make the best contribution it can to that target.

Mr. Peter Rost (Derbyshire, South-East)

Will the right hon. Gentleman confirm that his own programme will achieve a similar saving over that period?

Mr. Varley

I have resisted specific targets. I have always said that if over the next few years we can reduce energy consumption by 10 per cent. of current use, that would be a considerable saving.

Mr. T. H. H. Skeet (Bedford)

Not enough.

Mr. Varley

The hon. Gentleman says "Not enough." I have said on many occasions that I am not a proud chap, and if the hon. Gentleman or any of his colleagues can bring forward specific pro- posals for consideration which are practicable, we shall consider them. But when I speak about the overall target as a Community target, I hope that can be met in this country.

I turn to document Com(74) 1970, "Guidelines for the Electricity Sector in the Community". This document contains the Commission's views on the aims to be pursued by the electricity supply industry in the Community to about 1990. It consists of an introduction, a summary of electricity's rôle in overall energy strategy, and an analysis of electricity demand, primary fuels and finance, and sets out policy objectives.

The summary postulates a massive contribution from electricity generated from nuclear energy as an essential factor in reducing the Community's dependence on imported oil. The document concludes that in the long-term electricity prices are likely to be increasingly competitive. Demand growth for electricity will slow in the short term but rise to 9 per cent. per annum in the late 1980s. The analysis considers demand growth by sector. Overall electricity demand growth in the United Kingdom is likely to be lower than elsewhere in the Community because of the high consumption already existing here. Production is considered in terms of each primary fuel's contribution. Generation in nuclear power stations is seen as rising from 20 per cent. of all electricity generation in 1980 to 45 per cent. by 1985 and 70 per cent. by 1990. Target nuclear capacity in 1985 is 200 gigawatts.

The objectives emphasise: development of indigenous energy sources and heavy investment in nuclear energy to reduce dependence on imported oil; rational use of energy, including gradual substitution of electricity for oil in certain uses; an adequate tariff structure for the electricity supply industry and a common financing policy for the heavy investment programme required.

The target growth rate for electricity demand in the proposals is based on an assumption which is probably unrealistic. The proposals depend on a cheap and plentiful supply of nuclear fuel throughout that period. This is a crucial assumption but the paper does not discuss the justification for it. The proposed target for nuclear capacity is, in my view, unrealistically high.

Moreover, the document gives little emphasis to the industrial and financial difficulties of a massive nuclear expansion or to the consequences of failure to achieve it. In addition, it disregards the danger that a programme this size would tend to increase the likelihood of serious public reaction to the environmental problems associated with nuclear power. The paper also pays in the Government's view, insufficient attention to more efficient energy use and to the study of alternative fuels.

Mr. Peter Emery (Honiton)

Before the right hon. Gentleman leaves the question of nuclear energy, will he say how he views the prospects for British industry in terms of the plans for the reorganisation of the SGHWR being able to play a part in meeting the European demand? Does he not agree that the Government should do everything in their power to encourage British industry in this direction?

Mr. Varley

I thank the hon. Gentleman for that intervention, for it gives me the opportunity to say that it is sometimes forgotten by those in Europe that we already have the largest nuclear programme, in the sense that 10 per cent. of our electricity is already generated from nuclear power. That is a higher figure than that in any of the other Community countries. I very much hope that the advanced gas-cooled reactor programme will begin to come on stream quickly and make a contribution. The Government believe that the SGHWR should be built up as quickly as possible. That programme has been described as a modest programme of 4,000 megawatts, which will perhaps come on stream in the early 1980s. But I hope that before the first SGHWR is commissioned we can take stock of the situation in 1977–78 to see whether that programme can be improved. When one looks at the British nuclear programme in relation to Europe, there is nothing at all to complain about.

The next document is COM(74) 1961, "Community Policy in the Hydrocarbons Sector". That paper has six main themes: rational use of oil and gas; development of Community resources; control of imports and exports; investment policy; price policy; and Community measures in supply difficulties. Much of this paper is conventional Commission thinking. But we cannot accept the idea of Community arrangements if Governments do not adopt liberal policies for offshore development; common rules for imports and exports of oil and gas; price policy which went beyond transparency towards harmonisation; and Community measures for dealing with an oil crisis—especially that point—which do not accord with the International Energy Agency emergency oil-sharing scheme. But in any case, contrary to my expectations at the time that I tabled the explanatory memorandum, the draft resolution attached to the paper will not be put forward for discussion on 13th February, and as far as I know there are at present no plans for discussion of it in Brussels.

Mr. Douglas Jay (Battersea, North)

I should like to put one question to my right hon. Friend if this is the right moment. The House will recall that in the December debate what disquieted some of us was the Commission's proposal for an executive agency under the control of the Commission which would apparently have far-reaching control over future British North Sea oil supplies. Did my right hon. Friend oppose that proposal, has it been abandoned, or is it still lurking somewhere in these documents?

Secondly, on page 2 of the explanatory memorandum my right hon. Friend refers to eventual harmonisation of duties and taxes". Did I understand from what my right hon. Friend said that he was also unwilling to accept that proposal?

Mr. Varley

Some of these measures are, to use my right hon. Friend's words, still lurking in these documents. The essential point is that they are not before the Council of Ministers. Indeed, I do not know of any plans to put them before the Council of Ministers.

Following the debate in this House in December, to which my right hon. Friend referred, I went to the Council of Ministers' meeting on 17th December and, on the particular point about control over our North Sea reserves, in the speech that I made at that time I said: I am sure my colleagues"— the other Energy Ministers— today will understand that our resources of oil and gas in the North Sea must remain under our national control. That was not challenged in the Council at that time.

I should now like to come to COM(74)1962, "Support to Common Projects for Hydrocarbons Exploration". In this document the Commission proposes a support scheme for high-risk offshore exploration projects—

Mr. J. Enoch Powell (Down, South)

On a point of order, Mr. Deputy Speaker. I apologise for interrupting, but the Minister has just quoted from a speech made by him at the Council of Ministers. This appears to be an important matter. I wonder whether you will consider the bearing on that quotation of the rule of the House regarding the laying of documents.

Mr. Deputy Speaker (Mr. George Thomas)

Obviously I will consider the matter and let the right hon. Gentleman know.

Mr. Jay

Further to that point of order, Mr. Deputy Speaker. Is it not the overriding rule of this House that if a Minister quotes from a document he lays the whole document before the House?

Mr. Deputy Speaker

If the document is a dispatch or a State paper, that rule applies.

Mr. Varley

I should like to come to COM(74)1962. In this document the Commission proposes a support scheme for high-risk offshore exploration projects to be undertaken by groups of Community companies in a widely defined area which includes the whole of the North Atlantic.

There is at present no obvious advantage for the United Kingdom in this proposal, and in discussion we shall point out its obvious defects. But in any case it now appears that the proposal again will not be on the agenda of the Council of Ministers on 13th February. This is just as well, since our view is that it needs a good deal of further examination, not least from the point of view of financing. The scheme could benefit us, but we should ensure that it does not conflict with our own Continental Shelf policies.

Mr. Frank Hooley (Sheffield, Heeley)

Does my right hon. Friend also agree that we would not want to enter into commitments in that area until the outcome of the Law of the Sea Conference is better known? That might have a considerable impact on the rights of Common Market countries to explore anywhere in the North Sea or elsewhere.

Mr. Varley

That is a matter that we certainly have under consideration in deciding our attitude to these documents and proposals.

The next paper is COM(74)1964, "Measures to be Taken in the Event of Supply Difficulties". The Commission proposes in an oil crisis emergency demand restraint covering all energy forms and Commission surveillance of intra-Community oil movements by means of an automatic licensing system. There is provision for the suspension of licences in the event of a severe crisis if the Commission finds that the oil supply of a member State is seriously endangered.

As we have indicated, there are defects in these proposals as they stand, and we have firmly reserved our position.

If the proposals come up at the Council meeting on Thursday 13th February, my noble Friend will make it clear that we are still not persuaded of the need for them, but that in any event we shall wish to ensure their compatibility with the International Energy Agency scheme.

Mr. Arthur Palmer (Bristol, North-East)

I understand my right hon. Friend's caution and reservation about oil sharing with other members of the Community in the event of a world or Western European oil emergency. However, is it not right that, under the International Energy Treaty, we would have to share anyhow?

Mr. Varley

That is certainly true. There is an implication there. We were first in the field and attached a good deal of importance, as did the previous administration, to the establishment of the International Energy Agency. We are sorry that the French did not join that agency. That is a great pity. We are still hoping that they will join. When it conies to oil sharing and supply difficulties, we attach much more importance to the International Energy Agency than to some of the Community proposals.

The next document is COM(74)1963, "Towards a Community Nuclear Fuel Supply Policy". The first part of this document sets out the Commission's targets for nuclear capacity up to 1990 and examines the implied requirements for natural uranium, enrichment facilities, fuel fabrication and reprocessing plant. It also estimates the investment implied to 1985 if the Commission's estimated fuel requirements are to be obtained.

The second part suggests solutions to these supply problems through the use of indigenous ore resources, diversification of supply sources, the establishment of European stockpiles, enrichment capacity and reprocessing facilities.

The draft resolution attached to the document affirms the urgent need to define and implement a Community fuels supply policy, and invites member States and undertakings to assist the Commission in the preparation of practical proposals to be submitted to the Council.

The most contentious feature of this paper is the dominant rôle envisaged for the Supply Agency. It is true that the Euratom Treaty 1957 gave the agency a monopoly of nuclear fuel procurement and supply. But the world glut of uranium in recent years enabled the agency to implement a simplified procedure under which national suppliers merely notified their contracts to the agency for retrospective approval.

The agency's consultative committee, on which all member States are represented, has twice recommended unanimously that the procedures should be continued. However, the agency contended that under the existing regulations it would be illegal in today's sellers' market. We still think that the arrangements with regard to the agency that have existed until now should continue.

Document COM(74)1963 envisages that the Supply Agency will in future make much more active use of the powers vested in it by the treaty and may intervene directly in the market. We would prefer to see the agency act on request in support of national procurement activities.

I deal now with document COM(74)1860, "Medium Term Guide Lines for Coal 1975/1985". The document has three parts. Part I sets out guidelines for the rôle that coal should play in supplying the Community's energy needs over the next decade. Part II is a draft resolution for the Council of Ministers seeking endorsement of those guidelines, and Part III is a communication from the Commission to the Council on measures for monitoring coal imports to the Community.

The most important points in the guidelines are: that Community coal demand by 1985—estimated at 300 million tonnes of coal equivalent—should be met by maintaining production at the current level of 250 million tonnes, and increasing imports from the present level of 30 million tonnes to 50 million tonnes; to safeguard Community coal producers, imports will be monitored under procedures proposed in Part III of the document; additional investment in deep mining capacity of some 6,000 million units of account, about £3,000 million, at a rate of 500 million units, or about £250 million, a year will be needed to maintain Community coal production at current level; Community coal producers should be assured of a stable market by a system of sales guarantees and by the establishment of stocks financed from public funds to compensate for short-term fluctuation in demand. Additionally, it envisages that subsidies on coking coal should be maintained and that the pricing policy should be one that progressively enables coal producers to cover costs.

The House will be aware that this document is fully compatible with the Government's own policy of support for the National Coal Board plan for coal as set out in the final report of the Coal Industry Examination.

The last of these documents is COM(74)10, "Guidelines and Priority Measures for a Community Energy Policy". Although it is not clear from its title, the document is concerned only with nuclear matters. It is better known as the nuclear plan of action. It lays emphasis on the need for concerted planning and sustained effort by all member States in three main areas: first, public health and the protection of the environment; secondly, the industrial, scientific and technological base; and, thirdly, nuclear fuel supply.

This document as drafted has no significant policy implications for the United Kingdom and has been put forward purely for consultative purposes. The United Kingdom is already carrying out a number of the activities proposed.

Dr. John A. Cunningham (Whitehaven)

When my right hon. Friend says that this document has no implications for the United Kingdom, any programme of enlarging nuclear generating capacity has considerable implications for us both environmentally and in terms of the investment we have made in enrichment capacity and fuel processing, are not these three crucial aspects of the policy about which we must be clear in approaching any attempt by the Community to shorten or to constrict our options?

Mr. Varley

I do not think that anything I have said conflicts with what my hon. Friend has said. He needs to bear in mind the operative words which I used: This document as drafted has no significant policy implications for the United Kingdom". The other aspects of nuclear power policy raised by my hon. Friend were covered in my reply to the intervention of the hon. Member for Honiton (Mr. Emery).

Mr. John Davies (Knutsford)

Will the Secretary of State say whether his last comment applies equally to the resolution attached to the instrument in question, the passing of which would have considerable implications on policy in the United Kingdom?

Mr. Varley

I think that the information I have given is correct. At the moment there are no policy implications in the document as drafted. However, I shall check the point and give the right hon. Gentleman a more precise answer to his question. There is nothing in the paper, as I understand it, which conflicts with the general aims of the nuclear policy of the United Kingdom.

Mr. Richard Kelley (Don Valley)

Will the Secretary of State say what power we have to determine what the Government's policy will be, having regard to the fact that we are now a member of the EEC, on what form of energy shall be produced in this country?

Mr. Varley

There is nothing in the documents—most of the objectives are long-term ones—which conflicts with our aims. As an additional safeguard, I draw my hon. Friend's attention to the Government's motion, which not only takes note of the document but goes on to say: … whilst co-operating in the development of a Community energy policy, of ensuring that such a policy is consistent with the aims of the United Kingdom's domestic energy policy. That is the approach to take on all the documents. That is probably the only approach we can take in the circumstances.

My final word is on Document R/3333, "Covering Note, point 9", which proposes that a statement be written into the Council minutes, perhaps on 13th February, raising the ceiling for annual appropriations for Community projects from 25 million to 50 million units of account. In our view, the need for an increase of this order is not yet proven. We shall wish to assess the outcome of the second allocation before reaching a view.

I hope that that outline of the documents and of the Government's position on each of them will assist the House in its consideration of these problems today. We shall listen carefully to all the views that are expressed and we shall take them into account not only at this week's meeting of the Council of Ministers in Brussels but also in our further consideration of all these matters.

We are prepared to examine any proposals in a constructive spirit, but we shall not hesitate to argue against proposals which do not suit our circumstances and our needs.

5.10 p.m.

Mr. Patrick Jenkin (Wanstead and Woodford)

The House will be grateful to the Secretary of State for his admirably clear and succinct summary of what he described as "the paper mountain" before us today. It was a formidable bundle to draw from the Vote Office last Wednesday, and I know that a number of my hon. Friends have spent a great deal of time between then and now trying to familiarise themselves with the content.

I endorse what the right hon. Gentleman said about the purpose of this debate, namely, that we should express our views on the documents so that his hon. and noble Friend the Minister of State can be aware of the views of right hon. and hon. Members on both sides of the House when he expresses the Government's view at the Council of Ministers.

During our brief debate on 3rd December, to which the right hon. Gentleman referred, he chided my lion. Friend the Member for the New Forest (Mr. McNair-Wilson) … because he embarked upon the long-term energy strategy of Britain rather than the documents before the House."—[Official Report, 3rd December 1974; Vol. 981, c. 1511.] At the risk of incurring the right hon. Gentleman's wrath, I propose today to go marginally wider than what is contained in these documents. We are not subject to the same stringent time limit as we were on 3rd December. What is more, there is not much point in discussing these far-reaching proposals unless we do so against the background of the world energy situation.

I recognise that this is not the occasion for a tour d'horizon of the whole energy scene, and I shall not attempt that. Nor, tempted though I might be, is it the occasion to voice the growing criticism which can be directed at the Government's energy policy, especially towards the dreadful mess into which, by a mixture of ignorance and prejudice, they seem to have got our North Sea oil policy. That must wait for another occasion. I hope that it will not be too long delayed.

Although part of my speech will be to offer comments on the documents against the background of the world energy scene, I want also to put on record the Opposition's attitude towards them and to ask one or two detailed questions about the matters which they raise.

Subject to some reservations—and they cover electricity, the oil product imports and exports and certain of the hydrocarbon proposals—we can generally go along with the main tenor of the proposals set out in the documents. In the words of the Government's motion, and as several of the right hon. Gentleman's explanatory memoranda make clear, we support the development of a Community energy policy. As our trade with our partners becomes more interdependent, as our economies become more integrated, there is obvious sense in our seeking to evolve co-ordinated energy policies.

That does not mean an identical energy programme for every member of the Community. That would be patently absurd. The United Kingdom is rich in coal and shortly will be rich in oil and gas. We are unlikely to want to pursue the same investment policy in different energy sectors as, for instance, France, which at present has little of any of these natural resources. But our internal policies should be complementary and not contradictory, and the Community must be the right framework in which to work these out.

Subject to the reservations which I shall mention in a moment, these documents provide a reasonable basis on which we can proceed. I see in them no threat to our ability to pursue energy policies which are in the best interests of the people of the United Kingdom. On the contrary, I see in them some assurance, through co-ordination and through an effort to achieve common objectives, that our own objectives are less likely to be hampered or frustrated by contradictory policies of our partners.

This is one—a very important—facet of the central argument about United Kingdom membership of the Community. Whether we are in or out, the other nations will be formulating policies and implementing programmes which, willy-nilly, will have a profound impact on our plans. The key question is whether we are to have some say in those policies and programmes. If we are in, we can have a say. If we are not, we cannot. It is as simple as that.

The reservations which I mentioned will cover much the same ground as those of the Secretary of State. I am sure that he will agree that much of what he said by way of reservation was more technical than political and in no way detracted from the central proposition which I have just put before the House.

If we take electricity, for example, there is a Community target of 160 GWe—gigawatts electrical—or possibly 200 GWe by 1985. Different nations are bound to make different contributions to that target. We accept that. But I wonder whether, in the light of the programmes, and especially in the light of the recent French cutback, even 160 GWe is not unrealistically high? The United Kingdom contribution is bound to be pretty small. It is true that 10 per cent. of our electricity is nuclear now. But even if all the five AGR stations come on stream and we have the 4,000 megawatt SGHWR programme, our contribution is bound to be small.

Still on the subject of electricity, one of the features about the paper which surprised me is that it seems to advocate an increase in the use of electricity for space heating. I find this a strange proposition, and I wonder whether the Government will accept that it could be wrong.

It is not only strange. It is also unconvincing. All the evidence suggests that the use of electricity for space heating is one of the most wasteful uses of energy that can be imagined. This was pointed out by the household fuel efficiency figures in Table 9 on page 25 of the NEDO report on energy conservation in the United Kingdom. That compares the gross fuel efficiencies—the gross input as opposed to the net advantage—of different domestic fuels. Coal has efficiencies ranging between 29 per cent. and 68 per cent. For gas, the percentage is somewhere between 61 and 75. For petroleum, it is between 60 and 73. Electricity can show a gross efficiency of only 24 per cent. However much nuclear electricity we are able to provide in the years after 1985, I find it very difficult to believe that it can be right to go in for a substantial expansion in the use of electricity for heating.

Mr. Rost

Does my right hon. Friend accept that the basis for this suggestion is that by 1990 a greater proportion of the electricity in France and Germany will be nuclear-powered and combined with district heating?

Mr. Jenkin

My hon. Friend has beaten me to the next matter that I intended to discuss.

I am not sure that that emerges from the Community documents. There are some references to what is sometimes described as "waste heat" from power stations. Incidentally, I dislike that expression. It is waste heat only because we waste it. It is by-product heat which at present we hardly use.

These documents do not emphasise nearly enough the fact that, without the utilisation of by-product heat, the efficiency of electricity generation to provide space heating is very low—perhaps between 25 per cent. and 30 per cent.—whereas, if it can be used, it may get up to 60 per cent. or even 65 per cent.

Mr. Palmer

There are obvious doubts and difficulties about the use of electricity for space heating but surely the figures that the right hon. Gentleman has just given do not take into account the total process. Is he aware that the use of electricity for space heating is now increasing in the United States as natural gas supplies are running out?

