Commons Sitting of 28 July 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  TRADE

    Independent Commercial Agents
    Mr. Silvesterasked the Secretary of State for Trade what progress has been made towards the agreement of the EEC draft directive on independent commercial agents.
    The Under-Secretary of State for Trade (Mr. Eric Deakins): In May and June 1975 officials of my Department had useful informal talks with Commission officials, who, we understand, are now reviewing the provisions of their draft proposal. My Department is keeping in touch with developments.
    Mr. Silvester: I am glad to hear that things are moving now, although I realise that events are taking place only at official level. What precisely is the objection of the Department? As I understand it, all other eight countries have agreed to the draft before the Commission.
    Mr. Deakins: It is a matter of difficulties rather than of objection, and some of the difficulties are significant. As drafted the proposal would cover a much wider range of activities than the Commission intends. We are obviously seeking solutions for our part, and we believe that Commission officials are doing the same. We are considering the draft sympathetically in the light of problems in agency relationships.
    Mr. Montgomery: Among the interested bodies with which the Department has had discussions was the United Commercial Travellers' Association, which felt that far from being consulted it was
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    merely being questioned on aspects of its work. Would it not be sensible for the Department to have full discussions with people vitally connected with this work before going on to negotiations with the other members of the Nine?
    Mr. Deakins: I have seen the United Commercial Travellers' Association in talks which took place on the 17th July. I had a long and useful discussion with the parliamentary agent and the general secretary. I left them in no doubt that we had been consulting them in the way we had been consulting other interested bodies. The consultations go back as far as the middle of 1973.

    Exports (Small Firms)
    Mr. Laneasked the Secretary of State for Trade what further steps he is taking to help small exporters.
    Mr. Deakins: The British Overseas Trade Board, of which my right hon. Friend is President, offers a wide range of export services which are available to both large and small firms. These services are widely and successfully used by small firms.
    Mr. Lane: Will the Government take one other step, bearing in mind the important part which small exporters, of whom there are many in my constituency, have to play in restoring our balance of payments? My exporting constituents are general satisfied with the services of Customs and Excise and of our posts overseas, but they complain about the slowness of communication with Government offices in this country. Will the Under-Secretary therefore try to speed up this communication?
    Mr. Deakins: I shall look into any complaint, whether from large or small firms, about delays in communication in this country.
    Mr. McCrindle: Does the so-called "piggy-back" system still exist whereby small exporters are encouraged to break into export markets with the assistance of larger exporters? If it does not, can it be revived?
    Mr. Deakins: Several schemes were in operation until recently. One was called the Group Export Representational Unit, which was designed to help small firms to market jointly overseas. This scheme had

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    to be discountinued through lack of support, and there is no evidence that industry's views on the usefulness of such schemes have changed.
    Mr. Tim Renton: What is the Minister doing to promote the export information service which collates market information from Her Majesty's consulates and embassies abroad? It is of very great use to small exporters. Can the Minister do something to ensure that more companies use it?
    Mr. Deakins: I am grateful for the hon. Member's comments. The Export Intelligence Service, with the computer, is a useful service. The Small Firms Division of the Department of Industry has recently commissioned a special booklet for small firms offering basic advice, particularly to those new to exporting, on the use of British Overseas Trade Board services.

    USSR
    Mr. Gwilym Robertsasked the Secretary of State for Trade what steps he is taking to improve the volume of trade with the USSR; if he will seek to renegotiate the 1969 long-term trade agreement with the USSR before the end of September, with the view to increasing this level of trade; and if he will make a statement.
    The Secretary of State for Trade and President of the Board of Trade (Mr. Peter Shore): Following the meeting of the Anglo-Soviet Joint Commission, which I attended in May, discussions are continuing at official level on the implementation of the two long-term co-operation programmes and I hope to make a further visit to Moscow in September. Notice to terminate the 1969 trade agreement will be given before the end of September 1975. The 10-year agreement which I signed with the Soviet Deputy Premier in May 1974 and the credit agreement and co-operation programmes recently signed in Moscow by my right hon. Friend the Prime Minister provide an adequate framework for extending our economic relations with the USSR.
    Mr. Roberts: I appreciate everything that the Government are doing, but will my right hon. Friend accept the need to stimulate East-West trade in view of the recession in the West? Will he take this
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    opportunity of dissociating himself and the Government from the fanatical cold war pose adopted by the Leader of the Opposition during the weekend?
    Mr. Shore: I have certainly no fanatical cold war sentiments. I hope, however, that I have a realistic and determined approach towards British-Soviet trade. I am most anxious to encourage it in every way possible. Exports in the first half of this year to the Soviet Union are up 100 per cent. in value over the first half of last year.
    Mr. Biggs-Davison: Dissociating myself from the hysterical observation of the hon. Member for Cannock (Mr. Roberts) on the objective speech of my right hon. Friend the Leader of the Opposition about the realities as opposed to the wishful thinking of international relations, may I ask the Minister how, apart from the volume of trade, the balance is getting on?
    Mr. Shore: The balance is improving considerably, because whereas our imports from the Soviet Union have remained stable on the whole, our exports have increased in the way I have described. Therefore, the gap is significantly closed.
    Mr. Cant: In view of the current difficulties of the motor car industry in the West Midlands, can my right hon. Friend say whether the rumours are true that such cars as the Polski Fiat and the Soviet Lada are being imported into this country at much-subsidised prices?
    Mr. Shore: No official complaints of that kind have reached me, but if my hon. Friend has any information that he wants to bring to my attention I shall certainly look at it.
    Mr. Michael Marshall: Will the right Gentleman confirm that, while we all accept in principle the value of trade with Russia, it would be extremely dangerous for us to depend on that country for our imports of chrome ore? Therefore, will the right hon. Gentleman take the opportunity of welcoming the decision of the British Steel Corporation to invest in South Africa in chrome ore?
    Mr. Shore: It is not for me to comment on a particular deal, but it is clearly in the interests of Britain to have a supply of chrome ore, and if possible a diversified supply.

    Manufactured Goods
    Mr. Biffenasked the Secretary of State for Trade what is the current trade balance in manufactured goods at the latest available date; what considerations have been given to the application of selective import control on these manufactures; and if he will make a statement.
    Mr. Shore: In the four months March—June 1975 the United Kingdom had a crude trade surplus in manufactured goods of £350 million a month. As regards the second part of the Question, we are prepared to consider action against dumped imports and other special cases on their merits.
    Mr. Biffen: In view of the considerable economic debate which has taken place over the past two or three weeks, may I ask whether the right hon. Gentleman is aware that there will be widespread support for his decisive rejection of die Tribune Group philosophy of import controls? Can he assure the House that he will be equally robust in repelling those who wish to enslave our trade with a fixed system of sterling exchange rates?
    Mr. Shore: I think that there is good sense in the present arrangements for floating sterling, and I shall certainly not advocate any change in it, although another Department invariably takes the lead in this matter. On import controls, the short answer is that it is not so much a matter of looking to one philosophy or another. What we need to have always in mind is where the best interests of the United Kingdom are to be found.
    Mr. Madden: Does my right hon. Friend agree that the case for controls of imported textiles is now overwhelming, and that other textile manufacturing countries which have implemented import controls have not suffered from the retaliation which we alone are said to expect if we were to continue the same course of import controls?
    Mr. Shore: As I have said many times, if there is evidence of dumping we shall, of course, take up any such complaint very vigorously. Beyond that, however, we must consider the balance of advantage. Whilst it is true that some countries have imposed import controls on textiles, my
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    hon. Friend should be aware that an extensive system of controls on imported textiles is operated by this country. The problem, as my hon. Friend and the whole House well know, is that there has been a collapse of demand for textiles on a large scale, certainly in the major consuming countries. The result is that we are all under pressure.

    Shipping (Radio Distress Frequencies)
    Mr. Aitkenasked the Secretary of State for Trade if he will make a statement on his future plans for the radio distress frequencies at sea.
    The Under-Secretary of State for Trade (Mr. Clinton Davis): On 1st January 1976 VHF Channel 16, which is the present maritime "calling and safety" frequency, will be internationally designated as the "distress, safety and calling" frequency. No changes are involved in the respective responsibilities of Her Majesty's Coastguard and the Post Office coast radio stations for search and rescue communications, but modifications in procedural instructions are being discussed with the Post Office.
    Mr. Aitken: Does the Minister agree that the effect of the plans he has just described is that from 1st January there will be three distress frequencies operated by two separate organisations? Is he aware that anxieties have been expressed by the two main professional groups responsible for safety at sea about the possible risks and confusions arising from that division? As the professionals who operate the services seem to be worried, will he please consider looking very carefully at the whole matter again?
    Mr. Davis: We have looked very carefully at the whole situation. The hon. Gentleman is quite right. There will be three frequencies operating, but the new VHF Channel 16 frequency, which is to be regarded, I think, as complementary to the other two, will be of considerable assistance in co-ordinating certain rescue work, particularly in inshore incidents. I am aware that some anxieties have been expressed, though I do not accept that they are as widespread as the hon. Gentleman suggested. I think that they are misplaced.

    Travel Trade (Convention)
    Mr. Neubertasked the Secretary of State for Trade whether he plans to attend the Association of British Travel Agents convention at Miami Beach in the autumn.
    Mr. Deakins: I have no plans to do so.
    Mr. Neubert: While I understand the Minister's natural anxiety that a journey to Miami Beach at this time might be misinterpreted, may I ask whether his failure to go is perhaps rather due to his unwillingness to face the full force of the resentment of retail travel agencies at their exclusion from representation on the Air Travel Reserve Fund Agency? Will the hon. Gentleman comment on their threat not to co-operate with the Court Line liquidator, and report on progress in making repayments to holidaymakers who lost their cash last year?
    Mr. Deakins: I am aware that the retail agents are at the receiving end of complaints from last year's disappointed holidaymakers, and I have every sympathy with them. It is our task as a Government Department and the task of the Association of British Travel Agents to work together as speedily as possible not only with the trustees of the respective bond moneys but with the new Air Travel Reserve Fund Agency to ensure that payments are made as speedily as possible. Nevertheless there have been some legal complications, which I mentioned in my Press statement in May. I am hopeful that they can be overcome in the next few weeks.
    Mr. Dykes: Does the Minister approve of the ABTA meeting in Miami, bearing in mind the foreign exchange costs? Presumably the customers of the industry will be paying for the visit and convention. Is that something that the Minister thinks to be a good idea? Why should it not meet at Bournemouth, Scunthorpe, Blackpool or even Harrow?
    Mr. Deakins: I remind the House that a number of bodies, political bodies included, always prefer to hold their annual conference at places such as Blackpool. Whilst it is not for me to contrast the delights of Blackpool with those of Miami Beach, the location of its annual conference is a matter for the association to
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    decide. I understand that it is not unusual for the ABTA convention to be held overseas.

    Textile Imports
    Mr. Boardmanasked the Secretary of State for Trade whether any approaches have been made by his Department to the importers of textiles with a view to reducing the quantity.
    Mr. Deakins: Discussions which officials of my Department and the Department of Industry have had with leading retailers and manufacturers have explored the possibilities of their buying more of their textile requirements from United Kingdom sources.
    Mr. Boardman: In view of the nonsense which is being talked about the dumping of textiles, will my hon. Friend make it perfectly clear that these textiles have been bought by people in this country before they leave the country of origin? If, for legislative reasons, it is not possible to limit the imports now, surely my hon. Friend could speak with some force to the people who are exploiting the situation and consequently killing off our own textile industry.
    Mr. Deakins: I am well aware of the force of the sentiments expressed by my hon. Friend and other hon. Members. The discussions were held to discover whether any possibilities were left unexploited in terms of the purchase of United Kingdom textiles as distinct from imported textiles, and to make sure that manufacturers and retailers were exerting themselves positively. Although I cannot give a quantitative estimate of the results of the discussions, I can say that the reactions of the retailers and distributors were constructive and can only have been helpful.
    Mr. Fletcher-Cooke: Did the hon. Gentleman point out to these gentlemen that the Government themselves were to change their bad habits in the matter and that the Defence and Health Departments were to buy more British textiles than in the past?
    Mr. Deakins: There was a reference to Government and other public purchasing in the statement on 23rd July by my right hon. Friend the Secretary of State for Industry.
    Mr. Cryer: Can my hon. Friend explain what has happened to the only anti-dumping application about textiles so far? This is the application by the West Riding textile spinners and was apparently made in November last year. My hon. Friend may recall that on several occasions Ministers have said that urgent, immediate action would be taken if evidence were presented. Evidence has been presented, and I wonder on what urgent, immediate action the Government are about to embark.
    Mr. Deakins: I must make one thing clear: there is no formal anti-dumping application in respect of the worsted spinners' federation of the West Riding. Such an application was made and dismissed a long time ago. More recently the federation has complained to the EEC, although not in the form of a formal anti-dumping application, about the imports of acrylic yarn from South Korea and Taiwan. This complaint has now been overtaken by discussions between the EEC and those countries—and some of them have already been successfully concluded—about voluntary restraint, which will certainly help that industry.
    Mr. Shersby: Can the Minister say what rates, if any, will be applied to Portuguese imports?
    Mr. Deakins: An announcement was made recently in a parliamentary answer—I shall see that the hon. Gentleman gets a copy—to say that we are to reimpose import duties on Portuguese textiles. I shall let the hon. Member have full details.

    Civil Aviation Policy
    Mr. Les Huckfieldasked the Secretary of State for Trade whether he will make a statement on his review of civil aviation policy.
    Mr. Tebbitasked the Secretary of State for Trade if he is yet ready to announce the results of his consultations following his review of air transport policy guidelines.
    Mr. McCrindleasked the Secretary of State for Trade if he is now in a position to make a statement on his review of civil aviation policy.
    Mr. Shore: I expect to make a statement very shortly.
    Mr. Huckfield: Will my right hon. Friend bear in mind that as most international airlines on international routes are losing money and as British Airways on its domestic routes is losing money, it does not make sense to go on having a policy of double designation of British-operated international routes or competition on our domestic routes? Does he not think that the time has now come to bring to an end the policy of a mixed economy in British civil aviation?
    Mr. Shore: What my hon. Friend says about double designation and its effect is one of the matters to which I have had to give careful consideration. However, my hon. Friend would not wish me to anticipate my statement by saying any more now.
    Mr. Tebbit: Apart from observing that the hon. Member for Nuneaton (Mr. Huckfield) is talking nonsense, may I ask the Minister whether he is aware that as his statement is so imminent and as we have rehearsed the arguments before, I at least will wait until he makes it?
    Mr. Shore: I thank the hon. Gentleman for showing an unusual degree of self-restraint.
    Mr. Conlan: During the course of his review, will my right hon. Friend take account of the report of the Civil Aviation Authority in connection with the location of airports in this country? If so, will he accept my assurance that the Civil Aviation Authority was right to reject the consultants' recommendation in connection with an airport in the North-East?
    Mr. Shore: I assure my hon. Friend that I shall not be making a statement on this occasion to cover airport policy. I hope to have something separate to say about that a little later.
    Mr. McCrindle: I do not wish the right hon. Gentleman to anticipate the content of his report, but can he say whether he has seen suggestions in the Press that the rôle of his Department in civil aviation is likely substantially to increase as a result of publication of this report and that at the same time the rôle

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    of the Civil Aviation Authority is likely to diminish? Is he in a position to confirm or deny that that will be the situation and to comment on the matter in any way?
    Mr. Shore: Both the CAA, which was established in 1971, and the Department of Trade have indispensable rôles to play in the evolution of British civil aviation policy and its implementation, and I certainly envisage a continuing part for both organisations.
    Mr. Donald Stewart: Contrary to the statement of the hon. Member for Nuneaton (Mr. Huckfield), is it not the case that on some of the routes where British Airways has had competition from another airline the British Airways share of the market has gone up as well?
    Mr. Huckfield: So have the losses.
    Mr. Shore: I know that the hon. Member has a keen interest in this subject, but he should look with great care at the figures for particular routes. It may well be that that has been the result in one or two cases, but he may reach different conclusions about other and rather more important routes.
    Mr. Warren: Will the right hon. Gentleman give an assurance before making his statement that he has consulted the EEC Commission, because any change in British civil aviation guidelines will have implications for the Commission? As he knows, the Commission itself is preparing a civil aviation policy for Europe which it hopes to publish next year.
    Mr. Shore: The answer to that question is "No, Sir."

    Trade Missions (North Africa)
    Mr. Hooleyasked the Secretary of State for Trade how many trade missions will visit the countries of North Africa during 1975.
    Mr. Deakins: The British Overseas Trade Board has approved three trade missions to North African countries for support in 1975.
    Mr. Hooley: Does not my hon. Friend agree that it is absurd to send 16 trade missions to South Africa this year and only 15 to the whole of the rest of Africa? Is it not time on both economic and
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    political grounds, that we reorientated our trade effort to Africa at large?
    Mr. Deakins: I assure my hon. Friend that the determining factor in all trade missions is the commercial judgment of companies. Although our trade with North Africa is relatively small, it is a fast-growing trade. In the first five months of this year our exports to North African countries were up by 72 per cent. over the same period of last year.
    Mr. Robert Taylor: As I have the privilege of leading one of the forthcoming missions to West Africa, may I support the Minister and tell the hon. Member for Sheffield, Heeley (Mr. Hooley) that his knowledge of selling in any part of Africa is absolutely abysmal?
    Mr. Kinnock: Does my hon. Friend agree that another determining factor, as he put it, in making decisions about trade allocations is the Labour Party manifesto, with which he is at least as familiar as I? What is the application of that same manifesto to the decision announced by the British Steel Corporation about the chrome smelter in South Africa, especially as the information is that the chrome ore originates in Rhodesia so that, far from being locked up in South Africa, as the Department of Industry has put it, the dividends resulting from investment in this process could in fact be repatriated?
    Mr. Deakins: This is primarily a matter for my right hon. Friend the Secretary of State for Industry and I am sure that he will be answering a number of Questions on this subject in due course. I assure the House that there is no question of any ECGD facilities being involved in that transaction.

    Export Credits
    Mr. Hal Millerasked the Secretary of State for Trade whether he is yet in a position to relax some of the requirements of the Export Credits Guarantee Department cost inflation insurance scheme; and if he will make a statement.
    Mr. Deakins: We are still considering industry's various comments on the scheme. My right hon. Friend hopes to make an early announcement.
    Mr. Miller: Is the Minister aware that, apart from the representations of the manufacturers in Redditch, about which

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    I wrote to him on 26th June, the whole construction industry in this country attaches the greatest importance to this scheme, which is an essential aid to its export effort, which is vital at a time when domestic construction is so lamentably low? In particular, will he pay attention to covering the total inflation cost, which I am given to understand is the practice in France and West Germany?
    Mr. Deakins: I fully understand and sympathise with the case that the hon. Gentleman is making on behalf of his constituents. It has been made to us by the CBI and a number of major firms. However, primarily we have to have regard to public expenditure considerations. Although in the best possible world open-ended cover would be eminently desirable, consistent with our international obligations, that is obviously impossible for the Government.

    Export Credits
    Mr. Stanleyasked the Secretary of State for Trade whether he is satisfied with the implementation of the Government's policy on export credits.
    Mr. Deakins: Yes, Sir.
    Mr. Stanley: When will the hon. Gentleman be able to give details of the new ECGD scheme to cover pre-shipment finance?
    Mr. Deakins: We hope that an announcement on this matter will be made fairly soon. As the hon. Gentleman will appreciate, there have been a number of difficulties with the clearing banks. The problems are not with my Department but with the clearing banks themselves. I am hopeful for a successful outcome to the discussions and that we shall be in a position to make an early announcement.
    Mr. Dalyell: What are these difficulties?
    Mr. Deakins: My Department wants some assurance that the clearing banks will not regard the provision of pre-shipment finance by the Government as a reason for cutting back on their own overdraft lending to the particular industries concerned. That is a major difficulty which must be overcome before we can put forward an acceptable scheme.

    Concorde
    Mr. Jesselasked the Secretary of State for Trade if Concorde will be further tested for noise.
    Mr. Clinton Davis: Yes, Sir. Special arrangements have been made to monitor Concorde's noise on take-off and landing at Heathrow throughout this summer's endurance flying programme.
    Mr. Jessel: When the next test takes place, will the Minister or the Secretary of State stand under the flight path within about five miles of the airport so that he is personally aware of what people living near the airport will have to suffer? Why is there so much delay in publishing the results of the tests which have been carried out so far? Is the Minister aware that the Greater London Council, which has very great experience in carrying out noise tests, has already published the results of its own tests on Concorde showing that it makes a noise which is seven decibels louder than the next noisiest aircraft?
    Mr. Davis: On that last point, the hon. Gentleman will be aware that the GLC has indicated that it is premature to come to any conclusive verdict about the matter at this stage. I resent the suggestion that there is any desire on the part of the Department to suppress the facts about these endurance tests. It is essential to look upon the tests as a whole, to analyse the results carefully and in accordance with international scientific standards, and then to announce the results. That is the Proper way to proceed. As for the first part of the hon. Gentleman's question, I propose to witness the take-off and landing of Concorde at the earliest possible opportunity.
    Mrs. Millie Miller: Will my hon. Friend say whether there is any truth in a report appearing in a French periodical, Le Sauvage of 19th January, saying that during the course of one Concorde flight over the British Isles a Scottish farmer lost his whole herd of cattle, half the animals being said to have died on the spot and the remainder having to be put down because they had gone mad from the effects of the supersonic bang? The report adds that Her Majesty's Government decided to grant the farmer the sum

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    of £14,000 in compensation for the damage.
    Mr. Davis: I know of no such reports. In any event, the aircraft does not fly at supersonic speeds over the United Kingdom.
    Mr. Warren: Although I respect the point made by my hon. Friend the Member for Twickenham (Mr. Jessel), and although I have great sympathy with people who live near airports, may I ask the hon. Gentleman to confirm that Concorde has met two out of the three required guarantees on noise for certification, that the third will probably be mastered by improved techniques, and that in New York the tests proved conclusively in the hands of American pilots that the aircraft could meet the requirements for noise take-off profiles in New York?
    Mr. Davis: I am grateful to the hon. Gentleman for that intervention. I agree with him entirely. He speaks with considerable expertise.
    Sir Anthony Royle: On a point of order, Mr. Speaker. In view of the fact that my constituents suffer just as badly as those of my hon. Friend the Member for Twickenham (Mr. Jessel)—
    Mr. Speaker: That is not a point of order.

    Counter-Inflation Policy
    Mr. Tim Rentonasked the Secretary of State for Trade what rôle his Department will play in implementing the Government's counter-inflation policy.
    Mr. Adleyasked the Secretary of State for Trade if he will make a statement on his Department's rôle in implementing the Government's incomes policy.
    Mr. Peter Morrisonasked the Secretary of State for Trade if he will make a statement on the rôle of his Department in the Government's counter inflation policy.
    Mr. Shore: As a Minister responsible for a Department whose interests cover exports and important industries in both the public and private sectors, I have been closely involved in the formulation of the policy. My function in implementing it will include the supervision of the
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    nationalised and public bodies for which I am responsible and the control of increases in the scheduled rates of premium for certain insurance business.
    Mr. Renton: Can the Secretary of State say what advice he is now giving to American companies seeking to make new investment in this country? Is he telling them that the Government's wage policy is voluntary on employer or statutory? If they should fail to understand his answer, will he then give them the details of the secret powers Bill so that they may know fully the Government's intentions?
    Mr. Shore: I think that that was a little laboured. Any advice which I give to a company in this position is that, like anyone else, it will be expected to observe the agreed guidelines of Government policy.
    Mr. Tomlinson: If there were any question of import controls on a generalised basis, would not they serve to damage the Government's counter-inflation policy by forcing up the cost of living in the short run?
    Mr. Shore: Yes. The impact of import controls is not helpful to the cost of living, although, as my hon. Friend knows, that is not the only argument put forward by those who advocate import controls.
    Mr. Adley: Is the right hon. Gentleman aware that in my constituency very many small traders and business men earnestly hope that the Government's counter-inflation policy will be successful? Is he aware, further, that some of them are particularly concerned about the variance between the Government's view and the TUC's view on the £6 limit? Will he give urgent consideration to clearing up this point, because none of his right hon. and hon. Friends has yet done so?
    Mr. Shore: I was not aware that there was, after our recent debates, any serious doubt about the matter. If there are further points which need clarification, I have no doubt that my right hon. Friends principally responsible will see that the clarification is made.
    Mr. Raphael Tuck: Will my right hon. Friend press the Secretary of State for Prices and Consumer Protection and the

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    Chancellor of the Exchequer to consider seriously what is now being done in the Republic of Ireland, where large subsidies are being given for essential foods and for services like electricity and gas so that prices may be kept down, and where the Government recoup themselves by imposing a surcharge on income tax?
    Mr. Shore: The policy of giving large subsidies through nationalised industry prices and directly in the form of food subsidies and rent subsidies has been practised by this country long in advance of the Irish Republic. I say additionally to my hon. Friend, whose deep concern I appreciate, that the success or otherwise of the latest Irish measures has yet to be demonstrated.
    Mr. Morrison: What will be the right hon. Gentleman's attitude if firms with large order books from overseas are forced out of business by unions trying to breach the present counter-inflation policy?
    Mr. Shore: I should be very upset about any such outcome to the Government's incomes and prices policy—of course I would. All those concerned have to weigh the consequences of their actions. This is one reason why it was so right to seek to get the maximum of agreement and understanding of all those concerned.
    Mr. Thorne: Can my right hon. Friend say what effect import controls on television glass manufactures would have in relation to Japanese exports to Britain?
    Mr. Shore: If we were to restrict Japanese exports to Britain in the industries mentioned by my hon. Friend—certainly in the case of television tubes—undoubtedly this would improve the British balance of trade. As my hon. Friend knows, however, there are many other factors to be taken into account before drawing too simple a conclusion from that proposition.

    Books and Periodicals (Export)
    Mr. Goodhartasked the Secretary of State for Trade what further action he is taking to promote the export of British books and periodicals.
    Mr. Deakins: Since the hon. Gentleman's earlier Question on this subject, my Department has continued to col-
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    laborate with the publishing industry in promoting its sales overseas.
    Mr. Goodhart: Does the Minister recognise that in January British publishers for export will have to pay postal charges which are 50 to 98 per cent. higher than those paid by their American publishing rivals? Does he recognise that the British Book Development Council believes that these new charges will have a calamitous effect on British book exports, and will he have discussions with those most affected?
    Mr. Deakins: As regards a meeting with the British Book Development Council, I have written assuring its representatives that I should be happy to meet them but that first they should make positive proposals. If they have any suggestions, I and the British Overseas Trade Board will be delighted to receive them. I understand that the industry is looking after itself in the light of the increased postal charges, not only those of which it has had a first instalment, but those represented by the second instalment which comes in in January next year—quite a large increase—and it is investigating quite positively and successfully further and cheaper ways of exporting books.

    USSR
    Miss Fookesasked the Secretary of State for Trade what results to date have followed the trade agreement with the Government of the USSR announced during the Prime Minister's last visit to Moscow.
    Mr. Shore: Our exports to the USSR are rising and there are good prospects for an improvement in Anglo-Soviet trade.
    Miss Fookes: Does the right hon. Gentleman agree that that is an extraordinarily vague answer which seems to belie the great noises of triumph which the Prime Minister made when he returned with this agreement? May we have a few more facts?
    Mr. Shore: If the hon. Lady had come in earlier, she would have heard me answer a similar Question in which I gave figures indicating that there had been a 100 per cent. increase in the first six months of this year compared with the first six months of last year. We are

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    starting from a very low base of trade with the Soviet Union. Therefore, we have a considerable way to go before we can begin to be satisfied about the volume of trade.
    Miss Fookes: On a point of order, Mr. Speaker. Is it correct for the right hon. Gentleman to upbraid me, because I gather that the two Questions were not linked?
    Mr. Shore: The hon. Lady, whose sensitivity I well understand, must not feel that she has been upbraided, I was trying to help her by giving a little bit of additional information which it was her bad luck and misfortune not to hear earlier.

    Cyprus Fruit
    Mr. Townsendasked the Secretary of State for Trade whether Great Britain is importing Greek Cypriot-owned fruit from Turkish-occupied Cyprus.
    Mr. Deakins: Fruit is imported into the United Kingdom from the Republic of Cyprus and disputed ownership is not a ground for refusing entry. Decisions on ownership are not for Ministers but for the courts.
    Mr. Townsend: Does the hon. Gentleman agree that, as a guarantor of a free and independent Cyprus, it behoves this country to treat this matter with considerable caution? Will he be prepared to consider setting up a working party to see what more can be done to exercise greater control?
    Mr. Deakins: There are some complex problems involved, but I am not convinced that the setting up of a working party would be helpful. What is needed in Cyprus is a proper political settlement, and that must spring from the two communities in Cyprus meeting together. That is why we are giving our full support to the inter-communal talks in Vienna.
    Mr. Lipton: Will my hon. Friend see what he can do to ensure that payment is made to the legal owners of these exports and not to the people illegally in possession of them and exporting them to this country? Will he agree to the dispatch of a Select Committee to Cyprus to ascertain the facts?
    Mr. Deakins: On the question of disputed ownership, I understand that a High Court case is pending in which four
    1284
    farmers' co-operatives in the north of Cyprus are seeking an injunction to prevent certain British importers from handling fruit from that part of the island. Obviously I do not think that any further action is called for at the moment.

    Japan (Motor Vehicles)
    Mr. Edwin Wainwrightasked the Secretary of State for Trade if he will give the number of Japanese cars imported into the United Kingdom over each of the past 10 years and the value of such imports in sterling; and if he will also give comparable figures for British cars exported to Japan.
    Mr. Shore: I shall have the detailed figures for which my hon. Friend has asked circulated in the Official Report. They show a large and increasing adverse balance in our car trade.
    Mr. Wainwright: Does my right hon. Friend agree that the figures will most likely prove that for every car exported to Japan from this country at least 50 cars are imported? Is he quite certain that dumping is not taking place? What is the latest evidence that he has received from the Society of Motor Manufacturers and Traders on this issue? What action will he take in the near future to ensure that the British motor car industry is able to supply cars in this country and not allow Japanese cars to come in? If cars can be produced in Japan and shipped to this country to compete with cars produced here, some fiddling must be taking place.
    Mr. Shore: My hon. Friend will know that we have been considering the charge of dumping and there has been an investigation. But the Japanese success in the British market has been due first to the unparalleled opportunities which they had for selling in this country in the 1972–74 period when British supplies were curtailed and limited, and secondly to the fact that in the last year or so the type of car which the Japanese have been selling tends to be of the small variety and, therefore, has a particular attraction in these days of much higher fuel costs. Those are advantages which the Japanese have. We cannot blink the fact or try to dismiss the Japanese success on the ground that they are trading unfairly. If I were to hear evidence of that, I should act on it. The problem is the more serious

    1285
    one of the present strong competitiveness of the Japanese car industry.
    Mr. Ridsdale: Is it not a fact that the French and German industries are looking after their home markets much better than we are looking after ours and, therefore, Japanese imports into Germany and France are not nearly as high as they are into this country? The salvation of our car industry against Japanese imports depends on our own industry and not on the Japanese.
    Mr. Shore: I have no doubt that the salvation of the British car industry lies basically with the British car industry. If our industry is to prosper, which I believe is the wish of hon. Members on both sides of the House, we must give it considerable aid and support in the period ahead. I do not have the figures relating to France and West Germany, but I will check them. Those who tend to single out Japanese car imports as being a problem of special moment should bear in mind that our net trade in cars with France and Germany is worse than it is with Japan.
    Mr. Les Huckfield: Does my right hon. Friend realise that, continuing logically from what he said, leaving out of account the fleet users and company sales, only one in three of British private motorists is buying a British car? As the figures for the first six months of 1975 show that imports have increased in value by 50 per cent, but exports have increased in value by only 19 per cent., even if my right hon. Friend cannot see his way to introducing import controls will he recognise that there is serious concern particularly among hon. Members such as myself who represent car manufacturing constituencies? Is it not about time that his Department made a definitive statement on import controls?
    Mr. Shore: I note and share my hon. Friend's concern about the trend. I offer him one modest solace in the light of the figures that he has mentioned. Taking the car industry in its broadest sense, including not only made-up cars but components and spares and associated vehicle industries, we are still substantial net exporters. Do not let us lose sight of that fact, because it is important to this country and to the future prosperity of
    1286
    the areas which my hon. Friend and other hon. Members represent.
    I take the point that hundreds of thousands of our fellow citizens prefer to buy cars which they know come from countries whose balance of payments situation is stronger than ours. I repeat what I said in the country some time ago: all of us who are concerned about the future of this country and its industry should search our consciences very carefully indeed before deciding to buy foreign cars.
    Mr. Shersby: In the light of the interesting reply which he gave to my hon. Friend the Member for Harwich (Mr. Ridsdale), can the Secretary of State assure us that there are no artificial technical barriers to prevent the export of British cars to Japan?
    Mr. Shore: All the obvious technical trade barriers are either non-existent or lower in the case of Japan than they are in the case of many other countries. For example, their tariff is 6·4 per cent. as against our own 11 per cent. There have been changes in various procedures which the Japanese practised in the past in relation to imports which have been to the advantage of our exports. It is difficult to pin on the Japanese industry any specific measure which it is using to protect its home market which would be disadvantageous to our exporters.

    Following is the information:

    Imports

    Exports

    £'000

    £'000

    Number

    £'000 cif

    Number

    £'000 fob

    1965

    …

    168

    63

    2,540

    1,477

    1966

    …

    1,230

    472

    2,739

    1,618

    1967

    …

    1,425

    550

    2,054

    1,299

    1968

    …

    5,791

    2,220

    1,689

    1,178

    1969

    …

    2,676

    1,186

    1,715

    1,263

    1970

    …

    4,291

    2,031

    1,776

    1,465

    1971

    …

    16,971

    8,231

    1,561

    1,476

    1972

    …

    68,676

    42,355

    1,328

    1,510

    1973

    …

    97,342

    71,395

    997

    1,742

    1974

    …

    86,899

    64,387

    1,805

    3,253

    Tea Estates
    Mr. Bryan Daviesasked the Secretary of State for Trade whether he will introduce an import levy on tea, the proceeds of which will form a welfare fund for the benefit of workers on tea estates.
    Mr. Deakins: I am not convinced that such a scheme would be practicable. However, as far as Sri Lanka is concerned, we are continuing our discussions

    1287
    with the Ceylon Association following the report produced by the group of Members who visited Sri Lanka at Easter. These discussions now need to take account of the Sri Lanka Government's plans to nationalise all foreign-owned estates.
    Mr Davies: I thank my hon. Friend for that reply, but does he accept that many of us will find it somewhat disappointing? Does he agree that something concrete ought to be put forward to help tea workers in Sri Lanka in particular and on many other estates throughout the world where there are British tea interests? Should he not capitalise on the real feeling among public opinion that tea is somewhat underpriced in this country and could bear a modest increase if the proceeds were directed to this meritorious end?
    Mr. Deakins: The Government's policy is to work towards international commodity agreements, of which tea would be one. However, the fact is that to impose a levy for this purpose would require new legislation and could be implemented only with the agreement of all tea exporting countries, not all of which are in need of this type of welfare fund and some of which might be reluctant to see a weakening of the competitiveness of tea vis-à-vis coffee.
    Sir John Hall: Has the hon. Gentleman any reason to believe that the Governments of the countries concerned would be prepared to accept a fund raised in this way for the benefit of one section of workers only? This applies particularly to Sri Lanka, which has been reluctant to accept any help directed specifically to tea plantation workers.
    Mr. Deakins: I cannot speak for the Sri Lanka Government, but I should have thought that other tea exporting countries which would be affected by the levy would be most unlikely to tolerate a levy on all tea exports the proceeds of which were directed merely to one country.

    European Community
    Mr. William Hamiltonasked the Secretary of State for Trade if there is any discernible improvement in the balance of trade with the EEC; and if he will make a statement on the impact of steel and food in this context.
    Mr. Shore: The crude deficit, seasonally adjusted, on our trade with the EEC averaged £171 million a month in the four months March to June 1975, compared with £225 million a month in the preceding three months. Between these periods the crude trade deficit in food and live animals was little changed and the deficit in iron and steel was reduced by half.
    Mr. Hamilton: Will my right hon. Friend confirm that the true balance concerning goods other than food and steel is showing a slight reduction compared with 1974? Will he give us a more specific answer on steel imports in view of the parlous plight of the steel industry in this country? Why are we continuing to import so much steel when our own industry is capable of meeting the demand in this country?
    May I congratulate you, Mr. Speaker, on your birthday and hope that those felicitations might help me to catch your eye in future debates?
    Mr. Shore: There has been a lower level of imports of iron and steel. In our judgment, this reflects the easing of capacity constraint and reduction of demand in the United Kingdom. That has been helpful in terms of the balance of trade with the EEC in iron and steel.
    As for the overall improvement, this is probably the first time in 16 months that I have been able to report to the House that there has been a slight reversal, which I welcome, in the trend. However, the House must be aware that what I am talking about on the basis of the past three months is an annual deficit of £2,000 million as distinct from a crude deficit of £2,500 million which previously obtained.
    Mr. Dykes: The Secretary of State has now admitted that there has been an improvement in the three months to June. During the referendum campaign he categorically said that the situation was getting worse. Should he now apologise for misleading the public?
    Mr. Shore: I do not think so. The referendum campaign ended, as I recall, a month ago. Indeed, the campaign was fought in the main two months ago, and the trend in the figures then was precisely as I described.