Mr. Jenkin

That is quite right. In the United States there is a much more balanced load because of the air-conditioning requirement in the summer. When we would have a substantial peak winter demand I find it difficult to believe that we could usefully go for an increased direct use of electricity for space heating. I would much rather see development through the use of by-product heat and through the distribution of hot water. It is an interesting fact that transmission losses in transmitting hot water at, for example, 120 degrees Centigrade in properly constructed insulated pipes are less than the transmission losses involved in carrying electricity by cables over long distances. That is a fact that is not often appreciated.

The policy to use by-product heat is now recognised in all Community countries as essential. When I was in Germany in May I was told that they had embarked on a major study to see how they could increase the use of such energy. We should be doing the same. I welcomed the statement from the Electricity Council the other day. In one sense, it could be summed up as saying "Please, sir, it is not our fault". That may be true, but I think that it needs a greater effort on everyone's part to try to get this one off the ground.

My second main reservation concerns the import and export of oil products. The right hon. Gentleman did not mention this matter but his explanatory memorandum exactly reflects my anxieties. We need to look at it carefully. I need to say no more because I agree with what he wrote.

Thirdly, there is the question of aid for oil and gas exploration. At first sight that might appear attractive as most of the exploration would be bound to be on the United Kingdom Continental Shelf. However, we would need to go extremely cannily: timeo Danaos et dona ferentes. I fear the Greeks even when they come bearing gifts.

I support entirely our right to regulate our offshore oil and gas fields. That is essentially a sovereign right which my right hon. and noble Friend Lord Carrington asserted two days after taking office. There has never been any difference between us on that matter. It is clear that the oil is ours. I want to be satisfied that the regulation could in no way be represented as the thin end of the wedge or that it could give others the right to have some influence over depletion policy. Depletion of a natural resource belonging to a Government must be a matter for that Government. That is the way in which the matter must be stated. I welcome the extract from the remarks which the right hon. Gentleman made on 17th December. We endorse that view entirely.

I now come to my first question. Perhaps the Under-Secretary of State will be able to answer this point. The papers indicate a target Community oil production figure in 1985 of 180 million tons per annum. Where did that figure come from? Last November there was an interesting report in The Guardian of a speech by M. Henri Simonet, the European Commissioner responsible for energy. The report reads: In addition, he said that if production of North Sea oil reached the 180 million tons mark by then—a target given to him by the British Government—the Community could make further savings in its balance of payments. I have seen no other published figures which indicate that the Government have a target production figure in 1985 of that sort. Is the figure of 180 million tons in the Community document the same figure as The Guardian claims was given to M. Simonet by Her Majesty's Government? What would that represent as a surplus above our own requirements, recognising that there must be a balance of imports and exports to meet our own requirements? Is that 60 per cent. or 70 per cent. excess production? What does that mean for the rate of depletion of our oil resources? What assessment has been made? Is that the maximum output which the Government believe to be possible from the United Kingdom Continental Shelf in 1985 or some lesser figure that implies some degree of depletion control? We need to know the origin of that figure. I hope that the Under-Secretary of State will supply us with that information.

Mr. Alexander Fletcher (Edinburgh, North)

I think that my right hon. Friend is being a little unfair. He may remember that during a recent Question Time the Secretary of State for Energy was unable to give us a target for oil production for 1975, 1976 or 1977. To ask him about 1985 does seem a little unfair in the circumstances unless there is now a target for the current year.

Mr. Jenkin

I have no doubt that my hon. Friend is absolutely right. I well remember the exchanges to which he has referred. If the Government's policy continues as at present there will not be any oil at all. That is the serious matter.

I now come to my second question—namely, the financing of the energy programme. The figures are terrifying. Paragraphs 93 to 96 of the electricity document suggest that 170,000 million units of account will be needed for electricity alone. That is about £85 billion. That represents only two-thirds of the total. Half as much again is the total. That would amount to 250,000 million units of account or £120 billion. Do the Government regard that as remotely credible?

More relevant, what would that imply for the self-financing of the energy industries? What would the implications be for energy tariffs, particularly electricity tariffs? There is some suggestion in the documents that electricity tariffs will have to increase faster than the rate of inflation to provide the financing. Is that a conclusion which the Government would be prepared to accept as part of this massive policy or is it the case, as the right hon. Gentleman suggested, that a 160 GWe programme is itself unrealistic?

I think that finance is the biggest question mark of the lot. When we remember that we are considering only part of the total needs of the OECD we can understand that there will be an immense strain on the free world's financial resources to meet these energy targets. I believe that this matter was well put by Anthony Harris in an article in the Financial Times on 15th January. The article reads: Ducks, according to zoologists who have studied the matter, have a system of number which goes 'one, two, a lot …'; and it seems clear that there is some point at which human appreciation of large numbers also breaks down. That, at least, is the most appealing explanation of the fact that the OECD's forecast that energy investment between now and 1985 would total some $1,200 billion to $1,600 billion has attracted no attention at all. It is extraordinary that it has not attracted attention. The financial resources needed to finance this programme at a time when the Eurodollar market will not be able to supply them must be apreciated. The Eurodollar market is not as flush with funds as it was in the earlier years of this decade or towards the end of the 1960s. That is a matter on which we need much clearer answers.

Perhaps one answer lies in a remark which attracted my attention which was reported in a recent Gulf magazine about shale oil, which in America requires huge investment. The president of Gulf Energy and Minerals Company, Mr. R. W. Baldwin, when he was giving evidence to the Federal Energy Administration in Washington, said: The development of our domestic energy resources, including non-conventional fuels, on a scale broad enough to contribute meaningfully to our energy supplies is so vast an effort that private industry must play a major rôle. That falls strangely on European ears but I believe it to be right. The raising of equity capital for much of North Sea investment and other investment is essential. The tragedy is that at the moment it cannot be done.

I think that Mr. Baldwin's view is robust and realistic. Governments cannot be expected to finance this. I have been responsible for the Government's public expenditure programme—as has the right hon. Member for Battersea, North (Mr. Jay)—and I know the limitations imposed by all the constraints on Governments. One cannot see Governments being able to raise the volume of money needed. Nevertheless, is this plausible? What does it imply, if it is not, in respect of increased dependence on imported products? We should be grateful for answers to those questions.

I now return to the main—indeed, the only—point that I want to make in this debate. It is a point which is not in these papers but ought to be. EEC policy must be formulated against the background of energy developments in the world, and particularly against the background of other energy initiatives in the free world, and here I come to the international energy programme.

It is in no sense to devalue the Community to stress the crucial importance of these wider arrangements. The IEP, itself a product of the Kissinger initiative of January 1974, is, as the Minister said, supported by all parties. The agreement was signed in Paris on 18th November 1974, a week before the papers which we are debating today are dated. It provides for an emergency oil-sharing scheme of a far-reaching character, for the provision of information by the oil industry on the international oil market, for a framework of consultation with the oil companies, for long-term co-operation on energy, for relations between producers and consumers, and other matters. It is a wide, comprehensive agreement between the main oil-consuming countries in the world.

In some respects it goes further than the Community Governments, particularly on the question of emergency measures, where it is much more specific than the EEC proposals. For that reason I think the proposals in the 1964 document are subsumed by the International Energy Agreement.

Mr. Jay

Does the right hon. Gentleman think it is a defect in the Community documents that they apparently never mention the international agreement?

Mr. Jenkin

I am not sure it is true they do not mention it, at any rate indirectly, but I agree with the right hon. Gentleman that the policy makers in the Commission would do well to lift their eyes from their desks and look at what is going on around them. Perhaps their proposals would then prove more acceptable to those who might otherwise be inclined to reject them.

In other respects the IEA is much less specific, particularly on long-term co-operation between member States. But it is much bigger than the Community. It now includes 17 countries. Australia has joined, and Norway is hovering on the fringes, as well as eight of the nine EEC countries. As the Minister said, it excludes France but, as a result of the understandings reached at Martinique between President Ford and President Giscard d'Estaing, it is not impossible that that exclusion will come to an end.

The first point I make is that it is not sensible to debate important aspects of EEC energy policy except in the light of the IEA, and I shall come to one or two points in a moment. My second point is that it is obvious sense for the Community to approach the International Energy Agency with co-ordinated views and even, if possible, with a common policy. The members do not, of course, vote as a bloc. Each member has his own vote under Article 62, but the voice of the people of Europe is much more likely to be heard if we can act together and present a united front to the world. This is what worked so effectively at the Washington conference, following which the Chancellor of the Exchequer returned and reported on the decisions on monetary policy. This is just as important, and perhaps even more so, in the agency.

The view is gaining ground in relation to money surpluses that the problem will be much less serious in the long term than at one time had been supposed. The capacity of the oil exporters to absorb oil revenue will be greater than had been estimated. By 1978 the surplus may be half last year's figure of $55 billion to $60 billion, and by 1980 the surplus may have disappeared altogether. Therefore, the recycling problem is essentially short-term but it is, none the less, serious.

An energy programme of self-sufficiency, a more rational use of energy, the development of new sources, and research and development into new forms of energy are essentially long-term problems. These papers take us to 1985, with a forward look to 1990 in some cases, and provide target dates.

There is a need to develop a collective policy for Europe, particularly towards the International Energy Agency, the instrument of the consumer nations. If eight EEC members, and possibly nine, could join, they would be a most influential and valuable group in the agency.

Mr. Neil Marten (Banbury)

My right hon. Friend referred to a policy in Europe. Did he mean Europe, or did he mean the Common Market?

Mr. Jenkin

I used the phrase, as I think many of us do—

Mr. Marten

Slightly incorrectly.

Mr. Jenkin

—colloquially. I meant the Common Market. The other European members not in the Community which are members of the agency must play their own rôle.

When, in the Community documents, the Commission talks in the hydrocarbon sector of standardising the calculations of emergency stocks, my view is that this must be done in the light of the highly sophisticated arrangements that are being worked out in the International Energy Agreement. It is all there. The same goes for the system of allocation. It is all there and has been worked out, and the Community would do well to recognise that and not try to set up a rival show.

Co-operation with producer countries is a central feature of the IEA, and the Community would do much better, instead of trying to set up a rival show, to work to estabish Common Market solidarity within the agency. As I read these EEC documents, they give the impression of being a little unreal in trying to proceed in isolation, and I hope that the Government will point to the dangers of proceeding in this way.

All this is leading up to one central issue which I want to examine. Underlying all these documents is the desirability of reducing dependence on outside sources, and with that we must all agree. The EEC is 63 per cent.—nearly two-thirds—dependent on imported energy, and this is now overwhelmingly OPEC oil. Our aim must be to reduce our dependence. In the light of the events of last winter, our political freedom of action is threatened. The oil weapon is shown to be an instrument of formidable power, and all the talk about sovereignty, and so on, becomes a little meaningless when one is confronted with that kind of situation.

It is important to state this because throughout 1974 there was considerable confusion of thought among consumer countries about how we should deal with this situation. Many people, especially in the United States of America, have been arguing for some time that the highest priority is not to establish independence but to get the price down—it was the price that was intolerable. That is now recognised as a lesser part of the problem. It is not necessarily consistent with seeking security or independence.

More recently, the emphasis has switched to the need to promote investment in indigenous sources, even if they be high-cost sources of energy. The United States' "Project Independence", a survey of alternative strategies, showed that with $7 and $11 oil it was possible, in certain circumstances to achieve independence and to eliminate oil imports by 1985. What has emerged is the realisation that these are mainly high-cost sources—the outer Continental Shelf, shale oil, the tar sands in Canada, and so on.

Mr. Kelley

The right hon. Gentleman is boring the House.

Mr. Jenkin

I must try to do my best. If independence is to be achieved, billions of dollars will need to be invested in these high-cost sources, but there is the risk that they will be uneconomic if the oil price falls, and in a moment I shall come to a point which may be of more interest to the hon. Gentleman.

Mr. Kelley

Get to it.

Mr. Jenkin

It will be uneconomic if the oil price falls. This has been christened, with characteristic American obscurity, the "downside risk". The dilemma is that if there are no new sources of energy, if there is no way to break the cartel, prices will remain high and the economy vulnerable. But it we do invest in high-cost new sources, we may force the cartel to cut prices drastically and so render that self-same investment uneconomic, thereby incurring severe losses. "Catch 23" they call it in some circles.

So there was born the concept of a floor price for energy which has gained increasing attention over the last few weeks and was the centrepiece of the three-day discussion in Paris of the International Energy Agency last week. I believe that some such protection for investment in high-cost energy is crucial to the development of EEC energy policy. It is manifestly essential to the development of the United Kingdom Continental Shelf, which is rapidly becoming a very high-cost source of energy.

It is a considerable weakness of these documents that, although there has been much discussion, they do not reflect this or acknowledge it at all. We are told in the Press that there are divided views within the Commission and, indeed, within the Community. Italy and perhaps others with no prospect of indigenous oil are apparently highly suspicious of measures to prevent oil prices from falling. The Commission is said to frown on the concept of a floor price.

I understand those fears, but I earnestly hope that something of the sort will find a place in Community energy policy and will be acceptable. I know that it has been actively canvassed, but there is nothing in the documents to show the results. I hope that the United Kingdom Government are in favour, but we want to hear a little more about that. Perhaps the Under-Secretary could tell us something of the Government's attitude to the proposals for a floor price or some kind of protection against the downside risk.

That would be a sort of insurance policy, and, like all insurance policies, it may well never be needed. It can be argued that world oil prices are not likely to fall steeply. There will be a considerable demand for oil exports from OPEC countries for many years yet, and my guess is that the oil price will remain fairly high. Nevertheless, we should have some kind of protection.

So, in the medium-and long-term picture, which is one of sustained oil imports, we need an investment protection policy. No one can be sure that the price will not fall, and uncertainty is the biggest enemy of investment—and it is investment that we need now. We want to reduce dependence, and become more self-sufficient and diversify energy sources. If a fear of cheap imported oil inhibits these goals, that fear must be met.

Consumers may ask what is wrong with cheap oil. My answer is simple—what comes down can go un again, and we may be just as badly off as a result. It is true for oil and it is true for coal. I know the deep interest of the hon. Member for Don Valley (Mr. Kelley) in the coal industry. As the Secretary of State said, the language of the documents on coal is very similar to the language of the final report of the tripartite investigation. It speaks throughout of the need to restore the confidence of the coal industry in its future.

What would be more likely to restore the confidence of the coal industry than its knowledge that there was a floor under the price, by whatever method it would be achieved, which ensured that coal would always be in demand for as long as men could mine it? Part of the problem with labour relations in the coal industry is that, after many years of rundown, some of those who work in the industry believe that they are at the moment enjoying what might be a very short-term bonanza and they are determined to make the most of it, whereas if they could really be convinced that there is a long-term future here, as I believe there is, more moderate and sensible policies would probably prevail.

So, not only for oil but also for coal, the concept of some protection against the downside risk could play an important part in the future energy policy not only of the Community but of this country. I urge the Government to press on their partners the view that Community support should be given for such a policy. It is not only desirable but essential if the objectives are to be achieved.

We on this side accept the Government's motion and do not intend to divide the House. We see every advantage in seeking the co-ordination of the energy policies of member States and developing a genuine Community policy. Although these documents do not get everything right, they are a perfectly acceptable start. Provided that we stay in, they could form the basis of a lasting and coherent energy policy for all our peoples in the Community.

5.46 p.m.

Mr. Arthur Palmer (Bristol, North-East)

Rising to speak on this important subject, I can best describe myself as a low-profile pro-European, but I do not therefore intend to neglect my critical faculties when considering these documents—if only because it is always the business of the House of Commons to look at everything critically. I agree with the right hon. Member for Wanstead and Woodford (Mr. Jenkin) that if there is one argument that cannot these days be used against the approach of the EEC in this area, it is the argument of national sovereignty. In energy matters, no country in the world should wisely suggest that it should run its policies on a "go-it-alone" basis or could succeed if it tried.

The other day I came across some words written a long time ago by someone who I think can be described as a Socialist and who was much read, certainly in my political youth—H. G. Wells. A paragraph in his "Outline of History" well sums up my point of view: If socialists object to a single individual claiming a mine or a great stretch of agricultural land as his own individual property, with a right to refuse or barter its use and profit to others, why should they permit a single nation to monopolise the mines or trade routes or natural wealth of its territories in which it lives? It is in that kind of internationalist spirit, as a Socialist, that I look at some of the issues which we are discussing.

Apart from the views which may be held on the desirability or otherwise of British membership of the EEC, how can the nine nations whose territories geographically adjoin one another rationalise and improve their energy policies in their common interest, bearing in mind all the time their mutual world responsibilities? This is where EEC energy policy differs from other issues which we have considered in EEC debates of this kind—such as sugar policy or food policy.

In policy for foodstuffs the balance of advantage may well lie with wider trading relationships altogether, but when it comes to energy the vast capital costs naturally associated with its production put a premium on its physical regional organisation. For instance, although it is not in these documents—I suppose we can argue about what might be in them—a West European electricity grid could yield many savings in production costs. It could include the United Kingdom by connecting lines under the Channel, towards which there have been some small moves already. That interconnection could hardly be extended in physical terms to the Caribbean. I am saying, in effect, that a common energy policy for Western Europe is somewhat different in nature from common policies for those other economic relationships which cause so much controversy.

I have always advocated a total energy concept for coal, oil and nuclear fission. The main primary sources of secondary energy should be seen as complementary to each other and not as rivals. We must allow for temporary ups and downs in cost but I have never regarded those varying costs over a period as being significant. In energy matters there is a tendency for alternative sources of supply to balance each other out in cost terms. I think it was a failure to appreciate this that led this country to commit the follies of the 1950s and 1960s under Governments of both the main parties, when the British coal industry was almost deliberately run down on the ground that oil and nuclear power would soon be cheaper.

Mr. Patrick Jenkin

This point is frequently made in attacks on Governments of both parties but the history of the coal industry in that period shows that there was a continuous series of efforts by the Governments of both parties to delay and slow down the rundown of the coal industry. I do not think it is right to say that this was a deliberate policy. Both sides did their best to slow it down.

Mr. Palmer

As someone who followed this subject and took a fairly consistent view throughout the whole period, that was not my impression. It would be unfair to take the argument too far however. I sincerely believe there were some people holding ministerial office at that time who regarded the coal industry on cost grounds as something to be got rid of as soon as could conveniently be arranged.

Whatever other defects there may be in the documents in front of us, I am glad to note that the EEC draft policies for coal do not now make that mistake. In this up-to-date EEC strategy coal is intended to play a strong part in the energy mix, with the emphasis most naturally on the profitable and efficient areas of production in Western Europe, which would include the United Kingdom and Germany, but certainly not Belgium.

I am struck by the similarity of the per head consumption figures of energy in the EEC countries. Leaving aside Luxembourg, which is a rather special case, where steel production is carried out on an enormous scale in a tiny territory, and leaving out Italy and Ireland, which are countries with an accepted lower standard of living, the remaining six countries, including the United Kingdom, have roughly similar figures per head for energy consumption. Indeed, the figure for consumption per head in the United Kingdom is much the same as the average figure for the six leading nations. It is rather ahead of France and it is slightly behind the Federal Republic of West Germany. That brings home a truth that the gloomy prophets of disaster in the City of London and in the Confederation of British Industry should be made to understand, and it should hearten my right hon. Friend the Chancellor; namely, that in physical assets the United Kingdom economy is still extremely powerful. Certainly this is so with energy assets.

If our energy use per head is not equalled at the moment on any comparative basis by our wealth production per head, it is because we tend to overuse energy domestically but under-use it industrially. That sums up the position in the United Kingdom. The issue of energy waste should be the concern of my right hon. Friend, as I know it is. It has also been the concern of the Select Committee on Science and Technology, which is investigating the subject at the moment. As Chairman of the Committee I cannot commit the Committee, or its ultimate report, and I must not pre-judge its conclusions. The hearings have, however, been in public, so what has been said is common knowledge. We have received much evidence to show that the United Kingdom, as yet, is not ready to set targets for the avoidance of waste. That is a pity, because I think we should take the target system seriously. My own view, which I have already expressed in the House, is that over a reasonable period the United Kingdom should be able to save about 15 per cent. in overall energy consumption without loss of output in wealth terms.

The Commission suggests a savings target of 15 per cent. for energy consumption—by 1985. I had assumed that it could be done rather more quickly.

Mr. Rost

The hon. Member has just said that without loss of output there would be more production. Would he not agree that it would lead to an increase in the gross national product?

Mr. Palmer

That is probably the case. I was brought up as an engineer and not as an economist, and I am probably not using the terms as closely as I should. I meant to say that if we used our energy more efficiently, we could produce much wealth in real terms and it would add to national productivity. The figure given by the EEC is 15 per cent. by 1985, which I think is rather a long span. I notice that it proposes a reduced growth in internal energy use from 5 per cent. per annum to 3.5 per cent. against maintaining a GNP at 4.5 per cent. These are figures which my right hon. and hon. Friends in the Ministry should study with care for possible application here at home.

I should like, in particular, to refer to the evidence which has been given in public to the Select Committee on Science and Technology by Sir I. Evan Maddock, the Chief Scientific Adviser to the Department of Industry, and by the National Industrial Fuel Efficiency Service. In evidence to the Select Committee both bodies felt that a great deal more could, and should, be done to conserve energy not only domestically and commercially but in industry, including Government Departments. Their bias in the evidence they gave to the Select Committee was in favour of using the target system, as does the EEC in the proposals. I hope that my right hon. Friend will note that.

I intend to devote the remainder of, I hope, my fairly short remarks to another aspect of maintaining a proper balance in primary energy sources between coal, oil, natural gas and nuclear fission. On the subject of coal the approach of the EEC cannot be challenged too much. Some of its arguments sound very similar to those that were used in Britain not so long ago—indeed, they are probably being used by the National Coal Board and the National Union of Mineworkers still.

The EEC is saying that we should not use imported oil in power stations if possible, that we should instead concentrate on coal and upon expanding the nuclear power programme. That should not bother my right hon. and hon. Friends in the Department. My hon. Friend the Under-Secretary will remember how he and I used to sit together on the Opposition benches below the Gangway and challenge repeatedly the burning of oil in power stations. The new view of the EEC coincides with our view, and it would be a little silly if the Department were now prepared to sanction the burning of more oil in power stations while we are still dependent upon imported oil.

I come now to the size of the nuclear programme. I will not go into the matter in too much detail because I had the opportunity just before Christmas of raising the subject on the Adjournment. I argued then, as I argue now, that the United Kingdom has chosen the right type of reactor for the future. We are to base everything upon the steam-generating heavy-water reactor, known popularly as the "steamer". We made that important decision, unlike the French, who are very much wedded now to the American light-water reactor. They abandoned their own gas-cooled reactors some time ago; they have a tendency to say that if they do something it must be right and it is a pity, of course, that the British have not followed suit.

However, be that as it may, I maintain that we have been right on safety and other grounds to select the heavy-water reactor, and I believe we should continue with it fast on a much expanded scale in collaboration with the Canadians who have a similar programme for heavy-water nuclear production. There is only a slight difference in that the Canadians use natural uranium while we propose to use slightly enriched uranium. The British programme is too small in relation to need. This fact can best be illustrated by an examination of the size of the three programmes we have undertaken since we began nuclear electricity production in the 1950s.

The first programme, which is now pretty well complete, was for the Magnox stations and was for 5,000 MW. The second programme, unhappily not yet complete, was the AGR programme which was for 6,000 MW. Now, all these years later, with all our experience and knowledge in these matters, and with the major energy requirement which there will be in the future, we are proposing a third programme based on the steam-generating heavy-water reactor of only 4,000 MW. The Minister was right to claim that in the actual production of electricity we are so far ahead of other countries, but these figures for future capacity represent a retreat, not an advance.

The size of the French programme is staggering, but so also at one stage was the nuclear programme put to the Government and the Select Committee on Science and Technology by the Central Electricity Generating Board. That involved a much larger programme than we are now contemplating, as my right hon. Friend knows. The chairman of the CEGB urged that size irrespective of which nuclear type was chosen. Therefore, I suggest to my right hon. Friend that if the Commission is asking us, as it is asking other West European countries, to have a large nuclear power programme, we should not sit back complacently and suppose that we are right to go for a small programme. Those countries may be right. Without committing ourselves to the EEC figures necessarily we should plan for a very much larger programme of nuclear stations than we are at present proposing.

The Americans have more or less a monopoly, direct or under licence, of the European market with their light-water reactor. The British decision to use the heavy-water technique backed by the considerable resources of Canada means that we should be urging our partners in the EEC to take development of the British heavy-water reactor as seriously as they take the American version. We do not want to cause unnecessary fear, but there are much greater risks with LWRs than with other types. The Americans have recently taken a number of their reactors out of service because slight cracks are developing. Many of us fear that if something goes seriously wrong with a light-water reactor anywhere, since there are so many in use throughout the world it might lead to a general public outcry and to demands for a shutdown of every such reactor. Therefore the argument for diversity of reactor type in Europe as elsewhere is a very strong one, and it is the business of British Ministers to urge the adoption of this approach within the EEC. This is a field where our experience should count for something.

6.8 p.m.

Mr. John Davies (Knutsford)

May I thank the Government for affording time for a debate on these instruments. I do so on two counts. First, the extent of the brief debate on 3rd December left a number of hon. Members dissatisfied and it is advantageous that we should be able to devote additional time to the subject. Secondly, the debate fulfils the undertaking given by the Leader of the House in the last Parliament, which I am glad to see is borne out in this one, that four full days would be allowed during the parliamentary term for discussion of matters of primary importance in the EEC context. This being the first of such occasions, it is worth noting the fact and thanking the Government for it.

The very fact that we are debating energy as the first of those occasions is an illustration of the importance of the subject. However, it is interesting to recall that the formulation of an energy policy was not one of the original purposes of the Communities. The Treaty of Rome made no such provision. Euratom provided for some part policy within the framework of energy matters generally. This ever-growing issue has become one of ever-growing importance, and it has occupied the attention of the Community more and more as time has passed, notably in the meetings of the Heads of Governments in Paris in October 1972 and again in December last year when they reinforced their belief in the whole principle of an energy policy for the Communities.

The two Front Bench speakers have commented upon the size and complexity of the papers, and with good reason. They have both seen parts to accept and parts to reject in them, and that seems reasonable too. The papers themselves, despite their somewhat voluminous character, seem to me to be well drawn. They are exceedingly interesting and thoroughly studied. Of course, there is so very much that would need to be adjusted in terms of the normal negotiations which take place. But it would be a pity to assume that, because the papers are voluminous, they are therefore wordy and useless. That is not my view.

The speeches we have heard from the Front Benches tend, however, in some way to cloak what is none the less an absolutely crucial issue from the point of view of Britain in relation to its future membership of the Community. The issue of energy policy and Britain's adherence to it, and the whole of Britain's relationship as a member of the Community, able either to stimulate or to forestall the pursuit of energy policies, is a crucial issue for the future.

In value terms it vastly outdistances anything which could possibly be the outcome of the renegotiations. For instance, we are talking in terms of decisions made about energy which could have the most penetrating effect not only on our economies but on our whole life-style for the future. It would be wrong to imagine that there is not involved in these papers an issue of the most substantial importance to this country and to the whole of Europe.

The issue before us is whether, in the face of what is a mounting and more and more recognised problem, to combine with neighbours to face the challenges and dangers and, indeed, the uncertainty of the remainder of this century or to seek to go it alone. That is the crucial nature of the decision before us, and some reference to it must be made, particularly in the light of the oil crisis dating from the latter months of 1973.

Major industrialised nations and groupings of industrialised nations the world over have recognised what a critical issue is represented by an adequate supply of energy. It seems to me that, for the first generation or so after the war, the constant supply of energy was almost taken for granted. People did not register the fact that one could be deprived of it at a certain time, or supplied with it only at such cost as would put the general realisation of their normal living standards in doubt. This has become so clear now that we all seem to think that it was always recognised. It is not so.

Countries are now facing the need to deal with their security of energy supply as a matter of absolutely first priority in national policy. The clear way in which they have gone about it in the light of the experiences of the last 18 months—seeking to diversify both sources and forms seeking equally to concentrate those sources and forms in ways which are valuable nationally or continentally where continents are concerned, and seeking to diminish reliance on external dependence—has been the worldwide pattern.

Whether one considers the policies adopted in North America or those adopted in Western Europe or in Japan, in the last 12 months one sees the constant pattern of these groupings of countries realising that if they went short of energy they went short of their life-style, and they have had to work out a system to give them greater assurance for the future. But they have all recognised in so doing that an immense resource requirement is necessary if one is to attain those objectives and that they can be met only by really powerful economic groups.

It is beyond the capacity of individual countries, even countries of the stature of some in Western Europe, to achieve on their own the degree of security and non-dependence which we seek—except, of course, in cases like our own, which are special cases in relation to that of the industrialised world. The essential need of most of these countries is to shift a major part of their energy demands to non-vulnerable sources. They, of course, look to the rapid development of the generation of electricity by nuclear means and, therefore, the use of electricity as one of the primary methods by which that shift should take place.

For the moment, the whole endeavour worldwide seems to coincide with the views of the oil-producing countries themselves. They in turn have expressed anxiety and concern lest the consumption of their precious material goes at a rate which is inimical to their own best economic interests. They therefore fear that the over-rapid exhaustion of these resources could be damaging to them. They have not seen objections in the tendency within the industrialised world to seek to make a mammoth shift.

It also coincides with the other concerns which have been expressed, within the framework of the Club of Rome and other like bodies, about the excessively rapid use of raw materials worldwide, and particularly the burning up of valuable commodities like hydrocarbons which have a variety of alternative uses. Thus, all the lines of action debated so widely in the world have not at this stage met any strong resistance.

The Community's part in all this seems to have been, understandably, defined in certain fairly clear terms. The first is to go in for a major programme of hydrocarbon use economy. There is no doubt that we ourselves and the Government can perhaps be criticised for an inadequate approach to this major problem of economy in the use of energy, but the great purpose of the Community's plan is to bring about a very substantial reduction in energy used.

The second part of the programme is clearly to go for a major promotion programme in the discovery and development of local fossil fuels within the Community area. The third part of the programme is to procure a joint capability in our nuclear generation. The fourth is to assure access to and enrichment of the necessary fuel, particularly uranium, for the purpose of meeting that nuclear demand.

Allied to these principal pillars of the Community policy has been the need to pursue a common line of action in relation to the security of the population and the restriction of pollution, as well as to provide for solidarity amongst the Community countries in the event of external obstacles to supply and the creation of emergency situations.

I hasten to assure my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) that the Community's purpose is not at all in such matters to act in spite of the International Energy Authority. On the contrary, from my contacts with the Community I suggest that the whole purpose is to find means of ensuring that the Community as a whole represents a valid part of the authority and can usefully contribute, but as a powerful group, to the formulation of its policies. That is where I look forward to a European economic policy, and it is the way in which the Commissioner concerned looks, together with that part of the Commission over which he presides.

Mr. Patrick Jenkin

Does not my right hon. Friend agree, however, that it might be better if there were more overt recognition of this fact in the Community's documents? I can find practically nothing about it in them.

Mr. Davies

I think that my right hon. Friend has not had as much experience as I have had of trying to follow the extraordinary deviations and deviousness of the Community mind. The Commission takes a long time to produce many statements. I have no doubt that it is still catching up with the development of the International Energy Authority.

Indeed, few of us perhaps, as my right hon. Friend rightly pointed out, even yet recognise the full intensity of the commitment that the Government have taken on in terms of support of member countries and of the authority in the event of an emergency. We have taken on an absolute commitment in respect of any production we may get from our coastal waters to support that operation in terms of an emergency. There is no doubt that the extent of the activities of the authority are as yet only partly permeating our own thoughts and, indeed, the thoughts of the Community.

The alternative to participating in this major programme of common effort is to pursue an individualist policy. That is conditioned by what I have just said on the subject of the commitments that this country has taken along with others—but not, for instance, Norway—in relation to the commitment of its potential indigenous crude oil supplies to support others in an emergency.

We could have a go-it-alone policy. Such a policy for Britain inevitably involves a fossil fuel energy policy. If we are to rely on our own resources to meet the energy needs of the remainder of this century, we shall not have access to the capital required both to develop the major fossil fuel resources needed to give us that assurance and to pursue the extensive development of nuclear energy, a programme which has been so much part of our pattern of activity over the past 20 years but which we could not sustain alongside the immensely demanding requirements of promoting the necessary fossil fuel policy.

It is useless to imagine that on the basis of a go-it-alone policy we could maintain a capability in every field which is within the framework of future energy demand and need, as will be the case in the United States of America, or perhaps more properly in North America as a whole, and undoubtedly in Western Europe. We shall have to choose, and our choice will have to be fossil fuels, with all the risks that that might entail for us.

The choice of such policy would run against the general tendencies which are prevalent throughout the industrialised world. We should find ourselves pursuing lines that were not parallel with the countries of North America or elsewhere. We should be pursuing lines that were peculiar to ourselves.

The choice between these two alternatives is not all that obvious. There are some substantial arguments which might make us contemplate a go-it-alone policy. If we believed that oil prices would be maintained in real terms at high figures, and that we could indulge in a virtual bonanza from our own resource area, we could well imagine that we had a major advantage nationally in simply pursuing that to our own benefit, despite any alternative consequences it might have.

There is the added and not insignificant importance of the feeling of self-reliance which would be implicit in such a policy. In all reason, I do not subscribe to the view that that would be worth while. It would have us running unreasonably high risks. We are not yet sure of the quantitative aspect of our own resources. It required only a certain threatening attitude by the Government last year to procure a sharp reaction among those concerned with the production of these oil resources and their development. We are now treated to the somewhat unedifying spectacle of the Government's going into reverse on the matter to cajole back into the fold people whom they had succeeded in frightening out of it as recently as a few months ago. The birds in the bush are by no means certain not to fly off. Here I refer to the North Sea and, as we have seen recently, estimates made of the Celtic Sea.

Secondly, the price position is by no means certain. My right hon. Friend the Member for Wanstead and Woodford spoke about this, and I shall not labour the point. If the major consuming countries succeeded in meeting energy demand from other resources, there would be a totally different supply and demand pattern from the current pattern of crude oil and gas supply worldwide. If that happened, the present apparent solidarity to maintain high levels of crude oil and gas pricing would be under great pressure. We might well find ourselves with an asset of depreciating value rather than an increasing value, the more so if we take into account the vertiginous level of costs which we are reaching for development and production in the fields concerned. We are seeing the gap profit sharply narrowing even at present oil prices. If those prices are not maintained at their current level, or if they fail to rise in real terms with the value of money, that pressure will be increased.

Mr. Hooley

The right hon. Gentleman is under a serious illusion if he supposes that the major oil-producing countries will allow their revenues to fall colossally in real terms. He must appreciate that they could restrict output way below their present levels and still have massive overseas earnings.

Mr. Davies

Of course that is true, but the hon. Gentleman is looking at the matter with far too short a perspective. In these issues we are dealing with decades and not with the next year or two. In terms of decades there can be a massive replacement of energy demands. If the intentions of our North American friends are fulfilled, there will be. Over the rest of the century at least, which is the period we are speaking about, that can have a big impact on price levels in the oil industry. It would be folly to imagine that one can rely on a sustained high level of oil prices in all circumstances for an indefinite time. I share my right hon. Friend's view that from the point of view of the security of investment there is every reason to support the Dr. Kissinger view over the need for a floor price to ensure investment.

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

There is some logic on the right hon. Gentleman's side but I hope that in answering my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) he will not overlook the fact that we do not want to kill research into other forms of energy and their development. He must concede that oil and other fossil fuels are all wasting assets. Incidentally, I hope not to make a political point.

Mr. Davies

The Minister has used the ball that I teed up to drive. I favour a widespread approach to an energy policy of the kind that the Community puts forward. It would be dangerous to become involved entirely in a single area of effort irrespective of the many other important areas in which we should be concerned but which unfortunately we cannot undertake alone.

On balance, having made a serious assessment of the alternative virtues of two different policies, I favour a joint and concerted policy with our fellow members of the Community. That is wise.

There is much to be done in sharpening up, changing and improving a great deal in the papers, but the broad purpose is right. It is to have a major effort, and it involves us in making commitments as well as receiving them. Commitments will be required on both supply and price of oil, commitments which by no stretch of the imagination limit our capacity to be masters in our own house on the subject of production or to be the licencegiver, the retainer of the whole economic benefit of the marvellous asset we have found round our coast. There matters are not in question.

In pursuing a common policy with our European neighbours we must give commitments about support in times of emergency, the non-transgression of Community principles, free trade activity across Community borders and so on. Such commitments must be part and parcel of any policy into which we enter. We should pursue to finality the purposes of these operations and should regard ourselves as a major stimulus in reaching an effective, comprehensive Community energy policy.

6.30 p.m.

Mr. William Small (Glasgow, Garscadden)

It is always a pleasure to listen to the right hon. Member for Knutsford (Mr. Davies). He always puts forward thoughtful propositions and ideas, and to that extent the House is indebted to him. It is also indebted to the Opposition Front Bench spokesman under the new régime, the right hon. Member for Wanstead and Woodford (Mr. Jenkin). Apparently there is to be no vote tonight. That augurs well for those of us who are likely to remain on these benches for many years to come, despite the "Eurovision contest" which we have had here and in Europe almost every night.

Nations are judged by the amount of horse-power at the elbow of their work forces. The important consideration is the area from which that horse-power comes. At the Copenhagen summit at which Dr. Kissinger was present, the Shah of Iran was almost fixing the price of cereals on the American breakfast table. Then a formula was devised and the proposition was that we should go nuclear. It seems that the nuclear age dawned after the Copenhagen summit. According to the OECD documentation, there is a 40 per cent. external energy requirement and a 60 per cent. internal energy requirement, with the majority of it being nuclear. In essence, that means building 200 nuclear power stations between now and the year 2000 and a tenfold increase in radioactive waste as a by-product.

We cannot for much longer run society on windmills, and, therefore, oil prices may or may not fall. All countries have a vested interest in recycling petrodollars in their own interest—that is, to solve their balance of payments problems. In terms of the Euromarket, most of the money is being invested in areas where uranium fossil has been discovered. To that extent there is a minuscule attempt to invest the money rather than recycle some other country's national debt.

I hope that in discussing matters of this kind we shall not become overawed by people who have vested interests in being anti-nuclear. That is illustrated by the propaganda issued by the oil companies which have a vested interest in changing the energy source Italian-style. However, the German economy has a tendency towards nuclear innovation. The world stands still no longer. South Africa, with a natural uranium base on its doorstep, can build in nuclear terms at a rate one-third cheaper than can be achieved by British technology. According to the Ecologist, the faith of the aborigines is centred round the green ant—a living symbol of another world. The aborigines are living on top of the richest uranium deposit in the world.

In the Observer of 7th February there was a story about a trade union organiser whose death in a car accident still puzzled the FBI. It was claimed that she had had evidence about the recycling of plutonium in a private company, and the dangers inherent in recycling and in handing over these matters to private enterprise to the extent that safety standards are not being met is still a matter of investigation. I hope that these matters will be investigated. We have had one Windscale when there was a leak in the sense that safety apparatus did not register for three days. As a result, cars and other items were contaminated. We must study the duality aspect of the use of nuclear energy. If we go against public opinion in these matters, we may well retard the development of nuclear power.

I used to be an engineer millwright, but today we no longer talk in those terms. Tomorrow's man will be the nuclear technician. It will be his sensitivity, judgment and training that we shall value, and the quality of his training must be such that we do not have a second Flixborough as a result of someone saying "We need a 28-in. pipe, but we will use a 20-in. pipe and that will cover it".