    Aircraft Noise
    Mr. Pattieasked the Secretary of State for Trade whether he has seen a copy of the policy document by the Local Authorities Aircraft Noise Council entitled "Relief from aircraft noise"; and if he will make a statement on his policy towards its recommendations.
    Mr. Clinton Davis: Yes. I have seen a copy of the document. My Department is already taking action in a variety of ways to provide relief from aircraft noise, but we are always prepared to consider new measures and study their practicability. The council's document embraces many wide-ranging measures and I cannot at this stage comment on them in detail. They will need careful consideration and my officials have arranged a meeting with the council to discuss the document.
    Mr. Pattie: May I press the Minister further, despite his answer, and ask him to comment on two facets of the report which are particularly important: first, the desirability of encouraging research into the production of quieter aircraft engines and, secondly, the two operational methods mentioned in the report for reducing aircraft noise on landing?
    Mr. Davis: The hon. Gentleman will no doubt recall that on two previous occasions I have indicated to the House that it is important to continue research into the production of quieter engines. The question of landing techniques continues to concern my Department and those engaged in the aviation industry. I hope that the hon. Gentleman will accept my assurance on those matters.
    Mr. R. C. Mitchell: Will my hon. Friend study the report carefully and in particular do something to give relief to many of my constituents who are suffering from continuous aircraft noise caused mainly by training flights from Hamble?
    Mr. Davis: I am aware of the difficulties experienced by my hon. Friend's constituents and by the constituents of other hon. Members who represent areas near Hamble. I have written a number of letters on this matter to them. However, they should make representations to the authorities at Hamble, who, I am sure, are sensitive to these matters and
    1290
    are trying to mitigate the disturbance which is caused.
    Sir Anthony Royle: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply which the Minister has given on the question of aircraft noise, and in view of the fact that I am unable to address a question—
    Mr. Speaker: Order. The hon. Member must make his point of order in the accepted form.
    Sir Anthony Royle: May I make it now in the accepted form? In view of the unacceptable reply which the Minister has given, I beg to ask leave to give notice that I shall raise the matter on the Adjournment.

    Motor Vehicle Insurance (Drunken Driving Offenders)
    Mr. Freudasked the Secretary of State for Trade whether he will conduct an investigation into the practices of motor vehicle insurers in their treatment of persons convicted under Sections 5 and 6 of the Road Traffic Act 1972.
    Mr. Clinton Davis: No, Sir. These are matters for the underwriters.
    Mr. Freud: Is the Minister aware that people convicted under Sections 5 or 6 are now being asked to pay premiums of 200 per cent. and 300 per cent. over the normal premium? Is he also aware that the Act was never really intended to punish people more than the ordinary criminal? A man convicted under Sections 5 or 6 is now not only disqualified from driving but cannot get insurance when he regains his licence after the stipulated time. Is the Minister further aware that this tends to drive people who want insurance to get inadequate cover from fairly unscrupulous companies?
    Mr. Davis: I think that a commercial rather than a moral judgment has to be made. Unquestionably insurers regard convictions of this nature as serious and as evidence of a high risk. Therefore, it is right that, in their judgment, they should charge more where such convictions have been established. If a driver is dissatisfied with the premium charged, he is at liberty to seek other quotations, but I do not accept all the assumptions made by the hon. Gentleman.
    Mr. Speaker: In view of my desire to preserve the sanctity of Question Time, I forbore from doing so earlier but I now take cognisance of the compliment paid to me by the hon. Member for Fife, Central (Mr. Hamilton). There comes a time in one's life when one does not wish to be reminded of one's age. However, I accept the compliment in the spirit in which it was made, even though the spirit was perhaps one designed to turn away wrath.

ANGOLA (BRITISH SUBJECTS)
Mr. Dalyell Mr. Dalyell (by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the safety of British subjects in Angola.
The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): As hon. Members will know, in view of the dangerous situation in Angola it was decided to evacuate British citizens and to close the Consulate-General. The decision was taken over Friday night, and the Royal Air Force evacuated 26 British citizens from Luanda on Sunday morning. Fourteen EEC nationals, 10 United States nationals and four Commonwealth and other nationals were brought out in this plane. About 12 British citizens decided not to leave. It is hoped that they will have the opportunity if they wish to do so within the next few days to take spare seats under air or sea evacuation arrangements of other friendly countries.
These arrangements were for Luanda only. In other parts of Angola, many have already left independently under arrangements made in consultation with our Consul-General.
Decisions on evacuations and their timing are always difficult. In this case, we were mainly influenced by the importance of using the airport while it remained safe to do so, and while access to the airport through troubled quarters of the city remained feasible.
Our best assessment is that the situation in Angola is likely to get worse and that the capital could become a battleground in which British citizens would be at serious risk. So far, there have been no British casualties, although there has been some damage to property.
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We greatly regret the tragic turn of events which made this evacuation necessary.
Mr. Dalyell: Is it sufficient simply to say, as regards those who elected to remain, that there will be sufficient accommodation for them under the evacuation arrangements of other countries? Would it not be wiser to make some definite arrangement?
Mr. Ennals: The British citizens who decided to remain knew that the evacuation arrangements were being made. We issued a warning on 24th July, which was broadcast on the BBC Overseas Service, advising British citizens whose presence in Angola was not strictly essential to leave. We then informed them as soon as the decision was taken. It seems that about 12 have decided to stay. There are alternative arrangements—quite apart from those made by friendly countries—if in the event these people cannot leave under the arrangements made by friendly countries in the next few days.
Mr. Tugendhat: From this distance it would be impossible to criticise decisions taken in Luanda, but will the Minister of State confirm that a number of other European countries have left diplomatic representation in Luanda and that we are the only country to have withdrawn?
The Minister of State said that some British subjects had decided to stay. I think that he was referring to people in Luanda as distinct from Angola as a whole. Were there any British subjects who, far from declining to leave, were unable to get to Luanda because of the speed with which the operation was conducted? How many British people are there actually in Angola altogether? Can the Minister say what is the value of British interests in Angola currently at risk? Finally, which friendly Power is looking after our interests now that we have left?
Mr. Ennals: There are a number of questions there. As the hon. Gentleman recognised, it is always difficult to take a decision. If we had taken a decision too late and it had been impossible to get the plane into the airport, we would no doubt have been criticised because we had not acted quickly enough. We are not the only country which has evacuated citizens. Some have

1293
done so by their own arrangements and some have done so by our arrangements. There are still some countries, of which the United States is one, which have not evacuated their citizens.
As the hon. Member deduced, the statement I made about 12 British citizens referred to Luanda alone. I do not think that there were any British citizens who decided to remain because they did not know of the operation or were unable to leave at that stage. As for those in other parts of Angola, it is difficult to be certain how many have left under their own arrangements. Some people live in fairly scattered areas. It is a very big country and it had long been agreed—these people knew it—that exacuation from Luanda could not include citizens in the distant areas of Angola. The number is likely to be few. In some cases they are wives of Angolans or of Portuguese settlers. The number is very small.
I will have to inform the House later as to the responsibility that is held.
I cannot at this stage tell the House the total value of the property that is left there. As I said in my statement, some of the property has been damaged. Most of it has not been. The British consular staff are being looked after by non-British staff; so the consulate is still there.
Mr. Newens: Can my right hon. Friend say what the attitude of the British Government will be to the parties involved in hostilities? Can we take it that we shall be pursuing a policy of neutrality?
Mr. Ennals: We certainly deeply regret the situation—
Mr. Speaker: Order. I allowed this Question with some doubts because of the safety of British subjects. I do not think that we can get involved in general questions of foreign policy.
Mr. Newens: On a point of order, Mr. Speaker. Does it not affect the question of the safety of British citizens to know what attitude the British Government are taking towards the parties involved in the hostilities? As the hon. Member for the City of London and Westminster, South (Mr. Tugendhat) asked such a long question, am I not entitled to have a comment on this matter?
Mr. Speaker: The hon. Gentleman is entitled to have a comment if the Minister chooses to make it.
Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. In at least two respects I think that the Minister will find that he has not said what he meant to say, through verbal infelicities. On this occasion it is important that we should have on the record what he meant to say, so perhaps he can be allowed the same indulgence as a maiden speaker to alter the record in Hansard to what he meant to say.
Mr. Speaker: I do not regard that as a serious point of order.
Mr. Kinnock: On a point of order, Mr. Speaker. While I understand your ruling that the Minister must make up his own mind as to whether he answers the question asked by my hon. Friend the Member for Harlow (Mr. Newens), in fact you rose before my right hon. Friend the Minister of State had had time to answer the question put by my hon. Friend the Member for Harlow. It may be that my right hon. Friend the Minister of State was about to tell my hon. Friend to take a running jump. Surely my right hon. Friend should be allowed to tell my hon. Friend that for himself.
Mr. Ennals: I had intended to answer the question asked by my hon. Friend the Member for Harlow (Mr. Newens). We deeply regret the situation in Angola. It is not for us to take sides. I, and, I think, the whole House, would want to appeal to both sides to call off this very damaging armed struggle so that Angola can have a smooth and peaceful transition to independence. I do not think that it would be helpful to us to take sides.
Perhaps I may be allowed to add that I now know that the estimated value of British property in Angola is £60 million.
Mr. Teddy Taylor: As the situation in Angloa is now developing into little more than a bloodthirsty shambles, is the Minister of State seriously telling us that he has no precise idea of the number of British residents, that he has no precise idea of where they are, and that he has not given them any instructions as to whom they should contact if they get into

1295
trouble? In view of the right hon. Gentleman's obvious and well-known interest in the so-called freedom fighters in Angloa, does he not think that he has a duty to give us some indication of what advice he has given to people whose lives will be at risk?
Mr. Ennals: I do not think that the situation is as the hon. Gentleman describes it. As regards those in Luanda, I have already said that our best information is that the number is about 12. It could be 14, but it is roughly that figure. I cannot give a figure for those in other parts of Angola, simply because, as people have been leaving in the course of the last few weeks, we do not know how many have left and how many are there. They all know perfectly well that if they are able to get in touch with Luanda they will be able to make transitional arrangements to get out of the country.
Mr. Faulds: Is it not the normal practice in circumstances as abnormal as this that one of the matters of first priority is to determine who will oversee British interests when we withdraw?
Mr. Ennals: This decision will be taken probably in the course of the next 24 hours. The operation of the evacuation of citizens has been done very rapidly over the weekend. It is a matter of negotiation, and the matter will be dealt with rapidly. I shall answer a Question in the House concerning which country will take responsibility.
Mr. David Steel: Surely our Consul in Angola does not constitute our diplomatic representation in that area. Somebody must be responsible for British affairs in that country.
Mr. Ennals: It is true that the British Consul has been withdrawn. It clearly would have been wrong to have left our small consular staff in Angola after the vast majority of the British citizens had been withdrawn. The Consul returned in the early hours of this morning.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I think this matter must be pursued on another occasion.

DIVISION NO. 290
The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): I wish to refer to the adjourned debate on the Solicitor-General's motion which took place in the early hours of last Monday's sitting. As you know, Mr. Speaker, this motion would in the normal way have been accepted without discussion, but in the event a vote was called and a number of my hon. Friends were involved in voting in both Lobbies. I should like to apologise to you, Mr. Speaker, and to all Members of the House for this incident.
Mr. Peyton: There are two points that I wish to make. First, I think the underlying issue of whether or not the House should deny the courts the enjoyment of Hansard needs looking at again. It is a very stupid rule. However, I hope that the Patronage Secretary will agree that votes and rules about votes, whether they are concerned with majorities or quorums, are very important matters that should not be tampered with or treated in any way lightly.
Mr. Mellish: On the question of the Solicitor-General's motion and Hansard, that is not a matter for me at this moment. It is a fact that Members have voted in two different Lobbies before now. However, I do not want to go back too far in the past. I can only say, speaking for myself, that I spend all my time trying to get as many Members as I can into one Lobby. I am overwhelmed by the enthusiasm of those who vote in two.
Mr. George Cunningham: As the most important aspect of this matter is how the rules concerned apply if the number of people voting in both Lobbies produces a number over 40, could you give a ruling now or at some time, Mr. Speaker, as to the proper interpretation of Standing Order No. 29(2), which clearly says:
"If at any time it shall appear…that forty Members are not present"?
It would seem from that provision that one should not count two votes as two but only as one if they are cast by the same Member. Are you in a position to say, Mr. Speaker, what the position would be if the number of Members who voted, however composed, fell short of the

1297
number required for a quorum? If you knew, Mr. Speaker, that that was the case at the time of the Division, is it not the case that you would rule that a quorum was not present? If that knowledge came to you on the day after the vote had taken place, Mr. Speaker, would you declare ex post facto that the quorum had not been present, and declare the decision invalid?
Mr. Speaker: I shall rule upon that matter, but I will first take one more supplementary question.
Mr. Wiggin: This is a matter that was raised almost a year ago when some Members of the Liberal Party voted in both Lobbies on a Friday afternoon.
Mr. Mellish: That was because they did not know.
Mr. Wiggin: I raised the point on that occasion with the Deputy Chairman who was in the Chair, but I received no ruling. I think it would be appropriate if we could have a definitive ruling from you, Mr. Speaker.
Mr. Speaker: I shall rule straight away. It is clear from Standing Order No. 29(2) that on a Division there must be 40 Members present for the decision to count. Included in those 40 Members are the occupant of the Chair and the four Tellers. If 20 Members each vote in both Lobbies, that does not constitute a quorum. If the matter were reported to the Chair, the Chair might order another Division and would rule, but if that moment is allowed to pass, and if the matter is raised on a subsequent occasion, that must be a matter for the House. It seems that this is the kind of thing that always crops up in July. Last July we had a somewhat similar occurrence, which was resolved by the decision of the House. I hope we can leave the matter there.
Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. If the House or any Member has reason to believe that on an occasion when the question of the quorum is involved there has been voting in more than one Lobby by certain hon. Members, does it lie within the power of the occupant of the Chair to call immediately for the two Division Lists so that either you, Mr. Speaker, or one of your deputies can examine the lists, or is it necessary to wait until the lists appear in the printed
1298
record? This is an important matter, because for the Chair to call for the lists could provide a very much quicker way of resolving the matter rather than waiting for perhaps more than one day, if there is a printing backlog, before the record becomes available.
Mr. Speaker: If there was a difference of opinion about what had happened and if the matter were raised at once, perhaps it would be for me to ask for the Division Lists to be brought to me so that I could examine them and carry out my own count, but the point must be raised at once. The Chair will listen to any representations that are made at once. If there is a difference of opinion, the normal rule is that the Chair asks whether the Tellers agree. If there is a disagreement among the Tellers the Chair orders another Division to take place. That is what normally happens provided that the matter is raised at once.
Mr. Maxwell-Hyslop: Further to that point of order, Mr. Speaker. It seems that there is a difference between dealing with such a question by sending for the lists and ruling, which could result in the adjournment of the House and having a further Division which could give the opportunity for one of the parties to obtain the presence of Members who were not present during the previous Division. That is why I ask you, Mr. Speaker, whether the matter could be disposed of by the Chair sending for the lists. I believe that this is a point of substance, because the results of the two Divisions would not necessarily be the same.
Mr. Speaker: I think that the hon. Gentleman is on an important point, and I shall rule on it when it happens.
Mr. Ridley: Is it not a dubious practice that hon. Members can vote in both Lobbies? Would it not clear up this matter if it were referred to the Procedure Committee, so that that Committee might determine whether we need to vote in both Lobbies on any occasion? Matters are made difficult from the point of view of recording an opinion, if hon. Members can vote in both Lobbies. Of course, they are not allowed to do so in order to try to secure a quorum. The practice of voting in both Lobbies makes matters difficult for the Chair, and it should be possible for hon. Members to

1299
make up their minds as to which Lobby they want to go into before going into one or the other.
Mr. Speaker: I hope the House will not pursue this matter for too long. This is a day to which the guillotine applies, and I want to get on with the Bill as quickly as I can. In my experience I have only known hon. Members to vote in both Lobbies when they wanted to correct a mistake. That has happened within my knowledge only rarely. I would deprecate very much it happening in any other circumstances.

RT. HON. MEMBER FOR WALLSALL, NORTH
Mr. Speaker: As regards the point of order raised by the hon. Member for Birmingham, Handsworth (Mr. Lee) on Thursday last, I give my ruling now. Last Monday I read to the House a letter from the Chief Clerk of the Bow Street Magistrates' Court reporting that the right hon. Member for Wallsall, North (Mr. Stonehouse) had been detained in custody on a number of criminal charges. As explained in pages 100–102 in "Erskine May", the House has long ceased to claim the privilege of freedom from arrest in the case of hon. Members who are charged with criminal offences. Therefore, as long as the right hon. Member for Wallsall, North remains so detained, he will not be in a position to attend this House at his own wish.
Mr. Lee: May I ask you, Mr. Speaker, to enlarge further on that situation. Can the House by its own resolution require the presence of the right hon. Member for Walsall, North (Mr. Stonehouse), or anyone else who is so detained, so that he may address the House if he so wishes?
Mr. Speaker: I am grateful to the hon. Gentleman for raising that point. I want to make it clear that there is no initiative which lies with the Chair in this matter. This is a matter for the House; the Chair has no discretion. The House can by resolution decide what it wants to do. I think that it would even be possible for a Select Committee with the authority of the House, to decide what it wished to do. As I have said, this is not a matter for the initiative of the Chair.

STATUTORY INSTRUMENTS
Ordered,
That the Elections (Welsh Forms) Regulations 1975 be referred to a Standing Committee on Statutory instruments.—[Mr. Dormand.]

PETROLEUM AND SUBMARINE PIPE-LINES BILL (ALLOCATION OF TIME)
Motion made, and Question,
That the Report [17th July] of the Business Committee be now considered.—[Mr. Benn.]
put forthwith, pursuant to Standing Order No. 43 (Business Committee), and agreed to.
Report considered accordingly.
Question,
That this House doth agree with the Committee in their Resolution.—[Mr. Benn.]
put forthwith, pursuant to Standing Order No. 43 (Business Committee), and agreed to.
Following is the report of the Business Committee:
That of the two allotted days for proceedings on the Petroleum and Submarine Pipelines Bill under the Order [7th July], the first shall be allotted to Consideration and the second to Third Reading.

ORDERS OF THE DAY

  PETROLEUM AND SUBMARINE PIPE-LINES BILL
  [1ST ALLOTTED DAY]
  As amended (in the Standing Committee), considered.

New Clause 1

  UNITED KINGDOM OIL CONSERVATION AUTHORITY
  '(1) There shall be a body corporate to be called the United Kingdom Oil Conservation Authority (and hereafter in this Act referred to as "the Authority") which shall be constituted in accordance with the following provisions of this section.
  (2) The Authority shall consist of not more than five persons appointed by the Secretary of State, one of whom shall be appointed chairman and two of whom shall be appointed deputy chairmen.
  (3) No member of the Authority shall have any pecuniary interest in any business engaged in any phase of the oil or gas industries.
  (4) The Authority may from time to time appoint one or more persons having special technical or other knowledge—

  (a) to sit with the Authority to hear and consider any matter before it, or

  (b) to inquire into and report to the Authority in respect of any matter before it.

  (5) The Authority shall have power to do anything which is necessary for or incidental to the achievement of the purposes of this part of this Act, that is to say—

  (a) to provide for the appraisal of the reserves and productive capacity of oil and gas resources in the United Kingdom and controlled waters;

  (b) to provide for the appraisal of the existing or future requirements to be met from United Kingdom oil and gas resources—

  (i) in the United Kingdom and

  (ii) in markets outside the United Kingdom;

  (c) to effect the conservation of, and to prevent the waste of, the oil and gas resources of the United Kingdom;

  (d) to control pollution and ensure conservation of the environment in the exploration for, processing, development and transport of oil and gas resources;

  (e) to secure the observance of safe and efficient practices in the exploration for, processing, development and transport of the oil and gas resources of the United Kingdom; and

  (f) to provide for the recording and timely and useful dissemination of information
  1302
  regarding the oil and gas resources of the United Kingdom.

  (6) The Authority shall, in the exercise of its powers for the purposes of this part of this Act,—

  (a) be guided by directives given to the Authority from time to time by the Secretary of State;

  (b) hold such inquiries, make such orders, give such directions and take such action as the Authority reasonably considers to be necessary to give effect to the purposes of this Part of this Act and to any directives given to it under paragraph (a) above;

  (c) make investigations, undertake studies, and prepare reports on any matter within the purview of this Act or of the Petroleum (Production) Act 1934, the Pipelines Act 1962, the Continental Shelf Act 1964, the Prevention of Oil Pollution Act 1971 and the Mineral Workings (Offshore Installations) Act 1971 or any statutory modification or re-enactment of any of them; and

  (d) provide advice to the Secretary of State with regard to such measures as the Authority considers necessary or advisable in the public interest related to the exploration for, production, development, conservation, control, transport, use and marketing oil and gas resources and for the safety of those engaged or employed in connection with such activities.

  (7) Where under this Act, or under any licence or authorisation issued pursuant to this Act or to the Petroleum (Production) Act 1934, or to any statutory modification or re-enactment of either, any matter falls to be referred to arbitration (howsoever such reference may be described), such matter shall be referred to the Authority for determination and not to any other tribunal.
  (8) Where under this Act or under any licence or authorisation issued pursuant to this Act or to the Petroleum (Production) Act 1934 or to any statutory modification or re-enactment of either any matter or thing falls to be determined decided, directed, approved, specified or consented to by the Secretary of State, then at the instance of any person affected or likely to be affected by such action by the Secretary of State the matter or thing as aforesaid shall be referred to the Authority for inquiry or investigation and recommendation and the Secretary of State shall not act as aforesaid in respect of such matter or thing until the Authority has issued a recommendation thereon and the Secretary of State has considered such recommendation; and where the Secretary of State acts otherwise than in accordance with such recommendation he shall state his reasons for so doing.
  (9) The Secretary of State may after consultation with the Authority and with the consent of the Lord Chancellor make Regulations governing the proceedings of the Authority under subsections (7) and (8) of this section and without prejudice to the generality of the foregoing such Regulations may provide for—

  (i) the service of notices upon any person affected or likely to be affected by any such proceeding;

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  (ii) allowing any such person as aforesaid to submit written or oral evidence or to make representations in any such proceeding;

  (iii) requiring all such persons as aforesaid to have access to all evidence given or representation made as aforesaid;

  (iv) the examination, cross-examination and re-examination of witnesses in any such proceeding;

  (v) representation of any such person as aforesaid by Counsel or a Solicitor;

  (vi) the protection of privilege for any words spoken or written and for any acts done, whether by the Authority or by any person concerned, in any such proceeding;

  (vii) such other matters as the Secretary of State (after such consultation and with such consent) may consider necessary or desirable for the proper performance by the Authority of its functions and duties under subsection (7) and (8) of this section.'—[Mr. Patrick Jenkin.]

  Brought up, and read the First time.
  3.54 p.m.
  Mr. Patrick Jenkin: I beg to move, That the clause be read a Second time.
  We have a very heavy agenda before us and as you have reminded the House, Mr. Speaker, we are operating under the guillotine—a guillotine which, it is agreed on all sides, owes nothing to any intransigence on the part of the Opposition.
  The clause proposes the establishment of a new regulatory body which we have christened the United Kingdom Oil Conservation Authority. It embodies a proposal put forward last year by the Conservative Party in a statement which I made on 11th September. That proposal duly found its way into the Conservative election manifesto.
  It is a happy coincidence that this Report stage of the Bill follows only a few days after the proposal for a regulatory body received powerful endorsement from the Select Committee on National Industries, in a report from Sub-Committee A, under the chairmanship of the hon. Member for Feltham and Heston (Mr. Kerr). I regard that as a valuable report, and it is a pity that it was not available before the conclusion of the Bill's Committee stage. The Select Committee agreed its report on 23rd April, a week before the Second Reading of the Bill, but it was only last week that it was published. It seems to me that if these reports are to be of value to the House, they need to be issued, published
  1304
  and made available to hon. Members as swiftly as possible.
  In Standing Committee we concentrated on three main points: first, the powers, rôle and purposes of the British National Oil Corporation; secondly, the finances of the BNOC and the participation in North Sea oil licences; and, thirdly, the strengthening of the regulatory functions of the Government in relation to licences, pipelines and refineries.
  In our debates we established a number of valuable propositions, as I am sure the Minister will agree. The first proposition was that the central purpose of the existence of the BNOC and the participation in licences was to gain information and expertise. This point was put clearly by the Secretary of State on 17th June, as follows:
  "In addition, participation has a special value, because it gives the nation itself a direct knowledge of and expertise in the production of oil."—[Official Report, Standing Committee D, 17th June 1975; c. 4191
  One might add that the nation needs it.
  I, for one, was not much reassured by the answer given by Lord Balogh on 23rd July in another place, when asked by Lord Orr-Ewing
  "As the noble Lord referred to all previous advisers as amateurs, perhaps he could give the names of the professionals who are advising the present Government?"
  Lord Balogh replied:
  "My Lords, I am."—[Official Report, House of Lords, 23rd July 1975; Vol. 363, c. 332.]
  I find that a very disturbing answer indeed.
  Much had been made in our debates of the need to secure revenue and to exercise control, but in debate it became clear that participation in existing licences will bring no extra revenue because the Government are pledged to negotiate on a "no gain, no loss" basis. Furthermore, it became clear that revenue from new licences must be regarded as a somewhat speculative venture. It was also established that the pattern of control had nothing to do with BNOC. It is interesting to note that when the Department gave evidence to the Select Committee earlier in the year that was not clear. It has now become clear and we welcome it.
  The second point we established was that this by any standards, will be a very costly exercise for the taxpayer. The figure put forward from the Opposition

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  estimated the exercise as costing over £2,000 million of taxpayers' money—sums which will have to be invested up to 1980. The Government were not quite so forthcoming. They admitted to a figure of £500 million in 1976 and a further sum of the same order in 1977, and they went further and said that, in addition, there would need to be added the compensation payable to the companies under Clause 41. Up to the end of 1977, at any rate, we are talking of a sum well in excess of £1,000 million and it could be half as much again.
  The third proposition we established was that to finance this venture we shall need the £900 million which the Corporation will have to borrow under Clause 6 and also the flow of royalties diverted from the Exchequer to the national oil account. Furthermore, there is the question of BNOC's exemption from petroleum revenue tax. The Government did not deny that by 1980 these sources could provide the BNOC with funds of up to £2,000 million at least.
  Fourthly, we established—and, if we did not do so, the Select Committee endorsed the point—that the capacity of the BNOC to operate as an exploration or production company in the early years wil; be virtually nil. Indeed, The Guardian reported last week:
  "The Government is expected to announce shortly that the proposed state oil company will take no technical part in North Sea oil search for the first few years of existence."
  As appears from the Select Committee report, it will take many years before the BNOC can build up the teams of experts necessary to make a success of the operation. For many years it is bound to be no more than a sleeping partner, although an exceedingly expensive one.
  Yet, despite all these considerations, we were able to agree in Committee that there needs to be pretty close supervision of offshore exploration and development. We agree that the Government need high technical competence at their disposal to undertake this task. They need information and expertise, and they also need fully to understand the problems facing the industry which is responsible for carrying out the operations on the continental shelf.
  But nothing said in the course of a long Committee stage, either by the Secretary of State for Energy or by his
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  indefatigable Under-Secretary of State, began to convince me that it makes any sense to invest up to £2,000 million of public money to achieve those purposes by direct participation. At £2,000 million, information and expertise is very dearly bought. On the contrary, the more we discussed the proposal, the more unnecessary and irrelevant it seemed. In our view, the Government's legitimate objectives would be far better achieved, not by investing thousands of millions of pounds in an unnecessary State oil company, but by setting up a proper, well-staffed, regulatory agency of the kind to which we direct new Clause 1 in this Bill.
  4.0 p.m.
  The central idea behind the proposal for an independent regulatory agency is the need to combine three features—competence, impartiality and trust.
  The body needs to be highly expert and to have a high level of technical competence if it is to handle effectively the regulatory functions at present vested in the Secretary of State. The Select Committee cast some doubt on whether the Department of Energy was sufficiently equipped by itself to carry out that task.
  Secondly, the functions need to be exercised with a strict—almost a judicial—impartiality, not only when considering issues that arise between one licensee and another, but perhaps still more when they arise between the licensee and the Government themselves.
  Thirdly, if these functions are to be operated properly, there needs to be built up the trust and confidence of the industry, whose operations and investment decisions can be quite dramatically affected by the exercise of the regulatory power.
  It was these ideas which commended themselves to my party last year and led to its including the proposal for a United Kingdom Oil Conservation Authority in its General Election manifesto. We now know that shortly afterwards the same ideas were put to the Select Committee on Nationalised Industries by several witnesses and were endorsed by the Committee earlier this year. Perhaps I may direct the attention of the House to paragraphs 165 and 166 of the Select Committee's Report. Paragraph 165 reads:
  "On its visit to Norway the Sub-Committee was impressed by the work of the Petroleum

  1307
  Directorate, to which we referred in Chapter 5. This external Government agency's tasks include the monitoring of Shelf activity, the collection and processing of technological material, the preparation of appraisals for Government, the publication of technical data, and the function of ensuring that production takes place in accordance with guidelines laid down. BP in their evidence recommended that a regulatory commission should be set up here, comparable to the Norwegian body. It would be ultimately responsible to DEn (which would fulfil the central policy-making role for oil and gas), but would be semi-autonomous and at arm's length from both the Department and the oil industry. Its functions would include the custody and release of licensees' technical information, conservation policies, unitisation, the assessment of reserves and the regulation and inspection of pro-rationing programmes."
  The Committee then went on to refer to other similar bodies, such as the Energy Resources Conservation Board of Alberta and the Texas Railroad Commission. The House knows that I, together with a number of my hon. Friends, had the opportunity in January of studying these bodies when we visited the United States and Canada. We became convinced that something of the sort is needed in this country. It is through such a body that the Government would best acquire the competence, the information and the expertise which we are all agreed they need to have. It is, therefore, very reassuring to find that the Select Committee has reached the same conclusion. I should like to quote very briefly from paragraph 166:
  "We assume that the Government recognises the need for these tasks to be performed by a competent body, but it was not clear to us how they proposed to handle it ֵ There is also advantage in separating the regulatory body from the Department itself, which would of course retain the ultimate responsibility for its work."
  That is exactly the pattern for which we have provided in new Clause 1, which sets out the framework. I drafted new Clause 1 and put it on the Notice Paper before I had read the report of the Select Committee, so it is all my own work.
  We envisage a small body, of no more than five members, though with power to take on technical assessors for particular studies. We believe that the members should have no financial interests of any sort in oil and gas activities, so that they may be strictly impartial. We believe that this should be the body to monitor and, so far as it can, establish the reserves
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  of oil and gas available to the nation, to prepare reports and studies on the markets, and to be responsible for the conservation rôle and the prevention of waste—waste having in this context a very wide and rather specialised meaning. It would be the body to monitor and control pollution, and deal with safety and other similar matters. It would build up and establish a library of information which would be available to the Government and, as appropriate, to the industry.
  It is worth noting that the Alberta board reckons to have the finest collection of core samples of any such body in the world, because it is entitled to collect, store and monitor them under the Alberta legislation. It is perfectly true that the Institute of Geological Sciences, under the NIRC in this country, performs something of the same function, but in a less satisfactory and rather less coherent way. But, of course, policy must remain with the Government, with the Secretary of State, and we recognise that. New Clause 1, therefore, provides that the Secretary of State may give directives to the conservation authority, and the authority is then bound to carry out its function in the light of those directives. The detailed implementation is for the authority. It would be empowered to hold hearings and inquiries, to undertake studies, to prepare reports and to tender advice to the Secretary of State. It would be the expert arbitration tribunal to hear and decide on disputes that might arise. It would be able to make recommendations to the Secretary of State in cases where he is vested with powers under the licences or under the Bill.
  I am not wedded to the exact wording or even to every detail in the clause. The main purpose is to paint a broad general picture of how such a body could be set up and operated.
  The Secretary of State will no doubt recognise—or his officials will be able to recognise—that I have drawn heavily on the Alberta legislation, and certainly the Alberta board has become the model not only for other provinces in Canada and for the National Energy Board in Ottawa, but for similar bodies in other parts of the world.
  When my hon. Friends and I visited Alberta we were much impressed by the

  1309
  trust and confidence in which the Alberta board was held by industry, and also—just as important—by the confidence of the board that it in turn was not being bamboozled or misled by industry. As the Deputy Chairman, Mr. Doug Craig, said with a smile, "We reckon we know enough to know when the industry is not telling us the whole truth."
  It seemed to us then, as it seems to us today, that the United Kingdom could do much worse than to learn from this experience and base its institutions on the Alberta model.
  The Select Committee's report brings out one other valuable point. In Chapter 5 it goes to some length into the shortage of skilled staff. Indeed, this is perhaps the central message of the report. Paragraph 103 says:
  "A constantly recurring theme in our evidence was the difficulty of finding sufficient technological expertise to direct, operate and support this huge programme of exploration and development. This is a major limiting factor in the aspirations of any nationalised industry, state corporation, private sector company or Government department or agency in playing a useful role in the exploitation of UKCS oil and gas."
  Yet, when the Committee dealt with the question of regulatory aspects, it indicated that staffing might not be quite the difficulty for a conservation authority that it would be, for instance, for the BNOC. In paragraph 112 of the report, Professor Whiteman thought
  "… that if the Department were to carry out the function of a proper regulatory commission a staff much greater than those at present in the department of IGS would be needed to handle all the seismic data, logs, geophysics, etc., and to make assessments, look after conservation and legal problems and so on."
  British Petroleum also said that the Department was not at present properly equipped to handle such matters, and suggested that staff might be recruited from specialists who had just retired and might be willing to serve the Government for a few years. But Sir Eric Drake makes the considerable point that the kind of people nearing the end of their careers who could perform a useful task in a regulatory commission are not the kind of people one should be looking for to start such a body as the BNOC.
  I believe that the establishment of a United Kingdom oil conservation authority is not only necessary but
  1310
  perfectly feasible. It would have one overwhelming advantage compared with the British National Oil Corporation proposed by the Government. Its budget up to 1980, instead of being £2,000 million or more, might require no more than £10 million or £20 million. Instead of saddling the industry with the BNOC, a huge, unwieldy inexpert operating partner—a real cuckoo in the nest if ever there was one—the Government would have their own watchdog, expert, competent and impartial, to safeguard the national interest.
  Mr. Dennis Canavan: But with no teeth.
  Mr. Jenkin: The hon. Gentleman would do well to study some of the orders made by the Alberta board, the Texas Railroad Board, and the Oklahoma Gas and Oil Commission. It is nonsense to say that they have no teeth.
  It is desperately important that the Government should make this change of direction. It is freely admitted that the momentum of exploration is slowing down. Rigs are leaving our waters at the rate of about one a week. The current issue of Offshore Services says:
  "… it now seems that exploration activities are beginning to run down. The contracts of some of the big semi-submersibles expire this year and in the absence of renewal contracts with North Sea operators some of them are now certain to take up overseas contracts and leave the North Sea at the end of Summer."
  We know, too, that there is grave shortage of orders for production platforms. The Under-Secretary of State made a statement last week trying to deal with the danger.
  On 18th July, moreover, The Guardian reported:
  "A serious crisis in the North Sea Oil construction programme is casting doubt on whether Britain will get the oil ashore as speedily as the Government has planned."
  What are the real reasons for the rundown of capacity in the yards, in the manufacture of modules and all the other equipment needed? The Government do not have to look far for them. They were spelt out by Sir Eric Drake in his evidence to the Select Committee earlier this year. He said, in answer to Question No. 603:
  "… I must tell you that the proposed establishment of the B.N.O.C., and the unknown rate of taxation through the petroleum tax, are beginning to slow down the exploration and productive scene of the North Sea."

  1311
  In answer to Question No. 605, Sir Eric said:
  "… in common sense these must have an inhibiting effect on the development of the North Sea, for two reasons, one because of a reduction of an unknown rate, so far not known, and secondly, to the extent that the establishment of B.N.O.C. may represent an interference perhaps by less skilled people in the decisions of those whose profession it is."
  The Government have, of course, since then announced the detail of the PRT but the British National Oil Corporation still hangs over the industry as a threat which is inhibiting activities.
  4.15 p.m.
  Mr. Gordon Wilson: Even if new Clause 1 were accepted, surely the BNOC would still remain in existence. Surely the clause is more to do with the powers of the Department of Energy than with the BNOC.
  Secondly, if, following aspects of Government policy, there is or will be a diminution of activity in the North Sea, would not the proposals in the clause for bringing in a conservation authority and giving it teeth lead to a further diminution of that activity?
  Mr. Jenkin: The hon. Gentleman has been in the House long enough to know that once a decision has been reached in Committee it is unlikely to be permitted to be reopened on Report. We were bitterly opposed to the setting up of the BNOC, and we see the oil conservation authority as a very much better alternative. But, of course, within the constraints of debate on Report, the hon. Gentleman is right. Second, he must distinguish between the machinery for giving effect to proper conservation policies and what those policies might be. The latter would be for the Government to decide. I am content for the purpose here to assume that the powers would be those set out in Part 2 of the model clauses of the licences. If one were looking at this matter de novo that view might also De rather different. But a regulatory body of the sort I have described would be an infinitely better way to look after the public interest than anything proposed in the Bill.
  The Government should abandon their doctrinaire proposals for the BNOC and embrace the concept of a regulatory agency which would secure all its legiti-
  1312
  mate objectives more efficiently, more surely, and much more cheaply.
  Mr. J. Grimond: I hope not to repeat in detail all the arguments I advanced on Second Reading and in Committee. But the fact that I do not repeat them does not mean that I am convinced by the Government's replies.
  I suggested to the Conservative Government that they should set up a committee to monitor developments taking place in connection with oil. I suggested that it should be purely advisory and that its advice should be available not only to the Government but to local authorities. I suggested that it should also try to cover the effects on the environment and on local economies of oil-related work. That was not done. Later, a committee was set up and it is still operational, but it is difficult to find out what it is doing. I think it reports to the Secretary of State for Scotland. Could we be told a little more about its activities?
  I wholly sympathise with the new clause as an alternative to the BNOC. But what alarms me is that if the Government were to accept it we would have the new conservation authority in addition to the BNOC. There must be an end to the setting up of commissions, corporations, Ministries and so forth. We have not the people of sufficiently high calibre at hand unless they are taken out of other important jobs. Secondly, we are always getting top hampers of unproductive officials while the country desperately needs to increase production.
  The right hon. Members for Wanstead and Woodford (Mr. Jenkin) put the conservation authority idea forward as an alternative to the BNOC. He must face the danger that it might be in addition to the BNOC. He may well argue that it would be a small body. No one would want to tie him down to the exact wording, but, against the background of his description of the Alberta authority, it is clear that he would regard the conservation authority as having pretty wide powers, and executive powers into the bargain. For any such body to remain small would be wholly against the whole ethos of its history. The original Cabinet Secretariat contained four people but it now contains 500. It has been steadily accumulating functions, and in my view

  1313
  this body would do the same. The House would be showing total disregard for history and undue optimism if it thought that any such body would remain compact with five or six people. Alas, those happy days of the Indian Civil Service and our Civil Service at its best have disappeared.
  I do not see why most of this function should not be discharged by the existing Department of Energy. It is primarily the business of Government Departments to undertake this sort of general assessment of developments. One reason why I regret appointing civil servants to the BNOC is that it would confuse the position. The Department should be the guardian of the public, looking at developments, advising about them, taking expert advice from universities and other places from which it can be obtained, and ultimately making up its mind on questions of conservation, how fast we should develop our resources and what the effect will be.
  Therefore, my first reaction is that this would be a valuable alternative to the BNOC and one which I should prefer. However, before the debate ends I hope that we shall be more enlightened about whether the Conservative Party will be happy if this new body is set up in addition to the BNOC and the Ministry and the existing committees, of which there are several.
  There are two small points to which I should like to draw attention. It is suggested that this new body will be responsible for the control of pollution. Who is the ultimate authority? Who is in final charge of anti-pollution measures? As I understand it, there are, in effect, various Ministries, such as the Ministry of Defence, the Department of Trade and the Department of the Environment, all of which may have some part to play in anti-pollution measures. If there are oil slicks and so forth, many people will be in control of different means of dealing with them. I make no complaint about that, but there should be some definite chain of command because action may have to be taken quickly. I hope that in that respect we shall know a litle more about the present control of pollution.
  Moreover, I do not think that I shall he in favour of giving this new body,
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  if set up, the ultimate authority to deal with pollution. I do not think that would be a very suitable function for it, if it means deploying the various means which are available to deal with oil slicks and so forth. However, if it means dealing with wider questions such as pollution of the atmosphere, that may be a different matter. I am not certain what is meant.
  The second matter concerns the environment. We are just reaching the stage where oil-related developments may soon have some considerable effect on the environment. Many people will have been alarmed by the events in the Gulf, where apparently large quantities of highly poisonous petroleum are pouring out and cannot be stopped. I doubt whether this body would be the right one to deal with such environmental problems.
  I am a little concerned about who has the ultimate responsibility, especially in Scotland, where the Scottish Office, the Department of the Environment and the local authorities all seem to come into the matter. I do not know whether this matter can be dealt with in an amendment to the Bill on Report, but the fact that this is mentioned in the suggested duties of the new body entitles me to ask the Government to look at the matter and to see whether the present position is satisfactory.
  Dr. Colin Phipps: I declare an interest, as I have done on many previous occasions, and I refer the House to previous energy debates. Very few hon. Members would take exception to the objectives of new Clause 1. Those objectives are fairly well understood within the international oil industry and, as has been pointed out by the right hon. Member for Wanstead and Woodford (Mr. Jenkin), they are similar to objectives that are already carried out by various regulatory bodies in various countries.
  However, it is necessary to state that the proposed regulatory body is hardly an alternative to the BNOC. In my view, it is totally unrelated to the BNOC, and I bear in mind the remarks of the hon. Member for Dundee, East (Mr. Wilson). The BNOC is not designed to be a regulatory body. The proposed regulatory powers, excellent as they are—I have read them carefully but I am subject to correction—are powers already possessed

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  by the Department of Energy. There may be one or two powers which, as suggested by the right hon. Member for Orkney and Shetland (Mr. Grimond), are possessed by other Ministries, but, as far as I know, the powers are not powers which the Ministry cannot already exercise should it so wish.
  I doubt whether the Ministry needs to produce a new body of this complex kind. I should like to see the Ministry grow in expertise. Many of us have felt sad that the Ministry has not developed and built its staff at a more accelerated rate. We have had, since the first gas discovery, some 12 years in which to build a bigger and more competent technical staff in the Ministry. I am in no way suggesting that the current staff are not competent. Indeed, I think that they do their job quite remarkably given the size of the tasks which confront them and the small number of people concerned.
  Since 1965–66 I and many others have pressed what was then the old Ministry of Power—it has had a number of metamorphoses since then—to employ more and more technical people. During the past 12 years the rate of progress in that direction has been most unsatisfactory.
  There is the further question of the BNOC staff. Once more we are told that we cannot have a BNOC because it cannot get sufficient staff, it will take too long to recruit staff and for them to become expert, and, therefore, it will be too long before the BNOC can do anything.
  Precisely the same arguments were put to me in 1966–67 when I proposed the formation of the National Hydro-Carbons Corporation to the then Labour Government. That proposal was put to three successive Labour Ministers of Power and it was rejected by all three. One of the principal grounds of rejection was that it would take too long to develop the staff and the expertise, and too long before we had a body that would genuinely be able to do something positive.
  We are now faced with precisely the same arguments. We all appreciate that it will take time to gather the proper staff and to train them. However, we shall be getting oil and gas out of the
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  North Sea well into the next century. We have to start sometime, and the time has come now. I have heard the same arguments for eight or nine years. The House should not be prepared to accept them again. We need a BNOC not for regulatory purposes—that can be fully carried out by the Ministry—but in order to have proper participation by this country in its own resources.
  I emphasise that the regulatory bodies and the staff of the Ministry, no matter how competent or how dedicated they are, are not concerned with the day-to-day technical difficulties of looking for, winning and producing oil and gas in the North Sea. It is important to have at the Government's disposal a body of people who do have that day-to-day experience. This is not just for the advantage of this country, but for the advantage of all the oil companies.
  I have worked in many countries and dealt with fine technicians who work for the Government and who have made what appear to them to be fine decisions on a political and technical basis, but which frankly, on a practical basis, really were not on. Those countries which have a properly developed national oil company participating with a working interest within the industry are the ones whose Governments are able to get the best possible advice. The industry benefits from this as well as the Government.
  I believe that the objectives of the new clause are excellent but that they are already within the powers of the Ministry. I do not believe that a new regulatory body makes a lot of sense. The BNOC is an essential part of our overall strategy.
  4.30 p.m.
  Mr. T. H. H. Skeet: Plainly, the hon. Member for Dudley, West (Dr. Phipps) accepts the view that the BNOC is essential in its own right, not as a regulatory body but as an oil company. In my view, it is totally irrelevant.
  We already have two major internationals, BP and Royal Dutch Shell, as well as many other smaller companies. Why, therefore, do we need the British National Oil Corporation, which has to start from the ground to build itself up? It has no chairman and no staff. The right hon. Member for Orkney and Shetland (Mr. Grimond) said that he would

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  like to see the Department running the whole show. We cannot have anything like that. The hon. Member for Dudley, West has already vividly reminded us that the gentlemen in Whitehall do not know best, just as they did not know best years ago.
  My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has already referred to the argument set out in the First Report of the Select Committee on Nationalised Industries. In paragraph 166 the Committee said:
  "Some of the evidence suggested that the Government might be looking to BNOC for at least a part of the regulatory role. We think this would he undesirable. A regulatory commission, as BP suggested, should be independent of the oil industry, of which BNOC, if it is to act as an effective commercial participant in exploration and development, would obviously be a part."
  To that extent, therefore, the Select Committee accepts the view that the BNOC should be completely independent, that it should, as the hon. Member for Dudley, West said, be an oil company.
  On previous occasions, I have given the reasons why we should not have the BNOC as an oil company, and I am certain that that case can be fully sustained. It would be invidious to put the corporation also into a position where it had some regulatory powers.
  The Secretary of State is on an easy wicket here. He need do no thinking at all. He could look at what is done by the Texas Railroad Commission and study its performance. Equally, he could go to Alberta and study what has been happening there during the past decade or so. Equally, he could follow the advice set out in Appendix 30 to the Report of the Select Committee, in the memorandum by Mr. Kenneth Smith, of the University of Glasgow, who talks about the Norwegian petroleum directorate. Mr. Smith deals with what has been done by that independent body set up by the Norwegians to look after all these matters in considerable detail. It is an advisory body only, giving advice as an expert body to the Government, on the basis of which the Government are able to order what should be done.
  I think it desirable to sketch out in a little more detail the responsibilities of the Energy Resources Conservation Board of Alberta. I turn here to the board's report for 1973. There are 12 departments. In
  1318
  present circumstances, one need not go into coal, electricity and like matters, but I shall mention the relevant departments—those concerning themselves with development, with gas, with economics, with geology, with oil and with pipelines.
  The development department will concern itself with the drilling and production section, enforcing regulations relating to drilling, completion, production and abandonment of wells and pollution abatement in field operations. The field operations section is responsible for implementing the Oil and Gas Conservation Act and the Pipeline Act. There is also an environment protection section. The gas department concerns itself with such matters as determining reserves, establishing permissible rates of production, gas conservation schemes, gas cycling schemes, and gas processing facilities, having an eye to the effect on the environment, and it concerns itself also with the production performance of gas pools.
  The economics department looks at forecasts of supply and demand, preparing monthly oil pro-rationing computations, preparing monthly pro-ration orders, and generally assessing the competitive position of Alberta oil.
  One need not spend time on the geology department. The oil department has as its separate interest to deal with reserves, reviewing the performance of primary depletion oil pools and promoting the application of enhanced recovery methods. Also, it ensures sound operational methods, advising the economics department in the preparation of monthly oil production allowable orders.
  It is apparent from all this that what is going into what are known as the model clauses, relegating to the Secretary of State all manner of powers, could well be done for oil outside Whitehall by an independent body—which, incidentally, could be located in Scotland, not in Whitehall. Such an independent body could be located in Scotland to fulfil all these functions.
  The pipeline department in Alberta would incorporate what we find in Clause 21 of the Bill; namely, authorisations, as well as what we find in Clauses 24 to 26.
  That is just a rough sketch. On Report one ought not to go into the technicalities of what each division of this important body—a body of some size, I should add

  1319
  —in Alberta does, but it illustrates a vital consideration in this context. It takes responsibility away from the Minister and puts it into independent hands. This independent body cannot legislate, but it can advise. In the same way, our Minister could take such advice and dispassionately review it, making a fair judgment on what is reported to him. It should be emphasised that if BP is prepared to recommend a body such as the Norwegian petroleum directorate or something along these lines, there is at least one oil company supporting such proposals.
  I turn now to the Railroad Commission of Texas, another of these organisations. In Article 6008 of its general provisions, it is provided in section 12:
  "If and when the Commission finds that waste exists or is imminent in the production of gas from any reservoir, or that the capacity of the wells to produce gas from any reservoir exceeds the market demand for gas from such reservoir, the Commission shall then proceed by proper order to prorate and regulate the gas production from such reservoir on a reasonable basis."
  This shows that the regulatory bodies in the industry in the United States, in Canada and in Norway are independent bodies separate from the main legislative stream. The idea is that experts talk with the oil industry and, because they are removed from and independent of the industry, they are able to make impartial assessments on the maintenance of performance throughout.
  The Secretary of State's difficulty in the set-up which he has provided is that he is himself embroiled in so many matters that he will have applications put to him on which he will have to decide this, that and the other. No doubt he can delegate minor matters to his Under-Secretary of State, but his Department will be so concerned with many matters that the oil industry will not be able to get on with the job of extracting oil from the North Sea as quickly as is desirable—desirable partly because our own United Kingdom market wants it, and partly because we need it for balance of payments reasons.
  The Under-Secretary of State did not say so, but we know that the only reason why he has been seeking substantial modification of the model clauses has been to allow for depletion control to be introduced. In both the Canadian scheme and
  1320
  the Norwegian scheme—I can give chapter and verse if necessary—and in the Texas scheme depletion is allowed in all cases. As for the United Kingdom, it is not likely that in the next five or 10 years depletion control will be required in relation to North Sea oil because all the oil which can be brought to the surface and marketed either here or in Europe will be required.
  I fully endorse the new clause introduced by my right hon. Friend the Member for Wanstead and Woodford. The Government would be extremely wise to accept it. It would mean that the whole pattern of this legislation would be turned upside down, but something of this kind will have to be introduced at a later stage, so why not do it now? If it cannot be done here on Report, at least let it be done in the other place, or perhaps it could be done by another statute next year. But, however it be done, I am certain that, as sure as I am standing in this Chamber today advocating what my right hon. Friend has proposed and what we have all seen elsewhere in the world, this will be the line which Britain will have to follow in future years.
  If we start off on the wrong foot, notwithstanding the administrative difficulties, the United Kingdom may well find delays developing and increasing, and we shall not have the oil extracted from the Continental Shelf at the rate we want. It will be our fault. There may be an administrative problem, but I strongly urge the Government to take this whole matter very seriously and at least to adopt the principle of the recommendations in the new clause. If they cannot be accepted in the form set out, the skill of our parliamentary draftsmen should be applied to them so that we finally adopt something in the right shape.
  Mr. Robert Hughes: I have the distinct impression that the First Report of the Select Committee on Nationalised Industries gives considerable comfort to those right hon. and hon. Members of the Conservative Opposition who are advocating the new clause, since they have quoted so readily from it. I suppose that that is only reasonable. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) has made clear that, while he sees the rôle of his proposed conservation authority as of importance

  1321
  in itself, he recognises that the rules governing the Report stage do not allow him to argue his main case; namely, that the conservation authority should be a substitute for the British National Oil Corporation rather than an additional body.
  It is fair to point out that the First Report of the Select Committee saw desirable objectives in having some kind of regulatory authority, but, as I read its report, the Committee saw it not as a substitute but as an addition. At no point did the Select Committee argue against the setting up of the BNOC. One of the difficulties of the Select Committee's report is that people draw from it what they want to draw and quote particular paragraphs which suit their own arguments. The report does not come down in such a hard and fast way as one would think from listening to the Opposition.
  For instance, the Committee says it was impressed with the workings of the petroleum directorate in Norway, but goes on to say that the new body, if it was set up, would be ultimately responsible to the Department of Energy, which would fulfil its policy functions and the body would be in some senses semiautonomous and at arm's length from both the Department and the oil industry. I am not quite sure how a body which is ultimately responsible can be semiautonomous and at arm's length at the same time. It is clear that there will be a direct relationship with the Secretary of State for Energy, who will appoint the five or six members and will oversee their functions. There may be a need for a body of this kind, but in the initial stages our main job will not be to set up a regulatory authority. It will be to get the BNOC under way and doing its job.
  Mr. Skeet: I am very much obliged to the hon. Member. Does he not agree that it would make a little more sense if there were no BNOC and the functions of the British Gas Corporation were extended? The report deals with this in paragraph 169, when it says:
  "It is possible that operating companies will see the British Gas Corporation as a more attractive partner than BNOC."
  We have the Gas Corporation, which is a going concern, and we could probably add to it. This would make it unneces-
  1322
  sary to have the organisation the hon. Gentleman is suggesting.
  Mr. Hughes: An argument is developed in the report suggesting that the British Gas Corporation and some of its subsidiaries or the National Coal Board and some subsidiaries might be amalgamated with BP to take on the rôle of the BNOC. If one sees the rôle of the BNOC as research and extraction of oil, there might be something in that argument. But I would like to see BNOC taking part and overseeing a whole range of work connected with the North Sea and eventually involved in the whole rôle of energy production and how energy should be used. The Bill gives the BNOC the power to sell oil, petrol and petro-chemicals. It is given a whole new range of functions and is not limited to one narrow sphere.
  The Select Committee's report points out the difficulty of finding staff, and some hon. Members have put forward suggestions for solving this difficult. The right hon. Member for Wanstead and Woodford suggested that we should rely on retired employees of oil companies who have expertise and could do a useful job with the new authority and others. I do not know how my colleagues on the Front Bench feel about this, but I would think very carefully before accepting as gospel the word of people who have been concerned solely with the oil industry all their lives if we had to rely on them to advise us on how to go about our business. I would like to see instead people brought in new to the industry. They might perhaps have had some experience but their whole lives should not have been steeped in the arguments about how oil companies should operate. That is not to say that retired people or those in semi-retirement do not have a useful rôle to play in relation to the BNOC. Of course they will be needed, and they could be employed in giving expert guidance. They would be selling their wares in exactly the same way as everybody else.
  4.45 p.m.
  I detect a worry about staffing running through this report. It points out the difference in experience between that of BP and Shell and the experience in Norway. Paragraph 117 says:
  "It is worth comparing the Norwegian staffing experience. The generally pessimistic opinions expressed by our witnesses (including

  1323
  the nationalised industries) contrast with the relatively optimistic view taken by its Norwegian partial counterpart, Statoil."
  Statoil felt that we would not have the kind of difficulties being suggested.
  It goes on to mention Professor Whiteman. No doubt he will be mentioned many times in the debate. He said that members of the petroleum directorate were beginners and that some of them had been his pupils. I am not quite sure whether that is a recommendation or not. It is capable of different interpretations. We need the staff, and I believe we shall get them. I do not share the criticisms of the Select Committee's report relating to staff. I am a little concerned that the Department of Energy has come under some criticism for failing to get as much information as it might have done from the British Gas Corporation, the National Coal Board and their subsidiaries during its period of participation. It is unfortunate that the Department has not had the opportunity to study all, and not just some, of the important points in the report.
  The purpose of the BNOC is not to act simply as a pollution expert. It will be the first nationalised industry starting up as a new industry, expanding its field of work. It will be a growth industry where the permutations of operations are almost endless. It gives very wide scope to add to it from time to time. The economics of the North Sea can be argued, but there is no doubt that unless we get firm control through the BNOC we shall lose the benefit to our economy that we might otherwise receive and the opportunity to work in the most profitable fields. They will go to other oil companies.
  Mr. Patrick Jenkin: The hon. Gentleman talks about firm control through the BNOC, but throughout the Committee stage we never got an answer from the Government about how the BNOC would add to their powers of control. It came down in the end to information and expertise.
  Mr. Hughes: Presumably the right hon. Gentleman is saying, and he may be right, that a board of directors in no way controls a company in the interests of shareholders on any occasion. The same case can be made for the BNOC. It can control and operate in the oil industry
  1324
  for the benefit of the shareholders, who in this case are the ordinary people of this country and not those who manage to buy into private companies. That is why I think the Government are right to go ahead with this Bill as it stands and to reject the new clause.
  Mr. Alexander Fletcher: The Government's attitude to this clause will determine in the closing stages of the long debate about this whole concept whether Ministers are motivated by the national interest and a desire to do the job of Government or whether they cannot resist the temptation to play the part of oil barons and to set themselves up in the North Sea as oil operators at the risk and expense of the taxpayer.
  There is clearly a need for a conservation authority. I do not think that anyone is making any bones about that. It should have teeth, be backed by Parliament and act in the national interest, not as a participator but as a referee charged with the responsibility to oversee those matters which are described in subsection (5) of the clause.
  There is no need for the BNOC. We have excellent British oil companies operating today and making a success of their operations very much in the national interest. At no stage of the Bill have Ministers suggested how long it will take for the corporation to become anything like viable, how long it will take for it to become in any way a substantial operator in the North Sea. I doubt whether the Secretary of State would deny that it is more likely to take a generation than a decade for the corporation to produce anything like worthwhile results.
  The justification given in Committee for the BNOC has been the need for the Government and the nation to get hold of the know-how and to understand what is going on in the North Sea with this great British asset. That is what the conservation authority is all about. That agency could provide the Government and the people of this country with the know-how necessary to understand what is happening in the North Sea and could act as a referee in the operations of the oil companies.
  The job of setting up a conservation authority would tax the ability of the Department and the Ministers to the utmost. It would be a tremendously

  1325
  important job which would keep the Secretary of State and his colleagues extremely busy for some time without them being able to take time off to play the oil business game in the North Sea. Ministers therefore should take a lead from my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) and study how in Canada and the United States Government agencies have acquired know-how without duplicating the operations of the oil companies.
  The right hon. Member for Orkney and Shetland (Mr. Grimond), and the hon. Members for Aberdeen, North (Mr. Hughes) and Dudley, West (Dr. Phipps) asked why the authority was necessary, why the controlling agency could not be the Department itself. I understand the principle of that argument, but as Whitehall has grown to such an enormous size people want to be able to identify more easily particular operations and agencies of Government, and the Department of Energy is now just a part of the huge Government machine. Its decision making process would be very much slower than that of a small well-staffed and well-equipped agency of the kind we propose in the clause.
  We could use and follow the example of the Civil Aviation Authority, which was set up independently and separately to do a particular job and to make decisions as rapidly as possible affecting a very important aspect of our affairs. That is how the conservation authority would operate.
  On the question of staff, naturally we should expect to attract good calibre people to this authority from the oil companies. We have no prejudice against oil company executives, civil servants or trade unionists. The only qualification would be that they would know something about the business and were able to administer the affairs of the agency efficiently and effectively. The opposite applies to attracting staff to the BNOC. Here, yet again, we are debating the Bill and still asking the Secretary of State if there is any hope of hearing before rising for the Summer Recess who the chairman of the corporation is likely to be. May we know, or are the Government still plodding through application after application without finding a suit- able applicant? That is how it appears to us.
  1326
  We believe that what we propose in the new clause would lead to the setting up of a worthwhile and streamlined authority which would serve the national interest in the North Sea.
  Mr. Gordon Wilson: The proposal in the new Clause is attractive at first sight because it seeks to lay out certain powers which would be usefully exercised on behalf of any Government. It also analyses the various sources from which to derive information which any Government would wish to build up. The question is whether this could be done effectively or should be done under the proposals of the clause through an oil conservation authority or whether it should be done through the Department of Energy.
  Very few people would quibble about the need to build up these reservoirs of experience and skill which will be necessary to deal with the very many important questions which will arise from the development of our oil resources. This is so in relation to a depletion policy. The Department of Energy will need to get much more information from the oil companies than it already does about their reservoirs, their structures and their reserves which are likely to be capable of development before it can decide upon a depletion policy.
  The report of the Select Committee on Nationalised Industries produces interesting information about the situation in Norway. The Norwegians have gone some substantial distance in building up an oil directorate which is seeking to obtain the information that is required.
  The clause gives rise to certain problems. I appreciate from the outset the difficulty which faces the right hon. Member for Wanstead and Woodford (Mr. Jenkin) when he admits that the clause would still leave the BNOC in existence. There is always the difficulty at Report Stages of ensuring that basic amendments are admitted for discussion even though they were discussed in Committee. However, I do not think that in considering the Opposition proposal we can accept the argument that the operations of the BNOC should be excluded. Most of the powers which the clause seeks are those which would have been enjoyed by the Department of Energy,

  1327
  and very few of them would be exercisable by the corporation except under the agency provisions, when the BNOC would be instructed to do certain things on behalf of certain Government Departments.
  Some of the points which cause me concern are as follows. Will the proposal lead to a splitting in control? It appears certain that the proposed oil conservation authority would not be an independent referee but would come under the direct control of the Department of Energy although the Department of Energy would be required to hold back on decisions until the authority had supplied it with the advice and guidance upon which the Department could then act. If that were so there might be no real difficulty, because then it would be subject to an ultimate source of ministerial control which would oversee oil policy generally and take the authority's guidance.
  5.0 p.m.
  But there is a problem. Two things can flow from setting up a body called the "conservation authority". By its very name, it seems to be much more interested in conservation than in other aspects. From the outset it can set about determining a conservation policy. No one would quibble about the need for that. But it is possible that if it happened the Department of Energy would not take so much interest in conservation. If the United Kingdom Oil Conservation Authority were taken away, we should be left with the Department of Energy and, we hope, its recognition of the need for depletion control and conservation.
  Therefore, there would be possible confusion, which could lead to conservation being put on a rather more minor road than many of us would wish. That is a matter of opinion, and I do not necessarily accept that it would happen. but it causes me to have second thoughts.
  The other problem is that if the Department needs to take speedy action, under what time scale would the authority have the power to make up its mind about the advice and guidance that it would give the Secretary of State? There is nothing here to cause it to take one week, a month, three months, a year or 10 years. It being the creature of the Secretary of State, no doubt there would be certain
  1328
  compulsions, but the fact that the Minister could not take decisions until the authority had given him advice could in certain emergencies place the Department and, therefore, the national interest in difficulty.
  I come thirdly to a point where I probably differ considerably with other hon. Members. Subsection (5)(b) says:
  "to provide for the appraisal of the existing or future requirements to be met from United Kingdom oil and gas resources—

  (i) in the United Kingdom and

  (ii) in markets outside the United Kingdom."

  That begs the question of where we are to set the limits on conservation. One would presumably have to work out what markets were involved. But in subsection (5)(b)(ii) we face the problem of what the EEC's policy will be. Is the subsection intended to apply not just the United Kingdom standards of depletion control applicable to the United Kingdom's needs or to make the new body take into consideration what the new European requirements will be? If so, what will be the emphasis on that?
  This is where I differ from many hon. Members, because I believe that in a sense the difference between the British attitude towards depletion control and the European attitude can be mirrored by the difference between Scottish and British attitudes. Scotland is a small country with a consumption of 10 million tons of oil a year. It is likely to hit oil independence day within a year, and will be much keener on conservation than the United Kingdom as a whole, which will hit oil independence day, at 110 million tons, in the early 1980s. When shall we reach oil independence day for Europe? We do not know. I should not like to see the authority given such latitude that it could stretch the definition of its conservation policy. We must lay down standards by which conservation will be judged—not just the reservoirs, the amount of oil available for development, but the time scale within which we wish it to be used, and the consumption.
  I should like to take the opportunity to protest yet again at the Conservative Opposition's failure to recognise that we who are lawyers in Scotland object to English legal imperialism. I am very sorry that, notwithstanding the criticism made of the hon. Member for Ross and Cromarty (Mr. Gray), he and the hon.

  1329
  Member for Edinburgh, North (Mr. Fletcher) have fallen yet again into the trap of signing amendments which seek to strip away from the Scots law the right to determine what sort of regulations will be made. I would have hoped that the hon. Gentlemen would read the clause before signing it. Perhaps they signed it in blank. Subsection (9) says:
  "The Secretary of State may after consultation with the Authority and with the consent of the Lord Chancellor make Regulations."
  That is an impertinence, when most of the oil is lying in the Scottish jurisdiction, even without my going any further into exactly what that means in terms of ownership. If the hon. Members want my support, they should consider these matters carefully. All Scots lawyers, regardless of their political views, will take umbrage when the rights of Scots law are once again overridden. I hope that the junior Minister, the hon. Member for Lanarkshire, North (Mr. Smith), will agree. It is a small point, perhaps, but it is the sort of matter to which many of us in Scotland take serious exception.
  One of the persuasive arguments in favour of the proposal before us is that it would create a new source of employment. In these desperate days of unemployment, any small crumb of comfort would be of use. If the proposed agency were to be situated in Scotland I could offer my constituency as a location, and I am sure that there would be a rush of offers from other constituencies. But we should not be bound by that argument. If we are to build up the expertise, skill and knowledge required, and if it is more logically to be under the petroleum division of the Department of Energy, it is simple to transfer that division to a Scottish location. The Conservative Opposition have made a manifesto commitment to doing that. They have appreciated that it would be a simple and reasonable thing to do.
  I am not convinced that the clause has been argued through in terms that enable me to support it, but I shall, as always, listen to the closing speeches with some interest.
  Mr. William Small: I intervene briefly to speak about the weaknesses of the clause, which suggests no intellectual embezzlement
  1330
  from the oil industry for its knowledge and wisdom. Subsection (2) speaks of
  "not more than five persons appointed … one of whom shall be appointed chairman and two of whom shall be appointed deputy chairmen."
  The clause then says that members of the authority shall have no
  "pecuniary interest in any"—
  I emphasise "any"—
  "business engaged in any phase of the oil or gas industries."
  Is this not like the Tsarina in St. Petersburg who would not invite a sexless Rasputin into her boudoir.
  What commercial and other knowledge of the oil industry does the authority want? Presumably, the kind of people who would be appointed under the clause are those standing in the wings, with no knowledge and no contribution to make to the national interest.
  Mr. Peter Emery: I am certain that it is not the intention of my hon. Friends, in appointing the conservation authority, to follow the line of reasoning that the hon. Member for Glasgow, Garscadden (Mr. Small) has just suggested. I am convinced that if such an authority existed it should consist of people, appointed by the Minister, with the necessary expertise and ability to carry out the tasks outlined by the clause.
  My hon. Friend the Member for Edinburgh, North (Mr. Fletcher) argued that there was a need for a conservation authority. He appeared to suggest that the need was self-evident, and that no one disputed it. I do not regard it as self evident, and I strongly dispute that it is.
  We do not need the BNOC. It is ponderous, wasteful, unnecessary and costly Socialist dogma. It will do nothing for the oil industry. It will not get more oil out of the ground, or help solve the problems of exploitation and marketing.
  Although I missed the first three minutes of his speech, I listened to my right hon. Friend the Member for Wan-stead and Woodford (Mr. Jenkin) with great interest. I am not completely convinced that we need a conservation authority such as he suggests. Surely we have enough nationalised authorities, public sector advisory bodies and nationalised industry committees advising

  1331
  Ministers. There is no sense in creating a new public body for its own sake.
  Both my right hon. Friend and my hon. Friend the Member for Edinburgh, North cited the example of the Canadian authority, the Alberta Energy Resources Conservation Board, and some of the regulatory bodies in the United States. However, the federal authorities in those countries do not have the powers that exist in this country.
  The new authority is
  "to provide for the appraisal of the reserves and productive capacity of oil and gas resources in the United Kingdom and controlled waters".
  That duty is now undertaken by the Department.
  The authority is
  "to provide for the appraisal of the existing or future requirements to be met from United Kingdom oil and gas resources".
  That duty is now undertaken by the nationalised industry policy division of the Department.
  The authority is
  "to effect the conservation of, and to prevent the waste of, the oil and gas resources of the United Kingdom".
  Although the Government refuse to accept my argument in this respect, in fact they have power to get the industry to agree to a sensible conservation policy without regulations.
  The authority is
  "to control pollution and ensure conservation of the environment in the exploration for, processing, development and transport of oil and gas resources".
  That duty is undertaken by a number of Ministries and local authorities, although perhaps that duty should be centralised under one authority, as was suggested by the right hon. Member for Orkney and Shetland (Mr. Grimond). However, I wonder whether those most concerned about the environment or about the preservation of rural England and Scotland would take the view that the authority should be judge and jury in its own cause.
  The authority is
  "to secure the observance of safe and efficient practices".
  That duty is undertaken by the two inspectorates under Government control. Although regulations in this connection
  1332
  are still in their infancy, I have no doubt that they will be fully implemented.
  Finally, the authority is
  "to provide for the recording and timely and useful dissemination of information".
  That is certainly a function within the Department's aegis. My former hon. Friend Tom Boardman, who was a Minister with me, ensured that we should have an annual report giving any necessary information.
  If these functions are already discharged, what is the need for a new authority? Would the work that is now done by the Department be transferred to the new authority and not also done by the Department?
  Mr. Patrick Jenkin: Of course.
  5.15 p.m.
  Mr. Emery: I am delighted to hear it. Does my right hon. Friend believe that possible? That is the real question. Are Ministers with such authority likely to divest themselves of the ability to undertake some of the responsibilities that existing law puts on their shoulders? Can my right hon. Friend convince me that the Minister will rely entirely on the authority and follow through its recommendations without duplicating its work in the Department?
  Mr. Skeet: The Alberta Energy Resources Conservation Board is charged with the administration of the Canadian Oil and Gas Conservation Act and with all these other duties. That is exactly what my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has in mind. Part of the responsibility now delegated to the Department would go to the independent authority, which would be thoroughly independent.
  Mr. Emery: I am delighted to hear that, but it is not clear from the new clause, because the authority's recommendations would go to the Minister, who would have to make the necessary regulations.
  Mr. Patrick Jenkin: No.
  Mr. Emery: That is how I read subsection (9). I am helped considerably if my right hon. Friend assures me that that is not so.
  In that case the Minister would not be able to overrule the authority's recommendations. I am not certain that this

  1333
  would appeal to the present Secretary of State, although it might appeal to me. Nevertheless, I need a firm assurance, and I am sure that the industry does, that there will not be a duplicate organisation, which will still have to be supervised by the Department, which until now has done a remarkable job, although normally massively understaffed.
  Does the oil industry want such a conservation authority? I am not certain that it does in normal times. However, perhaps with the right hon. Member for Bristol, South-East (Mr. Benn) as Secretary of State this is not normal times for the industry. The industry believes that the best regulator for conservation is the market itself. What concerns me is that the new regulatory body may set long-term policy on the conservation of existing discoveries which will go a long way to discourage either wild-catting or other exploitation, because the oil companies and their investors will feel that it will not be easy to alter established conservation policy.
  Therefore, my right hon. Friend has to make it clear that the conservation authority would not be so hidebound as to stop the type of investment necessary for an increasing exploitation by private enterprise in the North Sea. That exploitation will become more costly, and, the nearer we come to levels of production which meet the targets set for conservation, the incentive for wild-catting bodies to go into the North Sea will be very much less. If the clause were to be carried, it would be imperative for my right hon. Friend to explain to the industry how he would deal with that specific matter.
  As I said at the beginning of my speech, I believe that the best method of dealing with conservation is the ordinary market place. If the market place goes wrong, it may be necessary for the Government to take certain steps. At this stage, no one has the right to say that the market place will go wrong. It has not gone wrong up to now, and there is no proof that it is likely to. What worries me about the Socialists' intentions is that it is suggested that the market place must automatically prove to be a failure.
  Therefore, before I can give my full support to my right hon. Friend's clause, he must make it clear first that there will not be a duplication of staff or responsi-
  1334
  bility, secondly that he will ensure that it is the authority which has the powers, without further control by the Ministry, and thirdly that any conservation policy will take into account the need to encourage further exploitation. If my right hon. Friend can give the oil industry assurances on those points, I can support his clause.
  Mr. Peter Rost Mr. Peter Rost (Derbyshire, South-East) rose—
  The Secretary of State for Energy (Mr Anthony Wedgwood Benn)The Secretary of State for Energy (Mr Anthony Wedgwood Benn) rose—
  Mr. Speaker: Mr. Benn.
  Mr. Rost Mr. Rost rose—
  Mr. Speaker: Mr. Rost, if he must. [HON. MEMBERS: "Oh."] This is a guillotine day. I hope that the House wishes to make progress.
  Mr. Rost: My name appears on the Notice Paper as one of the sponsors of the clause, and I have been waiting to be called. I am sorry if that is thought to be unconstructive. I do not wish to delay the House. I am sure that none of my colleagues will regard my contribution as an unnecessary filibuster.
  I was very much impressed by the constructive and thoughtful contribution made by my hon. Friend the Member for Honiton (Mr. Emery). However, I hope that he will accept that those matters about which he seeks assurances from my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) are covered adequately in the original construction of the clause. Indeed, I should not be supporting it unless I had similar assurances, and I accept what my right hon. Friend said.
  It may be that my hon. Friend the Member for Honiton does not appreciate the spirit in which the clause is phrased. In my view, it is an attempt to give the Government a last death-bed opportunity to get themselves off their own Left-wing hook. It is an attempt to replace the rather unconstructive and damaging BNOC proposal with something that is constructive and will be in the national interest. In other words, it is an attempt to restore some semblance of responsibility and sanity to the affairs of this House and especially to this legislation.