The Americans were uncertain about the light-water reactor and, therefore, they asked Professor Rasmussen to look into the matter. On 10th September, 14 volumes and $3 million later, he gave clearance for the light-water reactor. On 25th September the Americans closed 21 nuclear power stations. I do not wish to go through the names of all the stations involved, but the documentation proved that the Press was as exotic and alarmist as ever. It is time that we had a slightly less alarmist Press, with reputable reporters or reputable people not connected with newspapers, making responsible examinations before reports are published.

The mental age of this industry is 21 years, but we have not yet experienced the safety problem of a station mothballed after 25 years' active use—in any country. I live seven miles from Hunterston A and B. The Scotsman talks of a £700 million investment on Hunterston C. If we have Hunterston A, B and C, there will be a clutch of nuclear material there and we shall be in trouble. The public will not accept it.

We should consider the arguments that were on the agenda of the Conference of the Law of the Sea. We should consider how far we can use the sea as a dump. If the sea becomes a dump for atomic waste which lives for 250,000 years, what will be the result? Will it be Ezekiel's valley of dry bones?

It has been reported in America that there are 170 people who are carrying a plutonium load above the risk level. That is on the recycling issue alone. I do not want to make a long speech. I merely want to quicken the pulse and excite the imagination beyond the profile of the man wearing a bowler hat and striped trousers who carries a good pen and writes well. The outside world is not like that, neither are the people whose daily lives will be affected.

I used to work in an explosives factory where colleagues died of glycerine heart. The doctors would never diagnose glycerine heart, but everyone knew that that was what those colleagues died of. We are approaching the same kind of problem. A new element is entering our lives. We have to face an increase in leukaemia in the future. I am not scare-mongering. I am reasonably well read on these matters. Hygiene and health standards should be approved both by European doctors and by doctors who leave the country, so that people may be protected.

I welcome this opportunity for hon. Members to realise the new elements in our way of life with which we shall have to contend in the future. I repeat the phrase vestigia nulla retrorsum. In ancient Rome there were no footsteps back from the lion's den. The nuclear age has dawned.

6.43 p.m.

Mr. John H. Osborn (Sheffield, Hallam)

I should first like to congratulate the Secretary of State for Energy on his summary of the difficult papers and for trying to put before us exactly what is going on in Europe. We have had only a few days to look at the Community documents, and I find that they are confusing and hard to absorb. I am a rapporteur on this subject in another assembly and I realises that we in the House have a long way to go before we can present the problems easily to ourselves, let alone to the country at large. The message I should like to come from this debate is that the Commission must give us less paper, summarise its conclusions more aptly and state more clearly what the Community should be doing and the effectiveness or otherwise of each country within the Community.

I agree with my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) and others that energy is much better looked at by Britain as part of a European Community pattern, and I shall elaborate on that in due course. The saving of energy and of imports of oil is all-important at this time. I should like to comment on figures which I have read today. Whereas Denmark has made a 25 per cent. reduction in consumption of oil since last year and other countries have made a 13 to 15 per cent. reduction, we in Britain have made only a 9 per cent. reduction.

On the question of avoiding waste, the domestic consumer has to pay for energy consumed in the home and the cost—certainly for the pensioner—is a reality that faces the individual and is perhaps the greatest possible force in reducing consumption. That is also true of industry. We have before us the NEDC report which is of value. Companies, particularly in the private sector, must reduce costs while still maintaining standards of safety and the highest possible power to the elbow of the worker. I consider the NEDC report to be a practical step in the right direction.

I want to come back to the European energy policy. I thank my hon. Friend the Member for Cheadle (Mr. Norman-ton), who will reply to the debate for the Opposition, for helping me in the Council of Europe by making me understand some of the changes that have gone on within the Community. Although we are debating a Community policy, surely we must also consider the policy in so far as it affects the whole of Europe.

Last summer the Western European Union discussed the need for a positive policy for the construction of reactors, and I referred to that in the debate in the House at that time. Industries in Europe are far too fragmented and far too nationally oriented. We need not to seek isolated solutions within the national framework of nations but to come together and adopt common policies on the type of reactor and the sharing of the cost of development. I hope that the Minister in his reply will be able to tell us what progress has been made in the last six months and what initiatives have been taken by the Government to achieve these ends.

I regret the isolation of this country last summer from some of the European activities. On the other hand I welcome the decision to develop the steam-generating heavy-water reactor as an alternative. The boiling-water, pressure-water and other light-water reactors have not provided all the answers for Europe and the United States, as the hon. Member for Glasgow, Garscadden (Mr. Small) said. We have to accept the comment of the hon. Member for Bristol, North-East (Mr. Palmer) that the British programme as it is developing is too little and perhaps too late. I hope that we in Britain ensure that our development will continue at the rate recommended in Europe.

The Western European Union and the Council of Europe have before them the whole question of safety. At present two problems are being looked at. One is energy in the environmental context, and safety. The second is the energy problem in the whole context of the Club of Rome limits to growth. These, as has been pointed out, are the issues facing every nation. Without energy as a resource our whole way of life is at stake, and the dangers are as great now as they were six months ago.

We have before us for review the energy prospects to 1985, in two volumes by the OECD. Again what is the significance as far as Europe is concerned? I think the lesson is that in the short term, the next 10 years, the same sources of energy will have to be used, because the momentum of change in the vast technological complexes is slow. Oil and natural gas will continue to be used. Coal will be of greater importance. This reaffirms the Community report.

The most interesting development is the fact that more and more oil will be developed off the shores of the continents, and new techniques, perhaps up to 1,000 metres or, say, 3,000 ft., will be developed within the next decade. But this involves immense investment in capital equipment and technology.

In the medium term, 1985–2000, new techniques will be evolved for extracting oil from depths of well over 1,000 metres. It will be reasonable to look forward to the new types of reactor, the high-temperature and fast-breeder. Again, however, each country can be involved in immense capital development unless the development is shared, not only on a European scale but with other nations also.

In the longer term, after the year 2000, certainly we shall have fossil fuels and the development of coal, but we must bear in mind that new generations of citizens will not readily go down deep pits. Until automated mining comes along or until we have better resources—and these must be basically outside the European continent—fossil fuels will involve transportation and importation because in the more modern ages men will become more and more reluctant, or it will become too costly for them to go down to great depths. I am talking of the long term, of 25 years hence. We must face up to this in this country. By then we should have nuclear fusion. Perhaps fast-breeder reactors will be well developed, and we can look to geothermal and solary energy.

Returning to the subject of nuclear energy, as has been mentioned already, the scale and complexity of processing and reprocessing fuels on a national let alone a continental or international scale is vast. This is where the nations of Europe must come together. I welcome the development of the centrifuge processes at URENCO and CENTEE. I very much hope that the targets of 200 tons per annum at Almelo and CENTEE will be achieved and exceeded.

I want to return to the question of waste disposal and safety. Within European countries, the Netherlands particularly, there is great concern about safety. There is normal leakage which can go up the chimney stack, a minimal leakage to coolant waters which is no more than natural hazards from other sources, which one can monitor and can live with. There are the large-volume, short half-life wastes, and techniques have been devised for dumping them in the sea. There is a demand that any form of dumping in the sea should be stopped. This has been debated within the Council of Europe. We have the benefits of OECD reports on the techniques and how they can be applied. But I was depressed when this matter was raised in the Council of Europe. The Minister of the Environment representing the Ministers of Europe, Mrs. Buckland from Norway, was unable to give an assurance that the techniques approved by the International Nuclear Energy Agency, approved through the OECD and NEA, are adequate and safe for the people of this country, Europe and the world.

Ministers must pay attention to the expert advice they have had and give the assurances which will allay the growing fears which have been put to Members of Parliament from responsible bodies. Many professors and others in departments of engineering, physics and power are much concerned that perhaps the administration have overlooked these matters. This, I believe, is all-important.

I have dealt with Community policy and European policy, but this must be viewed within the context of the International Energy Agency. I welcome the Nixon, now Kissinger, initiative. It is important that we know what those guidelines are, particularly for dealing with emergencies. It is important that as a nation we are prepared to make our contribution. But I go on to something much more urgent. In the United States the AEC has closed down, but there is a monitoring agency for nuclear safety. There has now been developed an energy agency within the United States. This is a dynamic body, which I very much hope to have the opportunity of seeing myself—although I saw the AEC last year—and it is co-ordinating developments on a vast continental scale in the United States.

There is reference in the documents to an overall authority which would over-ride the sovereignty of countries. I hope that the British Government and this House will look at an equivalent agency on a European scale—not necessarily a Community scale—which can dynamically look at the problems as we see them in Europe. Therefore, I do not shy away from a supranational authority. I hope that we shall endorse and support that.

To summarise so far, we now have an indication that the energy pattern and energy demands that are likely to face Europe will cause the consumption of solid fossil fuels to be greater. But where are those fuels to come from? Which countries are to produce them, and how? We should have more details as to how this is to be worked out.

The forecast for consumption of oil, if we differentiate between initial forecasts and objectives, is that, instead of almost doubling the initial forecast, the objectives will remain steady to 1985. How shall we fare in this country and achieve this? The consumption of natural gas will be up over this time. But, above all, there is a large budget for the increase of hydro, geothermal and particularly nuclear energy, and the initial targets are succeeded by objectives considerably greater.

I come to one aspect of the changes which will arise from the increased use of electricity. I do not want to get involved in the merits and demerits of electricity for space heating. I am not certain that I entirely agree with my right hon. Friend the Member for Wanstead and Woodford but if nuclear energy turns out to be a cheap source of energy it is possible to waste it and still get cheaper heating for our homes, provided there is adequate insulation.

I believe that we must look at the impact of a changing energy pattern in transportation. In the documents there is a reference to greater emphasis on public transport. The SMMT has produced a research document, with a foreword by Ray Brookes, on the energy crisis in the motor industry. How will the world's motor industry change? What kind of vehicles will be produced? Will there not be a new form of transportation? There is a demand that we should reduce the road programme even more. I do not share that view, because individual journeys of passengers and freight are essential for a flexible, prosperous and civilised society.

All these matters must be looked at, and I hope that when discussing these matters in Brussels the Minister will bear in mind that the creation of more energy as against the conservation of energy, is more essential if we are to raise our standards of living, and certainly if we are to maintain the present standard of living in the continent of Europe.

Mr. Speaker

May I make a special appeal to the House. There are 12 hon. Member from the back benches who want to catch my eye. The time remaining for this debate is 120 minutes. The mathematics are very simple. I appeal to hon. Members when called to try to keep their contributions short.

7.0 pm

Mr. Richard Kelley (Don Valley)

It is part of the arrogance of this House that we select the subject of energy policy as a matter for our attention. Who determines what energy is available? Energy is derived from the dynamism which the planet acquired from a solar source when it shot into orbit. We have to depend on that source of energy to meet our needs, and any policy that we decide relates to that energy source.

I remember sitting on the Opposition benches many years ago when the House often discussed whether we should devote our capital resources to the development of deep coal mining or whether we should depend on some alien source of energy which was available at that time—namely, cheap Middle East oil. The House, in its wisdom or otherwise, decided to close collieries and as a result reduce the output in the coal mining industry from about 230 million tons to 180 million tons. In subsequent years the figure dropped even further, and we had to depend on the alien source of energy which primordial forces had deposited on somebody else's territory.

At that time we thought that there were military forces at work behind the idea of providing oil from that source at a certain price. We felt that the military balance in the world might change in the years to come. It was thought that the Soviet menace, as one then saw it, might develop and become so dominant that this would have a considerable effect in a military sense on world energy sources. The then policy was to close down our pits. We now find that the Arab nations are able to dictate the price of their oil, and that is the situation that faces many Western countries.

At the time it appeared that the people in power were unaware of the political considerations involved in the availability of cheap energy from the Middle East. Therefore, they went on merrily closing down pits and cutting down coal output and decided to rely on cheap oil from the Middle East. That was what happened—until the time when the Russians were able to provide Egypt with tanks and Syria with strike aircraft, and when the Americans were no longer able to provide a highly organised military base in Israel to maintain Western dominance in the oil area.

We now face a situation in which we pay 73p a gallon for four-star petrol and high prices for fuel oil, with paraffin at 52p a gallon—a commodity which not so long ago cost 2s. 1½d. per gallon. Those are the facts of life we have to face in deciding upon energy policy. Therefore, energy is not a matter which we can discuss as a static factor in the lives of our people. The situation changes, and it will continue to change.

We are faced with the prospect of having to develop our own energy industry. I shall not go into the involved questions of heavy-water or light-water reactors and all the other technological advances. I believe that they are matters for scientists; they are certainly not matters for this House. The question we have to consider in solving the energy crisis is what is available to us as a nation. Each time we switch on our television set we see stamped across the screen "Save it"—in other words, we are constantly exhorted to save energy. The only way we can save energy is to produce the stuff ourselves. We can do that only by providing sufficient incentives for people to enter the coal mining industry and to produce the coal which, in turn, will give us the energy we require for our industrial and heating purposes.

We now face a problem of a wage conflict in the mining industry. Some people say that the miners are asking for the moon, but they are asking only for something that will induce people to go into the mining industry to enable our nation to produce 160 million tons of coal a year. Is there any hon. Member who feels it his duty to get down to a job of work which will help this country to beat the energy crisis? Will any hon. Member go into the pits, pick up a shovel and throw coal on to the conveyor belt and earn the enormous income that miners are supposed to pick up? There are over 630 Members of this House, and excluding those who are too old to do the work, including myself, and of course certain other categories, there are probably 250 Members who could go into the mining industry and help to produce the coal. But they do not do so because it would not pay them enough.

We all know about the large number of young people who appear on our television screens strumming their guitars and producing discordant notes, which they call music. We know that those performers can earn £100,000 and have large houses in Buckinghamshire. The point I am making is that we must try to make mining worth while for young people to go into the mines and to win coal rather than wanting to play their guitars. When Mr. Scargill talks about the miners' increase being only a bag of crisps, he is not talking a lot of nonsense. He is iterating the facts of life. If we want coal, we shall have to attract people to the industry to dig it.

Mr. Jim Lester (Beeston)

Perhaps we should report Mr. Scargill's remarks accurately. He was not talking about miners' pay in general. He was talking about an amount of £10 being equivalent to only a bag of crisps which is a very different thing.

Mr. Kelley

Mr. Scargill was obviously speaking metaphorically. He was making the point that an award of £10, after deduction of income tax, graduated contributions and a number of other things, would leave the miners with the equivalent of a bag of crisps.

Mr. Lester

I do not want to be difficult, but judging by what the hon. Gentleman says the miners must be fairly highly paid to have to pay so much tax on the £10 increase as to bring the net sum down to the equivalent of a bag of crisps.

Mr. Kelley

Yes. I hope that the miners are reaching such a status that people will consider whether to go into the City of London or the Stock Exchange, to become solicitors, barristers or the like or to go into the mining industry. The miner today, in the crisis facing this country, is a damned sight more important than a solicitor or a barrister or, for that matter, a school teacher.

We have chosen to debate this subject today because of the crisis in which we find ourselves. We require miners to get the sources of energy for us. The more they are paid, the more likely we are to get people to go into the mining industry to get the energy sources that we need. Therefore Arthur Scargill, in using flamboyant language, is only epitomising the situation in which the nation is placed. If we must have an incomes policy—I am not talking about the restriction of income—it must induce people to go into those trades, professions and occupations which will enable the nation to survive this crisis.

We should devote ourselves to devising means of developing our indigenous resources. We have regarded external sources of energy—Middle East oil, heavy water reactors, nuclear fission and nuclear fusion—as elements which would be more likely to provide the solutions to our problems. None of them has been able to solve our problems. We now have a restricted source of oil which will probably be even more restricted in future, despite what Sheik Yamani has said.

We are talking about 1980 as the date for getting our own oil landed on the Scottish coast. We shall probably have to extend that date because of capital restrictions. But we have a labour force in the mining industry which can be increased to produce 150 million tons of coal not at some time in future but within 12 months. I believe that we should devote ourselves to finding a way of inducing the mining population to do just that.

7.14 p.m.

Mr. David Penhaligon (Truro)

The debate is about our energy sources for the next 10 or 15 years. I have been shocked at the low attendance of hon. Members for a debate on what to me is one of the basic criteria for maintaining our economy.

Mr. Emery

Where are the other Liberals?

Mr. Penhaligon

Celebrating the fact that my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) has been a Member of this House for 25 years. If hon. Members care to make a statistical analysis, they will find that the Liberal Party is the best attended on a percentage basis. There is at least one of its 13 Members present.

Mr. Emery

That is one too many.

Mr. Penhaligon

The real point that the debate has brought out is the tremendous jolt that has been given to accepted trends within Europe by the great increase in the price of imported oil. It was a shock to many to discover that over 60 per cent. of the energy consumed within Europe was from various forms of imported petroleum products.

I have read this report. I do not know how many hon. Members are keen enough to read a report of that length. I think that it requires a certain lack of sanity to do so.

Mr. Emery

Self-judgment.

Mr. Penhaligon

I have read the report from one end to the other. It struck me that on the whole it was referring to the cost and security of supply. Great emphasis was put on the security of supply. I am not sure that there was more emphasis on security than was required. It struck me that the people who are fortunate to hold all present reserves of energy in the world must sell them to others. It is not in their interests continually to threaten the economies of their best customers.

Having read the article, it seemed to me that Europe was basically saying that its answer was a stringent policy of conservation backed by the use of nuclear energy as a major part of the production of electricity.

I read somewhere that by 1985 about 46 per cent. of electricity to be generated in Europe would be nuclear-based. I am not sure that the case, cost-wise, has been made for that statement. The report states categorically time and again that the case exists cost-wise. I read it in some detail, but I doubt whether that case has been made out.

The report referred to large stations. I admit that I got a bit mixed up between megawatts and gigawatts at that stage. However, reference was made to power stations of the like of which we have no experience in this country—really enormous power stations.

Where are we to put these plants? I hope that Cornwall is not chosen. I do not mind where they are put, but I suggest that Cornwall is left out of consideration. We must pick isolated sites for these stations.

Mr. Roger Scott (Westhoughton)

Cornwall.

Mr. Penhaligon

I made the point quickly because I realised that people might think that Cornwall was a suitable site.

We want isolated sites from a safety point of view. The risks involved have been brushed over. It does not seem convenient, within the present energy problems of Europe, to discuss the safety risks of nuclear power.

I do not know what the latest figure is, but I suspect that the present thermodynamic efficiency of an electricity generating station is 37 to 38 per cent. If anyone chooses to correct me, I will stand corrected, but I understand that it is of that order. Anyone who has done any technology on power generation knows that the chances of its reaching 45 per cent. efficiency in the next 25 years are remote. We have got to the point where we cannot increase the strength of materials to increase efficiency substantially above what it is now.

I suggest that, instead of referring to the efficiency of power stations, we should refer to their inefficiency. Really 37 per cent. efficient means 63 per cent. inefficient. It is that 63 per cent. that we desperately need to start using within the context of energy in this country and in Europe.

I think that there is at least some agreement that we must have isolated sites for nuclear power stations. If we are to have isolated sites and insist that we use the 63 per cent. loss of efficiency to which I was referring in some form of district heating, the problems become obvious. Many people say that it is impossible to run a district heating system if the pipes carrying the fluid exceed 30 miles. Therefore, the suggestion appears to be that these enormous nuclear power stations must be sited in the middle of highly populated areas to use the heat that would otherwise be lost.

Mr. Rost

Is the hon. Gentleman aware that in Sweden hot water is piped over considerably longer distances with substantially less loss of heating efficiency than with electricity transmission through the grid system?

Mr. Penhaligon

I read that in one article. I hope that it is so. I found it quite amazing. I have read in several other articles the converse. This is something that we could look into. It does not sound likely that we can transmit hot water 30 miles and lose less power than transmitting a similar amount of energy down a copper wire. I have read it before. Only scientific developments and a factual report can prove that what the hon. Member said is true. However, if it is difficult to transmit hot water over distances of 30 miles or more, that is a significant part of the cost and the viability of long-term nuclear planning.