  1335
  As my right hon. Friend the Member for Wanstead and Woodford said, the BNOC is not only irrelevant. It is damaging and costly. It is irrelevant because we have a British oil industry already, contrary to other less-developed countries, including Norway, where there is no highly developed oil and petro-chemical industry. We have one already. Therefore, the BNOC is irrelevant. It is damaging because it will create further nationalisation on a vast scale and inevitably will produce inefficiency. It is costly because it will divert vast sums of revenue which should be going to the Treasury into the coffers of the National Oil Account which will be spent on profligate nationalisation schemes and, by doing so, will help to create further inflation and accelerate the unemployment problems which will face the country over the next two or three years.
  The real reason why I suggest that the clause should be supported is that no case has been made for the BNOC by the Government, either on Second Reading or in Committee, which is in any way convincing. We have been told that participation will be on a "no loss, no gain" basis. Why, then, go ahead with it when adequate taxation at almost a crippling rate already exists and when adequate Government controls are already in operation?
  Not only have the Government failed to make a case for the BNOC, but they have already by their proposals put the oil industry into retreat so that the main objectives of energy strategy which we should be striving for in order to make ourselves self-sufficient as soon as possible are being delayed.
  We really are giving the Government a last opportunity to get their priorities right and to adopt a policy which will be less doctrinaire and perhaps more pragmatic. As we have said on numerous occasions, the BNOC will not produce any more oil and will not produce it more quickly or more cheaply. On the contrary, the BNOC as proposed by the Government will do precisely the opposite.
  It is really time that this House woke up to the realities of our economic situation and that we gave the Government a last opportunity to abandon their outdated Socialist proposals. The country has
  1336
  already paid too high a price for this extravagance. It cannot afford any more. It is time for more realism and common sense. It is time that the Secretary of State put the national interest above Socialist Party dogma. That is why I beg him to regard this clause as a constructive contribution from the Opposition and as an alternative to the destructive proposal contained in the Bill.
  Mr. Bean: I recognise that, in moving the Second Reading of the clause, the right hon. Member for Wanstead and Woodford (Mr. Jenkin) was putting forward a major statement of Opposiiton policy. The House regards it in that light. It appeared in the Conservative Party's manifesto, and later a number of Opposition Members went to Alberta, where they found that it worked. They were attracted by it, and now we are invited to look again at the North Sea in the light of the Alberta experience. What is more, the Select Committee said one or two things pointing in this direction, and this has been recommended to the House on that basis.
  Governments do not normally refer to Select Committee findings until they have given an official response. But I can say this about the Select Committee. It suffered from the disadvantage, which no doubt it would recognise, of not having had the Government's proposals before it in full prior to completing its report. Therefore, it was a Committee which did valuable work but in ignorance of the development of Government policy.
  Mr. Alexander Fletcher: And vice versa.
  5.30 p.m.
  Mr. Benn: And vice versa. That is manifestly correct. That is what I would call a "no gain, no loss" situation.
  Three main provisions would relate to the United Kingdom Oil Conservation Authority. First, the Secretary of State would have to refer to it before reaching a decision. That would be a built-in delaying feature. Secondly, the authority would have to act under the Minister's orders. That would, to some extent, erode its own authority. Thirdly—and this is the most astonishing thing of all —having advised the Minister on licensing matters, it would have to perform an advisory function and an arbitration function. Theerfore, it would advise the

  1337
  Minister what to do and then arbitrate in any dispute between the Minister and the oil companies. I may have done the new clause an injustice, but it has that slight deficiency.
  The argument for the UKOCA, put forward with great charm, as always, by the right hon. Member for Wanstead and Woodford, is that it would provide knowledge without expenditure. The right hon. Gentleman gave a very cheap figure for it. There would be licensing controls, but one would win back the confidence of the industry despite the fact that UKOCA would have teeth, although they would be cheaper teeth. [Interruption.] It would have teeth of a regulatory character. The right hon. Gentleman therefore asserts that the oil rigs would come cruising back again and our problems would be resolved.
  I have not intentionally minimised the importance of the proposal, because the Alberta scheme and, no doubt, the Texas Railroad Commission are different ways of dealing with the matter, but if the Opposition's proposal is to be fully understood it must be seen as a regulatory proposal compared with our proposal, which was put in our manifesto—and I am in favour of people sticking to their manifestos. Our proposal was for deliberate participation. I invite the House to compare the two propositions.
  My argument is that there is no substitute for participation in regulation. The Opposition, in putting forward their proposal, recognised that the UKOCA would be a spectator, though a critical spectator, of the oil business with certain regulatory powers. I shall return to the question whether one needs the UKOC'A to deal with the matter because the new clause was to some extent torpedoed by a former Parliamentary Secretary at the Department of Energy, the hon. Member for Honiton (Mr. Emery), who made some points which I shall embrace and adopt.
  UKOCA would have no right to explore for oil. Therefore, it would have no expertise in exploration. It would have no control over oil or gas and it would not have the capacity to develop downstream or in other ways which the BNOC would have. Therefore, the House should appreciate, when voting, if it is to vote, on the new clause, that UKOCA would not be an alternative to BNOC. The
  1338
  Opposition's request to us, which they are entitled to make, is to drop the BNOC and hive off the Department of Energy and make that an agency—[HON. MEMBERS: "No."] Many of the functions of the Department of Energy would be hived off.
  Let us consider the regulatory role. To what extent can the Government exempt themselves from matters as important as the regulation of the resources off our shores? The argument sounds attractive, and the hon. Member for Honiton was right in saying that the Opposition felt that they should have an agency, too; it must be cheaper and non-interventionist, but it must be an agency to compete with the Government's proposal. But the balance of payments implications, the question of revenue, international policies and the interests of the supplying industries are such that the Government must take a major part in those aspects of policy which it is suggested should be hived off.
  Even with regard to what are called the small cases, I am advised—and I believe that the figures are right—that the Brent field alone has a potential of about £1 billion in balance of payments terms and £l½ million in supplying industry value terms. One cannot hive off decisions of that magnitude and be dependent on the advice of others, because the House of Commons will expect the Secretary of State of the time to defend his policy. I know that UKOCA would have to do what the Department of Energy said, but since it would have the right to have matters referred to it the House of Commons would find that its rôle had been eroded by UKOCA whereas in matters of concern to the nation we want the Minister to be accountable to Parliament for what has happened.
  I therefore believe that UKOCA is a badly conceived proposal which is no substitute for the BNOC and would weaken parliamentary control, about which hon. Members opposite were concerned in Committee.
  Mr. Skeet: The right hon. Gentleman, in developing his argument, has not dealt with the question of the independent Norwegian board. In Canada all the important matters, such as exploration and exploitation of oil, are dealt with at the centre by the National Eneregy Board. We are not suggesting that such matters should not be considered, but it is better

  1339
  to have an independent body rather than a Government Department to deal with them.
  Mr. Benn: The argument about an independent body rather than the Government is confusing unless it is understood that the independent body must remain answerable to Parliament. The question of execution can be hived off in certain circumstances, but the House of Commons would expect the major decisions to be taken by Ministers who could be cross-examined in the House.
  I did not hear the name of the Committee to which the right hon. Member for Wanstead and Woodford referred and about which he sought information. When I have read the Official Report, I shall reply to him.
  The right hon. Gentleman asked about the question of pollution and the chain of command. Hon. Members who have dealt with this issue and similar issues over the years know that we cannot have a single chain of command for a major subject which impinges on every Department. It is not practicable. It is like asking who is in charge of science, because everybody has a scientific research interest, or who is in charge of space, because many departments use space— the military authorities for their purposes, and the Post Office for its purposes, for example. The Scottish Office, the Department of the Environment, the Department of Trade, with its marine responsibilities which cannot be removed from it on the basis that pollution must take precedence over its other responsibilities, and the Department of Energy have pollution responsibilities and responsibilities for enforcing environmental safety levels.
  It is not therefore possible to put one aspect of a matter in a single Department without creating appalling dereliction of duty by other Departments.
  Mr. Grimond: I apologise to the right hon. Gentleman if I did not make myself clear. I agree that there are two aspects of pollution. There is the general aspect, which I agree affects many departments, but there is the narrower aspect to which I referred. Let us suppose that there is a major accident in, say, Scapa Flow in my constituency. Who will be immediately responsible for mobilising all the Departments which no doubt will be con-
  1340
  cerned? If it is a fire, one does not telephone all the Ministries; the fire brigade deals with it. It is important that we should be clear about this matter. Who will be responsible within minutes for dealing with a situation of that sort?
  Mr. Benn: The right hon. Gentleman has made a different but very important point; namely, when a incident occurs, to whom does one go to discover who should take charge of the matter? If there is any dubiety about it, I undertake to write to the right hon. Gentleman and put the letter in the Library so that there is no doubt about it. It depends whether there was a major leak in a tanker in the Thames or off our coast. Different authorities would be brought into play. The right hon. Gentleman is entitled to a clear answer to that question and I shall seek to give it to him.
  Mr. Tam Dalyell: Is the answer that the man who is still responsible for vast areas of the North Sea is that admirable fellow the Chief Constable of Aberdeen? This matter needs all my right hon. Friend's energy to sort out. Will he reflect that the whole of the anti-pollution strategy has been made to look silly in recent weeks by the proposed experiment with an oil slick in an area where a great number of birds take their young? Although this may not be the most momentous issue with which my right hon. Friend has to deal, the fact remains that the general arrangements for anti-pollution have been open to some ridicule. Ought he not to direct his energy to that subject?
  Mr. Benn: I do not want to treat any intervention without due gravity in responding to it. My hon. Friend referred to the duties of the Chief Constable of Aberdeen. I think that it is the Grampian Region now which has these responsibilities. The Chief Constable deals not with pollution as such, but with enforcement of law and order on the oil rigs. I have had the opportunity of discussing this matter with the authorities up there. This is not primarily a pollution question.
  Concerning the extent to which tests may affect bird life or other interests, this must be looked at seriously. However, it is not always possible to conduct tests without having some effect on the environment. The fact that oil is released into

  1341
  the sea to test means of clearing it up necessarily creates some pollution. It is like the vaccination principle. However, I take seriously what my hon. Friend said and will make inquiries.
  One question asked by my hon. Friends the Members for Dudley, West (Dr. Phipps) and Aberdeen, North (Mr. Hughes) was whether it was true that we could not find staff for the BNOC. Everybody recognises that this is a big operation. The BNOC will have to develop over a period. However, I cannot accept that it will not be possible to recruit, train and develop people for the British National Oil Corporation. I have some sympathy with the point made by my hon. Friend the Member for Dudley. West, who referred to the National Hydrocarbons Corporation of 1968, I think, and listed the number of Ministers whom he was unable to persuade about the matter. Had we started at that time, I believe that we would have been much further advanced than we are now. I cannot accept the argument that suitable people cannot be found for this purpose.
  Mr. Peter Viggers: Does the right hon. Gentleman accept, agree or confirm that several senior oil executives have refused the position of chairman of the BNOC because they do not believe that it is a proper, sensible and commercial operation?
  Mr. Benn: The hon. Gentleman is now inviting a Minister to comment upon matters which are the subject of speculation in an attempt to draw out of him comments on approaches which may or may not have been made. In dealing with this matter we are defending a basic national interest.
  I will give a single example which I quote from a newspaper. I do not know whether the account that I read is correct. Last week it was reported that a single oil company, which I will not name, had paid £20 million in a nine-year period in a country, which I will not name, in contributions to political parties. If anybody seriously believes that what the hon. Member for Honiton called the market place is the only factor which bears on oil politics, he is being naïve to an exceptional degree. The truth is that we must defend the national interest. That statement, which was widely reported, was an official statement.
  1342
  I am pointing out to the Opposition that systematically throughout its deliberations the Select Committee in most cases espoused the interests of the industry and implied that the interests of the Government were not served by the establishment of a national oil capability. I am anxious—indeed, I believe that it will be possible—to develop the strong overlap of interest which exists between this country and the oil companies exploring in the North Sea. They have an interest in forwarding their investment. We have an interest in getting the oil. To say that there is a strong common interest on which we should build is not the same as saying that there is an automaticity of common interest between the oil companies and the United Kingdom.
  Mr. Skeet Mr. Skeet rose—
  5.45 p.m.
  Mr. Benn: The hon. Gentleman must allow me to finish. This argument ought to brought into the open. When the Conservative Government left office, they left this country without a petroleum revenue tax, with having granted 46-year licences with a requirement to drill for only six years, with no participation, with no provision for information, with no depletion control, with no control over flaring and with no control over the transfer of the ownership of licences which had been given. The previous Government, in their handling of operations in the North Sea, failed the nation. That is my argument. To come up now with a conservation agency—a new term for the functions of the Department of Energy—is no substitute for the development of a national capability. That is what is embodied in the Bill. The new clause—
  Mr. Skeet Mr. Skeet rose—
  Mr. Benn: The hon. Gentleman must allow me to finish my sentence. The new clause is, therefore, not an alternative policy, but a cover for a lack of policy. I hope that the House will not give it a Second Reading.
  Mr. Patrick Jenkin: This has been a valuable debate. I am grateful that the Secretary of State recognised the nature of the new clause. There are two kinds of new clause. There is the new clause which is put forward with the avowed intention of attempting to improve the

  1343
  Bill and the new clause which is put forward to air alternative policies to the proposals in the Bill. The right hon. Gentleman fairly recognised that this new clause fell squarely into the latter category.
  To the right hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Member for Dundee, East (Mr. Wilson) I can categorically say that we envisage a properly constituted conservation authority—a regulatory body—as an alternative to the BNOC. We believe that it would be a much better and far cheaper way of attaining the legitimate objectives of the Government.
  I should like to rebut utterly and completely the outrageous remarks made by the Secretary of State on that subject. In Committee, where he did not have the ear of the Press, he was more reasonable. When talking about depletion, he said that nobody knew—he did not know, we did not know, the Department did not know, and so on. I could quote the passage from the Committee if he wished me to do so. However, on the Floor of the House the right hon. Gentleman makes wild, extravagant claims with no substance at all.
  I think that the House is anxious to reach a decision, so I will be brief. I suggest to the hon. Member for Dudley, West (Dr. Phipps) that we cannot build up the kind of staff which the BNOC needs within a year or two. I commend to him the words of Sir Eric Drake answering Question No. 531 before the Select Committee:
  "You cannot just go out and recruit a man and other men and put them together and say, 'Now we have got a team.' It does not work."
  That is what we fear about the BNOC—it will not work.
  My hon. Friend the Member for Honiton (Mr. Emery) was under a number of misunderstandings about the intention of the clause. Here perhaps I can take up a point made by the Secretary of State. It always seems to me that there is, particularly in this area involving inevitably fairly direct Government intervention, a clear distinction to be drawn between the formulation of policy, which is a matter for Ministers and on which they are answerable to the House, and the
  1344
  detailed implementation of that policy, particularly where that implementation can affect to a dramatic extent the rights and advantages enjoyed by private corporations in the market place.
  Rather than continuing to describe, it is better to illustrate. Let me illustrate how I envisage our proposed conservation authority working in the realm of depletion control. I know that my hon. Friend has studied the new powers which the Government are taking in the model clauses set out in Schedules 2 and 3—powers over exploration, powers over development, and the ultimate depletion power—the power to pro-rate in model clause 16. It is for the Government to determine what the overall rate of production from the United Kingdom oil province should be—one would imagine on a five-year rolling programme; some indication to meet the balance of payments objectives and other objectives that the right hon. Gentleman set out. That is for Ministers and must remain with them.
  When it comes to determining how, within this overall global production, production is to be authorised to this licensee or to that licensee, which fields are to be pro-rated—this field or that one —when one is dealing with an infinite variety of economic and geological circumstances, that is a matter for detailed and impartial administration by a highly expert body of administrators.
  It may well be that my hon. Friend would be content, as he said in an earlier debate, to leave it to the Murrays and the Mongers of this world, but that is not what is wanted by the industry, not that the Ministry has anything but praise for the two individuals concerned. However, it is not, and cannot be, their job.
  I have discussed this proposal with a great many companies in the industry —British, Canadian, American and others. They raised some of the doubts that my hon. Friend expressed, and some went even as far as to say that it should be left to the market. However, I made it clear that no British Government could accept this with an essential national resource of this sort and that administrative powers had to be taken to monitor and control the operations of the United Kingdom's oil province.
  Given that, virtually without exception all the firms that I have consulted would

  1345
  far rather see the detailed implementation of these powers carried out by an impartial regulatory body of the sort described in the clause than they would see it left to the Department, which must inevitably be under the day-to-day political control of the Ministers who run it.
  So I believe that on this point we have the support of the industry, given that any Government must exercise powers of some sort, particularly powers over depletion.
  I come on now to answer my hon. Friend's other questions. First, the Minister would not have to make the detailed orders. We would envisage the regulatory body having an order-making power operating under the firm statutory control and under the broad directives of the Secretary of State. Secondly, certainly these functions would be transferred with the individuals concerned from the Department of Energy to the new authority. I hope that, with those assurances, my hon. Friend will feel able to support the proposal in the clause.
  Finally, the right hon. Gentleman still persists in the delusion that the only way for a Government to exercise effective control over an industry such as the oil industry is that they should get their hands dirty in doing it themselves. That is simply not true. There are examples, mainly in the Western hemisphere, where Governments have exercised perfectly effective control through the kind of regulatory control we are proposing, and they have done it—this is the key point—without the investment of the thousands of millions of pounds of taxpayers' money which the Government are currently proposing to invest in the BNOC.
  I believe that this proposal has a very great deal to commend it. I reject utterly the right hon. Gentleman's argument about the political contributions. Does he think that that kind of undesirable activity on the scale which he indicated is more likely to happen in a case where the decisions are taken by the political bosses than in a case where the decisions are to be taken by an impartial regulatory quasi-judicial authority? Does he not think that, in fact, contributions to a political party are more likely to happen—I do not say in this country, but in countries where decisions by Ministers on the detailed implementation of powers—
  Mr. Skeet: ENI.
  Mr. Jenkin: My hon. Friend is right —in countries where there is an exceedingly powerful ENI-type organisation, than where these powers are exercised openly and impartially by a quasi-judicial regulatory authority?
  Mr. Benn: The right hon. Gentleman has made a very significant statement in which he has recommended the House to consider that ministerial control is more subject to corruption in this country than would be an independent agency. Therefore, he is in a sense inviting the House to adopt his proposal, which is that we go for a conservation agency, on the ground that if the Government proposition for a British National Oil Corporation were to proceed it would be more likely to tempt to corrupt intervention by oil companies in the conduct of our affairs. On reflection, does the right hon. Gentleman wish to pursue that line of argument?
  Mr. Jenkin: The right hon. Gentleman has made abundantly clear the unwisdom of his ever introducing that argument into this debate. It is, of course, totally irrelevant. It is a piece of damaging prejudice against the oil industry, and was intended to be so. I ask my hon. Friends to join me in voting for the clause.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 230, Noes 296.
  [For Division List 305 see col. 1465.]
  Question accordingly negatived.

New Clause 2

  REPORTS OF PARTICIPATION AGREEMENTS
  'It shall be the duty of the Secretary of State to prepare a report of each such agreement as is mentioned in section 2(1)(e) of this Act or similar participation agreements that have been made with the corporation or a relevant subsidiary as and when entered into, such report to contain information as to the parties involved, the field or fields concerned and the interest which the Government as a consequence has in each such field, and forthwith to lay copies of his report before each House of Parliament.'—[Mr. Gray.]
  Brought up, and read the First time.
  Mr. Hamish Gray: I beg to move, That the clause be read a Second time.
  The clause is designed to ensure that the Secretary of State will prepare a report of every agreement made on participation. The purpose of the proposal is to allow us to discuss in some detail the whole principle of participation. For some time we have been debating matters under the guise of participation and those matters have been a fairly considerable step towards nationalisation. When we talk about participation we mean a sharing, but when we have a situation where the Government are to have 51 per cent. of control of the oil industry we are no longer talking of participation; we are talking of wholesale nationalisation.
  Is this in the best interests of the United Kingdom? The Opposition believe that it is not. For example, in respect of steel, shipbuilding, railways, coal and gas, airlines, aerospace and other matters, our performance, compared with that of our competitors, is dismal. We are bottom of the league. Indeed, we are a relegation-haunted team, if ever there was one.
  In Committee, considerable publicity was given to an article in the Daily Mirror on 26th June showing clearly the various leagues in which our nationalised industries were participating. It was apparent that we were not doing at all well. We do not think that it would be advisable to inflict on our newer industry, which offers so much to this country, the dampening hand of Government intervention. The success record of the private sector in the oil industry is outstanding. We believe that the consequent benefits to those employed, either directly or indirectly, have been enormous. At present, there are about 19,000 new North Sea oil jobs in Scotland. About 27,000 Scots are at present involved in work connected with the industry, but 19,000 of those jobs have been directly created as a result of North Sea oil. That work has been created not by the Government but by private enterprise—private companies whose investment we need so much at present. We believe that the profits of those companies can be distributed through Government sources more easily by normal taxation methods. We believe that it is quite irrelevant to create the BNOC.
  1348
  I was surprised that the hon. Member for Dudley, West (Dr. Phipps), whose opinion we always respect and whose knowledge we appreciate, took the line that he did on this subject. As a successful entrepreneur—the type of person we wish to encourage—he argued a case which was strangely alien to his nature and, indeed, to his business instincts.
  6.15 p.m.
  We believe that it is a mistake to create BNOC. What has happened following the Government's decision to take a massive intervention in the oil industry? First, the fear of intervention faces an industry which at present is desperately in need of further investment in the North Sea. That investment is suffering. The number of rigs has dropped substantially. In answer to a Written Question which I tabled to the Secretary of State for Energy on Thursday 19th June 1975, requesting to know how many oil exploration rigs were currently operating in the North Sea, I was told
  "There are 25 oil exploration rigs currently operating in the United Kingdom sector of the North Sea."—[Official Report, 19th June 1975; Vol. 893, c. 501.]
  That was in the month of June, when those rigs should have been at their busiest.
  The Under-Secretary of State for Energy (Mr. John Smith): To put the matter straight, let me tell the hon. Gentleman that the information last week was that there were 29 rigs in operation. The figure goes up or down according to the plans of the companies.
  Mr. Gray: I am grateful to the Minister for that information, and I am glad that there has been an increase to 29. Although that figure is substantially lower than the figure a year ago, it is at least encouraging that there has been a slight revival.
  On the subject of participation, let us consider the case of BP. Before 1967 the Government held just over half the ordinary share capital in BP. Then, as a result of certain transactions, there was a shift in the balance of power, and in December 1974 48·2 per cent. of the ordinary stock was owned by BP, plus some preference stock entitling it to 48·04 per cent. of votes at shareholders' meetings. What did BP have to say to the Select Committee on Nationalised

  1349
  Industries? I make no apology for quoting from that useful publication, although we are sometimes criticised for so doing by some Labour Members.
  Mr. Robert Hughes: All I said earlier was that when people quote from Select Committee reports, they quote those parts which buttress their line of argument. I do not complain about the situation. I am merely saying that it is a fact of life to be taken into account.
  Mr. Gray: I accept that entirely, and I propose to quote from that document to support my argument. It is interesting to note what BP said on that occasion. I refer the House to page xxvii, paragraph 73, of that report, where we read:
  "BP also said that when the Government's share was above 50 per cent. this had caused some difficulties for them in countries which excluded foreign government-controlled companies, and that the fall to 48 per cent. had enabled them to go to certain countries otherwise barred."
  That is an interesting point, because BP and BNOC could become partners in projects operating outside this country altogether.
  When we are considering the whole question of participation we should realise that it can be a mixed blessing, particularly in cases where the Government have a controlling interest. Indeed, the fact that the Government have a controlling interest may adversely affect projects in certain parts of the world which might otherwise meet with considerable success.
  BNOC is likely to be a partner in various consortia, but the problems which BNOC faces are very much the problems which it could inflict not only on its partners but on its competitors.
  Dr. Phipps: Is it not a fact that this has operated in the other direction? If we look at the example of our own country, we have been welcoming the National Iranian Oil Company in partnership in the North Sea because we believe it to be to our advantage to have that sort of relationship with it. Is it not a fact that countries which have national oil companies are doing rather better, in terms of participation in the oil industries of other countries, than those without?
  Mr. Gray: No, I would not accept that, because up till now successive Governments have been only too anxious to
  1350
  obtain investment in the North Sea and have not been all that fussy where the investment came from, as long as the investment was being made. One of the criticisms made of the former Conservative Government concerning licences was that they made the terms of the licences too attractive, but the hon. Gentleman has really made my point for me, which is that because those terms were so attractive we obtained a great deal of investment which we probably would not have managed to get otherwise.
  Mr. Skeet: In the allocation of licences by the Irish Government, BP has done very well, and so have Royal Dutch Shell and Texaco Exploration Ireland. The only State company which has secured blocks alone is Deminex, which is German.
  Mr. Gray: I am grateful to my hon. Friend for that comment. I now return to the problems which will face BNOC, particularly on the question of staff, which has been mentioned by quite a number of hon. Members. I turn yet again to the report of the Select Committee on Nationalised Industries. It is apparent from paragraph 115 that considerable doubt was raised by people who spoke to the Committee on this subject. The paragraph reads:
  "Some of the strongest misgivings expressed to us about the establishment and prospects of BNOC concerned staffing. BGC thought the major problem facing BNOC was that of setting up adequate staff. NCB believed that the question of staffing BNOC in terms of numbers and quality was going to be a difficult one indeed. … BP said that to the extent that BNOC sought to act as an operator in the UKCS, then it would have very real problems … BP also emphasised, from its experience, the value of building up group expertise and team spirit over a long period; merely recruiting a number of individuals and putting them together did not make a team."
  I apologise to my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), who actually touched on that part of the quotation earlier, I think, but it is significant that all those people, knowledgeable in the problems, expressed similar views. The former Secretary of State for Energy, in an answer to my right hon. Friend, said:
  "we shall have no difficulty in finding someone who will support the corporation."— [Official Report, 12th May, 1975; Vol. 892, c. 6.]

  1351
  I think we are all agreed—I am sure they would not deny it—that even at this stage the Government are having serious difficulty not only in obtaining the services of a suitable chairman but in getting the general outline of BNOC, staff-wise, off the ground. I remember suggesting, in the Second Reading debate, that the Secretary of State might be saving that occasion for announcing the name of the chairman. Here we are, almost at Third Reading, and we still have not the name of the chairman. We have very little more information about how this is to be achieved.
  We believe that the terms of the new clause are extremely important and necessary at this time I should like to look a little further at some of the other problems involved in the whole question of participation. There is the problem of the tax system. We earlier agreed that the most suitable way of clawing back profits was through the normal tax system, without the risk involved and the enormous expense falling on public funds merely in creating BNOC.
  During our debates in Committee we frequently had held up to us, as an example, the Government of Norway. This, it was said, was a Government which had tackled the problem in a splendid way. It was suggested that we should have done well to copy that Government. But that Government came a little unstuck in their taxation methods, because they were strongly criticised for the way they handled their excess profits tax. Last November the Norwegian Government proposed a 40 per cent. tax on excess profits, and there was such a great outcry about it—it would have raised the State take to 90·8 per cent.—that they decided to think again, and on 13th December they actually changed their policy.
  This information can be found by hon. Members in a very interesting article which appeared in the Economist of 26th July 1975. It goes into the matter in considerable detail. The Economist was fairly strong in its criticism. In the article headed "Friday the 13th", it is stated that the Stavanger-based magazine, Noroil, put down this decision by the Government to
  "a wave of unthinking, narrow nationalism",
  and Noroil dismissed the proposal as
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  "One of tae most ill-considered and inept oil political overtures yet … which would give the major investors in the Statfjord field less return on their capital than if they had put the money in the bank."
  I draw the attention of the members of the Scottish National Party to this, because they rival the Government in suggesting that Norway is the be-all and end-all of everything in oil planning. This example of narrow-based nationalism should be pointed out to them, so that they may bear it in mind in relation to some of their future arguments. However, we shall have plenty of time to hear about narrow-based nationalism when we discuss the next amendment, which is a Scottish National Party one.
  It is because of the hazards and the complexities of exploration and production—but particularly of exploration—that we believe that the terms of the new clause are important, and we should like the House to give them consideration.
  6.30 p.m.
  Dr. Phipps: I have always been told to beware of Tories bearing gifts. In this debate, I have been offered no less than the chairmanship of the BNOC by the Opposition and a seductive invitation to share my entrepreneurial gifts with them. First, however, having considered the matter of the chairmanship, I do not believe that I could afford the cut in my living standard that would be entailed. Secondly, I do not want to be seduced into an argument about the corporation, as I wish to talk about participation. It is enough to say that it is not always the case that hon. Members will allow their private interests to stand higher than those which they believe to be the national interests.
  I want to talk about the problems of participation as they affect the nature of the corporation itself. I have raised this point before, and I am grateful to the Opposition for new Clause 2, which again gives us the opportunity to discuss this aspect. We have not paid enough attention to the relationship between the BNOC and the Gas Corporation. That point appears in the report of the Select Committee.
  Ever since we first proposed a national hydrocarbons corporation in 1967, I have believed that the Gas Corporation, if not in its entirety then in its exploration and production division, was the logical place

  1353
  to start the functions of the BNOC. If we had followed that course, it would have answered some of the points raised by the hon. Member for Ross and Cromarty (Mr. Gray). The Gas Corporation has a team which has been developed over many years. Many of its members are known to me, and I have great respect for their abilities. It is one on which we should build.
  Not only is there a distinct lack of logic in having two national companies engaged in the North Sea it is difficult to understand the logic involved in the relationship between the BNOC and the Gas Corporation. If the BNOC goes to the Gas Corporation and says, "We will have 51 per cent. of your entire holdings", what will the Gas Corporation say? Will it say, simply, "No"? or will it say, "You will have to give us money for it"? or will it ask for special arrangements? It is difficult to see how the one will negotiate with the other, not only over existing fields but over new licences. What about the new round of licences? I hope that we shall adopt the principle that participation is the form in which the bid is made.
  I am not in favour in bidding large sums of money—of auctioning blocks in the North Sea. I think that that experiment was a failure. I would rather see the system of bidding in the form of a company saying, "For Block A, which is a good one, we are prepared to give 70 per cent. participation, but Block B is not so good, so we will offer 40 per cent., and for Block C, which is poor, we will offer 20 per cent." In that way, not only would the Government get higher percentage participation in good blocks, but they would have less financial obligation in the poorest blocks. That would be excellent for the Government. It is the practice in many other countries. I see no reason why it should not be the practice here.
  If that were the case, it would be impossible for the Gas Corporation to bid on a percentage participation. It might as well bid for 100 per cent. participation, because to the nation it would all be the same participation—it would be national participation, whether by the Gas Corporation or by the BNOC. I am far from convinced of the logic of allowing the two corporations to run in tandem in the North Sea.
  1354
  I am not persuaded that many of the problems raised about the staffing and the time taken for a company of this kind to develop and become operative could not be solved by taking the Gas Corporation as the basis. We might even solve the problem of the chairmanship, since I understand that the Gas Corporation already has a chairman.
  I turn now to the question of depletion policy. Partnership with the BNOC, far from being destructive with respect to its partners, is more likely to be constructive. Again, I return to the question of the specific working interests and knowledge of what is happening in a field. If the BNOC is involved in a working capacity, it is more likely to appreciate the true economic viability of a field than a Government Department is. This is a particularly important factor in the North Sea.
  In developing a depletion policy, we have to realise the costs involved in getting the installations into the North Sea in the first place. If we are to produce a field in the North Sea, we are in a different situation from land development or development in shallow offshore waters. A well drilled as an exploration well cannot, in normal circumstances, be used as a production well. It is a write-off. To produce a field, one has to make an enormous initial investment in the form of platform facilities, pipelines and so on. It would be totally wrong of any Government to suggest a depletion policy which did not allow at least that investment to be covered by production.
  I do not expect that this Government would suggest such a thing. But it puts a constraint upon depletion policy at a very early stage because if an oil company is to make the enormous investment ready it has to have an assurance that the field will be produced at an economic rate. If the BNOC is involved and is itself a partner to the companies, I believe that there is a much better chance of the Department's getting a thoroughly accurate assessment of the true economics than there would be if it were purely a matter of civil servants, however able, making that decision.
  Mr. Patrick Jenkin: The Government have made it clear again and again that the BNOC is not in any way to be concerned with the exercise of the regulatory

  1355
  powers to which the hon. Gentleman refers. Therefore, if that is the case on which he supports the BNOC, he is in a quagmire.
  Dr. Phipps: The point I was making was that the BNOC, far from supplying regulatory power, would bring pressure to bear on the Department, with its regulatory powers, to see that it allowed a proper depletion policy, I said that it will be better for the companies to be so involved with the BNOC, in that their case is likely to be better put for them by the corporation than by themselves.
  Finally, I want to discuss the effects upon our own resources requirements and our balance of payments position. The best current estimate from the industry is that we will need to have about 100 million tons of oil by 1980. It is probable that we will have 100 million tons of oil from the North Sea by then, but it is of a different nature from the crude oil mix we use to produce the product mix we have now. It is much lighter, and of a better nature. It has a lower sulphur content. I believe that our current sulphur tolerance is about 2 per cent. to 3 per cent., which is a good deal higher than the sulphur content of North Sea oil.
  Currently, we produce our product mix by importing largely medium and heavy crudes from the Middle East. One of the difficulties is to decide whether these crudes should continue to be imported to replace our valuable North Sea oil, which is not only lighter but commands a premium on the world's market, and could be exported as it is or refined and exported as petro-chemical products, as done by the Norwegians.
  I believe that one of the most important factors in ensuring that we produce enough—and produce more than we require, so that we allow for exports, whether as products or as light oil, to help with the balance of payments—will be our dependence on the European market. I do not believe that the market for this oil lies anywhere but within Europe, and I should like to see the European countries more closely involved in both the economic and the physical development of these resources.
  In that respect I see the rôle of the BNOC as extremely important. I believe that it is the ideal body to go to Europe
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  and to various other countries to make the sort of arrangements, both financial and in terms of exports, that are required, in order that we develop our resources not only at the best possible rate but in the best possible way and are able to import cheaper, heavier crudes, which will allow us to take, as it were, a turn on the better crudes from the North Sea which we export. The better crudes will have to go to a home, and that home must be prepared. I believe that only by co-operation between Governments—in our case using the BNOC as our Government agency—shall we get the best deal for this country.
  Mr. John Moore: I shall be brief. I hesitate to comment, but I must say that it would have been most useful if we had had the presence of the hon. Member for Dudley, West (Dr. Phipps) on the Committee, because it is obvious to all hon. Members, however much we may flatter him and perhaps suggest that he becomes the first Chairman of the BNOC, that his views would have been most valuable during the arduous months we spent in Committee. Listening with great attention to what he said, I gained the impression that I was hearing an argument for the BNOC like an advance guard for enlightened capitalism. Perhaps the hon. Gentleman should examine at his leisure the extent to which he was agreeing with views very close to my own heart.
  Mr. Viggers: I have not mentioned this point before, because I expected either the Chancellor of the Duchy of Lancaster or the Paymaster-General to enter the Chamber. As we are discussing participation and it has been made clear that they, together with Lord Balogh, are responsible for participation, does not my hon. Friend find it surprising that they are not present?
  Mr. Moore: Those of us who have sat on both oil Committees in the last eight months—the Committee on this Bill and the Committee on the Oil Taxation Bill—have had the pleasure of the presence of hon. Members on the Treasury Bench who have been most amenable—recognising the ultimate taxpayers' interests—and the benefit of the assiduous work of the Under-Secretary of State for Energy.
  The Under-Secretary and other hon. Members will remember the lengthy