There is the obvious problem of what we should do with nuclear waste. We have reached the point where someone could write an amusing story about what we could do with the waste from nuclear power stations. The problem must be overcome. I have heard some people say that they would solidify the waste, send it to the sun, put a guard over it, or throw it to the bottom of the sea. The problems are immense. A large number of well-informed people have spoken about the matter—I do not refer to the idiot fringe protests on conservation issues—and I think that such people should try to get their facts right.

The other part of the report is dedicated to ideas on better usage. Diesel fuel was mentioned with regard to transport. I have never been able to understand, even before the increase in the price of fuel oil, why diesel was not a much more widely used fuel for motor transportation. Certainly it is good to see it mentioned, and I hope that the Government will use financial incentives to persuade the manufacturing plants in Europe to move to the diesel system of power.

The insulation of factories has been mentioned. We are always talking about the insulation of factories. A long section of the document is devoted to the controlled ventilation of factories. Enough ventilation—not too much—is a useful saver of energy. As regards home insulation, mention was made of individual temperature-controlled rooms, the efficiency of burner systems, and all sorts of fuels.

I wish that the article had been written in London. I mention this jocularly, because recently I asked the Minister how much energy we consumed in lighting our new, magnificient, super-duper car park. He proudly replied—I cannot remember how much energy was used—that one-third of the lights were switched off as a conservation measure. However, the point is not that he did well to turn off one-third of the lights. The question which should be asked is "Why were they put there in the first place?" There was no need for that number of lights to be installed in the car park. Not only is there the matter of saving the energy used by the lamps, but we must consider the waste of natural resources and the paraphernalia of producing the equipment.

On another occasion, I asked a question about the uses and development of the heat pump. The heat pump is not a widely-heard-of piece of equiment. It incorporates a thermo-dynamic phenomenon. There are tremendous possibilities in this area. We hope that the heat pump will produce five times as much low-temperature heat as it takes in high-temperature heat to run it. Yet the talk here today is about encouraging electricity for the heating of houses. We are very lucky if we succeed in getting one-third of the initial energy put into the electricity generating system back into our front rooms via whatever heating apparatus we care to use, but a heat pump can supply five times as much energy into that room as was originally put into the heat pump. I am suspicious that the time taken to answer the question revealed that the Government were not sure what I was asking. But at least there is some recognition that the heat pump exists, and I am assured that a report will be issued saying at least what is the present world situation.

Money could be spent in this area. Some of the money we now spend on research and development into the aircraft industry could be spent on developing a heat pump which might be of benefit to the world and which would certainly put us in a sphere of technology where no one else in the world had yet become involved. I believe that the manufacture of heat pumps can become an important industry and will satisfy a world need for efficiency.

The hon. Member for Don Valley (Mr. Kelley) referred to coal. Although I do not come from a coal-mining area, I do come from a hard-rock mining area. Having spent some time in mines in one way or another, I know of the pressures referred to. The comment was made that people will not engage in mining in 25 years. If so, where will the world obtain its energy, copper, tin, lead and the other substances which contribute to our present way of life? It was said that we shall not be able to persuade people to go down the mines. Since mines will become deeper in the next 25 years, I dread to think of the consequences. We must make the mining enterprises sufficiently pleasant and rewarding so that people are prepared to go down them.

I was disappointed to read in the document how little expansion of coal will take place. There will be little more than a holding operation on a European basis. I believe that it is the embarrassment felt by European Governments, which have all run down their coal industries, that prevents them from expanding their coal industries. I believe that we need more coal to make a contribution to our economy; it will have no side effects such as the possible problems connected with nuclear energy.

Nuclear energy will come in the long term. There is little doubt that in a hundred years nuclear energy will supply the largest percentage of energy in the world. However, at least in this country now we have a great deal of fossil energy of various sources available. I ask that we should not, because of the panic caused by world oil prices, be driven into a quick changeover to nuclear power. I ask the House to encourage research into nuclear power, to present new ideas and to try out various ideas. Let us not be panicked into producing 46 per cent. of our electricity by nuclear power by 1985.

7.27 p.m.

Mr. Ronald Brown (Hackney, South and Shoreditch)

The hon. Member for Truro (Mr. Penhaligon) will forgive me for not directly following his train of thought. Nuclear power has not been thought of suddenly, and there has been no sudden switch to it because of the increased price of oil. Many of us have been arguing in favour of nuclear power for the past 20 years. Our objection is that progress has been too slow, whereas the objection the hon. Member has is that there has been a quick change of mind.

I am not sure that I follow the hon. Gentleman's argument about people wanting to go deeper down into the mines. He does not suggest that both he and I are anxious to do so, nor does he say what people will want to do in 25 years. I would not do that work however for £200 a week. Mining is not my vocation, and I do not want to see other people down the mines if we can avoid it.

It is vital to have a plan of action for an energy policy for Europe. It surprises me that any one should cavil at it. The documents take a look at the long-term future, but I detect in some of the speeches today a tendency to think in the short term. The documents present a long-range view. We make guesses, and it is necessary to do so, and I hope that the House will look at the matter in that way. To argue that Europe should not look at its own needs in connection with the International Energy Agency misses the point. This is the reason for the International Energy Agency. We suggest that our region is part of the whole. I am surprised that people think that we should look at the problem as a local and not as a regional issue.

The documents set out the analysis very well. As the Minister rightly says, it runs parallel with our own projection. My major worry is about its somewhat pedestrian approach to safety. As the House knows, I have always placed a high premium on safety in nuclear reactors. It is apparent from the documents that the Commission does not share my view. I recall the view expressed in the published report of the OECD where it was suggested that those concerned about safety in nuclear reactors were guilty of exaggerating the risks. All the evidence which has come out since then seems to support the reservations which many of us have had. It is always easy to dismiss such reservations and to call those who have them cranks or people with no knowledge. It is even suggested that matters of this kind are so complex that only the so-called and, in many cases, self-styled experts can really make judgments. It is this aspect which worries me.

In my opinion, however, the documents analyse the energy problems correctly, and I agree with many of the conclusions reached in them. Once again, however, there is the tendency to dismiss the safety aspect with a wave of the hand. Page 12 of the first document epitomises that. It says: The problems of nuclear energy as regards public safety and environmental protection are very properly of increasing importance in the public mind. These problems transcend national frontiers because of their very nature. Therefore public concern must find a response at the Community level as well as at the level of the national authorities. That is hardly showing a dynamic interest in safety.

I recall the ease with which many countries were persuaded to allow light-water reactors to be built in their territories. They were persuaded by the glib assurances given by the United States Atomic Energy Commission. The terminology used in these documents reminds me very much of those same glib assurances and causes me some mis-givings.

Neither the economic argument nor the expediency argument must be allowed to take precedence over safety requirements. I urge my right hon. Friend the Secretary of State to emphasise that as often as he can, because it seems to me that the Commission is still obtaining its information from the AEC in America. In my view, that body has a pretty low credit rating.

There are two other matters about which I remain unimpressed by these documents. The first relates to the transportation of nuclear waste and the second to its storage. About neither of these do I get the feeling that any solutions are offered by the Commission. The documents give a valuable forecast of the growth in nuclear fuel requirements and, therefore, of the amount of waste for disposal. This is the first time that I have seen such an excellent drawing together of a possible look at the future. But the timetable of work published at the back of document No. 446/74 indicates that a report is due in December 1975 on radioactive waste, and we are promised a communication on the transportation of radioactive material in June of this year.

The Government can be assured that many of us will need to be satisfied not only that security arrangements for the transportation and storage of waste in this country are adequate but that there are adequate safeguards on the mainland itself, since radioactivity is no respecter of artificial boundaries.

I want now to put some rather in-house questions to my hon. Friend the Under-Secretary of State. Can he say what arrangements are being made for insuring nuclear power plants in this country? Who insures them, for how much are they insured and who provides the necessary finance? Looking through the documents, I was struck by the absence of any mention of these matters. If we are discussing a proliferation of nuclear power stations, I am anxious to know about the insurance arrangements being made. I hope that my hon. Friend will be able to help me.

I shall be interested to know a little more about the position of the CEGB. According to the Government's new programme, have orders been placed? Has the Secretary of State had reason to talk with Mr. Arthur Hawkins to discover whether the CEGB is pressing ahead with plans as urgently as we were led to believe in December it would be? If not, why not?

Perhaps the Secretary of State will also consider whether, in the light of the new dimension threading through these documents, this is a good time to have a new head of the CEGB. We need new men who are willing to step into the front line of the fight. In my view, much of the information that we read in these documents should have come from the CEGB. Much of it is forecasting, and the board ought to have been able to supply it.

These documents provide a great deal of extremely valuable information. My guess is that this is the first time that the House as a whole has had an opportunity to add to its knowledge about energy matters. It has been done without our having to chase half-way round the world to get the information. This House should be very grateful for that.

At the same time, we have heard considerable criticism about the size and volume of the documents. I do not know what hon. Members expect. If we are to be supplied with a wealth of information covering a whole industry and the future into the year 2000, does anyone really expect it to be contained in two pages? The criticism which has been voiced shows how little this House understands, and if these documents have done nothing else they have drawn attention to the value of this technology. I hope that we shall have more debates of this kind in order to inform ourselves.

7.37 p.m.

Mr. Jim Lester (Beeston)

I agree with the hon. Member for Hackney, South and Shoreditch (Mr. Brown) about the volume of these documents and about the critical importance of a debate on this subject. Representing the area that I do, I intend to concentrate on the document dealing with the guidelines for coal.

Recently the Under-Secretary visited my area to attend a resolution conference. I gather that he was the first Member of this House and certainly the first Minister to do so. I understand that he enjoyed it to the full. Perhaps it is not too much to hope that at some future date I may be the first Conservative Member to be invited to such a meeting.

I welcome the document. Not only is it well informed and cogently argued; it pays a proper regard to the future of deep-mined coal and the major contribution that the United Kingdom's coalfields can make, especially those in the Midlands, Yorkshire and Scotland. I welcome also the urgency expressed in the document about the need for long-term plans and the necessary investment to back them up.

In Part I the figures are compatible. I am not sure whether this is a matter for joy or for sorrow. Too often we argue about figures, and it is something of a change to find that figures throughout the industries are compatible.

The fact that we are hoping to produce the equivalent of 300 million tons in 1985, and that our own industry expects to produce at least half that, underlines the importance of the coal industry and the enormous investment which will be required. The document underlines, too, that the miner has nothing to fear and that the industry has everything to gain from a continued association with Europe.

First, it allows for the wider demand that Europe itself generates to minimise any national fluctuations. It also minimises any national competition which may emerge between coal and, hopefully, North Sea oil. In terms of investment it lessens the effect of any purely national budgetary considerations, which, as we all know only too well, can affect the long-term plans for nationalised industries.

It is a fact that since we have been in the Community the European Coal and Steel Community has invested approximately £50 million in this country in the coal industry in housing, in compensation for industry and in research. I must admit that one of the by-products of that investment has caused me some embarrassment. In one of my "surgeries", in a mining area, I have acted as a house agent to miners who have come to request the 1 per cent. mortgages that they read about in one of the popular daily papers. It was rather difficult to explain to them that that was not the intention and that it was allocated to the National Coal Board.

The document underlines that during the next 10 years we can expect a great deal more help in the essential practical investment which is needed to support our own national programme, particularly in the critical areas of new investment. It is incredibly expensive investment in exploration in new pits, in equipment which is essential for increased production and in minimising risk, which is another key factor. There must also be investment to increase what I prefer to call mechanised muscle. These are ways in which we can make mining more attractive and less dangerous. In many people's minds that is the key area to which research and development should be directed.

I have not included the social aspects. There is the real problem in mining areas of re-training manpower when the exhaustion problem comes about. We recognise that if we are to hit the target of 150 million tons it will mean the rapid exhaustion of many highly productive pits. In my area it is a known fact that if they try to hit the 1 million ton mark the miners do feel that they are mining away their own future. In that way they fear for their security.

Further, we must consider the intelligent use and the better usage of coal. We recognise that it must be utilised in a more modern way through gasification. It is an increasingly valuable resource. We have proven reserves which exceed those of oil and natural gas. It is a resource that we need to use as intelligently as some of the oil-producing States seek to use their oil reserves.

A helpful suggestion is that there should be a wider financing of stockpiling as a better means of production and as an insurance against fluctuating supply and demand situations. The financing of stockpiling through the electricity industry alone is a considerable burden. If within the Community we can work out a more intelligent way of balancing the stock that exists and our usage of it we could make a major contribution to the more sensible generation of electricity.

I know that it is a matter of sadness within the industry that even during this mild winter the CEGB could have burnt a good deal more coal had it been available. As it has not been available, the CEGB has had to fall back on high-cost oil. That has reflected considerably in the energy crisis.

The document also gives key priority to the vexed question of future manning and the levels of recruitment. The hon. Member for Don Valley (Mr. Kelley has left the Chamber, but he will find that in many ways I agree with him. It is true that in the United Kingdom the recruiting figures are more encouraging. Many miners are returning to the industry. However, overall the industry still has an ageing work force. This must give us serious food for thought. According to the document, the French and the Germans rely much more on an imported work force to fill the gap. That raises an interesting question which perhaps the Under-Secretary of State will undertake to consider.

How would the industry itself regard the recruitment of redundant miners in France and Germany, in the coalfields mentioned in the document, to help work the faces in the Midlands and in my area which cannot be worked now because of a shortage of manpower? Is there any way in which recruitment in this country in key areas can be widely advertised and canvassed? It is clear that miners are being made redundant in a wider area than just the United Kingdom. It is a fact that the future depends on our ability to get men into the industry, to get men to go down the pits and to mine in a sensible and fair way. It is right that they should have a well-paid career, a secure career and one that properly recognises all the built-in risks within the industry. It is also right that we should have an industry and a work force which will co-operate fully in all aspects of research and productivity, and in doing that obtain a proper reward.

The document reinforces the Wilberforce Report's finding that we still need—we are now talking of the period up to 1985—to try to find an acceptable productivity base and an acceptable productivity agreement that will produce the results. In paragraph 16 it is suggested that it is important that there should be similar rises in productivity and real wages, and that the two things go together. Any imbalance in a labour-intensive industry which increases costs which are not justified in terms of productivity will not only harm the prospects in the future for the industry but damage the balance between the four-fuel economy which we all want to see. It would add greatly to the general cost of energy.

It is a fact that for the industry and for the individuals in it the next few months are critical. On the basis of the document it is clearly shown that within the EEC there is a sound and well-invested future. It is to be hoped that in the months ahead that will bring out the best and not the worst in the industry.

7.47 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

One of the major curiosities of the document that we are considering, R/3333/74, is that it did not emerge until as late as December 1974. It is curious that the Common Market Commission never devoted its mind to such an important matter as energy until 17 years after the Common Market began to function. It is clear that the reason is a sudden neurotic obsession with the oil crisis and some of the consequences for the Common Market organisation.

It is argued that we paid no attention to the matter. That is not true. Way back in 1967 the present Chairman of British Rail laid a document before the House in an endeavour to develop some sort of fuel policy for Britain. He was criticised for doing so.

The document that we are debating is dominated by the three classic and disastrous Common Market dogmas—namely, harmonisation, self-sufficiency and free competition. On harmonisation, in page 2 of the document dealing with oil prices we read: The fact that Member States are unequally affected exacerbates the dangers to the extent that it risks comprising the internal cohesion of the Community and its capacity to progress towards the definition of common policies. The Community is obsessed with the internal cohesion of the Community and not necessarily with the more important interests of the countries within the Community and the people who live in them. That theme runs right through the document.

Next, I turn to self-sufficiency. The Commission must accept that there is not oil within the Common Market area to supply the Community's needs. Therefore, it argues powerfully for cutting down the two-thirds' dependence on oil—that is, roughly the present figure—to a level of two-fifths. The document puts forward an extraordinary programme for electricity by nuclear generation.

Finally, free competition. There is the usual statement on page 8, which reads: Apart from the efforts of Member States, this action"— that is, energy saving— should be at Community level whenever there is the possibility that the free movement of goods or the free play of competition within the Common Market could be jeopardised. We have there all the usual dogma.

The fact is that in terms of energy policy there is an important international consideration to be borne in mind by this and every other country. If the United Kingdom ever wants extra natural gas, we shall go to Norway for it. If we need uranium for our nuclear policy, we shall go to Canada, Australia or South Africa. If we need extra supplies of oil during the next four or five years before we can exploit indigenous resources, we shall go to Nigeria, Libya or the Middle East. Not on any of those accounts shall we go near the Common Market, because it cannot supply our needs and would not pretend that it could.

I want to raise another point which is important in this concept of quasi-self-sufficiency in power as expressed in this document. Over the weekend my right hon. Friend the Prime Minister referred to the undesirability of the formation of great raw material producer cartels such as OPEC, and he mentioned the possibility of a copper cartel, a bauxite cartel, and possibly cartels for tea, coffee, tin, and so on. That is a potential danger to international trade, but it is a danger that will be exacerbated enormously if Western European industrial countries continue to gang up in various ways, as they tried to do with sugar—fortunately unsuccessfully—and as they are now trying to do on oil consumption, and arrange a position under which their interests dominate, irrespective of the interests of the producer countries.

It would be infinitely more sensible for Western European countries to join other great industrial nations, such as the United States, Japan, Canada and Australia, and enter into real, serious and genuine negotiations aimed at arriving at a mutual balance of interest, rather than produce documents of this kind which are obsessed with the necessity of cutting down oil consumption for their own economic purposes, irrespective of the possible impact of that policy on the major oil-producing countries.

It may be that through international agreement there would emerge a policy under which the sort of figures which the document has produced would prove to be relevant for consumption by Western Europe. I should not care to predict that one way or the other, but what is dangerous, because it will provoke counteraction by OPEC and the oil countries generally, is to set out deliberately to produce a policy under which we say that we dislike this two-thirds dependence on oil and, therefore, we shall cut it down.

It is dangerous to say that even if the ultimate consumption remains the same we want a two-fifths and not a two-thirds policy and that we shall pursue that policy without prior discussion with the major producing countries, without consideration of the effect upon their economies, and without, I fear, serious consideration of the possible effects on prices, production and the attitude which those countries will adopt when they see this written down as Common Market policy. There is an important case for looking at that aspect of the whole document.

The most interesting comment made by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) was that the document totally ignores the International Energy Authority and the negotiations which had gone on, but the possibility of another oil emergency—

Mr. Skeet

Is the hon. Gentleman suggesting that the oil countries should gang up against us but we should not take any protective action?

Mr. Hooley

I said explicitly about three seconds ago that there should be discussions between the two sides before documents of this kind are produced laying down a pre-determined policy in terms of consumption. It would be far more sensible, before writing a document such as this, to say that there should be international discussion—which France has opted out of—to see whether this kind of consumption will dovetail more sensibly into the general world energy situation so far as we can work it out within the next decade.

Mr. Ronald Brown

Do I understand that what my hon. Friend is complaining about is the suggestion in the document that we should conserve our energy, and, therefore, the use of oil unwisely, is not in the interests of anybody? Is he challenging the concept that saving oil by not misusing it is wrong?

Mr. Hooley

I am challenging the concept of a unilaterial determination of the level of consumption by Western industrial Europe without consultation with the major oil producers of the world. I am not saying necessarily that the figure which would have emerged from that consultation would have been more or less than what is here set out. It may have been less in the interests of conserving supplies, or it may have been greater. The fact is that this is an attempt to determine a unilaterial policy, and the right hon. Member for Wanstead and Woodford drew attention to the absence of a genuine international outlook in drawing up the policy set out in this document.