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  debate we had during the fourth sitting of the Committee, when we tried to discuss possible alternatives to the current quagmire at which we had arrived in our society, in terms of the development of nationalised industries. It was a most interesting debate, started by an amendment moved by my hon. Friend the Member for Bedford (Mr. Skeet), who sought to introduce commercial practices into the BNOC at the very beginning. Many hon. Members—although at present I speak only in a personal capacity—are not against participation. We believe that the State has arrived at a sensible attitude towards participation through the tax door. We all know that we are already getting more than 70 per cent. of the profits, at no cost to the nation. I should have thought that this would be regarded by all hon. Members as reasonable.
  The tragedy of the debate in the fourth sitting was that we were not really discussing participation. During that debate we tried to make members of the Committee—now members of the House and, through this House, the public—aware of the route we had taken in the nationalised industries sector which would finish up not providing for the nation the advantages that all hon. Members, in all sincerity, were seeking to argue.
  6.45 p.m.
  Let us examine what we shall have from the Bill. The BNOC will not produce the sort of participation and advantages that the Government seek. It must produce additional negatives, associated with the creation of another nationalised industry. That is what we are debating when we debate the BNOC and this new clause.
  I want to make two points, but I shall not go into the enormous detail that I did in Committee. The hon. Member for Dudley, West said that we were creating a new nationalised industry. If that is so we must ask ourselves, first, to what extent—if we are arguing the nation's interests—are the current nationalised industries responsive to the nation? Are they responsive through Parliament? Whether an hon. Member sits on the Public Accounts Committee or studies the proceedings of the Select Committee on Nationalised Industries it does not take him long to recognise the deep con-
  1358
  cern that exists on both sides of the House about the degree to which it is not in control of the financial arrangements of the nationalised industries. This is an accepted view on both sides of the House. It is not a matter in great dispute.
  We are creating another vehicle which will be equally out of control in terms of its relationship with the public. Surely that is a non-starter from the very beginning? However, not only must we ask ourselves to what extent are we in control through Parliament, but, more important, are the nationalised industries successful? It is no good saying that the nation's interest demands participation through a nationalised industry if we create vehicles of the kind we have seen created in the last 25 years. They are patently unsuccessful.
  I shall not pursue the subject of the figures which my hon. Friend the Member for Ross and Cromarty (Mr. Gray) quoted from that very erudite article in the Daily Mirror, acquired from the Financial Times for a previous month. However, I was delighted to see the article in that more interesting popular paper, because it brought out the point about overmanning. I shall not pursue the argument, because one does not have to be regarded as denigrating or attacking organisations to accept the nation's judgment today, which is that the nationalised industries, however much they try, are patently unsuccessful.
  Dr. Phipps: Does the hon. Gentleman accept that one of the problems with the current nationalised industries is that we are the people who determine the prices that they are able to charge, whereas in terms of participation in the North Sea—where participation is a very important factor—the prices that are charged will be international prices charged by the international oil industry as a whole? Here, we are looking for a piece of public enterprise as opposed to the salvation of "lame ducks" or just the provision of public services.
  Mr. Moore: We argued this point in considerable detail in Committee. I spent half an hour trying to argue the problem of pricing for the nationalised industry boards. I tried to get inside their minds and analyse the difficulties that we, in the House, had created for a nationalised industry in endeavouring to be

  1359
  competitive, when we tried to structure it in a competitive way. I tried to stress that whichever side of the House was in control of the Government politicians would create situations that would make it impossible for a nationalised industry to be competitive. This has been done successfully or, perhaps I should say, unsuccessfully for the past 25 years.
  We know the problem of social pricing. I cannot accept the optimistic note lying behind the words of the hon. Member for Dudley, West. I cannot believe that the BNOC downstream will be successful, especially as I shall not discuss this matter now, but we shall come to it later—with its inability to segregate its accounting functions properly. There is no way in which we can judge the commercial viability of the instrument that we are creating in the Bill. I am concerned about what it will produce. In my view it will produce the reverse of what the Government sincerely wish to produce. I think that it will produce the same sort of monopoly organisation which will eventually monopolise the extraction, production and distribution of petroleum, right the way through to the petro-chemical industry. That is the sort of beast it will produce. That sort of beast has not been a success for this country over the past 25 years, and the beast being created by the present Bill will be no more successful.
  Mr. Gordon Wilson: If I have a criticism of the new clause it is that it does not go far enough. The proposal is that the Secretary of State shall prepare a report on each agreement which is made and that that report shall be laid before each House of Parliament. I should much prefer to see coming before Parliament a report on each negotiation so that we could at that stage say whether we agreed. My worry here is much the same as the worry I had over the Oil Taxation Bill, when the negotiations went on under cover. Eventually, the Government collapsed under pressure from the international oil companies and international banking institutions, and, knowing the poor creditworthiness of the United Kingdom, we were faced with a fait accompli.
  We all know that participation negotiations have been going on to fulfil the
  1360
  pledge in the Labour Party manifesto, but already it has already boiled down to a "no gain, no loss" basis. I had always thought that one of the advantages of participation was that one went into it for gain in the public interest, and one of the reasons for doing it was that one produced petroleum at production cost and could sell it back to the oil companies at the international price if one did not intend to use it for one's own national oil company.
  Mr. Skeet: The British Gas Corporation buys natural gas at 1½p a therm and then charges the public 10p a therm. Is that a public benefit?
  Mr. Wilson: One problem at the moment is that the British Gas Corporation is running at a loss.—[HON. MEMBERS: "Yes. Of course."]—This is one of the problems connected with what it is charging and what it has been doing, but that is a far more complicated issue than the straight issue of participation in the context of the oil lying off our own coast. There may be an argument in connection with natural gas coming from the Frigg Field or the Brent Field, and I say only in passing that we have very little information about the prices likely to be charged in connection with those supplies.
  The theory of participation was that one would make a profit and that that profit would go to the BNOC. My fear, however, is that the Government will be paying to the oil companies compensation for certain items of profit for which they should not pay, and we shall not know the terms of the negotiations till long after they are over and matters are settled. Therefore, as I say, it would have been more useful had we decided that such agreements should be brought before the House for approval and, if necessary—here, I take a view very different from that held by other hon. Members on this side—be sent back to the Government with a clear instruction that they renegotiate on far stricter and tougher terms.
  One of the points that came out in Committee about the value of the National Coal Board holding was that the Government would be repaying the capital of about £50,000 plus the exploration expenditure, and certain hon. Members on the Government side wondered

  1361
  whether the NCB was being done down, although it is another public corporation. I was interested to read in the North Sea Newsletter of 11th July 1975, published by the oil consultants, Wood Gundy Limited, an analysis of what is happening:
  "NCB(Ex) is to form the basis of British National Oil Corporation (BNOC). Its interests are identical with Continental (save Norwegian Statfjord) and Gulf (barring the Southern gas area), for net oil equivalents of about 600 million barrels. This ranks NCB as a North Sea leader, ahead of several international majors. Valued at a conservative 75 cents. a barrel, NCB(Ex) is worth some $450,000,000: rather more than the £50,000 which the United Kingdom Government is to offer for it under the Petroleum Bill (50,000 shares at £1 each)."
  As we know, although it is not stated, there will also be the refunding of exploration expenditure.
  The argument there is that if one is dealing with one public corporation one can balance with one hand against the other, but that ignores the question whether public companies which are involved in exploration, perhaps in a partnership sense, learning the job with other companies which are very experienced, must of necessity do ill. Certainly, the NCB is an example of one public organisation which has done extremely well, but which then, by the sudden appearance of BNOC, is now to find quite a substantial sum of potential profit stripped away.
  I return to the argument that if the clause were stronger, requiring the participation agreements to be brought back to the House while in process of negotiation, the House could exercise some control, and that control, I hope, would be exercised in favour of tougher agreements than those which, I fear, will ultimately appear on the scene.
  Mr. Viggers: I must again express amazement that the Ministers responsible for participation have chosen not to be present for the debate. We have so far had from the Under-Secretary, who is always very courteous in these matters, no explanation of their absence. Are we to take it that, having had Second Reading and Standing Committee, the Government feel that Report and Third Reading are mere formalities to be hustled through during the latter part of July, and that no one need regard this as a debate of any importance?
  Mr. Gray: I suggest to my hon. Friend that the real reason why the Ministers concerned with participation are not here is that the Government realise that if they brought them here at the same time as the Secretary of State there would be such a danger of controversy on their own Front Bench that they would be put in great embarrassment.
  Mr. Viggers: Yes, indeed. I am obliged to my hon. Friend. In the Standing Committee we did not have the benefit of advice and guidance from the Ministers responsible for participation, and now, on this most important new clause, I am amazed at their absence.
  I have to declare an interest in the oil industry, an interest which I have recorded on several previous occasions. How is participation to work? There have so far been four participation agreements, and in each case—Deminex, Blackfriars, Burmah and Tricentrol—there are special features which might cause the company concerned to wish to settle with the Government. But what is to happen where a company has no such desire to settle?
  This question was put specifically to the previous Secretary of State for Energy, the right hon. Member for Chesterfield (Mr. Varley)—and here I quote from Ocean Industry of May 1975, page 51:
  "There is inherent risk in our business and there must be compensation accordingly. What if a company does not want to sell or negotiate, and turn over 51 per cent. to the British Government?"
  The right hon. Gentleman replied:
  "I hope that most companies will want to come into partnership terms with us, and I will absolutely stand by the word I have given that we are not confiscatory."
  The right hon. Gentleman then said:
  "You must realise there is a political commitment to get 51 per cent. participation."
  What a lame, limp reply that was.
  What is to happen if companies do not wish to sell 51 per cent.? Hon. Members on the Government side think they know the answer. They believe that powers will be introduced in due course to force recalcitrant oil companies to sell a 51 per cent. stake. After all, they argue, this is a nationalisation Bill, so why pussy-foot around with voluntary provisions which merely permit companies to sell 51 per cent. and allow the Government to buy? The hawks of the Left wing have no

  1363
  patience with such measures and believe that compulsory nationalisation measures will be needed soon.
  My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has referred to the rundown of activity in the North Sea. There is no doubt that the confidence of international oil companies has been shaken. But we in this country need their investment drive to help us to develop our resources.
  For my part, I do not believe that the Government will shortly bring forward measures to force companies to sell 51 per cent. participation, because I believe that there is a residue of common sense and realism among the Government's advisers. They know that Britain needs foreign skills and investment, and they recognise that compulsory nationalization would cause serious alarm among foreign investors. There have been consistent and repeated assurances that acquisition will not be compulsory, but there remains something which could cause as much alarm as open compulsory acquisition, and that is forced acquisition.
  7.0 p.m.
  The oil industry works in an environment which is created by Governments. There are 100 ways by which the Government, with a nod here and a wink there, can give oil companies the impression that they will have favourable treatment in the next round of licences or in some other way. I am not suggesting that the Chancellor of the Duchy of Lancaster and the Paymaster-General are resorting to blackmail in their dealings with the oil companies, but how does one persuade a company to sell 51 per cent. when it does not want to? If there is a desire to buy 51 per cent. and no one wants to sell, that is a sellers' market and the seller could name his own price. The present situation does not make sense, and the fact that the Government have declined to show their hand is cause for concern.
  In Committee the Secretary of State said:
  "these are voluntary negotiations and that it would be against the public interest for us to show our hand in too much detail".
  Later, in the same column of Hansard, he said:
  "it manifestly would not be in the public interest for a Minister engaged in the nego-
  1364
  tiations with these oil companies to answer every question that might be put."—[Official Report, Standing Committee D. 17th June 1975; c. 422.]
  What an extraordinary statement for a Minister to make. Why not disclose one's hand and tell us the position with regard to negotiations? This comes from a Secretary of State who says he believes in open Government. Is that only when it suits him?
  There is another point which I have put on several occasions which has not been given sufficient credence. The Government are proposing to buy into oil at a cost of £2,500 million to £3,000 million. This means the Government are gambling on the price of oil continuing to rise, or at least not falling. It is a gamble just as much as if they bought £3,000 million worth of copper bars or soya beans. They are gambling on the future market in commodities. It is estimated to cost £100 per barrel per day to develop oil in the Middle East. The estimate for the North Sea is £2,500 per barrel per day. If the Government go ahead with their participation plans, it will not be the Arabs who will have most need to keep up the price of oil but the British Government. That point has not been considered seriously enough. If the Minister says that the chances of the price of oil coming down are remote, I would agree with him. It is an improbability, but it is not good enough to gamble £2,500 million or £3,000 million of British taxpayers' money on something that is merely a probability. If participation proceeds, the Government dare not let the price of oil drop below 7 or 8 dollars a barrel, and, as development and exploration costs increase, that price will increase.
  The new clause is a modest measure requiring the Government to keep the nation informed of developments in participation and the manner in which negotiations are being handled and developed as companies agree, if they do. I cannot see that it is anything but sinister if the Government do not accept it.
  Mr. Skeet: I agree with the remarks of my hon. Friend the Member for Gosport (Mr. Viggers). The idea of the negotiations for 51 per cent. being put forward by the Government is that they hope to catch as many sprats in their net as they can, but they are prepared to leave those who do not come into the

  1365
  net until, possibly, they nationalise them at a later date. Let us say to the companies concerned—and I can because I have no consultancies with them—that if they stand out against the Government for good economic reasons or because they want to control a field in the North Sea, there is no possibility of the Government passing legislation to nationalise them within the next three years. By then, there may be a new Conservative Government, things could change and reason might prevail.
  What do the Government mean by participation? Is it simply that a corporate State will participate or are they prepared to allow the public to participate as well? In Alberta a number of shares were offered on public subscription, not only to the people of Alberta but to the rest of the Canadian people as well. They could participate in the company concerned.
  I do not know whether the Under-Secretary had had the opportunity to to read the supplement on Iran in The Financial Times today. It refers to:
  "A scheme to make major manufacturing companies offer 49 per cent. of their shares to employees and the public."
  What a good idea this is, but we do not find it being brought forward by our own Government—quite the reverse. What are the benefits? The article reports:
  "It will encourage greater production, a greater sense of belonging and a greater social acceptance, says the Finance Minister … The scheme is an attempt to achieve a more equitable distribution of wealth."
  But what do we find in our case? Participation just means that the Government will step in to acquire 51 per cent. There will be no opportunity for any Englishmen, Scotsmen or Welshmen to buy any shares. This is a charade. The Under-Secretary should spell out a little more clearly what he means by participation.
  If the Government force companies to concede 51 per cent. ultimately, they will create a precedent which other nations will follow. BP and Standard Oil of Ohio have reserves in Alaska totalling 13 billion barrels—roughly equivalent to the reserves in the North Sea. If Fodco, which was a State corporation, was ever established in the United State, could not the argument be used that it should take a 51 per cent. participation in the Alaska
  1366
  deposits? Would not BP and the British Government have lost a considerable sum of money? Have the Government considered the Mineral Leasings Act passed in the United States in 1920? It deals with deposits of coal, phosphate, sodium, potassium, oil, oilshale and gas. It says:
  "Citizens of another country, the laws, customs or regulations of which deny similar or like privileges to citizens or corporations of this country, shall not by stock ownership, stock holding, or stock control, own any interest in any lease acquired under the provisions of said sections."
  I understand that this Bill has not yet been repealed and could have extremely serious consequences for BP.
  The Government insist that when negotiations have failed, they will bring in the big hammer and make the whole compulsory, or, if the negotiations do not fail, include BP in the net, but they could be caught under the provisions of the 1920 Act. We cannot assume that Governments or Parliament will handle these matters the way we would like on this side. Take the recent muddle over the construction of oil platforms. In 1974 the projection was that between 55 and 80 platforms would be required by 1980. Now the projection is for between 43 and 61. The Minister had to go scurrying to Scotland the other day to have talks with a Dutch company to try to persuade it to build construction platforms in the United Kingdom. I wish him well, but that is what happens when there is too much control in the hands of the State. The State is not capable of handling these matters in the way in which we in the United Kingdom would desire.
  I agree with the point made by the hon. Member for Dudley, West (Dr. Phipps). He said that if there has to be a BNOC it ought to be the British Gas Corporation. I deviate from that view in only one respect. The BNOC will have to be formed now because it has been at the root of this Bill, but I predict that it will last for only about a year and that it will then be merged with the British Gas Corporation.
  We are trying to understand what participation is. We are trying to understand the purpose of the BNOC. If there are two major international oil companies in the United Kingdom already we do not want another. If the oil

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  companies are already serving this country by providing petrol at a relatively cheap price, bearing in mind the tax imposed by the host country and this Government, why bring in another competitor? How will it rationalise the market, and what opportunity will it have of doing anything but lose money for the taxpayer?
  I therefore suggest that the Government should consider our ideas on participation. We believe that it will not be necessary for the BNOC to participate. The Government would have one "let out" in that they could lay down any conditions they pleased for subsequent licences in the next round. If they want to make clear that the BNOC must participate then, that is up to the Government because the companies would have known what the conditions were. For existing licences, however, it is totally wrong to impose participation, and it is morally wrong that in the background lurks the threat to nationalise companies. I hope that the Government will take this into account.
  Mr. Rost: The Government call it participation but it is nothing of the sort. It is 51 per cent. nationalisation. We believe that what is proposed is irrelevant, costly, damaging and against the national interest. It is nonsense. If we have to have it, the very least we can expect is a proper statement of the details of each particular piece of grabbing. The clause suggests just that. It is reasonably modest and sensible, which is more than one can say for the Government's policy on 51 per cent. nationalisation.
  We expect our proposals to be accepted because they contain nothing to which the Government can object. The Government should accept them in their own interest. If they are to proceed with 51 per cent. nationalisation they should at very least be prepared to provide evidence that it is being undertaken on a fair basis, and that the dealings between the Government and private enterprise are honest and above board. We are told that the nationalisation negotiations are proceeding on a voluntary basis. Let us have the evidence, because we have not had it yet.
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  We have suspicions which no doubt could be dispelled by the Government accepting the clause. The suspicions are that the negotiations for nationalisation are proceeding behind the scenes, and, goodness knows, they are taking long enough to conclude. The suspicion is that a certain amount of pressure is being exercised and that under this legislation new powers for strengthening the Government's negotiating hand are provided for the Minister, powers perhaps for manipulating the allocation of licences to those companies that are prepared to concede nationalisation. We suspect that he will have powers to influence the investment programmes of those companies which are prepared to concede, and that the difficulties which those companies may get into over financing very heavy capital investment programmes in the North Sea will be eased.
  The BNOC will be trading unfairly as a nationalised corporation in comparison to the private sector. That injustice, for example demonstrated by exempting the corporation from PRT, will work against the private sector and to the advantage of the nationalised sector. It will squeeze the cash flow of the private sector and introduce retroactivity into various financing and other activities. It will make life far more difficult for the private sector.
  The country is entitled to know the evidence for saying that the negotiations are voluntary. We want to be certain that the Government are not using their strong-arm tactics behind the scenes, blackmailing or bullying or even using patronage in order to exert influence over the policy for 51 per cent. nationalisation.
  I therefore urge the House to accept the clause. It gives the Government an opportunity to show their good faith and that they are negotiating on a fair and open basis with nothing to hide. It will give the Government the opportunity to remove the veil of secrecy which hangs over these negotiations. Let us have out in the open the proof that the Government are dealing fairly and honestly with these companies.
  7.15 p.m.
  Mr. John Smith: The clause follows the pattern of the previous new clause in that the Opposition have chosen it as a

  1369
  vehicle for discussing a matter of general interest; namely, participation All those who served on the Committee will share my feeling that we have been round this course once before. We had debates on the principle and practice of participation at some length in Committee. Our debate today has followed much the same pattern as was adopted in Committee, ending with the usual message of joy and hope from the hon. Member for Derbyshire, South-East (Mr. Rost), who can always be relied upon to put in a prejorative way anything which emanates from a Labour Government.
  We have had repeated the dogmatic opposition of the Conservative Party to any notion of public enterprise or the extension of public enterprise in any shape or form. I waited, as I always do in debates on participation, to hear whether they had yet made up their mind about whether they would adopt participation in any future round of licensing for which they were responsible. If participation is so thoroughly wrong as they have constantly argued in our debates they should forswear it as an instrument of future policy. If they are not prepared to do that I see an element of hypocrisy in the argument they constantly use about the principle of participation.
  If this country were not to follow the principle of participation and form a State oil company it would be the only country in the Western world, with the exception of the United States, which did not do so. The Government's desire to secure participation has been explained before. It will give us a measure of national control over an extremely important national asset. It will give the Government a title to the oil. It will give the Government the benefit of the advice and assistance of a State oil company which would acquire expertise and knowledge in the way which was convincingly demonstrated by my hon. Friend the Member for Dudley, West (Dr. Phipps). It provides the possibility of the Government having a 51 per cent. State option in future licensing rounds. It will give us the opportunity of allocating blocks on a 100 per cent. basis to the BNOC so that the Government will get 100 per cent. and not 70 per cent. from some operations in the North Sea.
  All these arguments have been advanced before, and, therefore. I do
  1370
  not claim originality for my reply. However, I say that in the knowledge that there has not been much originality in the attacks made again today on participation and the BNOC as a concept.
  My hon. Friend the Member for Dudley, West introduced the argument about the British Gas Corporation and what its relationship will be to the British National Oil Corporation. He will be aware of the provisions in Clause 12, under which the Secretary of State has a certain influence on co-ordinating the activities of both corporations. I am aware of my hon. Friend's views on the matter. He has made them clear to me before. Many of our colleagues in the Labour Party are aware not only of his campaigning rôle in trying to persuade the party to adopt the policy of a State oil corporation but his views on what should have happened to the British Gas Corporation. This is not a suitable occasion to go into that matter in detail, because the Government have made up their mind and prefer the route of a British National Oil Corporation.
  The hon. Member for Dundee, East (Mr. Wilson) said that we were not going far enough in our participation negotiations. He is aware that one of the difficulties that the Government face is that licences were given out on the terms decided in 1971.
  Mr. Patrick Jenkin: In 1969 and 1965 —the third and second rounds—under Labour Governments.
  Mr. Smith: The right hon. Gentleman knows that during the earlier rounds we were thinking of gas, not oil, and 1971 was the important licensing round for oil.
  I very much agree with the conclusions of the Public Accounts Committee, which criticised the Conservative Government for not having considered participation in 1971. It is a tragedy that we did not follow a policy of participation earlier. As The Economist observed last week:
  "The present Labour Government has been involved in a catching up exercise to close the gaps in Britain's North Sea oil policy."
  This is one of the gaps.
  Mr. Patrick Jenkin: The hon. Gentleman perpetuates mythology. We dealt with this matter at considerable length in Committee, and I thought that the hon. Gentleman accepted the point that all the

  1371
  previous licensing agreements were made on identical conditions. When the hon. Gentleman says that the oil finds were made under the 1971 round, that is not true. The Forties field was found as a result of licences issued in the second round, for which his party was responsible.
  Mr. Smith: I do not want to shuffle off any blame attributable to previous Labour Governments, if an objective case can be made. It is silly for people to introduce party political points and defend previous Governments. We are concerned with 1971, which was the major round of oil licensing. That is indisputable.
  As the right hon. Gentleman is fond of newspaper cuttings, I am sure that he has added to his list some of the comments in The Economist last week about the basis on which those licences were awarded. [Interruption.] It is true that those remarks were addressed to all parties, but the party with most influence was that which was in government in 1971, when there was the major round of licensing.
  Mr. Gordon Wilson: The Minister perhaps accepts his share of the blame for what happened in the 1960s and early 1970s, which cause difficulties about the nature of participation. Participation is highly desirable. Considering the tremendous loss of public resources which will be occasioned by the Government's failure to go through with their negotiations on participation in the full sense, does the hon. Gentleman agree that it would be better to move as quickly as possible to a Scottish Government, which would be a new high contracting party and, therefore, not bound by the previous agreements?
  Mr. Smith: I do not see how anybody can assume the existence of a Scottish Government, as the majority of the electorate rejected that concept at the last General Election. I prefer the guidance of the electorate to a fantasy about the future.
  We have had the usual debate on the nature of participation. As on previous occasions. I have tried to set out clearly why the Government wish to follow a policy of participation for this country. We are in good company with countries
  1372
  which do not necessarily have Left-wing Governments. It is the Conservative Party that is becoming isolated in its continued objections to the principle of participation.
  In a sense the Government agree with the spirit of the clause. It is right that Parliament should be informed about participation agreements, and information broadly along the lines described in the clause will be in the BNOC's annual report. However, I do not believe that it would be proper to put that provision in the Bill.
  The Opposition have legitimately used the clause as a vehicle to discuss the general principle of participation. We are not likely to reach agreement on this matter, as there are profound differences between the parties on it. We believe that fundamentally it is of great importance to the country to assert public control over the development of the North Sea and to acquire a national capacity. That will redound to our benefit in controlling this important national asset.
  I end on a note that the hon. Member for Gosport (Mr. Viggers) introduced. He talked about the great risks of investing in the North Sea. One talks of risks when public enterprise is involved. That does not seem to deter companies such as the one of which the hon. Gentleman is a director from making investments in the North Sea. [Interruption.] That is not a personal attack. The hon. Gentleman declared his interest. He has never attempted to conceal his interest in an oil company. I make the point, as I am entitled to, that for someone in his position to talk of risks, when his company is making an investment in the hope of making a profit, indicates a certain selectivity of approach. We believe that there are profits to be made for the nation, just as for oil companies.
  Mr. Gray: When we began the debate I did not imagine that we should persuade the Minister to accept the clause. It seems that the 25 Committee sittings have done little to mellow him. He still clings to his doctrinaire Socialism.
  It is interesting for the official Opposition to note that the hon. Gentleman has been joined by Scottish National Party Members, who for once cannot adopt a suitable posture here and a different posture outside. [Interruption.] If the

  1373
  hon. Gentleman had given way to me, I might not have had to make the point so forcefully. The Scottish National Party Members are firmly committed to a policy of supporting the Government's attitude to oil. Today they went so far as to say that an independent Scotland would probably be even more Socialist than the Socialists. They made little secret of that.
  The Under-Secretary quoted from The Economist in connection with participation. He might be interested in the following quotation from the same issue:
  "The idea behind participation is to secure greater state control over what is happening out in the North Sea. That makes sense for Norway which had no oil expertise behind it but Britain has a number of established oil companies. The British attempt to negotiate widespread participation agreements therefore seems a rather costly and fruitless exercise, especially as the government insists that it wants no extra financial gain from participation."
  I am glad that the Secretary of State has returned to the Chamber, because I wonder whether he agrees with the writer that the Government want no extra financial gain, and whether he agrees with some of his Cabinet colleagues who have expressed rather controversial views—no doubt controversial to him—on the same issue.
  We could debate the matter for a long time, but we have a huge list of amendments to get through, and we are operating under a guillotine. It is doubtful whether we shall be able to debate before 11 p.m. more than a fraction of the amendments selected.
  Therefore, bearing in mind that a Division now would probably cost us another 15 minutes of valuable time, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

Clause 1

  CONSTITUTION OF THE CORPORATION
  7.30 p.m.
  Mr. Gordon Wilson: I beg to move Amendment No. 1, in page 2, line 1, leave out subsection (2) and insert—
  '(2) The Corporation shall consist of four Divisions which shall be named respectively the Scottish Division, English Division, Welsh Division and Northern Ireland Division.
  (3) Each such Division shall assume responsibility for the powers granted to the Corporation under section 2 of this Act in relation to the appropriate areas allocated to it as aftermentioned, but shall have no responsibility for the searching for and getting of petroleum existing in its natural condition in strata external to the United Kingdom and its controlled waters other than waters immediately contiguous to areas so allocated to each Division.
  (3) The geographical areas of operation of the respective Divisions of the Corporation shall be defined as follows—

  (i) The Scottish Division shall have power to search for and get petroleum existing in its natural condition in strata lying in the Scottish area of the United Kingdom continental shelf as designated by paragraph 1(3) of the Continental Shelf (Jurisdiction) Order 1968 and, by permission of the Corporation, in any waters immediately contiguous thereto.

  (ii) The Northern Ireland Division shall have power to search for and to get petroleum existing in its natural condition in strata lying in the Northern Ireland area of the United Kingdom continental shelf as designated by paragraph 1(3) of the Continental Shelf (Jurisdiction) Order 1968 and, by permission of the Corporation, in any waters immediately contiguous thereto.

  (iii) The English Division and the Welsh Division shall have power to search and get petroleum existing in its natural condition in strata lying in the area referred to as "the English area" of the United Kingdom continental shelf in paragraph 1(3) of the Continental Shelf (Jurisdiction) Order 1968 and, by permission of the Corporation, in any waters immediately contiguous thereto; but subject to geographical division of said area between England and Wales, by Order in Council for the purposes of defining the respective areas of operations of the English Division and Welsh Division.

  (5) The Board of the Corporation shall consist of not less than sixteen and not more than twenty persons appointed by the Secretary of State to be members of the Corporation; and the Secretary of State—

  (a) shall appoint one member to be chair man of the Corporation;

  (b) may appoint another member or other members to be the deputy chairman or deputy chairmen of the Corporation;

  (c) shall ensure that two members are persons employed in the civil service of the State (or in the cases of the Scottish, Welsh and Northern Ireland Divisions respectively, employed by the civil service of any legislative and executive branch of government for Scotland, Wales and Northern Ireland, respectively, which may by Parliament be created) and that at least three members of the Corporation shall be persons having experience in oil exploration and exploitation;

  (d) shall ensure that at least twelve of the members so appointed have been nominated by the Boards of said Divisions

  1375
  to serve on the Board of the Corporation; and that no Division shall be represented by less than three such members so nominated and appointed'.

  Mr. Deputy Speaker (Mr. Oscar Murton): With this it is proposed to discuss the following amendments:
  No. 29, in page 12, line 25 [Clause 16], at end insert:
  '"Secretary of State" means in relation to the Scottish Division the Secretary for Scotland; in relation to the English Division the Secretary for Energy; in relation to the Welsh Division the Secretary for Wales; and in relation to the Northern Ireland Division the Secretary for Northern Ireland; and'.
  No. 48, in page 38, line 4 [Clause 40], leave out subsection (1) and insert—
  '(1) There shall be accounts to be called respectively the Scottish Oil Account, Welsh Oil Account, English Oil Account and Northern Ireland Oil Account (and hereafter in this section referred to as "the Accounts") which, subject to the following provisions of this section, shall be in the case of the Scottish Oil Account under the control and management of the Secretary for Scotland; in the case of the Welsh Oil Account under the control and management of the Secretary for Wales; in the case of the Northern Ireland Oil Account under the control and management of the Secretary for Northern Ireland; and in the cases of the English Oil Account and the General Oil Account under the control and management of the Secretary for Energy.'
  No. 49, in page 38, line 9, after 'the', insert 'relevant'.
  No. 53, in page 38, line 24, at end insert:
  '; and in determining the appropriate account the criterion shall be operations within the relevant jurisdiction sectors and in the case of the General Oil Account the operations of the Corporation'.
  No. 54, in page 38, line 25, after 'the', insert 'relevant'.
  No. 55, in page 38, line 37, after 'the', insert 'relevant'.
  No. 56, in page 38, line 41, at end insert:
  'and in determining the appropriate account the criterion shall be operations within the relevant jurisdiction sectors and in the case of the General Oil Account the operations of the Corporation'.
  No. 59, in page 38, line 43, leave out from 'credit' to end of line 45 and insert:
  'of the Accounts exceeds the amounts required for the purposes of the Accounts he may with the consent of the Treasury pay the excess from the General Oil Account to the funds of the Scottish Development Agency; the excess of the Welsh Oil Account to the funds of the
  1376
  Welsh Development Agency; the excess of the English Oil Account to the National Enterprise Board; and the excess of the Northern Ireland Oil Account to the funds of the Northern Ireland Finance Corporation'.
  Mr. Wilson: The debate that we have just concluded demonstrates what the Conservative Party stands for—a great deal of wind and nothing much at the end of it. We have debated a clause relating to one of the fundamental parts of the Bill, and yet the Conservative Party did not seek to promote a Division. Unless the Minister sees his way to accept our amendments, I assure him that my hon. Friends and I will have no hesitation about pressing for a Division at the end of the debate.
  Mr. Gray: A waste of my time.
  Mr. Wilson: The hon. Member says that we shall be wasting his time, but by his actions at the end of the last debate he certainly succeeded in doing that.
  We are presenting two sets of amendments crucial to Scotland. The first set deals with the constitution of the British National Oil Corporation. In Committee we had a not inconsiderable battle on the question whether the BNOC should be cut into a Scottish oil corporation, an English oil corporation, and corporations for Northern Ireland and Wales. I still think that that is by far the simplest and best way in which to deal with the Scottish situation.
  However, in Committee, by a combination of the Conservative and Labour Parties, the voting against that proposal was 19 to 1. I was the sole member of the Committee who voted for the amendment when Scottish interests were sold out.
  Mr. Alexander Wilson Mr. Alexander Wilson (Hamilton) rose—
  Mr. Wilson: I am only just starting my speech; I shall give way to the hon. Gentleman later.
  What we are seeking in these amendments is a devolved structure for the BNOC. Once we get a Scottish Government, which will come at the next General Election, we can quickly dismantle the BNOC which, thanks to the Government, will have its headquarters in Scotland, so making our task all the easier. I wish that the Government had set about their participation policy in a much tougher way,

  1377
  for that would have helped us even more with the job that we shall still have to do.
  Here we are dealing with a matter that goes to the root of the Government's devolution policy. Let us assume for the moment that the BNOC is to exist whether people like it or not. We are suggesting that there should be devolution within the format of that body, that it should be split into operating companies—
  Mr. Alexander Fletcher: Why?
  Mr. Wilson:—each responsible for a given area and certain functions, because that would be the most effective way of operating and would help to prevent centralization—
  Mr. Alexander Fletcher: Why?
  Mr. Wilson: Perhaps the hon. Member, who keeps making monosyllabic utterances from a sedentary position, will kindly allow me to continue, or make his interruptions standing.
  Mr. Alexander Fletcher: The hon. Gentleman is advocating not just the one nationalised industry that the Labour Party would set up, but five, because on top of the four that he is advocating there would have to be some kind of holding or controlling authority.
  Mr. Wilson: There would be a holding company, in the sense that one frequently finds a holding company in the private sector. For instance, it is not the parent oil company that goes into the exploration business. The parent company sets out subsidiaries to carry out the work.
  We are proposing that the BNOC should set up operating subsidiaries to take care of functions closely defined in relation to given geographical areas. That would not only make the operations of the BNOC more efficient, but would give a better chance of Scottish control over the operations of the Scottish company. Even though the BNOC is established in Glasgow, it will still be a United Kingdom corporation responsible to the Department of Energy here in London and still closely tied by the Bill.
  If the Government do not accept our proposal for a devolved constitution, they will be back-tracking on some of their manifesto proposals for devolution in
  1378
  Scotland. I should like to make it clear at the outset that two issues are involved in this series of amendments. The first is the constitution of the BNOC itself. The second relates to money and where it should go, and it is on that issue that I expect a number of explosive interruptions from various hon. Members.
  I have in my hand the Royal Commission Report on the Constitution. The year 1969 was the date when the Kilbrandon Commission—under a different chairman—was instructed to consider devolved government. It is six years since that consideration was first given, but still there has been no action. It is one and a half years since the commission reported. There have been two General Elections, and the Government in their manifesto have accepted the need for a Scottish Assembly.
  We are advocating not only political devolution—devolution of a parliamentary type—but administrative devolution. Some of that is already happening, as can be seen from the way in which various Government offices have been spread out. We have seen it in a marginal way—I make this slight concession—in the establishment of the BNOC headquarters in Scotland. One is naturally in a stronger position if the head office is attached closely to the area of operations rather than situated far away in London and near the Department.
  Mr. Alexander Wilson: On the same argument, is it not true that Sir Hugh Fraser's main business interests lie outside Scotland, although he is one of the biggest backers of the Scottish National Party?
  Mr. Wilson: I do not know where Sir Hugh Fraser's business enterprises are. I have never met that gentleman and I cannot speak with authority about him. I know that he has built up industry in Scotland and has supplied employment there, which is a useful purpose. Jobs are not to be sneezed at at any time, and anybody who goes out of his way to build up industry should be congratulated rather than penalised by certain members of the Labour Party who would rather do without jobs for the sake of ideology.
  I am talking about the need for parliamentary and administrative decentralisation, but I am also concerned with