I now propose to refer briefly to some aspects of the United Kingdom's position, and perhaps I may touch on the various types of fuel that are referred to. For the basis of comparison I have been bound to take Cmnd. 5879, the public expenditure document, because this is the most recent statement of Government policy on capital expenditure in terms of the production of fuel resources, and also because it contains some interesting figures about the level of fuel supplies expected under the different heads. The difficulty is that Cmnd. 5879 looks only five years ahead, whereas the Community document purports, I think unwisely, to look ahead for 10 years.

Dealing first with coal, there appears to be reasonable compatibilty between the two programmes, in so far as we envisage a reasonably stable output in the United Kingdom of 120 million tons a year, and the Community document likewise thinks that internal production will stay fairly stable in the EEC at about 250 million tons.

There is, however, a considerable difference in the figures for oil. According to the Brown Book which the Government published last year, we are looking forward to a potential output in the early 1980s of 150 million tons from North Sea sources, although I rather fear that that target will slip in terms of time, for reasons upon which I do not want to elaborate now. Nevertheless, according to the statements of experts, oil Companies and explorers it seems that the natural capacity of the oilfields which have already been discovered—Brent, Ninian, Forties, and one or two others—is abundantly able to give this country an Output of at least 150 million tons a year. Therefore, if we decided that it was in the interests of a fuel policy to do so we could envisage the consumption of oil within our economy at a consider ably higher figure than our present consumption of about 90 million to 100 million tons. If we decided to conserve internal consumption and go for exports, we could find ourselves a member of OPEC.

The position with other Common Market countries would be different. They are not purporting to expand their oil consumption. They have no indigenous source of supply, although I imagine that the document would take on a startingly different aspect if the French Government discovered oil in the Bay of Biscay. It is clear that the position of the United Kingdom vis-à-vis other countries of the Community will be radically different. It is not immediately obvious that we should dovetail our energy policy into the policy advocated in this document in terms of the resources that the British Government will have available.

But there is another aspect of the document which is disquieting. It suggests that the Community might go prospecting around in the North Sea or even the North Atlantic under its own steam. This is to disregard the kind of discussions which went on at Caracas last year and which will take place shortly in Geneva. If the Commission is seriously thinking that the Community can go prospecting in, to use its phrase, "the non-sovereign areas of the high seas", without provoking reactions from the United States, the Soviet Union, Norway and other countries, it is seriously deluding itself. This also reveals the lack of genuine international thinking to which the right hon. Gentleman drew attention.

In terms of gas consumption, Command 5879 appears to envisage about a 40 per cent. increase in the British use of indigenous gas sources, rising from 11,000 million therms to 18,000 million therms in five years. The Common Market document looks forward to a 200 per cent. increase, which is fair enough if France, Holland and Italy have access to resources of gas which will enable them to reach that level of consumption, but it does not follow that the United Kingdom should put itself into the same straitjacket and use indigenous resources on that scale unless it would suit our purpose.

I suppose that the most controversial aspect of Document R3333/74 is the incredible assumptions about the development of nuclear energy. It suggests that over 10 years the production of electricity from nuclear power will rise 17 times, by 1,700 per cent. The investment cost of doing that staggers the imagination. Our own capital costs, over five years, of increasing our peak load capacity from 60 million kW to 65 million kW—a mere 8 per cent.—envisages a capital programme rising from £580 million a year to £840 million, which is pretty substantial. How on earth the Commission supposes that Western Europe can finance a nuclear programme of the order envisaged in the document I cannot imagine.

But there is a more important consideration. My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) drew attention to the hazards of nuclear power. I believe that it would require only one serious nuclear accident—not an explosion and not necessarily in Europe—to call in question in the public mind the whole idea of depending massively on nuclear power as a source of energy.

This is speculation, but the whole oil crisis in 1973 came upon us more or less unheralded. Everybody now says that he predicted it, but I do not remember anyone saying so at the time. If there were a serious nuclear accident or spillage, the assumptions about building these stations all over the place—the programme must envisage an enormous number—would be seriously questioned not only in the United Kingdom but in France, Germany and so on.

I will touch very quickly on conservation. The document that we are discussing suggests a 15 per cent. conservation target, which is not unreasonable, since it squares fairly well with the kind of target suggested by the Government of between 10 and 20 per cent. in recent discussions.

I would reject the dogmas set out in the document, on two grounds. First, they do not take sufficient account of the genuinely international side of energy discussions, the fact that we may draw energy from remote parts of the world and continue to do so. Second, I am not convinced that the actual programmes set out are in any way compatible with the best interests of the fuel policy of the United Kingdom.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. Mr. Speaker earlier advised the House of the number of speakers and the time available. By a simple process of mathematics, those who wish to speak will see that they can just about fit into the time available if they confine themselves to 10 minutes each.

8.5 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

I undertake to do just that, Mr. Deputy Speaker.

I gather that the purpose of this debate, which is the first of many, is to let the Minister know before he goes to Brussels the views particularly of the back benches. That purpose in this debate has been somewhat frustrated by the fact that, as the Minister disclosed in his first few sentences, all the really controversial matters that he was to have discussed in Brussels in 48 hours have in some mysterious ways disappeared from the agenda.

I am very pleased that that should be so, because the really controversial matters were not in the interests of this country at all, even including those people such as myself who are supporters of the EEC. I regard the EEC as devoted primarily to the task of assisting free and fair competition between its members. That is the doctrine enshrined in the Treaty of Rome. As my right hon. Friend the Member for Knutsford (Mr. Davies) pointed out, there is nothing in the treaty to impose within the Community what is called an energy policy, and certainly not the sort of collectivist policy which is hinted at in many of the documents before us.

It is true, as the hon. Member for Sheffield, Heeley (Mr. Hooley) said, that the documents pay lip-service to fair and free competition. The word now used, which I quite like although it is new to me, is market "transparency". That is a new "in" word, although for once not a bad one.

Mr. Patrick Jenkin

It is an old one.

Mr. Fletcher-Cooke

Indeed? That shows how out of date I am in economic jargon. I do not mind that, because the jargon changes from year to year and one comes back into the full stream of fashion when it comes full circle.

"Market transparency" is not bad. It means that all members and their nationals have to disclose fully their costs, their subsidies and all the other devices which they may or may not use to get around obligations to free and fair competition. In so far as the policy of these documents goes that way, I am very much in favour of it and I have no strong objection to the setting of targets. I have little faith in it when it is done nationally and even less when it is done internationally, and particularly when it is done 10 years ahead.

We remember the forecasts made by the brother of the hon. Member for Hackney, South and Shoreditch (Mr. Brown) in the National Plan in 1965. They were very interesting, but none has been fulfilled. We are now 10 years on and I doubt whether one of those forecasts has been justified in the event. How much less likely is it when there is this international forecasting by the Community? However, it is not a harmful exercise as long as people realise that this is a mere estimate of the future and not a straitjacket into which individual member countries are to be dragooned.

There are indications that some people in Brussels have adopted this planning in the compulsory sense. There is, for example, a suggestion that there should be an enforcement agency telling member countries of the reserves they should keep and how they should alter their various sources of power. That has nothing whatever to do with free and fair competition. Every prudent member of the Community will keep the sort of reserves of fuel that it thinks it should and it thinks it can afford, just as my right hon. Friend the Leader of the Opposition keeps on her top shelf sufficient goods to supply her against a needy day.

Dr. Colin Phipps (Dudley, West)

To the year 1990?

Mr. Fletcher-Cooke

Yes. Some have a five-year supply and some a 50-year supply. Some have a 50-day supply, which is what is recommended in this document for certain reserves of fuel oil.

Mr. John Lee (Birmingham, Handsworth)

I am obliged to the hon. and learned Gentleman for giving way. Does the right hon. Lady the Member for Finchley (Mrs. Thatcher) regard it as correct that the size and scope of her larder should be regulated by her neighbours?

Mr. Fletcher-Cooke

I am quite sure she does not. She regards it as no business of her neighbours to regulate what she chooses to keep on her top shelf, and I regard it as no business of Brussels to regulate the amount of reserves in terms of days we should keep. That is a matter for us.

We must not sell oil or energy to Europe at a false price, because that would be contrary to the spirit and the letter of the treaties we have signed. That is quite different from the imposition of the semi-compulsory plans in these documents. Therefore, I am extremely glad that the Secretary of State announced that there was nothing of that sort on the agenda in Brussels on Thursday.

In a sense, the purpose of this debate was achieved in the first half hour. I do not like the proposal regarding EEC loans, about which we have heard very little, which was objected to by my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin). He regarded the loans suggested by the Community for the development of some of the resources of the sea as a gift of the Greeks. He is right. We have some experience nationally of this. Every time British industry accepts loans from a governmental source we find that it is subsequently blamed for so doing by the Secretary of State for Industry and told that it is to be accountable in some rigid fashion to the Government thereafter. This is what my right hon. Friend fears by the suggestion of loans from Brussels for these purposes. We can get on much better without them.

Finally, I want to ask my hon. Friend the Member for Cheadle (Mr. Normanton), who is to wind up this debate for the Opposition, how the European Parliament, of which he is such a distinguished member, has hoisted in the fact that this energy policy, in so far as it has compulsory overtones, is contrary to the spirit of the Treaty of Rome. I have in my hand European Parliament working documents dated 31st January 1975 and containing a report drawn up on behalf of the Committee on Energy Research and Technology, which at some length discusses the documents we have been discussing. Nowhere in them can I find any objection to the menacing compulsory nature of the plans which are contained and enshrined in some of these documents.

The only objection the committee seems to take is that countries which are not members of the EEC might be given too great advantages under these plans. As for striking any note of warning against what I regard as a bureaucratic tendency in Brussels evinced in these documents. I can find no trace, not even a trace that there is any objection to the suggestion in one of the early documents that for the purposes of drawing up further research and plans in Brussels the Commission must employ another 80 to 100 "specialists". That struck a menacing note in my mind. I hope my hon. Friend will assure us that in Strasbourg and Luxembourg, not only for financial reasons but also for reasons of deep policy and doctrine, he and his colleagues will not allow Brussels to get away with that.

8.16 p.m.

Mr. Peter Hardy (Rother Valley)

The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) tempts me to pursue a number of interesting points. I shall refrain from doing so because of the shortage of time, except to say that I am glad that his copy of one of the European Parliament working documents on energy actually comments on energy. The last one I had was about edible vinegar. I could not understand why it was supposed to be devoted to energy and fuel matters.

I am glad that the hon. and learned Gentleman discovered the gem-like phrase "market transparency". It makes wading through documents of that kind rather more interesting. If we are to be faced with the task of wading through weighty documentation of that kind, I hope there will be more effort to make the task easier by presenting the material in a better way. I do a lot of my reading on the train between King's Cross and Doncaster. I tried to read these documents going up last week and coming down this week. It is difficult trying to manage paper as voluminous in size, weighty in extent and often so tedious and repetitive in style. The documents could be made more concise without omitting anything of value. When we consider that much of the debate is devoted to dealing with the proper use of scarce resources, it hardly behoves us to start wasting paper on the extensive scale which this exercise has involved.

There are a number of points I should like the Minister to deal with in his reply. In the documents a good deal of concern has been expressed about energy conservation. Over the last two or three years a lot of expert effort has gone into an examination of this subject. The evidence amassed in these documents tends to justify the approach of the Secretary of State, who appears quite properly to have abjured Government by gimmick and to have gone for conservation in a constructive way rather than attempting to get the headlines—an approach that has not been adopted in a number of countries.

My right hon. Friend will have found from experience that there is no easy way to achieve energy conservation and that the benefits can come only in the long term. I note from the documents that it appears likely that Europe cannot save more than about 8 per cent. of its energy requirements by the 1980s. It can do that only as a result of hefty expenditure. One of the ways in which we can save 8 per cent. of our energy is by increasing the insulation of buildings. I gather that the European policy would mean increasing building costs by at least 2 per cent.

Can my hon. Friend the Under-Secretary give us some idea of the huge costs that are necessary if we are to save energy? It may be that some of the savings are so expensive to make that we cannot embark on them. It is all very well Europe deciding to reduce its expected growth in energy demand from 5 per cent. to 3½ per cent., but we have to ask whether the costs incurred in doing so would not be too great.

The Europeans are extremely optimistic about being able to sustain the growth in energy demand over the next 10 or 15 years. They appear to be banking on at least a part of the 180 million tons of oil which they expect to be extracted from the North Sea very soon. The implications of that hope for this country have to be spelt out whether or not that matter is taken off the agenda by the European Ministers. The implications for Britain are far too serious for that not to be done.

If Professor Odell is right and reserves in the North Sea are as massive as he supposes, we could clearly sustain a 180 million ton rate of extraction and sell some to Europe at the going world price but with the energy price floor which was advocated by the right hon. Member for Wanstead and Woodford (Mr. Jenkin). If the reserves are not of the scale suggested by Professor Odell, my right hon. Friend will do right to ensure, whether these items are on the agenda or not, that the interests of this country are paramount in our consideration of offshore oil even though Europe may try to stuff money in our pockets to secure extraction from the more expensive fields.

My main anxiety concerns the glib assumption by people in Europe that they can cease to rely to the extent they already do on foreign oil, but they appear too willing to become increasingly dependent upon the supply of natural gas and coal from non-European sources. If that happens, they could well be making the same error that has been made in the last year or so. The hon. Member for Beeston (Mr. Lester) said that Europe should be aiming at coal consumption of 300 million tons but, as my right hon. Friend the Secretary of State explained, that figure would consist of coal production of 250 million tons with up to 50 million tons being imported from outside Europe.

There can be no guarantee that in 10 or 15 years' time coal will be readily or cheaply available. In view of that and of our recent experience of excessive reliance on non-indigenous supplies, it would seem highly desirable for Western Europe to try to redeem some of the waste which it inflicted on itself by a too rapid rundown of its coal industry. It would be highly desirable if Britain could be given the financial guarantee which would be required in order to maintain and increase its coal production.

We can and should increase our coal production, but we can do so only if we have the men to get the coal. I was heartened today to read of an increase of 3,700 in the number working for the National Coal Board compared with 10 months ago. That is an achievement which I hope the Secretary of State will regard as satisfactory, but we shall only get the men to go down the pits if we pay them. The men are no longer captives of coal, and geography no longer confines them to employment in the pits. I do not suggest that there is no need for statesmanship in the union or that we can treble or quadruple miners' wages overnight. Nevertheless it needs to be clearly shown that the miners have a future and that year by year they can enjoy a steady and sustained enhancement of their earning potential. This may mean that coal will increase in price, but the alternative is likely to be even more expensive.

The Europeans talk of a massive increase in nuclear capacity and a standardisation of reactor types. They seem to be keen on standardisation now whereas six months or a year ago they seemed to favour a variety of types. If we are to see standardisation, one hopes that it will not be a standardisation based on American nuclear technology. But if we are to move ahead to the scale of nuclear capacity which the Common Market currently envisages, the cost of that provision will, as the right hon.

Member for Wanstead and Woodford said, be an absolute burden which it is doubtful that Europe could afford.

We are talking about £85 billion at 1973 prices to provide that sort of nuclear generation. Surely it would be cheaper to spend more—even more than the Government have generously provided in their present plan—to ensure that our own coal extraction capacity—and, indeed, that of Western Europe—is increased. Even so, we shall have to have growth in nuclear generation, and it is vital that the Government make clear our policy and determination in two directions—first, the question of financing such nuclear development, and secondly the supervision and safety of nuclear power stations.

Many of us may be less than favourably disposed towards the EEC, but that does not necessarily mean that we are little Englanders. It has been suggested that before long there should be a supranational authority to exercise a broad supervisory rôle in international civil nuclear engineering. Recently a Sunday newspaper presented as a scare story an article in which it said that little children could get hold of "joke" matches and could easily set themselves on fire with them. The world contains some areas where politicians and people may as easily set themselves on fire. If we are worried about the risks of children setting themselves on fire, equally we need not think ourselves immune from severe risk. We have to think about our own problems in the adult world. The risks from nuclear power stations must rank among them. Anxious as we all are to have increased nuclear generation of electricity, we still have to think about the possible risks of setting ourselves towards destruction.

8.28 p.m.

Mr. Peter Emery (Honiton)

Much as I would like to take up a number of points raised by the hon. Member for Rother Valley (Mr. Hardy), I hope he will forgive me if I do not do so because I shall try to hold myself within the 10-minute limit, which very few hon. Members so far in the debate have managed to achieve.

I realise many of the problems which the Secretary of State for Energy faces. It is exactly 50 weeks since I had responsibility for some of them. I have purposely kept quiet about energy matters since then, because I think it only fair that ex-Ministers should leave their successors a fair run in trying to do the best they can in an area which is of such vital interest to the nation. But the two points which I want to make are points of criticism, and I am sorry that I have to make them. When one considers the host of documents that we have had from the Government on energy matters, two things emerge about which the Government should be doing rather more.

While I accept that in many instances it is nonsensical to believe that one can have within the EEC a policy on resources and other factors that will be completely adhered to by everyone without question, I believe it is possible to get considerable agreement on policy, thereby getting a major effort from a united Community working with Britain to our mutual benefit. I believe that the British Department of Energy has more to contribute than can be contributed by any other nation in Europe. One has only to think of our strength in hydrocarbons, whether the fuel be coal or oil or gas, and of our nuclear technology, which is perhaps more advanced than that of any other country in Europe, and is certainly on equal terms with the development of the fast-breeder reactor in France.

We ought to be playing a greater rôle than the Government have been able to achieve. The Minister and his Department should put more thought into trying, in co-operation with the European Parliament to ensure that policy thinking is a little wider and a little more sensible in an area where we can give considerable help.

I suggest—I have no God-given right to do so—that the estimates of possible nuclear growth in Europe in the next 10 years are beyond reality. I do not see how in any way, whether for technological, fuel or capital investment reasons, they can become reality. None the less, there can be little doubt that Europe will be moving towards nuclear energy to a greater extent than most people would have thought a number of years ago. That gives a major opportunity for British industry and technology which is not being grasped as it should be. The Minister and his Department ought to be giving more encouragement to British industry to attempt to win contracts within Europe which we have not yet succeeded in winning.

I should like to make a positive suggestion to the Minister. I am not one for creating new committees or new boards when there is such a proliferation of them, but he has under his control, and he is the chairman of, one of the most powerful nuclear advisory bodies that has ever been brought into existence—the Nuclear Power Advisory Board. My information may not be correct, but I believe that that body has done little since the advice was given on the SGHWR.

The possible terms of reference for the committee would go much further than just advising the Government on the next reactor. The Minister might well use the committee as an instrument for trying to bring to industry an input into Europe technologically, industrially and commercially. That would be of considerable benefit to our own nuclear and electrical industry and to the technological advance of nuclear manufacturing in this country.

Those are the specific points which I wanted to put to the Minister. He should do more in those areas than he has been able to achieve in the past 10 months. I hope he will take this criticism in the spirit in which it is given, because I believe that it will be helpful to him and the country.

I apologise to the Minister for the fact that owing to another engagement I shall not be able to be here for his winding-up speech.

8.32 p.m.

Dr. Colin Phipps (Dudley, West)

Before addressing myself to the main topic of the debate I would like to deal with a procedural point. I believe that the debate has arisen because we had a previous debate which my right hon. Friend the Secretary of State talked out. That debate was on a simple motion "That the House takes note of EEC Commission documents A, B, C and D." Until last Tuesday all such motions had been in that form, but then we suddenly had a new form of motion put down by the Government which said in effect "That this House takes note of EEC Commission documents A, B, C and D, but reserves the right to disagree with any part of them that it finds it wants to disagree with at some subsequent date". That kind of rider emasculates debate.

When we had a motion which was just to take note, it was possible to amend it, as happened the first time we debated these documents. I am a strong pro-European, but, pro-European or not, I believe that the House ought to have the opportunity to discuss European documents, if necessary to make amendments, and to express a point of view. With the best will in the world, it would not be possible to dissent from the motion before us. It says that we note the document and reserve the right to disagree with every jot and tittle in it if we care to do so at some subsequent stage. I find it difficult to see how we could have any form of motion which was an expression of view of the House.

Therefore, I hope that Ministers will revert to the old system of a straightforward take-note motion, which will allow the House to make its views known on the document before us.

Having completed that complaint, I address myself to the debate. We have yet to grasp just how transient our oil reserves are, both nationally and internationally. A number of Members have spoken as if the whole purpose of the documents was merely to tide us over the next 10 or even five years. I see in these documents the first groping for a form of unified energy policy for the whole Community. This is absolutely essential if we are to have energy sources not just in the remaining part of this century but in the next century. That is not too short a time-scale for us to consider.

I wish to talk about oil reserves in particular. The United States can be regarded as a microcosm, a model, of what has happened, or what will happen, regarding oil in the rest of the world. It has widely diversified geological basins. It was the first country to discover oil. It used it before, and at a greater rate than, any other country. If one considers the energy pattern in the United States in the last 100 years as it applies to oil, one finds that year by year more oil was discovered in the United States than was used. If a country is in the happy position of discovering more oil than it uses, it always has more oil left at the end of the year than it had at the beginning. That develops a certain euphoria in the country. It makes it believe that it will go on for ever.

However, a study was done in the late 1950s in the United States of the usage of oil compared with the trend of oil discovery. The best possible extrapolation was made, and it was found that the curve of new reserves discovered as opposed to the curve of reserves used per year had a distinct shape. Oil usage was a rising curve of asymptotic form. The curve of reserves discovered was, unfortunately, of the reverse kind which flattened out as it grew. It followed that the two curves were bound to cross. When they were extrapolated it was found that they should cross in the United States about 1964, and, lo and behold, in 1964 they did. From then onwards the United States no longer found as much oil each year as it used. It was this happening more than anything else which gave the oil-producing countries their current strength.

In those days we talked about the Gulf Coast posted price for oil. Nowadays nobody talks about it because it has no relevance in the world oil situation. The interesting point about the United States as a microcosm of the world is that we can do exactly the same for world oil supplies. Taking similar curves of oil discoveries for the whole world as against the amount of oil used each year we find that the two curves are doing exactly the same as they had done in the United States. They are due to cross in about 1985. After 1985 the world will not have a free and increasing supply of oil, and it will face one of the most traumatic experiences, which is only now becoming apparent. Societies based upon energy usage will find themselves without energy.

It is all right saying that in our own little island we shall be all right, because our curves probably will not cross until 2020, but the rest of the world will not sit idle while we consume our oil reserves. It will be looking for alternative sources of energy. To find them will require one of the largest technological investments in cash, manpower and everything else that the world has ever seen—much more vital, much larger than sending men to the moon, and much larger than the amount of money we are now spending in the North Sea.

Oil, coal and gas are forms of secondary energy, though they are often thought of as primary energy. They result from the genuine primary sources, which are gravity and sunlight and, for us, the internal heat of the earth. These produce all the other sources of energy which we use. We use concentrated forms of primary energy, one of those concentrated forms being oil.

We must harness the primary sources of energy if the world is to have a future as an energy-consuming society. The problem with the primary sources is that they are everywhere. They are in this Chamber. It is not generally recognised that if I drop a piece of paper, as I do now, energy is dissipated. Gravity is making it drop, attracting it to the ground. These forms of energy are everywhere dense but everywhere diffuse. Therefore, we must concentrate them. They have been concentrated for us in special things such as winds, waves and tides in particular, but even these are much more diffuse than fossil fuels.

We need unlimited energy supplies, and primary sources are for our purposes unlimited. They are not bounded. They will not be exhausted. We cannot exhaust the force of gravity—at least, not in terms about which any of us will have to worry, certainly not in geological time. But if we are to harness them—if we are to harness the tides, for example—we shall require an enormous input of technology and capital.

There is no way in which this country alone can ever do it. It will have to be done in conjunction with a body such as the European Economic Community. If we stay outside, using up our own precious oil, when it has gone and the Community has harnessed those other sources of energy we shall be at its mercy. We must join it now and join the rest of the world in finding a proper way to harness primary energy if the world as we know it is to succeed into the next century.

8.44 p.m.

Mr. T. H. H. Skeet (Bedford)

I am sorry that the hon. Member for Sheffield, Heeley (Mr. Hooley) is not present. I intervened during his speech to say that as OPEC was challenging the Western world, and was continuing to raise the price of oil, it was reasonable for the consumer countries to get together to try to work out, through dialogue, a satisfactory solution.

In the 1960s Middle East oil was sold at 10 times the cost of production. In the early 1970s it is being sold at 66 times the cost of production. If that is not what we commonly call being a bit greedy, I should like a better explanation of it. It indicates clearly that it is probably not unreasonable for consumer States in the Western world to stand up for their rights.

I listened with great interest to the hon. Member for Dudley, West (Dr. Phipps) and I should like to pursue some of his arguments. The argument that particularly attracted me was on alternative fuels. Much as we must look ahead 10 to 20 years, we must be realistic and realise that any alternative fuels to the existing oil supplies are at least eight to 10 years away. Investment costs of alternative fossil fuel sources, using the Middle East as a standard of comparison are as follows: Middle East crude would work out at 1, United States opencast coal at 3.5, deep-mined coal 6 and North Sea oil 12. Anything beyond that like tar sands, oil shale, synthetic natural gas and the liquefaction of coal ranges between 20 and 35. Therefore, it is not practical at present to deal with alternatives to our existing fossilised fuels. What we have to do—the documents bear it out succinctly and clearly—is to turn further and further towards the nuclear load.

We in the United Kingdom are assisted in this in that we are developing our North Sea potential. If we pursue Dr. Kissinger's idea about downside risk—if we have a stablised price of between $8 and $9 a barrel, we shall have a guarantee that should the oil price fall at a later stage we should be in a position to safeguard our investment in the North Sea.

There is one question to raise here. Professor Odell has spoken about unlimited resources from the North Sea. Another interesting treatise has been brought out by the stockbrokers Wood, Mackenzie and Company in which it is said that by 1981 maximum production yielded by the North Sea fields will total 2,413,000 barrels a day and that is likely to be sustained for only six years. We might perhaps maximise production in the North Sea, cash in while prices are high and use the money generated there-from to build up alternative supplies of energy.

The crux of these documents—I support the general argument contained in them—is that we shall see a considerable expansion in nuclear power. The documents state that from 1970 nuclear power is to contribute 20 million tons of coal equivalent, rising to 372 million tons by 1985 and rising as a percentage of the EEC energy balance from 1½ per cent. to 17 per cent. That is very significant. Natural gas is to rise from 11.6 per cent. of the energy balance to 24 per cent.

What is more significant is that France, pursuing an individualistic line, is following a policy which we in the United Kingdom should have pursued. France is going for six 1,000MW or 1,300MW power stations per annum in 1976 and 1977. According to its central planning council, the only real answer to the energy crisis is nuclear power. France has a peculiar characteristic. It has little natural gas other than what it imports and very limited coal reserves, which are small compared with those of the United Kingdom. Therefore, France must look for a local answer. When one compares that with our Lilliputian programme in the United Kingdom of 4,000MW comprising 6/660MW reactors, one obvious question is why it is so small. It is probable that what has been done is to capitalise on the use of coal which is available and bring forward a policy which will placate the coal lobby in the House of Commons.

After all, if there is to be a significant expansion of nuclear power in Europe as we know it, particularly in France and Western Germany, and when we have figures here in the United Kingdom which will show the economic advantages of it, why are we not prepared to pursue the same course? The following are the Secretary of State's own figures. The operating costs at the end of 1974 for Dungeness A were 0.35p per unit, and for Sizewell A 0.42p. The most representative oil-fired power station at Fawley figures at 0.88p and the coal-fired power station at Ferrybridge, not far from Selby, at 0.65p. Is not the Secretary of State convinced that, looking over the next 15 to 20 years—we must take a long-range view of this—this is the road on which we must go ourselves?

When the Secretary of State hears in the course of the recent negotiations with the coalminers that the militants are already claiming a larger and larger wage, and when he is forced to admit that 65 per cent. of the cost of coal is in wages, how can he possibly keep prices down in order to make it competitive?

Perhaps we may have learned one or two things from the documents before us on the use of coal in a Western European context. In my judgment, and in their judgment too, coal will tend to decline in the energy balance of Western Europe, although in the United States it will tend to increase. The capacity of the market to absorb higher coal output will be limited until conversion technology has made more progress. The Secretary of State must face this. He has two immediate uses for coal. One is in the electricity industry—he has yet to tell the House where he is going to place further power stations—and the other is in the steel industry for metalurgical coke. Outside that, until coal conversion comes along it will be difficult for him to find substantial enlargement of markets.

The second point which is apparent from the documents is that expansion of coal production is dependent upon labour costs. As these show no signs of abating in Western Europe or here, plans may have to be altered drastically over the years.

The third point is that in most European countries nuclear power will tend to squeeze the coal market but national programmes will take time to accelerate, and existing fossil-fuel stations will be phased out over a long period of time. It may be that there will be a number of local variations.

Finally on this point, as direct reduction of iron ore will take time to assume a substantial proportion of total steel production, blast furnaces will continue to prove a valuable market for coke. Where indigenous production is insufficient, the international market is likely to fill the gap, with the United States, Canada and Australia being the primary sources, to which may be added the Soviet Union, Poland and South Africa.

I pay tribute to the work that the Commission has provided. It has sought to interrelate a number of very diverse communities. One thing that is apparent to me is that while there is little oil in most of the countries of Western Europe, there is oil in the United Kingdom and in Norway, which is not among the Common Market territories. In the United Kingdom there is gas, and so is there gas in the Netherlands. The Netherlands actually has more gas than we have, but there is very little elsewhere in the Community. Coal is substantial in the United Kingdom and West Germany but there is little elsewhere in Italy and Belgium.

There is a further salient point. That is, that certain countries are more dependent than we are on imported energy—Italy as high as 80 per cent., France 70 per cent. and West Germany 50 per cent. The United Kingdom 45 per cent. Individual policies will, therefore, have to be enacted by these individual countries to suit their requirements. It is, however, possible to correlate the results.

I think that the Commission and the Council of Ministers together have achieved a very good result. May we have more debates of this order in the future, and may I persuade the Secretary of State that when he goes to Europe he should look through the spectacles of a European at the wider picture and not attempt a narrow stance. If he thinks in European terms, some of his problems will disappear. If he is thinking simply in terms of an island State, he will find that problems will surround him for many years ahead, and ultimately, when we get through the storm of our difficulties, he will find a Conservative Government on his side of the House.

8.55 p.m.

Mr. Ian Mikardo (Bethnal Green and Bow)

A Conservative Government on that side of the House is an interesting thought. We shall not only have changed the Government; we shall have changed the rules of the House to put the Opposition where the Government now are.

I apologise for having missed the last one and a half hours of the debate. I went home to deputise for a friend who was not well and was due to speak to a meeting on the EEC policy of the British Government, so I have been talking about that elsewhere.

In the few moments that I shall occupy, I should like to refer to almost the first thing said by my right hon. Friend the Secretary of State in opening the debate. He said that he wanted the debate to be about energy and not about the pros and cons or our membership of the Common Market. Of course, he was giving the House absolutely correct guidance, because this was to be an energy debate. From what I have heard, that guidance was followed almost entirely by the speakers who succeeded him. But one must comment in relation to that subject on the nature of this debate.

As my right hon. Friend said, we are debating a great mass of stuff. He held it up. It is an inch or two thick. I do not know how weighty are its contents. I have read only two of the orders. But it is certainly weighty in terms of avoirdupois. It has been produced by a number of gentlemen described by the right hon. Member for Wanstead and Woodford (Mr. Jenkin)—if I recall his words aright—as being so tightly chained to their desks that they have no idea of what is going on in the world all around them. We shall have to look at the record tomorrow and compare his phraseology with mine. I think that I am not far out—perhaps a little more polished and colourful.

We are debating something which by common consent of all those who have spoken this evening can affect what developments we make in nuclear energy and can affect out treatment of the coal industry. It can place limitations upon the extent to which we give priority treatment to coal—that is, discriminate positively in favour of coal. It can affect some basic elements in the Government's policy in respect of the development of North Sea oil and their relationships with the companies, and all the rest.

We are debating something which is vital, in the pure sense of the word—a matter of life—for this nation. This Parliament of 700 years' standing has the power and the right today to "take note" of the work of these gentlemen sitting in Brussels—no more. We cannot say "We like it". We cannot say "We do not like it". We cannot say "We think that orders Nos. 1, 2, 4, 9 and 11 are good and the rest are not so good." We cannot say "We would very much like to see order No. 2 amended by the addition of a so-and-so or a such-which." We are not allowed to say any of that. We shall not be able to say "All right, we shall take note of the orders, but—". No.

The only power of all of us who think so much of ourselves, and think we are so good and that we study politics and policy so much and are competent to guard over the affairs of our fellow citizens, is to take note. However much my right hon. Friend said—and to whatever good effect he said it—that the debate is not about membership or anything connected with membership of the Common Market, one cannot escape the fact, as he will be the first to realise, that the limited extent to which we in this House can safeguard and preserve the property and the destinies of this nation must be affected. That will weigh heavily with people when they come shortly to make perhaps the most crucial decision this nation has ever made in peace time.

9.0 p.m.

Mr. Tom Normanton (Cheadle)

I do not think there can be any doubt in the mind of either friend or foe of the concept of Britain's membership of the EEC that this debate has been useful. It has been valuable for a large number of reasons, some of which I hope to bring out in my winding-up speech.

Before I come to individual criticisms or comments on speeches presented by hon. Members on either side of the House—and there are many points which require comment—I wish to place on record a number of matters which involve principle rather than detail.

First, we should take great satisfaction from the fact that this debate is the second, or perhaps the third, occasion when the House has discussed a Commission proposal simultaneously with or just before the consideration of those proposals elsewhere. By "elsewhere" I mean inside the European Parliament, in the Council of Ministers or in the various committees which consider many of the Commission's proposals before presentation to the European Parliament.

This House has spent seven hours debating 10 separate but interlinked sets of Commission proposals. In the normal course of events the European Parliament and its committees would have spent three hours debating just one set of proposals. The European Parliament would have debated them following consideration amounting to several times the span of three hours in the committees of the European Parliament—committees which discuss the proposals critically and constructively.

Therefore, although the debate has lasted seven hours in this House—compared with previous debates on Community matters which have lasted a mere one or two hours—this is a very considerable improvement. But we have a long way to go before this House establishes the kind of machinery which will be appropriate to deal with the Commission's legislative and administrative proposals. This is not a point I am conceding to the anti-Community lobby but is a recognition of the situation which confronts hon. Members in this House. I believe that we are at least moving in the right direction.

In the Energy Committee of the European Parliament, of which I am privileged to be a member, the proceedings comprise a discussion rather than a debate. The meetings are informal, informed, intimate, frank—and, above all, not recorded. Therefore, nobody who takes part in such a discussion needs to say anything for effect for his constituency or for any other reason. A Member of such a committee needs only to be constructive. I certainly regard that procedure in the earlier stages during which proposals are considered as having very great merits.

The second point about the meetings is that they take place in the closest contact with the Commissioner responsible for drafting the proposals. I cannot let this occasion pass without recording a genuine debt of gratitude which Europe as a whole owes to M. Simonet, the Commissioner responsible for this aspect of Community policy. He has a very small staff and I believe that three of its members should be mentioned. I refer to M. Spaak, M. Blondel and Herr Schuster. Those three directors-general under M. Simonet deal with special areas of energy.

The point to remember is that on any one of these 10 subjects there could be 10 or 20 hours of discussion and debate before a final decision is taken to present the views of Parliament to the Commission.

Mr. Ted Leadbitter (Hartlepool)

To put the statistical record straight, may I ask whether the hon. Gentleman agrees that, against the general background of over 8,000 directives, orders or regulations from the Common Market, we have had only about 20 hours' debate in this House since the Treaty of Accession?

Mr. Normanton

Yes. But the point is that the administrative or debating procedure which has been established for dealing with this mass of legislation, directives or regulations has not yet been perfected. I hope that hon. Members on both sides of the House will be most energetic about having measures adopted to deal with that matter.

I am particularly grateful for the comments that have been made tonight arising from the fact that I have been appointed as Rapporteur to the European Parliament on one of these 10 proposals. I refer to the paper which deals with the financing of common projects for hydrocarbon exploration. The comments, both critical and constructive, which have been forthcoming in the debate are, I assure the House, of considerable benefit to me in trying to inject into my report to the European Parliament proposals, thoughts and, indeed, critical comments on the Commission's proposals with a view to arriving at better solutions than those contained in the proposals.

This debate can and, I hope, will in future continue to be conducted in a manner which will result in the improvement and variation of Commission proposals. In other words this House, if it takes the opportunity which debates of this kind present to it, has an opportunity to influence events to a far greater degree than many right hon. and hon. Members currently appear to believe.

Mr. Powell

The hon. Gentleman is eloquently urging that we should have more opportunities to debate these documents. Does he believe that the House should have any power to some to decisions on them?

Mr. Normanton

That, I must say, is a tricky point, but I am sure that the right hon. Gentleman did not put it in the form of a trick or a pit into which I would allow myself to fall. I am convinced, based entirely on two years' first-hand experience of the European Parliament and its committees, that the influence that individual Members bring to bear before proposals reach the decision-taking centre—the Council of Ministers—is out of all proportion to that as seen and interpreted by many hon. Members.

Mr. Fletcher-Cooke

On that point—

Mr. Mikardo

rose—

Mr. Nigel Spearing (Newham, South)

rose—

Mr. Deputy Speaker

Order. Will the hon. Member for Cheadle (Mr. Norman-ton) indicate to whom he wishes to defer?

Mr. Normanton

My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke).

Mr. Fletcher-Cooke

Surely there can be no constitutional objection, even by the most devoted adherent of the EEC, to this House coming to a decision on how the Minister should speak and vote at the Council before the Council takes any decision.

Mr. Normanton

I realise that I am straying from the secure area of energy to the unpredictable highways of constitutional polemics.

I hope that the Under-Secretary of State will comment on this. I hope he will confirm that in all the discussions which take place at the meetings of Ministers of Energy there is clear evidence of a reluctance to reach decisions until they have all agreed on the formula. I hope that that will generally be his interpretation of the way the negotiations and discussions take place in the Council of Ministers. That is certainly the view I have heard.

Some hon. Members may feel that it is desirable to bind a Minister to a Community decision or proposal. I doubt whether that is in practice constitutionally necessary if the Minister sticks to his point and if he energetically and consistently pursues the stand which he adopts during discussions in the Council of Ministers. At the end of the day the decisions invariably are binding. If the right hon. Gentleman wishes to react to this question, I hope he will be prepared to confirm that that is the experience he has had during the time he has been answerable for energy questions on our behalf.

Mr. Mikardo

I should like the hon. Gentleman to comment on two points. First, he said that it would be wrong for us to tie down the Minister and that it would be wicked in a democracy to have a vote. That does not matter. Since the hon. Gentleman has taken part in many debates where a draft has been discussed and where changes have been proposed, will he lay in the Library a list of the drafts which were amended as a result of the debates he described? To help him, I can tell him that he will need only a very small envelope in which to put such a list.

Secondly, will the hon. Gentleman say in what way his thesis applies to matters such as industrial and regional policy, which do not go to the Council of Ministers anyway?

Mr. Normanton

The hon. Member for Bethnal Green and Bow (Mr. Mikardo) knows that it does not lie in the hands of an Opposition spokesman to make decisions of that kind. This is a matter for the Leader of the House and for his right hon. Friends in the Government. Perhaps he will take active steps to pursue that red herring in that quarter.

This debate has been more informative and constructive in the way in which comments have been made than have other debates on Community legislation. With one or two exceptions, there has been a universal desire to keep to the subject of energy. In that sense, right hon. and hon. Members have met the earnest request of the Secretary of State. The views have been helpful and critical but constructive.