  1379
  industrial decentralisation, which Scotland badly needs in the private sector—that hinges on what has been done by manufacturers and entrepreneurs in Scotland—and the public sector. One of the problems of the public sector is that it is not responsive enough to the demands of public opinion in Scotland. I quote a document that reached me recently:
  "Just as provincial society lacks the capacity for innovation, so a branch-factory economy lacks the possibility of self-sustaining growth."
  The interesting thing about that statement is that it shows the need to get decision-making powers back in Scotland.
  Having the location of the BNOC in Scotland is a helpful step forward, but it is not sufficient in itself. I should like there to be a Scottish oil division of the corporation. It would look at matters through eyes very different from those of the BNOC which, because of the terms of its structure, must consider the United Kingdom point of view. A division of the corporation would try to identify itself much more closely with what was happening in Scotland and with Scottish needs, and would react more efficiently to the situation as it saw it.
  Looking at the structure which I propose, I am not arguing this in isolation, from the position of Scotland by itself. I am suggesting that the same pattern could be employed for other areas. I am not just talking in a vacuum. We know that there is the likelihood of exploration in the Celtic Sea, which could involve both Wales and England, and in the Western Approaches, where the seismic reports look quite reasonable and where there may be hope of finding oil. No one knows until exploration activities begin, but it seems reasonable to have an English division of the BNOC responsible for organising exploration close to where the activity is to be. Looking at the situation in Wales, there would be advantages in having a Welsh division with those functions. I know that it does not look too hopeful in respect of Ireland, because it appears from the map that the division would suit the Republic much more than Northern Ireland, but the point would still apply in that case.
  Mr. Norman Buchan: I agree with a great deal of the hon. Gentleman's argument, but surely
  1380
  there is one feature missing—the autonomy to be offered to Shetland. The amendment does not mention a Shetland oil corporation. Why not?
  Mr. Wilson: This is one of my party's strong points in relation to Orkney and Shetland and, let it be said, the Western Isles. We are in favour of maximum devolution. That is a matter upon which we have not attempted to back-track. Who amongst the other two parties can say what their attitude would be to Shetland, Orkney, the Western Isles, or even to Scotland, by way of devolution? We have seen the grand old Duke of York system of marching them to the top of the hill, but they get only half way and are then marched down again. Until the disorder in the enemy camps is resolved, who am I to pass comment on the weaknesses of the other parties in Scotland, who have lost their way and do not know where to go?
  I am presenting an argument which I hope will be accepted for its own sake. I ask right hon. and hon. Members to consider the organisation of nationalised industries in Scotland. I do not have to preach too much about this, because frost of it is well known to us. There are two which are completely autonomous—the South of Scotland Electricity Board and the Hydro-Electric Board. Both are very successful in their own way. Formerly, there was the Scottish Gas Board. That is no longer autonomous, and I would not have described it as the most successful of the nationalised industries at any time, in view of all the trouble that it caused me personally and is still causing my constituents. I well remember the natural gas period, only six months ago.
  I ask the House to consider the National Coal Board, which has a Scottish Division, British Railways, which have a Scottish Region, and the British Gas Corporation, which has Scottish Gas. Then there is the British Steel Corporation. That does not have a Scottish Division. I believe that it should have. In Scotland, we had an integrated steel industry, and Scottish Members are worried about what is likely to happen this week or next week about the jobs of those workers who are away on holiday at present. It was an integrated industry, but it was not organised on a Scottish basis. Whether or not we agree about the need for a

  1381
  Scottish steel corporation, there was certainly a strong argument for having a Scottish Division of the BSC. As I say, it was dismembered.
  7.45 p.m.
  The Strategy Planning Group which built up Ravenscraig was disbanded. All the technical expertise was thrown away. Much of the value of the Scottish steel industry was lost. This could, in turn, be leading to a reduction in the number of jobs. So we have to be careful to make sure that we have as much true devolution as possible, and the true transfer down of powers, influence and decision-making. It is all part of the great battle for decentralisation which we are fighting in our own ways. At present the British National Oil Corporation is almost a Stalinist creation, because it does not accept the need for a Scottish sector. Admittedly, most of its branches will come to Scotland, but that is only a temporary activity.
  Mr. Iain Sproat: But it is being set up in Scotland.
  Mr. Wilson: I am aware of that, but it should have a Scottish Division considering the development of Scottish oil from a Scottish point of view. That would be entirely different from what the British National Oil Corporation might seek to do.
  I realise that when there are divisions within the same corporation there is not the degree of autonomy which I would wish to see. But by 19 votes to 1 in the Committee my preference for a Scottish oil corporation was not accepted. For that reason, I have to deal with the matter in a way which I hope will be more acceptable to right hon. and hon. Members.
  I pass to the second set of amendments. These seek, in effect, to make sure that where there are surpluses on the oil accounts—and I suggest that there should be Scottish, Welsh, Northern Irish and English oil accounts, as well as a general one—they should be passed over to the areas concerned for development. Amendment No. 59 does not make that entirely clear. But if the first set of amendments is accepted, I shall seek to move a manuscript amendment to Amendment No. 59. However, we propose to leave the matter to be decided on the first set of amend-
  1382
  ments, relating to the structure of the BNOC, rather than to have two votes. It will be our wish to pass on to the second set of amendments if we are successful on the first.
  In relation to the oil accounts, I had better put this into the proper background. In the manifestos of all the parties represented here at present there are references to two matters, although expressed in different ways and with different degrees of intensity. The first is that the financial advantages of oil from the North Sea should go to help Scotland is particular—since we are discussing largely the Scottish sector at present—and also regional development.
  There are variants in each party manifesto, but in the amendments in relation to the oil accounts I specify where the spare cash would go. From the Scottish oil account, it would be fed to the Scottish Development Agency. Any excess from the Welsh oil account would go to the Welsh Development Agency. That from the English oil account would go to the National Enterprise Board, which is intended to help the regeneration of industry in England. Any excess in the Northern Irish account would go to the Northern Ireland Finance Corporation, which was set up in about 1972 with the objective of funding industrial development in Northern Ireland. In other words, in each case in relation to the profits of the BNOC coming from the operating divisions, funds would go into the oil accounts for industrial development. That is a very important principle.
  The alternative to working a system along these lines is to end up with a form of colonialism, with one area being exploited to suit the remainder. The structure which I have suggested would go a long way towards helping us in our present situation.
  We believe that these amendments are very important and we hope that, notwithstanding harsh words which have been exchanged in the past, the Government will agree with them. It is time that the official Opposition came off the fence on the question of devolution. They say specifically in their manifesto that they would like the petroleum division of the Department of Energy to move to Aberdeen. They say that they would fund a Scottish industrial development

  1383
  corporation directly from the oil revenues. Therefore, the proposals which I am putting forward should be acceptable to them. Our proposals also fit in with the formula for the unity of the United Kingdom, which will delight the hearts of all Members present, except my hon. Friends. There is a view about that matter which we do not share and do not intend to share.
  My proposal is quite moderate, and I hope that the Government will accept it. The Government's decision will be a factor which, plainly, we shall have to weigh very carefully when we decide what we should do on Third Reading. We supported the Bill on Second Reading, saying that we believed in participation, but if the Government believe that a further nationalised structure should be created without proper devolution of authority and without a proper sharing of the profits we shall have to change our minds.
  We hope that we shall have the support of the right hon. Member for Orkney and Shetland (Mr. Grimond) and his colleagues. For many years the right hon. Gentleman has been an adherent of devolution and decentralisation. We have had our battles in Committee, but we are now discussing amendments dealing with the question of devolution which is part of the package in the setting up of the Scottish Assembly. How better it would be if we could provide in the Bill a structure on which we can build when the question of the Scottish Assembly arises.
  Mr. Sproat: Has the hon. Gentleman made any calculation of the extra cost to the taxpayer in the United Kingdom, or, perhaps, specifically in Scotland, of setting up the four suggested divisions? How many extra civil servants would have to be employed?
  Mr. Wilson: I know of the hon. Gentleman's obsession with civil servants. If we had a Scottish Assembly and thereby got rid of regional government, and if Scotland had full self-government and we got rid of government from Westminster, there would be a dilution of the number of civil servants. We might well make savings—
  Mr. Sproat: In cost?
  Mr. Wilson: Yes, in cost—from the efficiencies of a devolved structure rather than have the inefficiencies which result from the grotesque scale of, say, the British Steel Corporation and which might result from the BNOC.
  Mr. Alexander Wilson: There is not much difference in the arguments, if they are arguments—they do not persuade me —which the hon. Member for Dundee, East (Mr. Wilson) puts forward for the separation of Scotland from the rest of the United Kingdom. The hon. Gentleman has still not said on behalf of his party what the cost would be to the people of Scotland if his policies were carried out.
  The amendments represent a slight watering down of the proposals of the Scottish National Party as they were put forward in Committee. They represent a greater watering down of the arguments put forward in the SNP's election material in October and during the referendum on the Common Market. We and the Scottish people are sick and tired of hearing the phrase "Scottish oil". There is a contradiction in Amendment No. 1 because it is admitted that there is oil in the Celtic Seas. The hon. Gentleman wants separate divisions of the BNOC to be set up in Scotland, England, Wales and Ireland.
  Is the watering down of the SNP's proposals for the sake of the House or a matter of playing politics for the benefit of the Press? Whatever the answer, it is admitted that the United Kingdom as a whole is involved in the operation of extracting this new indigenous fuel for the benefit of Great Britain.
  Mr. Gordon Wilson: Will the hon. Gentleman give way?
  Mr. Alexander Wilson: Not at this stage.
  During the Committee stage of the Oil Taxation Bill, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), in quoting from the Financial Times, which is not a newspaper I normally take, said that
  "… there was a headline from Washington by Paul Lewis, the American editor: US to warn Wilson on Scots Nationalists and oil'. The Americans are concerned whether the pressure from the Scottish Nationalists will weaken the British Government's control over the development of the North Sea by devolving

  1385
  too much of the responsibility for the oil industry on some form of Scottish Assembly."—[Official Report, Standing Committee D, 30th January 1975; c. 514–5.]
  This argument was used by the Scottish nationals and, to some extent, by the Conservative Party in Committee. The Scottish Nationals, in their propaganda, have tried to frighten away the developments necessary in the North Sea.
  What would it cost the people of Scotland should the policy of complete devolution and separatism by implemented? The answer is still not forthcoming from the SNP. Members of the SNP have changed their argument that whisky is the basis of the Scottish economy. They are now saying that oil is the basis of it. They should study the history of the energy requirements of Great Britain, and particularly of the indigenous fuel industries. Clearly the hon. Member for Dundee, East has not studied it, or, if he has, he has not learned anything from it.
  We should make a reasonable comparison between what is a completely new industry and some of the established industries. I have said before that the only comparison of indigenous fuels which one can validly make is a comparison between coal and oil. The coal industry, following the measures taken by Labour Governments, will far and away outlive any oil which may be extracted from the North Sea, even on the present assessments of oil availability.
  8.0 p.m.
  The increase in demand for energy throughout the world is such that to follow the pattern suggested in the amendments would mean a reversion—almost a revulsion—to old history as far as I knew and lived with it in the coal industry. It would mean unit against unit, area versus area and country versus country for resources and the produce of those resources. The growth and desire for nationalised boards and industries came from the grass roots of some of those industries. To start now with a new industry fragmented in the fashion which the Scottish National Party wants would be a complete disaster for Great Britain. It would make nonsense of the British National Oil Corporation, whether its headquarters be in Glasgow or anywhere else within the United Kingdom.
  1386
  The logic, if it is logic, of the amendments would mean a reversion to Scottish, English, Welsh and Irish Coal Boards. Accepting that thesis and bearing in mind the great desire for compassion which the Scottish National Party claims for the people of Scotland, I ask hon. Gentlemen to consider what acceptance of their amendments would mean. The facts of life are apparent. The English coalfields are far more accessible and have thicker seams than anything in Scotland. It is well to record that known reserves in Britain amount to 100,000 million tons of workable coal of the highest calorific value in Western Europe. We are talking about enough coal on present production of 120 million tons per year to last this country 800 years allowing for progress and industrial expansion.
  The SNP makes great play of what I think is an unknown quantity—namely, the returns to Great Britain's economy. The SNP does not know too much of what men, and women in some instances, went through in the Scottish coal industry. Therefore, hon. Gentlemen do not consider the result of dividing up nationalised industries. Britain is a small country.
  Mr. Gordon Wilson: Would the hon. Gentleman care to give way?
  Mr. Alexander Wilson: I will in a moment. The oil countries and, indeed, this country will view with concern the activities and, to some extent, the threats of this small band of warriors to the economy and working-class people of Scotland and, indeed, Britain.
  Mr. Gordon Wilson: I am grateful to the hon. Gentleman for giving way. Apart from the fact that this series of amendments, as framed, would not have the effect that he has mentioned—the previous set of amendments in Committee would have had that effect—may I ask him how many jobs have been left in his constituency by the British Coal Board and how many steel-making jobs are likely to be left in Lanarkshire by the British Steel Corporation?
  Mr. Alexander Wilson: If you, Mr. Deputy Speaker, would allow me to develop that history, I could do so. I could go through history and show how and why jobs have been lost in Lanarkshire or any other county of Scotland.

  1387
  I was concerned to show the lack of interest displayed by the Scottish National Party when miners and their families were going through the travails, desperation, poverty and degradation of past years. The SNP, from neither inside nor outside this House, ever displayed a desire for a Scottish Coal Board. Hon. Gentlemen were non-existent in their support of some of the people whom I represent.
  I will answer the question in constituency form. There are no pits or miners in the Hamilton constituency, but it is still basically, not far under the surface, mining in content, and proud to be so. I am also proud to represent it.
  Mr. Buchan: Does my hon. Friend agree that the Scottish National Party did not object to the travails through which the miners went in the 1920s and 1930s because the mines were under the control of Scottish coal owners, and the Scottish people have never suffered more as a result?
  Mr. Wilson: I deliberately said that I did not want to develop that point. However, I must agree with my hon. Friend, as I think everyone in the House must agree with him. I will not mention names, but it is a fact that the old Scottish coal owners—the Hamiltons, the Percys, the Wilsons, the Craigs and the Dixons—were responsible for the degradation of Scotland, particularly Lanarkshire. Therefore, let us have no more nonsense about where compassion lies. It certainly does not lie with the publicity hounds of the Scottish National Party.
  The hon. Member for Dundee, East, who moved this series—series, not "serious"— of amendments, referred to Orkney and Shetland. I am glad that the right hon. Member for Orkney and Shetland (Mr. Grimond) is in his place. I think that he will anticipate and know what I am about to quote. I refer to the Daily Telegraph, of all papers, which is certainly no friend of the Labour Party. This may be why the SNP does not include Orkney and Shetland in this series of amendments. The Daily Telegraph states:
  "The Scottish Nationalist party's dream of a North Sea oil empire has been dealt a sharp blow by the Shetland Islands, off whose shores lie some of the biggest reserves in the region.
  The island's council has voted overwhelmingly in favour of retaining its links with
  1388
  Westminster in the event of any devolution of power to a Scottish assembly.
  This in effect means 'no' to an independent Scotland and 'yes' to the United Kingdom."
  Looking at the geography of the North Sea, one can see that within 93 miles of the Shetlands lie five of the richest oil fields so far discovered. Hence the reason for the silence of that area within the context of the amendments moved by the SNP.
  I am sure that everybody will have gathered by now that I want this House overwhelmingly to defeat these amendments. I have no doubt that will be so. I assure the hon. Member for Dundee, East that there is no coalition between myself and the Conservative Party. The hon. Gentleman refused to give way when I wanted to contradict him on that point. There is no coalition. The Scottish and the British Conservatives may say what they like. This series of amendments is a sheer facade. The SNP is using them to have a debate on separatism for Scotland. I hope that the House will unanimously reject the amendment.
  Mr. Grimond: I said earlier that I would try not to repeat the speeches I made in Standing Committee. In Committee I dealt at some length with the position of Orkney and Shetland qua oil. For the benefit of those who had the misfortune of missing that speech but who want to look it up, I may say that it is reported at column 108 of the Official Report of the Second Sitting.
  I then dealt specifically with the question raised by the hon. Member for Hamilton (Mr. Wilson)—that is, the resolution passed by the Shetland County Council, so I do not intend to go again into the question where the boundaries between Scotland and Orkney and Shetland might be drawn—the Minister is an expert on that, too—or, indeed, into the question of the possibility of some form of self-government for Orkney and Shetland. These are important questions, but they have been dealt with, and we are under a guillotine.
  These amendments are different from those put forward in Committee by the hon. Member for Dundee, East (Mr. Wilson). They would, certainly to some extent, keep the control of energy on an all-United Kingdom basis. That would meet the point, which I think I also

  1389
  mentioned in Committee, that one of the largest sources of new energy will be the Yorkshire coalfield and that its exploitation should possibly be planned, to some extent, together with North Sea oil.
  It is always unfair to go too deeply into the details of amendments put forward by back benchers who have no expert draftsmen at their disposal. I am not quite certain whether the amendments, as drafted, would confine the British National Oil Corporation and its four or five divisions entirely to British waters. I think that they would. I do not know whether that is deliberate, but I think that they would preclude any possibility of the corporation's operating elsewhere.
  Mr. Gordon Wilson: I tried not to disturb the Bill too much in the sense of abandoning extra-territorial exploration. What I have done is to exclude the divisions from exploring internationally except to penetrate by agreement immediately contiguous waters—but leaving the corporation power to go abroad. It is a point on which I would probably agree with the right hon. Gentleman, but I felt that if I pushed that point I might detract attention from the many questions.
  Mr. Grimond: I am sorry to hear that but there we are. I had thought that this would be a limiting factor. As I said before, this is a very centralised Bill. I am of the opinion that the nationalised industries are too big and that we should examine how we can decentralise them and how we are to control organisations, even organisations of this size, after they have been decentralised.
  The real point I want to impress upon the House is a genuine one. We are getting into a most terrible muddle. We are all to different degrees committed to Scottish self-government in the very near future. Already an appalling muddle has been caused by the re-organisation of local government. This is not an attack on the present Government, for it was the Tory Government who brought that about. It is obvious to anybody that this will lead to appalling difficulties and that the first year or two of the life of the Scottish Assembly will be spent trying to make sense of Scottish government in general.
  1390
  We are now passing much more legislation. We do not know whether it is proposed that energy should be one of the matters to be controlled to some extent from Scotland or, indeed, if it is to be controlled at all from Scotland, to what extent. Perhaps it is not to be controlled from Scotland. We do not know. In this and other Bills we are passing legislation which, if the Scottish Assembly is given any powers at all, will be wholly altered within two years, and the first year or two of the life of the Scottish Assembly will be chaos. On the other hand, if all these powers over industry, land development and energy are to remain at Westminster, the Scottish Assembly will be nothing but a talking shop and I believe that it will be a disaster for Scotland and will be nothing but another layer of government.
  8.15 p.m.
  I suppose it can be said that this is a possible means of going some way towards meeting that difficulty, in that this centralised corporation would not be quite so rigid, as it were. On the other hand, the hon. Member for Dundee, East has abandoned his proposition of having two or three entirely separate corporations. However, when the Scottish Assembly is set up it is conceivable that it will be easier to deal with a federal structure for energy than it may be if it remains totally centralised, or if it is broken up into three or four entirely separate oil corporations. If so, the difficulties will be enormous.
  What we want to know is: what is to be the position of the Department of Energy after the Scottish Assembly is set up? Until we know that, it is almost impossible to see how these matters can be dealt with.
  I have not said a word about Northern Ireland or Wales. I do not know whether there is a great desire in Northern Ireland to have a national oil corporation. I do not suppose that the right hon. Member for Down, South (Mr. Powell) will be rooting for it. The Government should give us some indication of their thinking. I should even like to know whether the members of the Government who are discussing Scottish devolution have given any thought at all to the Bill. I think that at some point the Government should indicate, either to this House or to another place, what their proposals will be.

  1391
  This is not hypothetical; the Government are committed to it. As far as I remember, even with some delay they are committed to setting up an assembly next year. I make clear that I am not arguing which way it should be played, but it will create great difficulty if we pass these Bills totally separately and in different compartments.
  The same is true of the Scottish Development Agency. The Bill to set up that body is trundling through the House at the same time as this Bill. This amendment proposes to give the agency all the surplus funds from oil. All parties, including the Conservative Party, and, I think, the Government, are committed to giving some of the oil revenues to Scottish development. How is it to be done? Do these Bills really match up?
  I hope that we do not go over exactly the same ground as we did in Committee, but we should have from the Government an assurance that some degree of overall planning is going on in Government circles and that we are not piling up immense troubles for years to come.
  Mr. Sproat: Interesting as it would be to follow the right hon. Member for Orkney and Shetland (Mr. Grimond) into the paths he has somewhat sketchily mapped out as to the relationship between the Department of Energy and any Scottish Assembly which may be set up, I will resist the temptation to do so at any length and merely say that if the control of the revenue from the Scottish waters, however defined, of the North Sea were to be given to a Scottish Assembly that would be an end of the United Kingdom. It would not be so much the slippery slope towards separatism as the break-up of the United Kingdom.
  It is because I believe that this series of amendments is only a stalking horse towards separatism that I reject it and shall happily vote with those who vote against it, if the amendment is put to the vote.
  I rise with some reluctance, and even with some anger because under a guillotine the House has once again had to listen to the wanderings of fantasy of the hon. Member for Dundee, East (Mr. Wilson), to the farrago of rubbish that we had in Committee and that we have now had to listen to again. As no doubt the
  1392
  Scottish Press will be reporting this debate, which is no doubt what the hon. Gentleman wants, we are bound to try to nail these preposterous notions once and for all.
  The hon. Gentleman said that in Committee he was defeated 19 to one on his amendments. The reason he was defeated 19 to one was that it was the most ridiculous series of amendments I have ever heard of in any Committee I have ever served on. Indeed, I do not think that I have heard any hon. Gentleman—
  Mr. Douglas Henderson Mr. Douglas Henderson (Aberdeen shire, East) rose—
  Mr. Sproat: I shall not give way at this moment, because I have a number of arguments to adduce. No doubt there will be plenty of opportunities for hon. Members to catch Mr. Deputy Speaker's eye later.
  I object to our time being wasted on these matters. In Committee the hon. Member for Dundee, East was caught out on a number of examples of total intellectual dishonesty. I remember the arguments that we had about Scottish territorial waters and over Scotland being financially maltreated. On both those matters the hon. Gentleman was forced to yield completely.
  Tonight we have had yet another argument based on intellectural dishonesty. We have members of the SNP coming forward with proposals to set up Scottish, English, Welsh and Ulster divisions. They cannot tell us what the cost will be; they cannot even put forward the vaguest notion. They cannot tell us how many extra civil servants their proposal would involve. It is an abuse of our time to put forward this sort of suggestion without having done any homework.
  I am more glad than words can easily express that 40,000 jobs have been created for Scotland as a result of North Sea oil. Given the overall unemployment situation, words cannot express what that creation of jobs means for Scotland. But there are other advantages. For instance, there are the wages that come to the people of Scotland and the magnetic force of the oil industry drawing other industries into Scotland. However, in terms of oil revenue Scotland should not get one penny more nor one

  1393
  penny less than any other part of the United Kingdom without having regard to the level of deprivation in the area concerned. I hope that the revenue that comes from the Selby coalfield will be evenly spread, so as equally to relieve deprivation in Scotland although the coal is in England. I hope that the revenue from North Sea oil, although off the Scottish coast, will go to relieve deprivation in England. That is an essential principle for those who believe in justice and in the unity of the United Kingdom.
  I move on to the second theme of the amendments, namely, the setting up of the absurd divisions. Essentially they are little different from the setting up of Scottish, English, Welsh and Ulster national oil corporations. We had all this from the hon. Member for Dundee, East in Committee. The amendment now before us is the stalking horse for separatism, wearing a different guise. Essentially it is the same beast.
  At this stage it is not necessary to go into the details of our disagreement over the BNOC. Among other things, we believe that it will be expensive, dilatory and excessively bureaucratic. But if we disagree with the BNOC, all the more do we disagree with the triplication of the nonsense that would result in the separation of the divisions as put forward by the hon. Gentleman.
  It is obvious that the SNP has in no sense attempted to argue, let alone answer, the complaints that have been made on the basis of cost. The Scottish nationalists have given no indication of the costs involved. They have given no indication of the number of extra civil servants required. They have not begun to consider the difficulties of recruitment. That matter was argued endlessly in Committee. It will be difficult enough to recruit for the BNOC, but it will be that much more difficult to recruit for national divisions. Knowing the somewhat racist theories of some members of the SNP, no doubt it would be impossible to recruit for the Scottish division unless the grandmother of the recruit being considered was born in Scotland. How would we find people to staff the separate divisions as put forward in the amendment?
  Let us follow the logic of the argument as put forward by the hon. Member for Dundee, East. I have frequently given credit to the Government for setting up
  1394
  the headquarters of the Offshore Supplies Office in Scotland, but on the basis of the SNP amendments, are we to have divisions of the OSO in England, Scotland, Wales and Ulster. Are we to have drilling training centres in England, Scotland, Wales and Ulster? What about the additional costs involved? What about the complications that would arise for the managements of Shell and BP, for example? Have the SNP Members considered the problems that will arise if the oil companies have to deal not only with the corporation but, at the same time, with divisions in England, Scotland, Wales and Ulster? To envisage the complexities represents a grotesque nightmare. However, we have not even heard mention of these problems from the hon. Member for Dundee, East.
  I believe it essential that we maintain the unity of our energy programme. That must apply, whether we are talking of coal or oil. It is essential that the whole of the United Kingdom should benefit from its oil reserves as well as from its coal reserves. Although the amendments put forward by the hon. Gentleman are marginally less absurd than those he put forward in Committee, I believe that they would be damaging to the energy resources of this country.
  Mr. William Hamilton: I disagree very much with what has been said by the hon. Member for Aberdeen, South (Mr. Sproat). Although we are working under a guillotine, if SNP Members want to make fools of them-selves in a debate of this nature they have every right to do so. I defend to the last the right of SNP Members to make idiots of themselves, even if we lose half an hour in the exercise.
  The hon. Member for Aberdeen, South is quite right to say that no attempt has been made in the amendments to spell out the details of where we shall find the bodies to man a Scottish Oil Corporation. Maybe the SNP has in mind the hon. Member for Banff (Mr. Watt). He has obviously shown the right ability in the House. He has the right qualifications in that I gather he was a member of the Tory Party before he joined the SNP. He has all the characteristics and qualifications to make perfect nonsense of the SNP's idea.
  There are one or two more important matters that I must mention. One of

  1395
  the matters that I have in mind has already been mentioned by the hon. Member for Hamilton (Mr. Wilson). H we accept the principle of division on a nationalistic basis, we cannot stop at oil but must carry through the concept to, for example, coal, to rail, to the media and to the Post Office. In other words, we must set about complete separation. There is no evidence to be found anywhere in Scotland that that is what is wanted by the Scottish people.
  Mr. George Reid: The hon. Gentleman was not born in Scotland.
  Mr. Hamilton: No, and I do not live there. However, nine out of 10 of the Scottish people do not want separation on those terms. That shows that they are not so parochial as SNP Members would have us believe. It is well known that I was not born north of the border, but the Scots take no notice of where one was born; they have more interest in what principles one represents. That is how I found the situation in Fife.
  If we follow the corollary of this proposal, we find that the last thing that the National Union of Mineworkers wants is to have a separate union in Scotland from that which exists in England. We have only to see what has happened to the EIS compared with the NUT to realise the disadvantage of separation. Undoubtedly teachers are put at a disadvantage because of that separation. I repeat that there is not a trade union in Scotland which would seek to bring about the separation proposed in this amendment.
  The right hon. Member for Orkney and Shetland (Mr. Grimond) made an equally valid point—namely, that we were now passing enormously important legislation for the United Kingdom, and not least for Scotland. That obviously applies to the present Bill and also to the Scottish Development Agency Bill. The right hon. Gentleman mentioned the Assembly which we were promised for next year. There is not a cat in hell's chance of getting that Assembly next year. I hope that that will be the case. It is a matter of enormous complexity, and we must get the functions right. Therefore, that cannot be achieved in an overnight exercise. Furthermore, we cannot pretend that if
  1396
  that exercise is carried out there will not be a hostile reaction from other regions in England which are worse affected by the present economic situation than is Scotland. I refer, for example, to the area to which I belong, North-East England. That has a much worse record in terms of unemployment and deprivation than has almost any part of Scotland. If Scotland is to be given preferential treatment, people in the North-East will not sit idly by.
  8.30 p.m.
  I have not heard it suggested by members of the SNP that if all these efforts result in failure their view will be "It is too bad we have spent £500 million. Therefore, our separate Parliament will foot the bill for all the losses." Most sensible people in Scotland regard these as United Kingdom resources, and they believe that the profits which flow from those resources should be used not on the basis of accent or the part of the country from which people hail but on the basis of need in areas of greatest deprivation. That applies to social economic and educational spheres. [Interruption.] I wish the silly little man, the Member for Aberdeenshire, East (Mr. Henderson) would not make comments from a sedentary position.
  The essence of being part of a United Kingdom is that we should recognise our nation as a unity. Therefore, such resources as are available from these industries should be channelled into areas of greatest deprivation. Those areas are not necessarily in Scotland, but are on the peripheral areas of England. For that reason I hope that the House will reject the amendment.
  Mr. Henderson: Some extraordinary views have been expressed in this discussion. The hon. Member for Aberdeen, South (Mr. Sproat) was ungracious not to give way in his remarks when dealing with amendments tabled by the Scottish National Party. Of course the SNP has a full right to table amendments for discussion. I was delighted that Mr. Speaker saw fit to select our amendments, which shows a more tolerant view than that expressed by representatives of the Conservative Party.
  The hon. Member for Aberdeen, South referred to the vote in Committee, where the figures were 19 to one. He implied

  1397
  that that vote was appropriate in the circumstances. Surely that situation reflects only the fact that the rules of the House do not permit the SNP to be fairly represented in these situations. If there were a fair representation of our views, the figure would have been a little different.
  Anybody who listened to the remarks of the hon. Member for Aberdeen, South would quickly come to realise that time and again the Scottish Conservatives have dug their own graves. I am delighted to see the spirit of coalition shown by the hon. Members for Fife, Central (Mr. Hamilton) and Hamilton (Mr. Wilson) in joining hands with the hon. Member for Aberdeen, South. They will find that they are also digging the grave of the Scottish Labour Party in the next General Election.
  Mr. Alexander Wilson: You just wait.
  Mr. Henderson: We have waited for some time, and we are ready.
  I am delighted to see the Under-Secretary of State for Scotland, with his responsibilities for devolution, joining us for this debate. I hope that we shall hear something about the Government's policy objectives. It would appear from the provisions of the Industry Bill, the Scottish Development Agency Bill and the Bill which is now before the House that each Department of Government appears to be framing its legislation separately without any relationship to the Government's central commitment—namely, the devolution of power in these islands. I cannot believe that the Under-Secretary of State, who is here to reply to the debate, will find it possible to reject or resist the amendment in the name of my hon. Friends, if as I believe, he is genuinely committed to the concept that more power should be devolved to Scotland, and that the Scottish people should have some say in these matters.
  We have on previous Bills—for example, the Industry Bill—tried to table amendments which would enable the powers to be devolved into a Scottish, a Welsh or an English setting. I hope that in this Bill the Government will take the opportunity to firm up their commitment to devolution by accepting the amendment.
  1398
  I shall not say very much about the remarks of the hon. Member for Hamilton, which are best forgotten. It is excellent that he now takes his views from the Daily Telegraph, and no doubt we shall be hearing him repeat these at some time. I was glad that the point about Shetland came out in relation to this matter. The statement he made was that any devolution of power to Scotland would be resisted by Shetland, but, of course, the right hon. Member for Orkney and Shetland (Mr. Grimond) has consistently supported a form of devolution and self-government.
  Mr. Alexander Wilson: It may be unfortunate that the hon. Member for Aberdeenshire, East (Mr. Henderson) was not in the Committee—or maybe it was fortunate; I do not know—but in fact the hon. Member for Orkney and Shetland (Mr. Grimond) did not deny that I was the Member who brought this up in Committee, and he followed on. He did not deny it when his own local authority made that statement, nor did he deny it today.
  Mr. Grimond: I referred to the local authority, the County Council of Shetland, at the second sitting of the Committee, in column 110, before the hon. Gentleman spoke about it at all.
  Mr. Henderson: I hesitate very much to get involved in a brawl between two members of the Committee, and, as the hon. Member for Hamilton says, it is certainly fortunate for me—although unfortunate for the Committee—that I did not serve on it.
  One aspect of the amendment that ought to be stressed very strongly is that of providing funds to supplement the work of the Scottish Development Agency. At this time, when I see the unemployment figures in Scotland rising to staggering heights—heights achieved only by the Conservatives in the past, and now being very rapidly approached under this Government—the greater the resources that can be made available to the Scottish Development Agency, the greater will be our chance of providing a future of job opportunities to people in Scotland. It would be possible in these circumstances, and under the structure proposed, for some favours to be shown to Scottish companies, domiciled in Scotland, which provide employment and jobs there.