Since the purpose of these debates is to take note of Community legislation and proposals for regulations and directives, I wish to put on record the energy policy objective which some hon. Members have pursued in the Community and in the European Parliament. I quote: The … group believes that Europe's industrial expansion and economic stability depend upon the establishment of a Community approach towards an energy policy. The object should be to provide the consumer with a choice of supply, at the lowest possible cost, compatible with the overriding need for security and continuity. The rôle of the Commission should be to initiate proposals for such an approach and to devise a programme of action for implementation by Member countries. At this stage in the Community's development we cannot support the establish- ment of Community undertakings for the production or distribution of energy but place the greatest emphasis upon the Commission's rôle as a co-ordinator in the fields of sourcing, production, distribution, consumption and conservation of all forms of energy. I ask whether, after careful deliberation of that as a policy objective of those of us who are pursuing that line in the European Parliament by the process of debate and by the process of exerting the force of our argument upon our colleagues and on the Commission, any hon. Member can cavil at that as being in the very best interests of the country.

Mr. Spearing

Will the hon. Gentleman give way?

Mr. Normanton

No. I am pressed for time. There are a great many matters about which I feel I should make some observation.

It is against this view of a Community policy that I believe we should weigh carefully the proposals and the recommendations of the Commission which we have before us in this massive dossier of 10 separate papers. We may be critical of them in detail—I hope that we are—but we cannot criticise the vital need for a co-ordinated approach to dealing with the areas which they cover.

I feel that it is appropriate for me to make a few comments on certain of the papers. Time does not permit me to do more than that. As regards document No. 4, the defects in the translation should be noted. Reference is made to "joint exploration projections". Those of us who are not quite so familiar with the defects in translators' capabilities, and certainly Government supporters, should not be led to believe that this means "joint participation" in the sense of the Labour Party manifesto. That is not the sense in which the term "joint exploration projections" is used. When the Secretary of State is in Brussels tomorrow, I hope he will seek clarification of the real significance of the phrase.

In principle, and certainly in practice, the Community places the greatest possible importance upon the devolution of putting into effect its proposals rather than concentrating on their being centralised.

There is an area in Document No. 5 which needs considerable clarification if we are to overcome the widespread fears about sovereignty in relation to the North Sea. Reference is made to territorial waters and adjacent zones not subject to sovereignty". I hope that, when he is in Brussels, the Secretary of State will obtain at first hand not only the exact meaning of that term in words but also the spirit behind the words.

During the two years in which there has been frequent debate and discussion about North Sea oil and similar related subjects, I assure the House that there has not been one reference from any parliamentarians from any of the other eight member States which would lead anyone to believe that they, their member States or their political parties have it in mind to regard North Sea oil other than within the province of Britain's sovereignty.

I challenge anyone who has discussed the matter with the Commissioners or the staff of the Commission to suggest that they are able to draw from their discussions any evidence of a will, a wish or a thought of extracting North Sea oil, identifying it as Community territory or property and excluding Britain from it. That is not true, nor will this House allow such a thing to take place. That is the sort of thing we discussed and verified at first hand as members of the European Parliament in our continuous discussions with Commissioners.

On Document No. 5 there is another point which the House will be well advised to note. I hope that in Brussels tomorrow the right hon. Gentleman will take particular note of it. I do not think that even those who are enamoured with the concept of the Community are in any way satisfied with the adequacy of financial control and the auditing of the finances involved in the present spending of the Community. When we come to proposals of the kind that we are now discussing, we are moving into sums which make existing expenditure look like petty cash.

I hope that the Government will do all they can to ensure that the Community establishes at the earliest possible moment a proper form of financial control and auditing for all aspects of Community activities. In particular I hope that a court of audit will be pressed forward with the greatest possible speed.

Mr. Spearing

Why not now?

Mr. Normanton

I need not remind the House that that is a decision which must be taken by the Community as a whole. It is not a decision which can be taken unilaterally. I hope that the Government will take on board that point and press hard for that to be done.

It is essential to make one quick reference to what my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) said in opening the debate. My right hon. Friend commented about there being no reference to prices or the underpinning of the price of oil in any of these proposals. I hope that is a matter that the Government will confirm. I hope they have taken that aboard and that they will press the point in their discussions with the Energy Ministers in Brussels.

Another point on Document No. 5 is that I hope the Secretary of State, despite his hesitancy and the lukewarm approach which he took in his opening speech, will lend his weight to obtain unanimous approval for the proposals contained in Document No. 5. I hope that he will assist in the speeding up of worthwhile exploration in British territorial waters and in the zones which are outside our sovereignty. That is of crucial importance. Unless the Government take that point aboard and press it effectively, Britain will be the poorer.

I now turn to Documents Nos. 6 and 7. Coal is established as a vital Community energy source. Both sides of the House strongly endorse that as a matter of policy so long as it is concentrated on electrical generation. The arrangements for the provision of coke are causing acute difficulties, but that has been taken aboard by the right hon. Gentleman in his discussions. Here we have a firm declaration by the non-member States, which I hope will be adopted as Community policy, that coal is and will continue to be of considerable and lasting importance as a basis of our energy policy.

I now come to document No. 10. There have been references to the International Energy Agency and whether the Government should concentrate their actions in the area of the agency itself or whether they should take action in a Community energy agency. I believe that we shall be much more effective if we contribute to the establishment of a Community energy agency. It would then be in a better position to be a part of the International Energy Agency. The two are, and must be, interdependent.

I wish to comment on some of the points that have been made during the debate by hon. Members on both sides of the House. I made a voluminous record of the salient points that were made. The Secretary of State's statement about a massive contribution from nuclear generation smelt of complacency. The Government's policy on nuclear-generated power has been criticised, and I do not think I need add to what has been said but I repeat that the right hon. Gentleman's statement smells of complacency especially when viewed against the ambitious projections of other member States of the Community.

Mr. Varley

The hon. Gentleman is critical of our nuclear policy. What advice would he give his hon. Friends today on the question of nuclear policy, bearing in mind that for nearly four years up to February of last year the Conservative Government did not take a decision on the choice of nuclear reactor?

Mr. Normanton

This is not an occasion on which I wish to kick a ball into my own goal. I think that both major parties in and out of government have differences of view on this subject, but when it came to taking a decision the present Government produced a molehill when they should have produced a mountain. It is the size of the programme that I criticise, not the decision about the reactor. It is microscopic compared with the massive programmes of other member States of the Community. The unreality of it is to be seen in the Government's view of the matter compared with that of the French and the German Governments.

I feel that we should not let this occasion pass without acknowledging the debt of gratitude that we owe to my right hon. Friend the Member for Knutsford (Mr. Davies), who pressed the point that energy is the most crucial matter ever considered by the Community, not only in financial but in economic and industrial terms. The resources required are unique in the history of finance.

I think that my hon. and learned Friend the Member for Darwen has not got the right perspective on the question of "compulsory overtones". I have still to find evidence of any will or intention by the Commission to impose decisions on any member State or on the member States collectively. The whole purpose of the Commission is to reach agreement, to find common ground, and I believe that this debate has shown considerable agreement about the establishment of an energy policy for Europe, for the Community, with Britain playing a positive and constructive part.

I hope that the seriousness of Britain's situation will be recognised and reflected in action by the Minister in Brussels on Thursday and action within the framework of the Commission's proposals, adding his own views and those expressed in the debate, which I hope will be the precursor of a continuing and expanding procedure for involving all hon. Members in influencing the course of Community action.

9.31 p.m.

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

The Secretary of State expressed the hope today that the House would debate these documents fully and frankly. There can be no doubt of the range and depth of interest that the House has shown in them. I know that my noble Friend will fully reflect the views expressed tonight in Brussels on Thursday.

We do not expect any substantive decisions to be taken on any of these documents at the Energy Council, which is one of a series of meetings of Energy Ministers. Nearly all the matters that we have been considering deal, as my right hon. Friend said, with long-term issues which cannot be resolved in the near future. The formulation of an energy policy for the Community must proceed slowly and pragmatically. We shall not allow ourselves to be rushed in these matters. As hon. Members have said, there are certain points of fundamental importance in these documents and it has been useful to have the guidance of the House not only for the meeting on Thursday but for the whole course of discussion in Brussels.

The electricity guidelines document is, of course, a Commission policy paper. It is not itself adopted by the Council of Ministers and so does not directly impose obligations on member States. The Council instrument will be a resolution which "takes note" of the Commission guidelines.

The right hon. Member for Wanstead and Woodford (Mr. Jenkin) raised the question of domestic heating and said little to which most hon. Members would take exception. However, perhaps unwittingly, he implied that there was no restriction on what was meant when one was dealing with domestic heating.

I am encouraged by the emphasis that the document places on the importance of insulation and by the statement that electric heating should be permitted only in cases where its rational use could be guaranteed. There was no intention of just doing that without the stricture that I have tried to explain to the House.

There has been some discussion of North Sea oil and the issues arising from it. Various hon. Members have expressed concern that these proposals could affect our control over North Sea oil. I need hardly say that the Government pay the closest attention to all, and any, proposals coming out of Brussels which could have implications for our national control over North Sea oil. As my right hon. Friend said in his opening speech, we have made it abundantly clear in Brussels that it is for us to determine policy in these matters. It was for this reason that my right hon. Friend said that there were various aspects in the proposals which we could not go along with—and he gave examples.

It is not difficult to find references in the documents to proposals which seem to have implications for our North Sea oil. But I would ask the House to remember that we have not accepted these proposals and that a great deal of further discussion is needed in Brussels. In this discussion we shall, as the motion before the House states, ensure, while co-operating in the development of an energy policy for the Community, that such a policy is consistent with our national objectives.

Mr. Skeet

Will the Minister bear in mind that the Commission is talking about a consortium, a joint development, in the North Sea, for which subsidies would be available? Would this be compatible with BNHC?

Mr. Eadie

The hon. Gentleman is a little confused. I am talking about the motion. We seek to ensure an energy policy that is consistent with our national objectives. That is what I am saying. If I have time I will come to some of the matters raised by the hon. Gentleman.

I pose the question: what does that mean in terms of those proposals which appear to have implications for North Sea oil? My right hon. Friend has already explained that we are not ready to accept common rules for the import and export of hydrocarbons. In the document entitled "A Community Policy in the Hydrocarbons Sector", which, as my right hon. Friend said, is still in cold storage, there are other suggestions which we do not like. The document speaks of possible Community arrangements for the granting of exploration licences. We shall make it clear, if and when a proposal is put forward by the Commission, that the granting of licences is a matter for us.

Then there is the question of Community support for offshore hydrocarbons development. As the House knows, there is already a scheme for financial support of high-risk technological developments in the hydrocarbons sector. There was a first allocation of funds under this existing scheme last December, from which United Kingdom firms will benefit. I am advised that discussions on contracts are still proceeding, but I have no reason to suppose that there is any adverse implication under this scheme for our control over our own offshore developments.

On the contrary, those British firms which applied for support under the scheme stand to benefit financially from it. In view of recent developments in world oil prices, the Commission feels it to be its duty to do all it can to promote the development of secure sources of hydrocarbons. Its recent proposal concerns exploration offshore, chiefly in the North Atlantic. I think it is wrong to see in this proposal any specific United Kingdom North Sea implications. It is defined in such a way as to cover exploration activities, not only in the offshore waters of Community States but, more particularly, it appears to be aimed at difficult waters, such as those off Greenland.

The fact is, however, that this proposal has not yet been discussed between member States. When it is, we shall examine, as my right hon. Friend said in his explanatory memorandum, whether the proposal implies any limitation for our freedom to exploit the United Kingdom Continental Shelf. We shall, in the same way, examine very critically any other proposals put forward by the Commission—for instance, on prices or refining—to ensure that they are consistent with our national policies.

The right hon. Member for Wanstead and Woodford raised the problem which would arise with a fall in oil prices. There is no obvious reason why the price of crude oil should fall while production is largely controlled by OPEC countries. If it does fall it will be because of the united efforts of the 18 countries participating in the international energy programme, through conservation measures and the accelerated development of other energy sources, and through the provision of the necessary finance. There will be a continued dialogue on the control of oil prices, and the provision of finance implies, as Dr. Kissinger has recently suggested, some form of joint action to underwrite a fair price for new energy resources. The Government are urgently studying these proposals and are considering ways and means of giving effect to them.

My hon. Friend the Member for Bristol, North-East (Mr. Palmer) asked about the construction of oil-fired power stations. The Government's philosophy towards them is conditioned by the future availability of alternative fuels. We have embarked upon a modest nuclear programme. The supply of coal, as forecast in the final report on the examination of the coal industry, will not be able to meet all the expansion of fossil fuel demand in the electricity supply industry up to 1990. We therefore expect that it will be necessary to construct more oil-fired power stations to meet the growth in the country's electricity demand during the 1980s. In the longer term we expect that nuclear power will play an increasing rôle in meeting this demand.

My hon. Friend also asked about the size of the nuclear power programme. I know that the current programme compares unfavourably in this respect with its predecessor. However, I am sure that my hon. Friend agrees that the first and vital requirement is that the new programme should be a success. We must not stumble through trying to over-strain our resources in the early years. Of course we need to get the AGRs working and to press ahead with the SGHWRs as fast as we prudently can, and that we intend to do.

Mr. Palmer

My hon. Friend's statement that we are not going to get enough coal is a little startling, and if, in addition, we have still to be dependent to a great extent on imported oil, should we not in the circumstances be expanding the nuclear power programme?

Mr. Eadie

I want to clarify what I said. We hope to step up coal production. That fact is reflected in the study being carried out. Again, our aim is to get the existing nuclear power programme off the ground.

Hon. Members have expressed concern about the safety of nuclear power. I understand their concern about the safety of nuclear installations, and I assure them that the Government attach the utmost importance to the provision of adequate measures to protect public health and safety, and, in particular, the health of the workers in the industries concerned, bearing in mind the proliferation of nuclear installations envisaged by the Commission over the next 10 years.

We have checks and balances. There are stringent safety procedures. These are laid down under conditions attached to nuclear site licences granted under the Nuclear Installations Act. These procedures are enforced and are kept continuously under review by the Nuclear Installations Inspectorate of the Health and Safety Executive. The same standards as Government Departments use are applied by the Atomic Energy Authority to installations under its control. The stringent safety regulations and their application has brought about acceptability of nuclear power by the people. The necessary checks and balances have been carried out in order to ensure safety, and I hope that the public will continue to accept them as being effective.

Mr. John H. Osborn

Will the hon. Gentleman take up the point that, particularly in Europe—let alone in this country—parliamentarians are uneasy as to whether the steps now being taken, particularly with regard to waste disposal in the sea, are safe and adequate? We are assured, as parliamentarians, that they are. Are Ministers in Europe completely satisfied that the processes are safe and adequately carried out?

Mr. Eadie

We have public acceptability of nuclear power because of our checks and balances in all aspects of safety. That is a fact. The same process was carried out under the Conservative Government as under the present Government. If the hon. Gentleman wishes to write to me on the subject, I will be happy to give him further information. Perhaps at this point I may compliment him on his critique on the whole question of nuclear power, which I have had the privilege to read. We all know his interest in the subject and the value of his contributions. But there may be a difference of opinion, a difference of emphasis. If he has a particular point to make, I shall be pleased to hear from him.

My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) referred to nuclear sites. All licensed nuclear sites have to be covered for up to £5 million against any single incident. This cover is provided by the British Nuclear Insurance Pool, a group specially formed for the purpose. If cover of £5 million proved inadequate in any single incident, the balance would be met from Government funds, as provided by the Nuclear Installations Act 1965. For unlicensed sites—for example, those of the United Kingdom Atomic Energy Authority—cover is provided entirely by the Government.

My hon. Friend the Member for Bristol, North-East said that he had always believed in the total energy concept. I want to come to one point on that later on, because I think that I was misunderstood on the question of oil-fired power stations.

My hon. Friend is aware that many of us campaigned for what we believed was an overall energy policy. It was significant that hon. Members on both sides of the House took part in the campaign. My hon. Friend's statement that some Ministers had in the past seemed to be concerned with getting rid of our coal industry was challenged by the right hon. Member for Wanstead and Woodford. There was an amazing affinity of interest between my hon. Friend and the right hon. Gentleman, who said that the country's difficulty was that perhaps we had not persuaded the men in the mining industry that we were not engaged in a short-term bonanza. The right hon. Gentleman made the constructive point that we must convince the men that it is no short-term bonanza.

My right hon. Friend and I have been doing the best we can to persuade the miners of that. We shall have been in our present posts for a year at the end of the month, and in that time he and I have visited every coalfield. We have never believed that after a couple of decades the miners could be convinced by our staying in the office issuing edicts. I have crawled along the coalfaces in all the coalfields, and have spoken to the miners there. I have held meetings with them at the coalface. To the chagrin of my family, most of my weekends for some time have been spent addressing miners' conferences, trying to spell out the point that the right hon. Gentleman tried to make.

Mr. Patrick Jenkin

I am grateful to the Minister for the evident care he has taken over the suggestion I made. Putting a floor price under energy would give him and his right hon. Friend an additional, and I think potent, weapon in trying to convince people who work in the mining industry that it has a long-term future. That was the point I was trying to make. I am glad that the hon. Gentleman has been so forthcoming about it.

Mr. Eadie

Any points that the right hon. Gentleman has made in the debate, or has to make in the future, will be seriously considered by my right hon. Friend. Indeed, I have my right hon. Friend's authority to say so.

The hon. Member for Beeston (Mr. Lester) generously referred to the fact that I had visited the Nottingham coalfield and that I was the first Member of Parliament to address the Nottingham miners' resolution conference, which I did last week. The miners were very generous to me, and the right hon. Member for Wanstead and Woodford will be glad to hear that they responded very well to the point which I made about the rôle which coal must play in the economy. I was presented at the conference with the history of the Nottingham miners. I was glad to tell them that, although my right hon. Friend and I like to read history, I believe that after a year in office we are making history. It is probably too much to expect that the hon. Gentleman will be invited to address the Nottingham miners' conference. Knowing the miners, I say that it would be a fairly revolutionary concept if they were to invite a Tory to address them. However, that is a matter for them.

I wish to deal with two important points which the hon. Member for Beeston made, because they are pertinent to the debate and to the documents we are discussing. He referred to the question of foreign labour in the pits. I do not think that that is on. It would not help if we were to try to solve the problem of manpower in the pits by using foreign labour. I know that he made the suggestion in a constructive way, but it would not be helpful at this time if we were to adopt it.

Let me refer to the experience in Germany. I went down one of the pits in the Ruhr a couple of months ago. I do not confine my visits to British pits; I go abroad. In that pit 25 per cent. of the labour force was foreign. However, what distressed the German Government was the fact that about 40 per cent. of the labour force at the coal face was foreign.

Therefore, the use of foreign labour is no answer to the problem. The answer is that we have a good indigenous coal industry with an important rôle to play and we must give the miners confidence in their industry. We must carry out the recommendations of the tripartite coal examination. We must achieve the increased productivity or increased production about which we have spoken, of 120 million to 150 million tons.

I am glad that the House has taken the opportunity of debating the EEC documents. They are important because they strike at the heart of the matters which will form the basis of any European energy policy which it might be possible to devise in future. But the establishment of such a policy will not be achieved overnight. As the House is aware, the next meeting of the Council of Energy Ministers will take place in Brussels on Thursday, and my noble Friend Lord Balogh will represent the United Kingdom. None of the documents seems likely to be discussed.

One element in our approach to the policy documents is that we are not opposed for dog-in-the-manger reasons to a European energy policy. That is the attitude embodied in the motion for which the Government seek the approval of the House.

Question put and agreed to.

Resolved, That this House takes note of EEC Commission documents Nos. R/446/74 and R/3333/74 and of the Government's intention, whilst co-operating in the development of a Community energy policy, of ensuring that such a policy is consistent with the aims of the United Kingdom's domestic energy policy.