  1399
  The criticism has been made during the debate that my hon. Friend has not produced a list of civil servants, and so on.
  Mr. Buchan: What does the hon. Gentleman mean by "domiciled in Scotland"?
  Mr. Henderson: I mean companies with establishments in Scotland which produce and manufacture goods within Scotland, irrespective of their ownership, and which provide employment within Scotland. I hone that makes it very clear. I have in mind people like Loudon Brothers, which used to contribute large sums of money to the Labour Party in the West of Scotland and then went bankrupt.
  I should like to turn to the question of the number of civil servants involved, which has been mentioned several times. When I hear the hon. Member for Aberdeen, South ranting and raving, foaming at the mouth and chewing the carpet on this particular issue, as he has been doing, I just wonder whether his Government, when they introduced the Local Government (Scotland) Bill, did all the careful sums they ought to have done concerning the number of new officials required in the region, with the inflated number of posts required. The hon. Member should hold his head in shame over the results of local government reorganisation rather than quibble about whether we shall need a few more typists or desks in the Scottish division of this corporation. The amendments are worthy of acceptance, and we look forward to the Government saying that they are accepted.
  Mr. Robert Hughes: The amendments are about the possibility of the BNOC's being decentralised. One of the saddest things about the way in which they have been presented—indeed, one of the saddest things in any debate about Scottish affairs in recent years—is that every argument is used as a peg on which to hang the argument for devolution, or self-government, or independence. This means that, time and again, the real issues facing the Scottish people are bypassed, in the interests of putting forward the propaganda of the Scottish National Party.
  I do not suggest that a party in this House should argue completely object
  1400
  tively outwith the philosophy upon which its Members were elected or the ethos from which that party sprang, but there are times when we should avoid the nonsense slogans and ex cathedra statements whenever an SNP Member rises to speak. The hon. Member for Dundee, East (Mr. Wilson) has said over and over again that the Government's will to introduce self-government for Scotland is wavering—and he has said it without a single shred of evidence.
  My hon. Friend the Member for Fife, Central (Mr. Hamilton) did not suggest that the Government's commitment to devolution was wavering. He argued that the majority of people in Scotland did not want independence. That is a different matter. But it does not matter what is said—hon. Members representing the SNP simply keep on saying that the Government's commitment to devolution is wavering and that the whole exercise is being held back by some unnamed Cabinet Minister. I am not in a position to say what any unnamed Cabinet Minister is thinking of doing, but I can tell my right hon. Friend the Secretary of State for Scotland that the Government's commitment to devolution is consistent and that the exercise is going ahead to produce a detailed framework in which the Assembly can be set up.
  The most curious argument today was put forward by the hon. Member for Aberdeenshire, East (Mr. Wilson). He asked us to accept that every Bill that goes through the House and which has some impact on Scottish affairs should contain a detailed arrangement affecting the Assembly and stating what the Assembly's powers will be. The sooner the Government get the Scottish Assembly off the ground the better, because the SNP will then stand exposed. At the moment, it suits the SNP to pretend that the Government are wavering in their commitment. It enables the SNP to put forward spurious propaganda. But if the Government were to include such detailed provisions for an Assembly in every Bill, we would never get the Assembly off the ground. We would be bogged down on the detail of each Bill.
  Mr. Henderson: I am pleased to hear the hon. Gentleman's belief that the Government are going full speed ahead with the setting up of the Scottish Assembly,

  1401
  but does not he accept that, with forethought and the use of such amendments as these, the Government could make their commitment to meaningful devolution very much clearer?
  Mr. Hughes: The hon. Gentleman might have made such a point about amendments in Committee, but, as the hon. Member for Dundee, East has admitted, there is nothing in these amendments which would in any way affect the devolution exercise. The amendments are concerned with decentralisation of the operations of a nationalised industry, which could happen equally well if there was a Scottish Assembly or if the BNOC had never been heard of.
  Mr. Patrick Jenkin: Let us get on with the Bill.
  8.45 p.m.
  Mr. Hughes: The right hon. Member for Wanstead and Woodford (Mr. Jenkin) is making remarks from a sedentary position. These amendments are concerned with decentralisation. Therefore, they do not affect the devolution exercises in the way in which hon. Members have put forward spurious argument trying to lead us away from the facts.
  I turn to the amendments. It has been suggested that we should have four separate divisions of the British National Oil Corporation and that these should have a number of functions which would be specially Scottish-oriented. I am not sure what the phrase "specially Scottish-oriented" means, because it was not properly explained at any time. As I understand it, the four Scottish separate divisions would be able to organise their affairs and the economic activities within Scotland to give a special Scottish flavour and interest to the BNOC concerning, for example, the placing of contracts. It was suggested that Scottish companies should receive a special rate.
  This is a very short-term interest, taking the statements of the hon. Member for Dundee, East at their face value. At present, the vast majority of the work connected with North Sea Oil is based in Scotland. I am referring to, for, example, the rig building, which takes place in Scotland because we have the best waters and the deepest water. Indeed, the major part of the development of North Sea oil is taking place in the waters off the Scottish coast.
  1402
  What will happen when the major part of the activity moves south? Does the hon. Gentleman not foresee the possibility that in that case the English division will say, "We will not have any Scottish companies coming to take part in England. You have had your share. What happened before in the development of North Sea oil is fine, but from now on you are finished. Therefore, that will be the end of Scottish jobs."
  Mr. Gordon Wilson: Is the hon. Member for Aberdeen, North (Mr. Hughes) aware of the value of the market which lies off the shores of Scotland? It is a very substantial market, and the supply will last for many years. It is partly upon this that the Government's own calculations are based. Does the hon. Gentleman not realise also that the Scottish share, according to our calculation, is at present approximately 18 to 25 per cent. of that market, which is far too low? In view of the employment situation in Scotland it should be built up.
  Mr. Hughes: I shall not quarrel on the question whether the figure is 18 per cent., 20 per cent. or 25 per cent.; I want as much industry to come to Scotland as is possible. Obviously, I want as many jobs as possible to go to Scotland, because, apart from anything else, I have a constituency interest. However, I do not take the narrow view that only Scots should be employed in the exploration of North Sea oil, or that the benefits should come only to Scotland. In the interests of time, I shall not develop the point concerning the placing of contracts.
  It must be borne in mind that the operation of the four separate divisions, as set out in the amendment, would still be subject to the overall control of the British National Oil Corporation. Although there is a respectable argument concerning decentralisation, it is not one which can be carried forward in that context of devolution.
  Hon. Members representing the Scottish National Party—I am sure that they will accept that the financial side of their argument is the more important—argue that the surplus from the oil accounts should be paid over to the separate divisions and be used wholly within Scotland. The hon. Member for Dundee, East, in an otherwise fairly agreeable speech presenting the amendments, said

  1403
  that unless this were done we should see colonialisation being brought into Britain.
  When I hear emotive words such as "colonialisation" being brought in, I know that the hon. Member has a bad case, and I know that he knows it, too, for these emotive expressions are no more than attempts to divert attention from the essential question. The hon. Member knows—my hon. Friend the Member for Hamilton and others have reminded him—that the curse of Scotland has been the same curse as that which has fallen upon England, Wales and Ireland. Our natural resources, whether of the land or of the sea, have been exploited for the benefit of those who happened to have the power at the relevant time. They have never been exploited for the benefit of working people. They have been exploited for the Hugh Frasers, for the Noble-Grossarts and the rest. The financial and business empires built up in Scotland have been built on cheap labour, in precisely the same way as happened elsewhere in Britain.
  The argument is not between the Scots and the English, the Welsh and the English or the Irish and the English; it is between capitalist and Socialist, and the sooner hon. Members opposite, especially those in the Scottish National Party, understand that, the sooner they will at least begin to understand what is the right thing for the people of Scotland and for the people of the United Kingdom as a whole.
  There have been constant references to the Orkneys and Shetlands. That argument was best exposed and exploded by a short letter in the Scotsman in October 1974, in the middle of the election campaign. The letter came from a resident in Pappa Westray. He took up the argument on the question whether it was Scottish oil, Orkney oil or Shetland oil, and finished by saying that he had noticed that a resident of Stronsay—a small island in the Orkneys—was saying that his island should get the benefit of North Sea oil. His comment was that "if the residents of Stronsay think that they have any claim on North Sea oil, they have another think coming, because the value of the oil belongs to Pappa Westray."
  That sort of attitude—that the benefit belongs only within the narrow confines
  1404
  of where the oil happens to be at any given time—is a narrow, selfish attitude, which entirely ignores the needs of working people throughout the United Kingdom. I set my standard by the move of Socialism towards seeing that people throughout the United Kingdom, irrespective of their origins, or whatever it may be, benefit from our North Sea oil, and I reject these amendments, which are bogus in their construction and would be harmful in their implementation.
  Mr. George Thompson: The hon. Member for Aberdeen, North (Mr. Hughes) seemed to suggest that we should ignore the historical reality of the way the old States came together in the United Kingdom. I do not think that we can so readily ignore that reality in favour of the social reality to which the hon. Gentleman referred. So far as I know, there has been no movement in either Orkney or Shetland to declare independence from the United Kingdom, and until that moment comes we are dealing with a hypothetical situation.
  The hon. Member for Fife, Central (Mr. Hamilton) spoke about the plight of the English regions. Not long ago, I discussed this matter on a television programme in Carlisle with the hon. Member for Carlisle (Mr. Lewis). I said then, and I say again now, that if the people of Northern England wish to run their own affairs through some form of regionalism within England, it is up to them to make their demand and to see that that demand is accepted. I am convinced that the people of Northern England, who centuries ago showed that they had talent and ability beyond that of the English in the south, would still be capable of showing that ability if they were given the chance. If they want regional development of that type in their part of England, they should ask for it from the people of England. I doubt that it would be denied.
  As I see it, there are two kinds of decentralisation. First, one moves the bureaucratic monolithic—or perhaps should be megalith, as they seem to grow bigger and bigger every day—from Whitehall to some remote place that strikes a chill in the hearts of every Home-County-loving civil servant. It goes in one niece and takes longer to arrive than the megaliths took to reach

  1405
  Stonehenge. I remember somebody in a university telling me that to move a university department was like trying to move a cemetery.
  Mr. Joseph Dean: Get on with the Bill.
  Mr. Thompson: I am getting on with the Bill, in my own way. It may not be the way other hon. Members are used to, but it is the way I am used to in my part of Scotland. It may be tedious, but we in Galloway have time. If hon. Members ceased interrupting me I could get on quicker.
  Our amendments propose the other type of centralisation, where the megalith or monolith is broken into pieces and distributed throughout the country.
  Mr. William Hamilton: Then what do you do with it?
  Mr. Thompson: It is not a question of what I do with it; it is a case of what it begins to do for Scotland, Northern Ireland, or Wales. The right hon. Member for Orkney and Shetland (Mr. Grimond) said that we must always bear in mind that we are legislating against a background of devolution for Scotland. We should also remember the possibility of Scottish independence being on the cards soon. We in Galloway have been urging this matter on the Secretary of State for Scotland.
  We had an awful warning in the reform of local government, when we saw what happens when one reform is carried out and it is forgotten that another reform is still to come. We know that local government reform was pushed through because some people thought that if the voters were given regionalism they would not want the full article. These amendments provide for an easy transition from the present régime in the United Kingdom to the régime that will come into existence after devolution and after the independence of the components of the United Kingdom.
  Mr. Buchan: I was so astonished by the last few sentences of the hon. Gentleman's speech that I almost missed my cue. I found some of his statements quite extraordinary.
  As many hon. Members know, I have a long interest in Orkney. I was brought up there, and I rather resent the impu-
  1406
  dence of the SNP in claiming the oil to be its. It says on the one hand that it will grant the fullest desired autonomy to Orkney and Shetland on a level equivalent to the Faroese. I think that is its policy. The problem is that on that basis, even at the level of Faroese independence, all the oil in Orkney and Shetland waters will be Orkney and Shetland oil. Yet the SNP says that it is Scottish oil. It says that it is willing to grant autonomy, but before that happens it will grab all the resources away.
  Mr. Thompson: We have never said that this form of autonomy will be forced on the unwilling people of Orkney and Shetland. It will happen if they desire it, but we are not shoving it down their throats.
  Mr. Buchan: In its overwhelming generosity the SNP says that it will bestow autonomy but that first it will take the resources away, and it is precisely that to which we object. It has come up with the excuse that the islands are not yet independent and that until that moment comes the oil must be treated as Scottish. That proves my point. It illustrates the curious double think that people get into when they no longer care about people as people. I do not believe that the SNP any longer cares what happens to the Scottish people as Scottish people; it is concerned only with the abstract entity of a Scot. It would be just as sensible to say that only people living on top of coal mines should receive the coal resources.
  We say that the resources are for the people as a whole. We cannot tear aside the historic costs put in by the workers of England and Wales as well as Scotland to creating our present industrial entity in Britain under which North Sea oil receives the resources for exploration and the workers who take part in that exploration.
  One point arises with the SNP. Its real problem is that it is unable to distinguish the needs of a free independent Scotland from the needs of Scotland in what it sees as an independent era. Let me give one obvious example. Two points have arisen in our discussions on the Scottish Development Agency Bill. One concerns the creation of the National Enterprise Board in Britain as a whole, applying directly in England and Wales.

  1407
  The SNP has argued that the NEB must in no circumstances touch any industry north of the border, even if that is in the interests of Scotland. It is, however, willing for the Scottish Development Agency to interfere with matters south of the border. The whole thing is nonsense. The well-being of workers in the Linwood Chrysler plant will depend on the operation of both the SDA and the NEB.
  A situation of sheer class lunacy arises because the headquarters of the BNOC is being sent to Glasgow, but the SNP wants to send threequarters of it away again. This is total nonsense. Either we are fighting for the needs of Scotland or we are not. Those who fight for genuine devolution and the genuine saving of jobs in Scotland—
  Mr. Donald Stewart: Not you. You are the enemy of devolution.
  Mr. Buchan: I am concerned with genuine devolution, I will define it in a moment for the hon. Member for the Western Isles (Mr. Stewart). We want to decentralise, with partial control in Scotland, rather than being concentrated at Westminster and in London, but we are having our position cut away from under us by the SNP in its dogmatic approach.
  I cannot understand the Government. They are fighting for secrecy over the Crossman diaries, but they carry secrecy to absurd lengths. They have preserved secrecy for the past two or three years over the nonsense of the line drawn east of Berwick defining Scottish or English territorial waters for oil purposes. I wish my hon. Friend would drop the secrecy and tell the Scottish people the truth. The SNP is trying to persuade the Scottish people that all oil north of that line is, by definition and law, Scottish oil. It is nothing of the kind. The Scottish oil element will be decided by the drawing of a median line.
  As the SNP knows, the existing line is purely an arbitrary line. The SNP, too, has tried to keep that fact secret from the people of Scotland. It is an arbitrary line drawn for the purposes of the operation of civil and criminal law, and nothing else. If there were to be a
  1408
  division of oil between Scotland and England it would have to follow international criteria which would cut out the present operating oil fields from the Scottish sector, and as a Scotsman I would object. Most of the rest would go to Orkney and Shetland. It the SNP pursued its argument too far, there would not be too much oil left for it.
  Basically, the SNP hates devolution. It does not like people running their own affairs. The SNP likes the idea of armies marching up and down Princes Street. It likes the ideas of borders and everything else. Its economic policy demands borders, customs posts and all the rest. [Interruption.] I know a good deal more than SNP Members about Scotland. They violently object to the real devolution of power, which is away from the centre and into the hands of ordinary people. They want a highly centralised Scotland. Hence their hatred of the regional government set-up.
  Here was a chance to extend democracy and devolution further down the line into the hands of ordinary people. But the SNP does not want power in the hands of ordinary people, which is why I had no support from it when I put down an amendment to the Scottish Development Agency Bill to set up workers' co-operatives.
  Mr. Deputy Speaker: Order. The hon. Gentleman said that he would not go on to other matters. He is going very wide of the amendment by going into the whole subject of devolution. He should confine himself to the substance of the amendment.
  Mr. Buchan: That is precisely what I am doing, Mr. Deputy Speaker. We are here concerned with the devolution of industry and industrial control. We are concerned with the devolution of Government controls over an industry, and that is exactly what I am discussing. I gave an example of how, despite this spurious amendment, which they cannot mean, SNP Members are not concerned about devolution of power into the hands of ordinary people, although they may wish for devolution to a concept called Scotland. That is why they opposed an amendment of mine to establish workers' co-operatives in industry [Interruption.] No, but to be fair to the Government,

  1409
  they did not spend a whole Committee stage arguing about the need for Scottish control, devolution and decentralisation. But SNP Members did, until they had a chance to support devolution, and then they ignored it. They even opposed a simple Government amendment to allow the Scottish people, through the Scottish Development Agency, to take over firms where it was necessary to do so for the well-being of the Scottish people. The SNP objected to that, too.
  Mr. Deputy Speaker: The hon. Member must confine his remarks to the subject matter of the amendment. We are discussing the division of the BNOC into four. It is not the wider issue of industrial devolution generally.
  Mr. Buchan: I understand that, but the hon. Member for Dundee, East (Mr. Wilson) discussed the relationship between the BNOC and the Scottish Development Agency and the relationship between the Bill and possible legislation on the Scottish Assembly. That was an integral part of his argument. I merely better his argument; that is the trouble.
  The other thing that must be said—and the Welsh have now arrived—is that the Scottish Nationals even had the impertinence to divide England and Wales. No Welsh National has signed the amendment and might not even wish to do so. So the Scottish Nationals are not only cutting off Scottish worker from Scottish worker—and many Scottish workers work in England—but propose to cut off English worker from Welsh worker.
  Curiously enough, they are emitting dove-like noises. There is a good deal of sense in stripping down the monoliths, in their parlance, and much to be said for decentralising power. I do not know why they are nodding at that, for they objected to that when they had the chance to support it when I proposed giving power into the hands of the workers. They could have joined with me in asking for a workers' take-over of the oil industry in Scotland, and they could have supported workers' cooperatives.
  I understand and respect the views of the hon. Member for Dundee, East. I understand that he is concerned with this single dogma. If this proposal helps towards that dogma, I respect it. But, in the interests of the people of Scotland
  1410
  and the better government of the people of Scotland, and, above all, to make sure that we get a firmer grip on the oil development of Scotland, I believe that the amendments must be rejected.
  Mr. Gray: I suspect that after a long debate the House is anxious at this stage for the Minister to wind up, and I certainly do not propose to take long in what I have to say. Unfortunately, I cannot recommend my hon. and right hon. Friends to support the amendments commended by the hon. Member for Dundee, East (Mr. Wilson). I give the hon. Member a word of advice. If he wants anybody in the House to support him on anything, he must learn to be a little less arrogant and to have a degree of humility in presenting his case. The reason why this debate has proceeded for so long is undoubtedly that the way in which the hon. Member presented his case stirred up hon. Members on both sides of the House. If he wants support, he must change his tactics.
  However, despite the way in which the hon. Member moved the amendment, and although those amendments are different from those he moved in Committee, his arguments are very much the same. I have heard that speech at least twice, and it has not improved all that much from being kept locked away in his locker. I respect the hon. Member's views which I am sure are sincere, but I cannot agree with them for a number of reasons.
  First, the Conservative Party basically disagrees with the concept of the BNOC. I said in Committee that the hon. Member was compounding an error, and he is doing so here. If we have to have the BNOC, surely we in Scotland are likely to gain much more benefit from it if it has its headquarters in Scotland than if the headquarters is elsewhere and part of the corporation is hived off to Scotland. I do not see the Scottish people benefiting in any way from what the hon. Gentleman suggests.
  9.15 p.m.
  A great many interesting points were raised in the debate. We went from the Marxist theories of the hon. Members for Aberdeen, North (Mr. Hughes) and Renfrewshire, West (Mr. Buchan) in one breath to the extreme views of our friends in the Scottish National Party.

  1411
  I take up one point made by the hon. Member for Aberdeenshire, East (Mr. Henderson), because we dealt with it at some length in Committee. He complained bitterly that there was not a sufficiently high percentage of jobs, especially in the new technology, coming to Scotland. This is not the fault of the Government. I know that in my own constituency and in other parts of Scotland many of the incoming companies made considerable efforts to buy British and to buy Scottish. The reason why they did not do so was that there were neither British nor Scottish firms in a position to quote them for a great many of their requirements. In any event, I do not think that that was really a valid argument to advance in favour of this set of amendments.
  Therefore, bearing in mind that we are operating under this very strict guillotine, that we are on only our third debate, and that only one and three-quarters hours of debating time remains to us, I shall leave it to the Minister to sum up the debate. I regret that I cannot recommend my right hon. and hon. Friends to support the amendments.
  Mr. John Smith: I hope that the House will forgive me if I reply briefly to the debate. It has been a very wide-ranging one, but I think that I can, in a fairly short compass, explain to the House the Government's attitude to the amendments.
  In the first place, those hon. Members who served on the Standing Committee will recollect that the hon. Member for Dundee, East (Mr. Wilson) as was his privilege, put forward a series of amendments. Those were separatist in tone, whereas the ones that we have been discussing today are devolutionist, but the purpose has been the same in both instances, and the framework adopted in these present amendments, I suspect, has more to do with the rules of order affecting a Report stage than a change of mind on the part of the hon. Member for Dundee, East.
  The hon. Gentleman rather gave the game away at one point, when he said that it was very convenient to have the headquarters of the BNOC located in Glasgow, since that would be an ideal
  1412
  situation when a Scottish Government came into being, because they could grab what was there already. The truth is that putting it in a devolutionist framework is not sincere on the part of SNP members. They see devolution as a step to separatism, whereas we see it as an end in itself. That is a bridge that we shall not cross.
  The point has been made by many hon. Members on both sides of the House that the effect of the amendment would be to give away a great deal of what has been allocated to Scotland in setting up the headquarters of the BNOC there. I had always understood that a great deal of the complaint was that centres of industrial decision-taking were not located in Scotland or in other parts of the United Kingdom. The decision to put the headquarters of the BNOC in Scotland, following as it did the relocation of the headquarters of the Offshore Supplies Office, serving the whole of the United Kingdom, in Glasgow, represents a move of industrial decision-taking which I thought was to be welcomed. The effect of these amendments would be to derogate from that influence and to water it down.
  What is more it is, as my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) noted, rather presumptuous to allocate to the Scottish division that area of the North Sea covered by the Continental Shelf Order. The hon. Member for Dundee, East and I have had this argument many times. But it must be put on the record again that the division of the North Sea into civil jurisdiction zones between the law of England and Wales and the law of Scotland has no reality to any possible median line division, which would be approached on a quite different basis. In this case the hon. Gentleman is indulging in colonialism and trying to allocate to the Scottish section something which ought properly to belong to England and Wales if there were a division.
  The other point which the hon. Gentleman has not answered relates to the question of Orkney and Shetland. If it is desirable to create a Northern Ireland division when there is no oil in the waters covered by the Northern Ireland sector, as defined in the amendment, the stronger is the case for an Orkney and Shetland division. However, the hon. Member for

  1413
  Dundee, East, shied away from the conclusions of his own argument in that respect.
  The argument about the oil accounts is the most threadbare. It is said that there must be separate accounts for the oil. Amendment No. 59, taken with Amendment No. 48, proposes the creation of separate accounts—an English account, a Welsh account, a Scottish account and a general account. The general account would be under the control and management of the Secretary of State for Energy.
  There is a certain plausibility about such an arrangement. To each part of the United Kingdom would go that to which it was properly entitled. Amendment No. 59 proposes that the Welsh oil account should go to Wales and the English oil account should go to England, but that the general account should go to the Scottish Development Agency. I wonder whether other parts of the United Kingdom would feel that that was a fair arrangement. It is one thing honestly to argue nationalism; it is something different to argue it by a side wind under some other pretext.
  Mr. Gordon Wilson: If the hon. Gentleman had been listening to me he would have heard me say that I should have preferred to move a manuscript amendment. The hon. Gentleman will know the pressure under which the amendments were tabled, following the sudden decision to bring the Bill to the Floor of the House when, supposedly, it was to be delayed another eight days.
  Mr. Smith: I confess that I did not hear that explanation by the hon. Gentleman. I apologise if I have misinterpreted his argument and I am glad to hear that he does not put forward that proposition. One might wonder how that mistake came to be made. It is a curiously significant political mistake, but I do not want to misrepresent the hon. Gentleman's argument.
  The point which I wished to make, to which that remark was a preliminary, was that it is curious that we are not asked to create an energy account. What is proposed is purely an oil account. One wonders what would be the consequence of bringing gas into the picture and creating a gas account. It is not sufficiently understood that 95 per cent. of the gas used in the United Kingdom comes from the
  1414
  southern basin of the North Sea, in English Waters. [Interruption.] The hon. Member for the Western Isles (Mr. Stewart) is wrong again. Gas is sold at the same price to every part of the United Kingdom. He should know that. Most of the gas supplied to Scotland, as to other parts of the United Kingdom, comes from the English waters, as the hon. Gentleman would describe them, in the southern basin of the North Sea.
  That shows how foolish it is to parcel lawyers' terminology, irrelevant to the our energy resources in various parts of the United Kingdom. The Government's view—I hope that it will be the view of the House—is that we should approach the development of our energy resources on a United Kingdom basis for the benefit of the whole of the United Kingdom. To the extent that these amendments oppose that principle, I hope that the House will vote against them.
  Mr. Gordon Wilson: The way in which the debate has wandered off the argument is very strange. I well understand the attraction—one might call it the obsession—which certain people see in intervening in debates relating to the Scottish National Party and oil, thus causing them to go on for some time, although perhaps not much longer than previous debates. No one can say that this is not an important question. Many matters have been hammered out, although most of them have been, in lawyers' terminology, irrelevant to the amendments. That has not been the fault of my hon. Friends.
  I regret the rather patronising way in which the hon. Member for Ross and Cromarty (Mr. Gray) prefaced his remarks. It is a great pity that sometimes his talents are not used more productively and carefully.
  Under the structure which I have suggested, there would still be the headquarters of the BNOC, but, in addition, there would be operating headquarters in the form of divisions.
  Mr. Sproat: In Aberdeen?
  Mr. Wilson: That is a matter for the hon. Member for Aberdeen, South (Mr. Sproat) to press or for the hon. Member for Aberdeen, North (Mr. Hughes), who has so recently been returned to the back benches because of lack of Government

  1415
  money through lack of Scottish oil revenues. As soon as developments take place other than in the Scottish sector, divisions will in practice be set up. We are trying to avoid a structure under which that would happen and thereby prevent many of the faults from which Scotland has suffered in the past extending to other parts of the United Kingdom.
  The Government must have an overall attitude to devolution in advance of the Scottish Assembly. The amendment relates not to the Assembly but to decentralisation and devolution. That should be made clear.
  One benefit of a Scottish division would be an improved buying policy. I should be worried about the effect of BNOC as a United Kingdom structure regarding its buying policies. We know from the letter which has been sent to me by the Under-Secretary of State that the Offshore Supplies Office does not have any function concerning the steering of jobs or contracts specifically to Scotland. Its first task is to get the oil out as quickly as possible by providing the provenence or equipment, and its second task is to steer it towards development areas generally.
  We all know the amount of equipment which could be produced in the United Kingdom. Figures have been produced to show that 42 per cent. is going to the United Kingdom now. The Secretary of State on his recent visit to Scotland mentioned that. But it still leaves about 70 per cent. which the IMEG report suggested three and half years ago should be able to come to the United Kingdom. A Scottish division would perform a useful purpose in increasing purchasing.
  We are always willing to listen to Orkney and Shetland. I ask the Government, as I did in Committee, whether they have offered Orkney and Shetland any share of the revenues in the same way as they agreed with the Isle of Man. It would be interesting to know that.
  Initially gas came from the southern sector, but at one stage it was cheaper to get it from Soviet Russia, right across Europe, because the Germans were getting it at a lower price than gas was offered to Scotland. Substantial supplies of gas will shortly be coming from the Frigg field, a third of which is in United Kingdom waters—not to provoke any fur-
  1416
  ther division on that score—and from the Brent field. I understand—I may be wrong—that a third of the United Kingdom's total requirement will be coining from the northern fields. That shows that Scotland will be contributing substantially towards the gas industry in future. I should have no objection to a gas account as well as an oil account being opened. I hope that the Minister will follow his suggestion with subsequent legislation.
  I have been very disappointed by the arid, sterile and negative fashion in which the Under-Secretary has received these constructive amendments. Therefore, I must ask my hon. Friends to press the matter to a Division.
  Mr. Alexander Fletcher: Before the hon. Gentleman sits down—
  Mr. Wilson: I have sat down.
  Mr. Alexander Fletcher: Does the hon. Gentleman appreciate that the logic of his argument is such that had the Government tabled—
  Mr. Deputy Speaker: Order. I understand that the hon. Member for Dundee, East (Mr. Wilson) has resumed his seat.
  Question put, That the amendment be made:—
  The House divided: Ayes 16, Noes 287.
  [For Division List 306 see col. 1469.]
  Question accordingly negatived.
  Mr. John Smith: I beg to move Amendment No. 2, in page 2, line 1, leave out 'six' and insert 'eight'.
  Mr. Deputy Speaker (Sir Myer Galpern): With this amendment it will be convenient to take Amendment No. 3, in page 2, line 1, leave out 'six' and insert 'ten'.
  Amendment No. 4, in page 2, line 3 after 'Corporation', insert 'of whom not more than two-thirds nor less than one-third shall be part-time members'.
  Government Amendment No. 5; Amendment No. 139, in page 2, line 10, at end insert:
  'who shall be given leave of absence from their duties in the civil service while serving on the corporation'.

  1417
  Amendment No. 6, in page 2, line 14, at end insert—
  '(e) shall in appointing members ensure that they are persons appearing to him to be qualified as having had experience of, and having shown capacity in the oil industry, other industrial, commercial or financial matters, applied science, administration or the organisation of workers'.
  Amendment No. 145, in page 2, line 14, at end insert—
  '(e) shall appoint to the Corporation two representatives elected by its employees'.
  and Amendment No. 7, in page 2, line 14, at end insert—
  '(2A) Before appointing a person to be a member of the Corporation the Secretary of State shall satisfy himself that that person will have no such financial or other interest as is likely to affect prejudicially the exercise or performance by him of his functions as a member of the Corporation and the Secretary of State shall also satisfy himself from time to time with respect to every member of the Corporation that he has no such interest; and any person who is or whom the Secretary of State proposes to appoint and who has consented to be, a member of the Corporation, shall, whenever requested by the Minister so to do, furnish to him such information as the Minister considers necessary for the performance by the Minister of his duties under this subsection.
  2A) A member of the Corporation who is any way directly, or indirectly interested in a contract made or proposed to be made by the Corporation, or in any contract made or proposed to be made by a subsidiary of the Corporation which is brought up for consideration by the Corporation, shall as soon as possible after the relevant circumstances have come to his knowledge, declare the nature of his interest—

  (a) if he is not the chairman, to the chairman;

  (b) if he is the chairman, to the Secretary of State;

  (c) in any case, at a meeting of the Corporation'.

  Mr. Smith: Amendment No. 2 relates to the number of members of the BNOC. It will be recollected that I said in Committee that I would reconsider the minimum number of members. Therefore, the amendment proposes that the minimum number be changed from six to eight.
  Aendments Nos. 3 and 4, tabled by the Opposition, propose to increase the number to 10, but the Government feel that a figure of eight would be more realistic. It must be borne in mind that this is the minimum number, and that the maximum number is 20. The Secretary of State will not be inhibited from increasing that number if he so desires.
  1418
  Amendment No. 4 relates to the question of part-time members. There is no restriction in this regard, and the Secretary of State will be flexible.
  Government Amendment No. 5 and Opposition Amendment No. 6 cover very much the same ground and write into the Bill criteria for the appointment of members to the corporation. Since there is so little difference between us, we shall not need to spend much time in arguing that point.
  The other amendments in the group are Opposition amendments, and I shall leave Opposition spokesmen to speak for them selves.
  9.45 p.m.
  Mr. Grimond: I appreciate the time factor and I shall be brief I wish to thank the Government for tabling their amendment. The proposals in this grouping for which I am responsible relate to a point which I wish to press in regard to having civil servants on the board. I believe that such representation will cause confusion in their rôle. I do not believe that it will do either the organisation or the Department any good.
  I wish to draw attention to page 1xi of the First Report of the Select Committee on Nationalised Industries, paragraph 153 of which reads as follows:
  "Here we may remark that it would have been easier to assess and comment on Government objectives if the Department of Energy had met our repeated requests for information on the 'numerical weight factor' given in licensing rounds to the participation of nationalised industries, and to the size of their proposed stake."
  That illustrates my point, namely, that civil servants are supposed to advise Ministers on policy matters rather than become advocates for a company which may be involved in obtaining oil, as opposed to another company. It is difficult in such cases for those members to give impartial advice.
  I am not very impressed by the fact that in other countries civil servants may sit on boards when it has been argued by the Government that one of the reasons for involving civil servants is that they will acquire direct experience in the running of the oil industry. That experience could be obtained if they were seconded and given a sabbatical year

  1419
  while serving on the BNOC. This would put them to some extent at arm's length from the Ministry and enable them to acquire the skill, experience and practical know-how constantly referred to by the Government.
  My other amendment suggests that there should be two employees on the board. This point was mentioned very briefly in Committee, at the end, and I should have thought that the proposal must have general support. I hardly think that the Secretary of State is in a position to object to worker participation. He gave his reason for advising the Committee to oppose the Conservative proposal in Committee, as follows:
  "I do not believe that the new clause is worth the paper it is written on, because it provides only for the right to discuss every three months with the chief executive and anyone he thinks is worth having there."
  I have gone beyond that and suggested that these two people should be on the board, so that must get over the Secretary of State's objection. They would be in constant communication.
  As for the Conservative Party, the point was very well put by the hon. Member for Exeter (Mr. Hannam) at the same sitting. He said:
  "But whether we lean towards supervisory boards, whether we support worker directors or whether we support other forms of industrial democracy, the one general area for agreement surely must be that some kind of employee participation must be written into our company law structure if we are to achieve a meaningful dialogue between management and workers and, therefore, a subsequent degree of industrial productivity comparable with our rival competitor nations abroad."—[Official Report, Standing Committee D, 15th July, 1975; c. 1750–1759.]
  It could not have been put better even if he were a Liberal.
  Because of the guillotine, I have not time to develop these arguments at length, but I seriously suggest that sooner or later we have to face the question of associating workers' representatives—I mean workers who work in the company, and not merely trade union representatives of a general union—with the decisions of the company. I am well aware of the difficulties involved in doing this, whether by supervisory boards or by people directly on the board. Unfortunately, there are another 150 amendments, so this is not the time at which to
  1420
  go into it. But, in view of the Secretary of State's known attitude, and in view of the amendments put down in Committee by the Conservative Party, I hope that the Government will consider this and at least do something in another place to meet the general demand that workers should be associated with the decisions of the board. I hope that they will consider both amendments. I am grateful to the Government for their own amendments to this clause.
  Mr. John Smith: With regard to Amendment No. 139, I think that the right hon. Gentleman misses the point of having civil servants on the board. It is a point that we discussed in detail. It is to improve the flow of communications between the British National Oil Corporation and the Government. That advantage would be struck out completely if the civil servants were given leave of absence. The effect of the amendment would be to wreck the Government's purpose; therefore, I must ask the House to resist it.
  With regard to Amendment No. 145, the right hon. Gentleman referred to the guillotine. It was open to him to table this amendment in Committee and to discuss it more fully when there was no guillotine in operation, but he did not choose to do so then, and the Conservative Party put forward its amendment in such a way that it came up as the last amendment to be discussed in Committee. But, as my right hon. Friend said in the very short debate at the end of the Committee stage, it is very much the view of the Government that the question of industrial democracy cannot be imposed from above, but ought to emerge from below. It is rather simplistic to put two workers' representatives on the board and say that one has thereby achieved industrial democracy. I do not think that that would be seen as industrial democracy by those concerned.
  If the right hon. Gentleman had been more dedicated to this idea he would, I think, have pursued it at an earlier stage in the Bill, when it could have been discussed more fully. It has come in very much as an afterthought and I hope that the Committee will not accept it.
  Mr. Patrick Jenkin: Had the hour been earlier or the time unlimited, I might

  1421
  have sought to press the two points which the hon. Gentleman has not met and which are contained in our amendments. I will not do so, however, as there are more important amendments to follow which we feel we must spare time for.
  Amendment agreed to.
  Amendment made: No. 5, in page 2, line 3 leave out 'and' and insert
  "from among persons appearing to him to have had wide experience of, and shown capacity in, activities connected with petroleum, other industrial, commercial or financial matters, administration or the organisation of workers. [(2A)".—[Mr. John Smith.]
  Mr. Benn: I beg to move Amendment No. 8, in page 2, line 30 leave out from "Act" to "after" in line 31 and insert "1975".
  The Deputy Chairman: With this we are to take Government Amendment No. 9.
  Mr. Benn: These are drafting amendments to take account of the passage of the House of Commons Disqualification Act 1975 and the Northern Ireland Assembly Disqualification Act 1975, both consolidating Acts of the Westminster Parliament.
  Amendment agreed to.
  Amendment made: No. 9, in page 2, line 34 leave out from 'in' to 'after' in line 35 and insert
  "Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975". —[Mr. Benn.]

Clause 2

  GENERAL POWERS
  Mr. Patrick Jenkin: I beg to move Amendment No. 10, in page 3, line 5 leave out paragraph (d).
  The Deputy Chairman: With this we are to take Government Amendment Nos. 11 and 12 and Amendment No. 140, in page 3, line 8 at end insert
  'and as are otherwise authorised under this "Clause".
  Mr. Jenkin: The Government have gone part of the way to meet what we have in mind in Amendment No. 10. While I do not like this provision, I do not want to take up the time of the
  1422
  House in pressing our objections to it. I therefore will not proceed further with this amendment.
  Amendments made: No. 11 in page 3, line 5 leave out 'such services'
  No. 12, in page 3, line 6 after department', insert
  "such services connected with petroleum and anything derived from it".—[Mr. Benn.]
  Mr. Patrick Jenkin: I beg to move Amendment No. 13, in page 3, line 23 leave out from "functions" to end of paragraph.
  The Deputy Chairman: With these we are to take Government Amendment No. 14.
  Mr. Jenkin: The Government have met entirely the point which we made in Committee. Their Amendment No. 14 achieves the same purpose as Amendment No. 13 would achieve. I therefore will not go on with this amendment either.
  Amendment made: No. 14, in page 3, leave out lines 24 and 25.

Clause 5

  GENERAL FINANCIAL DUTIES
  Mr. Viggers: I beg to move Amendment No. 18, in page 5, line 26, at end add:
  'and shall be laid before each House of Parliament'.
  This is the first Bill of this nature to come before Parliament containing no financial target of any sort. We remain deeply concerned about the financial control of the corporation. The next group of amendments will deal with this aspect in depth. This amendment is modest and requires merely a financial notice to be laid before Parliament. Its implementation would be the simplest way of honouring the assurance given by the Under-Secretary of State in Committee when he said:
  "… I can assure the Committee that, before the financial objectives are set after consultation with the new corporation, Parliament will be informed about them."—[Official Report, Standing Committee E, 26th June 1975; c 811–12]
  Mr. Benn: This amendment would require the corporation's financial duties

  1423
  to be laid before Parliament. It is unnecessary in terms of parliamentary procedure because the financial duties must be published in the annual report, which must be laid before Parliament.
  Mr. Viggers: On that assurance, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 10

  ACCOUNTS AND AUDIT
  Mr. John Moore: I beg to move Amendment No. 19, in page 8, line 34, leave out paragraph (b) and insert:
  '(b) to prepare in respect of each accounting year a statement of accounts in such form as the Secretary of State may, with the approval of the Treasury, direct being a form which shall conform with the best commercial standards and which shall distinguish between the exploration activities, the production activities and the other main activities of the Corporation'.
  Mr. Deputy Speaker: With this amendment we may discuss Amendment No. 20, in page 8, line 38, at end insert:
  'and such statements of account shall also include a statement of the amount of Petroleum Revenue Tax to which the Corporation would have been liable and the consequential adjustment to Corporation Tax, were the Corporation not exempted from paying Petroleum Revenue Tax by virtue of section 9 of this Act;
  Government Amendments Nos. 21, 22, 23 and 24, Amendment No. 25, in page 9, line 4, leave out from 'question' to end of subsection,
  Government Amendment No. 26, and Amendment No. 27, in page 9, line 8, at end insert:
  '(2A) A statement under subsection (1)(b) or (2) above shall give separate information with respect to, and show as far as may be the financial and operating results of, each of the main activities of the Corporation or, as the case may be, of the group consisting of the Corporation and its subsidiary or subsidiaries in question; and if the Secretary of State so directs with respect to any statement required by the said subsection (1)(b) or it is so provided in any direction under the said subsection (2) for the preparation of a statement, this statement shall also give separate information with respect to, and show so far as may be the financial and operating results of, each, or such as are specified in the direction and the activities other than main activities of the Corporation or group '.
  Mr. Moore: This is a very serious and important section of amendments relating to Clause 10, which is concerned with the accounts and auditing of the BNOC. I am sure that my colleagues and Labour Members would equally deprecate the degree to which we have to rush the proceedings. Obviously it would not be amiss for me to make reference to the 32 per cent. of the potential debating time tonight that has been spent partly in discussing potential devolution, a shocking indictment of the way the Government see progress on their Bill.
  I turn now to the issues raised by this crucial series of amendments, which were discussed in Committee on Amendments Nos. 81 and 136. We tried to bring out two basic problems in Committee, and we have a third to raise tonight on the clause as they Government now propose it. The first was the degree to which the Bill, if not amended, would not include a breakdown that would allow us to analyse the commercial nature of the corporation and allow it to stand comparison with its competitors in the market. The second problem was exemplified in the phrase which I used that brought out the ire, wrath and distemper of the Under-Secretary—the "licence to lie" clause. I shall not use those words tonight. The phrase repeated the words of the Conservative Government's Gas Act 1972, allowing the BNOC to prevent Parliament and the public knowing the exact loss and profit position of the corporation. I cannot in the time allowed go into the details.
  The third problem relates to the degree to which the BNOC is connected from the payment of PRT. I am sure that my right hon. Friend the Member for Wan-stead and Woodford (Mr. Jenkins) will wish to address himself to this matter on Amendment No. 20, and I hope that at the end of the debate I shall have leave to recommend to my right hon. and hon. Friends that we divide on Amendment No. 20.
  Our amendments in Committee sought to offset these problems. I must draw to the attention of the Under-Secretary, the House and, through the House, the country the problems in terms of government, whichever party is in power. Let us call it a chatter to conceal rather than a licence to lie. Within the Bill as

  1425
  drawn—Just as within the Gas Act—there is ability for the corporation to do things that commercial corporations cannot do. No valid reason has so far been put before the Committee or the House for that.
  We asked the Under-Secretary in Committee, but perhaps he was too concerned with the language I used, and he gave no answer. However, no single positive reason was given to argue the need for that section which I believe is so obnoxious to the practice of good government. We must have a positive reason if we are to allow methods serving the public less well than those used by commercial and other nationalised corporations, apart from the British Gas Corporation.
  It was suggested in Committee that the reporting system in the gas industry had not worked too badly in practice. That is a fair observation, and one would not deny it. However, that would not seem to me to be a good argument from what I am constantly told is the revolutionary party on the other side of the Chamber. [Interruption.] I appreciate that such a party may exist more strongly below the Gangway, but I am addressing my remarks to the Government. It is all very well having a Doric chorus but, so long as it is impotent, it is more relevant for me to direct my remarks to the Treasury Bench.
  10 p.m.
  Although a similar provision may have been thought useful for the gas industry, my concern is not with precedent in that sense, because a bad precedent may create bad practice in the future. I accept that it has not done so hitherto, but it may well do so because we do not know what sort of Government we may have hereafter. It is, therefore, advisable to establish good canons of practice for the Government, recognising, as we must, that some less sincere and less capable Ministers, Ministers less conscious of their public duty than those in the present Government, and less aware of the full implications of the BNOC, may come to power. On that basis, therefore, I want to hear a positive justification for the clause as the Government propose it, and not just a reference to practices in the gas industry.
  1426
  Second, and more important—this was brought out in Committee—we are not here discussing like with like referring to the gas industry. The gas industry is a State monopoly, and we are not referring to that in the same terms as we refer to the BNOC. In Committee the Under-Secretary spoke of the BNOC as a vital and virile—I think that those were his words—or robust commercial undertaking. This will be a commercial undertaking competing downstream with other commercial undertakings, and we cannot allow it to have accounting and reporting standards different from those adopted by other commercial companies. The British Gas Corfporation provides no parallel.
  Concluding the debate in Committee, my right hon. Friend said:
  "I conclude that, without publication of the accounts both for the corporation and for the consolidated accounts, no one will ever know whether the BNOC is operating commercially. No one will know the returns on its upstream and downstream activities. No one will know whether it is cross-subsidising one activity with another. No one will know whether it is engaged in unfair competition with its competitors."
  Those words have not so far been answered.
  In reply to the debate in Committee, the Under-Secretary of State said:
  "We shall certainly take away this clause and see whether we can make a concession at a later stage, so that the account shows some distinction in the different activities of the Corporation."—[Official Report, Standing Committee D, 1st July 1975, c. 994–7.].
  That was the hon. Gentleman's comment or promise, but no essential change has been made in the clause. Tragically, there has been very little done to meet us. I accept that the Under-Secretary has tried to walk a little along the path, but all he has been able to do is encompassed in Government Amendment No. 26—
  "if the notice so requires, the financial and operating results as far as may be of each of the main activities of the group in question."
  But it is still at the instigation of the Secretary of State, and the requirement we seek is not established within the Bill. That cannot be satisfactory. There remain, therefore, three basic requirements. First, we must have a better breakdown, and a statutory breakdown, within the

  1427
  accounts of BNOC to show the figures for its various activities. Second, we must remove the—shall we call it?—charter to conceal unless there is positive reason given for its retention. Third—I am sure that my right hon. Friend will discuss this at length if he has time—we must break out the PRT liability related to the BNOC so that it can stand the test of competitive comparison with other companies in the private sector.
  Dr. Phipps: I shall not detain the House long, but I wish to comment on Amendment No. 20 and the effect of PRT exemption for BNOC. I am not sure whether this is a matter for my right hon. Friend the Secretary of State or for the Paymaster-General. I hope that my right hon. Friend will take it up with the Paymaster-General if necessary.
  I accept that exemption from PRT is a legitimate way for the Government to finance the BNOC. The money would go to the Government anyway. However, there are effects of this exemption which have to be considered. There would be a fairly minor effect on the partnership between a company that was not liable to the tax and one that was. It might have difficulties when deciding the best way of financing a particular project—whether by borrowing money, or purchasing or leasing equipment. The taxation of each party makes a difference to the best way of proceeding. It may be that the best way for the BNOC would not be the best for another company.
  The effect of unitisation is more important. If one has two parties to a unitisation, both of which, under the Government's 51 per cent. participation proposals, will be partnered by the BNOC, and the two sides of the field are different in commercial and physical terms, there will be a very great difference between the parties as regards liability to tax in coming to commercial arrangements for unitisation. It becomes more important if unitisation crosses national boundaries, as has happened between the United Kingdom and Norway, and may in future happen between the United Kingdom and Ireland. These are not insuperable problems, and I hope that my right hon. Friend will discuss them with the Paymaster-General.
  Mr. Patrick Jenkin: Not for the first time, I wish the hon. Member for Dudley, West (Dr. Phipps) had been on the Standing Committee.
  This was perhaps one of the most important debates that we had, and it left me with the greatest unease at the end. I refer particularly to Amendment No. 20 and to the exemption of the BNOC from petroleum revenue tax. We lost that argument in Committee, and I am not seeking to raise it again now. I want to make sure, however, that the effect of the exemption from PRT is plain and visible to all. In my relative ignorance of these matters, I had not referred to the unitisation argument, but it is every bit as strong as the argument about distortion of investment criteria between two partners in a single field with a single licence who have to arrive at common decisions.
  There is also the argument about fair profits. If the BNOC is to sell oil downstream in competition with other companies which have to pay the tax, there is every temptation for the corporation to use the effect of its exemptions to shade its prices in a way that would be unfair to its competitors. Most important of all, there is the argument that this is merely a way of concealing the size of the borrowing requirement needed to finance the BNOC. In a sense, the profit, being a profit after corporation tax but before PRT, will merely be a bogus profit. That is the most serious argument of all. In seeking to justify the exemption, the Under-Secretary said:
  "The main reason for proposing to exempt the corporation from petroleum revenue tax is that payment of the tax by it would not be consistent with the underlying realities of the corporation and its financial relations with the Government. Petroleum revenue tax is levied on the private sector companies to ensure that the nation gets a fair share of North Sea profits. Clearly no such requirement exists in the case of the British National Oil Corporation."
  If that were all, that would be an argument to which one would attach some weight. But it most emphatically is not all. The Under-Secretary, in replying to that debate, made it abundantly clear that he recognised that the arguments put to him from our side of the Committee had substance. When we

  1429
  referred to unfair competition he acknowledged that fact and promised that transfer prices would be on the basis of market prices. He has not been able to satisfy me that this will happen. He referred to provisions in the Oil Taxation Act, but equally he acknowledged that in the circumstances they might not be appropriate.
  I hope therefore that the Secretary of State will tell us what steps the Government are to take to make sure that transfer prices downstream by the corporation will be on the basis of full market prices and that there will be no question of unfair competition steming from the exemption from PRT. The Under-Secretary acknowledged that differing criteria could be a problem and he offered to have talks with the industry. I would be grateful if he would tell us what progress is being made with these talks with the industry to try to iron out the problem.
  The third aspect is dealt with by Amendment No. 20. In Standing Committee the Under-Secretary said:
  "We will consider whether anything more needs to be done, perhaps administratively, to make the whole financial position absolutely clear. We have no wish to hide the effects of BNOC' exemption from petroleum revenue tax."
  Later he said:
  "I assure him that we want to make the whole financial position absolutely clear."—[Official Report, Standing Committee D, 1st July 1975; c. 950, 953 and 972.]
  I welcome that, because it will go part of the way to meet our fears arising from this exemption. This is what the amendment seeks to achieve. It seeks to oblige those preparing the accounts to include a statement of the amount of PRT for which the corporation would have been liable, together with the consequential adjustment of corporation tax if it had not been exempted by Clause 9(1).
  Our prime aim is to make sure that the extent to which the corporation is being financed by the bogus profit accruing to it as a result of the exemption is made abundantly clear to Parliament and the country. I do not accept the view put forward by the hon. Member for Dudley, East that this is a legitimate method of financing. The Government should have allowed PRT to be paid to the Exchequer and then for the corpora-
  1430
  tion to borrow what it needed in the ordinary way. The borrowing limit would then have been probably not £900 million but £2,000 million or more, but I can understand why the Treasury was reluctant to see that appear in the accounts at this time with the difficulties that it is facing.
  As it is, exemption will allow a bypassing of this normal parliamentary control and the throwing up of a sham profit in the accounts of BNOC. At the very least there must be an obligation on the corporation to disclose what the amount would have been so that we could see exactly how much of this finance had accrued to it from this source. Amendment No. 20 provides that obligation.
  My hon. Friend the Member for Croydon, Central (Mr. Moore) made a powerful case. The Government have gone a small part of the way to meet one of the points we made in Committee. So far they have not moved on Amendment No. 20, and, therefore, I hope that to save time, we do not divide on Amendment No. 19, but feel that if the Secretary of State does not accept Amendment No. 20 the House would be entirely justified in dividing in support of it.
  10.15 p.m.
  Mr. Benn: The proposal in Amendment No. 19 is that we should write into the Bill that the BNOC's accounts should
  "conform with the best commercial standards."
  The phrase appeared in earlier legislation.
  Mr. Patrick Jenkin: The earlier legislation was the right hon. Gentleman's own Industry Bill.
  Mr. Benn: The right hon. Gentleman may be wrong.
  Mr. Patrick Jenkin: It is in the Schedule to the Industry Bill.
  Mr. Benn: I think that it is in the Labour Government's Post Office Act 1969, but all Labour measures have certain merits, which the right hon. Gentleman has identified. It is an arguable proposition, which he is not going to press.
  When my right hon. Friend the Secretary of State for Industry tried to have a similar phrase included in the Conservative Coal Industry Act it was resisted by the then Minister of State.

  1431
  Ministerial fashions on the matter seem to change somewhat. I am advised that the phrase has no precise enforceable meaning and adds nothing to the requirements already in the Bill that there should be proper accounts. We are providing in our Amendment No. 26 that there shall be a distinction between different types of activity.
  On Amendment No. 20 I should first tell the House, as I told the Committee, that whether or not PRT is payable by the BNOC has no practical effect. Therefore, the great feelings that were aroused on the matter are properly about accountancy practice and not about the net effect, because if the money were paid under PRT it would go to the Government in one form, and if it were not paid under PRT it would be available in another Government fund. That point should be stressed, because we are not concerned here with a matter of substance with regard to the financial position of the Government or the BNOC.
  However, I said in Committee that we had no wish to hide the effects of the exemption of the BNOC from the petroleum revenue tax. Therefore, I can give an undertaking that the information mentioned in the amendment will be made available to Parliament and the public. However, the form in which that can best be done will require further study. There are problems about the calculation of the precise liability to PRT, and it might be better, to avoid unnecessary work in establishing a notional figure, to give a broad figure showing the effects on the BNOC of the exemption, but, being a broad figure, it would not be subject to the auditing procedure mentioned in the amendment.
  Another question, as yet unresolved, is whether such figures should best be attached to the BNOC's accounts or to the National Oil Accounts. That is a matter to which we should give further attention.
  My hon. Friend the Member for Dudley, West (Dr. Phipps) raised practical questions of two kinds. One concerned the effect of the exemption from PRT on partnership arrangements, particularly the difference between the economic benefits of leasing or buying
  1432
  equipment, and the tax implications. My hon. Friend's second point was about unitisation, and the effect that that might have. The latter point was not made in Committee, but we have given a clear undertaking that in working in partnership the BNOC will operate on a commercial basis. There is no reason why we should doubt that that statement of Government intent could be executed.
  The right hon. Gentleman raised the question of transfer prices. The matter works both ways. One of the anxieties that the BNOC would have in partnership arrangements is that it would be on a perfectly transparent transfer pricing basis. That is embodied in the assurance that I have given about the commercial practice.
  I move to the other amendments—Government Amendments Nos. 21, 22, 23, 24 and 26, of which Amendment No. 26 is the substantive one, the others being consequential. The group of amendments is put before the House in discharge of the undertaking given by my hon. Friend the Under-Secretary that we would arrange that the accounts of the BNOC would show separately each of the main activities of the corporation. It provides for separate accounts for separate activities only where consolidation accounts are produced. Arguably, the same provision should apply where there is no consolidation, where the corporation and its subsidiaries produce separate accounts. I believe that Amendment No. 26 represents a discharge of that obligation.
  I must ask the House not to accept Amendment No. 25. There was an extensive discussion of this matter in Committee. The Government did not feel able in Committee to give an undertaking, and I refer the House to the arguments then used.
  Mr. John Moore: It would be churlish of me not to thank the Secretary of State for his undertaking about the PRT figure. The House will want to study carefully exactly what he said. He used the expression "unaudited", and mentioned the figure disconnected from the legislation. Although because of the Secretary of State's comments I shall not ask my hon. Friend's to divide the House, and although he gave a clear undertaking, his response

  1433
  on other matters was totally unsatisfactory. In Committee his hon. Friend the Under-Secretary said:
  "I am not familiar with all the detail of this and was not able to take the hon. Members argument very closely".—[Official Report, Standing Committee D, 1st July, 1975; c. 998.]
  He specifically did not answer the point that had been put to him.
  It has been put again in this brief debate. We have asked for an explanation why the Government have used a phrase that was admittedly used by the Conservative Government in the Gas Act 1972, when there was no debate on the subject in Committee. We have been referred to what was said in Committee on this occasion, but then there was a complete absence of argument. What I said about PRT has not been satisfactorily answered. It is not enough for the Secretary of State to decide how the accounts are to be broken down. That should be laid down in the Bill.
  Although the undertakings have been limited and although there has not been sufficient time, because the Government have rushed through their legislation so that undertakings have had to be given
  1434
  at the last minute on Report—and if there were more time, we should be able to get better legislation instead of having to hope and pray that the Government are able to concoct some way of matching their undertakings outside the legislation—in view of the Secretary of State's undertakings, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendments made:
  No. 21, in page 8, line 44, at end insert "group consisting of the".
  No. 22, in page 9, line 1, after "the" insert "group consisting of the".
  No. 23, in page 9, line 2, after "showing", insert "— (a).
  No. 24, in page 9, line 3, leave out "Corporation and the subsidiary or subsidiaries" and insert "group".
  No. 26, in page 9, line 4, after "and" insert—
  "(b) if the notice so rqeuires, the financial and operating results as far as may be of each of the main activities of the group in question; and".—[Mr. Benn.]

Clause 19

  PROVISIONS SUPPLEMENTARY TO S. 18
  Mr. John Smith: I beg to move Amendment No. 31, in page 15, line 5, at end insert:
  '1(A) Any information which the Commissioners of Inland Revenue possess in connection with petroleum won by virtue of a licence granted under the Petroleum (Production) Act 1934—

  (a) may be disclosed by the Commissioners to the Secretary of State, or to an officer of his who is authorised by him to receive such information, in connection with provisions of the licence relating to royalty payments; but

  (b) shall not be disclosed by a person to whom it is disclosed in pursuance of this subsection except as authorised by the licence or to a person to whom it could have been disclosed in pursuance of the preceding paragraph or for the purposes of proceedings (which may be arbitration proceedings) in connection with the licence'.

  This is a new point which was not touched upon in Committee. The purpose of the amendment is to allow the Inland Revenue to disclose information to the Secreary of State or an officer authorised by him so that royalty may be calculated accurately.
  The need for the amendment arises because royalty evaluation under model clause 9(5), as numbered in Part II of Schedule 2, is to be linked to tax evaluation, and it is clearly essential that the Secretary of State should be able to check the royalty returns made by licensees. The only way of doing this is for him to have access to the returns accepted by the Inland Revenue for tax purposes.
  Similarly it must be possible, as paragraph (b) provides, for the information to be used in arbitration proceedings. Paragraph (b) ensures that information passed to the Secretary of State for authorised officials for the purpose of checking royalty due shall be treated with the same confidentiality as information supplied to the Secretary of State under the licence terms—that is to say, it may not be disclosed to someone not in the service or employment of the Crown except with the licensee's consent. Therefore, there is no question of the BNOC becoming privy to the tax returns of its competitors. This is an inevitable amendment on the basis
  1436
  on which royalty payments are now to be assessed.
  Amendment agreed to.
  Mr. Rost: I beg to move Amendment No. 146, in page 15, line 11, at end insert:
  '(2A) Where a licence is revoked on the grounds of any act or omission occurring alter the licence was altered by virtue of the preceding section which act or omission would not have provided grounds for revocation of the licence had it occurred before the date of such alteration, and it is shown that the holder of the licence—

  (i) has incurred expenditure in carrying out work which is rendered abortive by revocation, or

  (ii) has otherwise sustained loss or damage which is directly attributable to the revocation

  there shall be paid to him out of the National Oil Account full and prompt compensation in respect of that expenditure, loss or damage'.
  Even this shameless Government must be feeling a flush of embarrassment about the unreasonably tight timetable being imposed under the guillotine. This has meant that we have had to curtail debates, and that many crucial and controversial matters affecting a key sector of the economy will not even be reached. It is most unsatisfactory that my colleagues and I will not have time to develop the detailed arguments which we as an Opposition feel that we should be able to develop on controversial and important matters.
  One such is Amendment No. 146. This raises the most important principle—one of the most obnoxious aspects of this legislation—of retroactivity resulting in financial loss to licensees without compensation. This is one of the areas in this legislation causing a great deal of concern to the industry, and we have had no satisfactory assurances during lengthy Committee debates, we have had no assurances on the justification for retroactivity on licences and, even worse, we have not even had any assurance that there will be compensation where financial loss results from this retroactivity. My colleagues and I regard this as most unsatisfactory, quite unacceptable and completely unprecedented. It cannot be allowed to stand unamended.
  The purpose of the amendment is to provide for compensation to licensees whose licences are revoked under the new

  1437
  model clauses in circumstances where they would not have been revocable under the old model clauses. Those hon. Members who have followed the proceedings in Committee in detail will know that the new model clauses create many more possibilities of licence revocation than existed under the original terms. These new risks of licence revocation pose a real threat to licensees, especially where they are associated with the broad discretionary powers that the Government are taking. It is quite wrong that licensees should be confronted with the possibility—some of us suggest the probability—of having to forfeit their licences without compensation in such circumstances.
  I wish that I could have developed at greater length the principles involved here about the problems which will result from this House allowing retroactivity to stand unamended. It creates the most important issues. First, it is quite contrary to the position which has always been taken by the United Kingdom Government in the past on many issues. It is quite unprecedented in Western Europe. It will create the most serious impact on the confidence which has always been placed politically in this country by foreign investors. It raises the most important principle that it invites or even encourages similar action in respect of British investments in other parts of the world.
  10.30 p.m.
  What justification will the British Government have to complain about confiscation without compensation of British investments abroad, as they have always done in the past, when they are setting this example? I could quote many examples of the British Government defending British investments abroad and claiming compensation. The Government's credibility will be undermined. It will never again be possible for us to uphold the rights of British companies abroad if we behave in this way. It could have serious repercussions. Furthermore, there are significant legal implications which the Government have not taken seriously enough. The rights of holders of licences may well be damaged without compensation.
  In the interests of brevity, and so that we may at least refer to other crucial matters, I shall curtail what I wished to
  1438
  say. No case has been made out for retroactivity, and, even worse, there is no justification for accepting it without proper, prompt and full compensation. What the Government propose will create a most dangerous precedent. It will damage the standing of the British Government. It will endanger the status of British investments abroad. It will seriously jeopardise the confidence of foreign investors in this country. It should not be accepted without serious challenge.
  Mr. Skeet: I should not allow this occasion to pass without making a few observations. I can probably couch them in the form of questions to the Minister.
  Why is this country breaking contracts which were entered into with the oil companies when the oil was not discovered? All the conditions are to be changed, without any attempt being made to negotiate with the oil companies, now that the oil has been discovered. The Secretary of State is prepared to negotiate with the oil companies on the basis of a 51 per cent. participation. He is not prepared to negotiate with them in order to revise the terms of the contracts which were negotiated at an earlier date.
  This is a blatant breach of contract by the Government, whose purpose should be to secure the rights of the citizen. Why have they done it, and why is it done in this form? If the Secretary of State can give a precedent for what he is doing, I should like to hear of it.
  The right hon. Gentleman knows perfectly well that Norway has not breached its contracts. It has studiously avoided that course. Australia has adopted the same legal propriety. Spain, in altering its regulations, has left the existing concessions exactly as they were. The Netherlands has respected the contracts. Greenland and the Republic of Ireland have adopted that course.
  Why have the British Government, who pride themselves on the rule of law, espoused a cause which will lead to nations saying that we do not honour the laws which we pass? The Under-Secretary of State said that alterations would be made to enable model Clause 16 on depletion to be introduced. That could have been done simply by inserting

  1439
  a clause in the Bill. In order to bring these things in, however, many other model clauses have also been introduced. This is totally meaningless.
  I ask the right hon. Gentleman to explain why this is to be done. Why have other countries not followed this precedent? Is he aware of the detrimental effect that this could have on one of our big companies—British Petroleum—in Alaska if the Americans were to adopt the same line? We could lose a substantial interest in the considerable reserves of oil in that locality.
  It is well known that we have in our own law plenty of room for compensation to be made available. I mentioned this matter in Committee on the Coal Industry Bill 1975 when we discussed for some time where compensation for subsidence was payable by the National Coal Board. We discussed it on the Water Resources Act 1963 and on the Mines (Working Facilities and Support) Act 1966. If we have it as a precedent in our law, why cannot it be accepted here?
  It would be a great shame on this Parliament if it were to take away rights of compensation from the citizen. All that the Secretary of State and his predecessor are prepared to say is that they will take this matter into account. There is no security in that. People are entitled to have laid down in statutory form that compensation will be paid if there is diminution of rights.
  Mr. Arthur Lewis: What about the protection of workers' rights?
  Mr. Skeet: The hon. Gentleman may say that, but we are dealing with the law of the land. I hope that while we protect workers' rights, which I would vouchsafe, the right hon. Gentleman will protect, not trample under foot, the rights of all the citizens of this realm. This is not the way to run a democracy. I hope that when the Secretary of State springs to his feet he will give the nation, which is watching carefully, a satisfactory explanation.
  Dr. Phipps: I think that the anger displayed by the hon. Member for Bedford (Mr. Skeet) is totally misplaced. We have debated this matter in the House on a number of occasions. Clause 19(2) makes it clear that this is not retroactive
  1440
  in any sense regarding licences already issued. It is retroactive only from the day that the legislation is passed.
  Why are we passing this legislation? I am sure that the hon. Member for Bedford knows that we are passing it because of the abuses of the legislation which we have seen in the past.
  Mr. Skeet: The hon. Gentleman has
  Dr. Phipps: It will apply only to acts which take place after the passage of the Bill.
  Mr. Skeet: It will alter the terms of contracts.
  misconceived the situation. This Bill, on the day that it becomes an Act, will apply a diminution of rights in the licences themselves.
  Dr. Phipps: It will alter the terms of contracts, but it will not apply to events which precede the passage of the Bill.
  We are passing this legislation for reasons which we have debated before. There was considerable abuse of the terms of the licences. People were taking out licences, promoting them—in fact, selling them—pocketing the money and going to existing licences. Therefore, there is back to Alberta, Texas or wherever they came from. The Bill is intended to prevent that kind of abuse. I am sure that my right hon. Friend has no intention of stopping genuine farm-outs or farm-ins or other genuine practices within the industry. The intention is to stop people who have abused these practices and have given a bad name to them in this country.
  Mr. Skeet: Of course, every absolutist authority will say that it will break the law to get away from abuse. But it is interesting that all the countries which I itemised, including Norway, have not adopted this course. They have respected past licences. In this case the terms of the licences have been broken. The contracts have been torn up. New conditions will be imposed on each contract. The companies which have been in from the beginning will say that they are not interested.
  Dr. Phipps: I assure the House that not one bona fide company will mind these conditions being imposed it will be only the promoters and the charlatans who will be upset.
  Mr. Grimond: I argued in Committee against the breaches of contract which are inherent in parts of the Bill. I shall not do that again. I still maintain that this is a very great error in British legislation. The points which I want to raise again relate to compensation. It may well be true that there will be very few companies which under the present arrangements would be entitled to compensation, but the Minister agreed that there might be a diminution in the value of the licences owing to the provisions of the Bill. Both for the sake of our companies operating abroad and because of the precedents set by our neighbours around the North Sea, there should be better terms of compensation. Have the Government checked that what they propose is in accordance with international law?
  Mr. Benn: The issues raised in this debate are important. We discussed them in Committee. I believe that hon. Gentlemen who have spoken have made heavy weather of this and have done so because of a fundamental misunderstanding of the issues at stake.
  The reason for the changes we are proposing is that the existing terms in the fourth round did not provide the opportunity for depletion control, control over conditional exploration or control over dealings in licences for another 40 years. Only in the first six years, as the hon. Member for Derbyshire, South-East (Mr. Rost) knows, because he knows this subject very well, was there even a requirement to drill. For the rest, the Tory Government in 1971 handed out licences for nearly half a century without these basic safeguards in regard to priceless national resources.
  If we are to have these matters elevated to high constitutional principle—if that is the way the hon. Member for Bedford (Mr. Skeet) wishes to discuss it—there is more than one high constitutional principle which can be marshalled in this debate. One is that no Parliament can bind its successors. If one Parliament were to choose to hand over the entire North Sea oil resources to some foreign company under arrangements that were manifestly damaging to the public interest, there is no concept in our domestic law that would make it improper for a subsequent Parliament to remedy the defects.
  Mr. Rost Mr. Rost rose—
  Mr. Benn: The hon. Gentleman must allow me to put this on the record, if he will be so kind. The question then arises as to retrospective legislation. I am no lawyer, but I understand that the main legal objection—indeed, the only legal objection—to retrospection in the ordinary sense is that Parliament should not act in such a way as to make illegal something that was legal at the time it was done.
  These provisions do no such thing. As my hon. Friend the Member for Dudley, West (Dr. Phipps) pointed out, they make no change in past practice. They provide that, if we pass this legislation, from now on certain new conditions will come into operation.
  Mr. Skeet: There are contracts.
  Mr. Benn: The hon. Gentleman should listen to my argument, because I am trying to address myself to what he said. The Government are continually changing the environment in which business operates—by budgetary measures, by legislation governing safety or by advertising standards—and by so doing are changing the environment in which all licence holders or contract holders operate in the United Kingdom.
  I go further. The hon. Gentleman asked me to give him precedents. I do not have to strain my mind to do that. I refer to what happened in Norway, Alberta and Australia. The Fuel and Electricity (Control) Act 1973 introduced by the Tory Government gave the Government of the day—I welcomed it on behalf of the then Opposition—power to make far bigger changes on the licences that had been negotiated two years earlier than the provisions of this Bill confer.
  I come now to the question of compensation and arbitration.
  Mr. Skeet: If the right hon. Gentleman is prepared to say that one Government can alter relevant provisions if they find it expedient to do so, and given that the Government have taken a certain course in participation and negotiation, why do they not take the same line in altering the contractual terms which are to continue into the future and negotiate with the companies so that compensation can be determined and agreed?
  10.45 p.m.
  Mr. Benn: The hon. Gentleman knows very well the argument on participation and on the development of policy generally which the Government put forward. The arguments as regards depletion, exploration and drilling terms are, in our view, fundamental matters which fall quite properly within a range of legislation that any Government might introduce, and would come well within the precedents which could be cited of a kind to which I have referred, given the fact that we do not accept that compensation would be appropriate in these cases and that the question of arbitration does not arise.
  In terms of the operation of the powers that we seek, we are bound to have very much in mind—I think I said this in Committee, but if I did not I say it now, and if I said it I repeat it—the two factors that have been mentioned in the debate, namely, the need for good working relations with the oil companies and the international repercussions following from what we might do.
  There is nothing whatever in the taking of these powers that could conceivably be argued as a move towards expropriation or a breach of international law.
  Mr. Skeet: There is.
  Mr. Benin: That could not arise in any sense, even if I accepted the hon. Gentleman's view, which I do not, until the powers were exercised.
  For the reasons I have given, I believe that we were fully entitled to seek from Parliament the powers that are in the Bill. I believe that they are fully in line with the changes made in the environment in which licence and contract holders operate. I recommend the House not to accept the amendment.
  Mr. Skeet: If the companies decided to take this matter to the International Court, the assent of the United Kingdom Government would be required. Would the United Kingdom Government give that assent?
  Mr. Benn: That is a hypothetical question that would not be for me to answer. If the hon. Gentleman re-reads what I have said, he will recognise that the Government have been able to give a complete answer to the arguments he has put
  1444
  forward. I invite the House not to accept the amendment.
  Mr. Patrick Jenkin: After seven and a half hours we have dealt with rather less than one-third of the amendments on the Paper, but the guillotine is shortly to fall. I regard it as an outrage that one of the most important pieces of legislation that the Government have introduced, on which no one has sought to argue that the Opposition have in any way filibustered or been unreasonably long in discussing, should be dealt with in this manner. The only reason for the introduction of the guillotine is that the Government were five months late in introducing the Bill. They have now run into serious timetable difficulties. It is appropriate that we should end the debate by voting in favour of the amendment, and I ask my right hon. and hon. Friends to do so.
  It is appropriate that we should now be discussing an amendment which makes it clear that the Government are engaged in a blatant breach of international law in that they are proposing the, unilateral retrospective abrogation of contractual rights. They have embarked on a path which will serve them and future British Governments ill in future when they come to negotiate on behalf of British subjects whose property rights are abrogated in a similar way by other Governments. They will not have a leg to stand on. They are doing a gross disservice to themselves, to the British people and to the integrity of the British nation in taking powers unilaterally, without compensation, to abrogate proprietary rights.
  The Secretary of State for Energy sought to offer two legal defences. The first was that the powers were needed. That has not been denied by us. We believe that we need to strengthen the powers, particularly in regard to depletion. We have said that on many occasions, both on Second Reading and in Committee. What is at issue is how those powers should be taken. If they could not have been adequately provided for by negotiation, the contractual rights could have been amended but could have been subject to the right of compensation.
  The right hon. Gentleman's defence was that the powers were not retrospective in a true sense—in other words,

  1445
  that there were no changes to make illegal that which was legal. That is a view of retrospection which is so narrow that no lawyer would recognise it. Any change that alters the basis on which people enter into contractual agreements is to that extent retrospective. Where, however, those contractual agreements confer proprietary rights, international law recognises them as proprietary rights, and therefore the abrogation of those tights amounts to a taking away of property. The Government have sought to deny those rights and, indeed, to deny that they are proprietary rights.
  I shall not repeat the authorities for our argument given by eminent international lawyers. I merely emphasise that over the years successive British Governments, including Labour Governments, have sought to argue in international fora and elsewhere that they are proprietary rights. There was a recent case in which the

  Division No. 307.]

  AYES

  [10.54 p.m.

  Adley, Robert

  Douglas-Hamilton, Lord James

  Hayhoe, Barney

  Aitken, J. W. P.

  Drayson, Burnaby

  Heseltine, Michael

  Alison, Michael

  du Cann, Rt Hon Edward

  Hicks, Robert

  Amery, Rt Hon Julian

  Durant, Tony

  Holland, Philip

  Arnold, Tom

  Dykes, Hugh

  Hooson, Emlyn

  Awdry, Daniel

  Eden, Rt Hon Sir John

  Hordern, Peter

  Baker, Kenneth

  Edwards, Nicholas (Pembroke)

  Howell, David (Guildford)

  Banks, Robert

  Elliott, Sir William

  Howell, Ralph (North Norfolk)

  Beith, A. J.

  Emery, Peter

  Howells, Geraint (Cardigan)

  Bell, Ronald

  Eyre, Reginald

  Hunt, John

  Benyon, W. R.

  Fairbairn, Nicholas

  Hurd, Douglas

  Berry, Hon Anthony

  Farr, John

  Hutchison, Michael Clark

  Biffen, John

  Fell, Anthony

  Irvine, Bryant Godman (Rye)

  Biggs-Davison, John

  Finsberg, Geoffrey

  James, David

  Blaker, Peter

  Fisher, Sir Nigel

  Jenkins, Rt Hon P. (Wanst'd&W'df'd)

  Body, Richard

  Fletcher, Alex (Edinburgh N.)

  Jessel, Toby

  Boscawen, Hon Robert

  Fletcher-Cooke, Charles

  Johnson Smith, G. (E. Grinstead)

  Bottomley, Peter

  Fookes, Miss Janet

  Jopling, Michael

  Bowden, Andrew (Brighton)

  Fowler, Norman (Sutton C.)

  Kaberry, Sir Donald

  Boyson, Dr Rhodes (Brent)

  Fox, Marcus

  Kellett-Bowman, Mrs Elaine

  Braine, Sir Bernard

  Fry, Peter

  Kershaw, Anthony

  Brittan, Leon

  Galbraith, Hon T. G. D.

  Kimball, Marcus

  Brotherton, Michael

  Gardner, Edward (S. Fylde)

  King, Evlyn (South Dorset)

  Brown, Sir Edward (Bath)

  Gilmour, Rt Hon Ian (Chesham)

  King, Tom (Bridgwater)

  Bryan, Sir Paul

  Gilmour, Sir John (East Fife)

  Kirk, Peter

  Buchanan-Smith, Allck

  Glyn, Dr Alan

  Knight, Mrs Jill

  Buck, Antony

  Godber, Rt Hon Joseph

  Knox, David

  Budgen, Nick

  Goodhart, Philip

  Lamont, Norman

  Bulmer, Esmond

  Goodlad, A.

  Lane, David

  Butler, Adam (Bosworth)

  Gorst, John

  Langford-Holt, Sir John

  Carlisle, Mark

  Gow, Ian (Eastbourne)

  Latham, Michael (Melton)

  Chalker, Mrs Lynda

  Gower, Sir Raymond (Barry)

  Lawrence, Ivan

  Channon, Paul

  Grant, Anthony (Harrow C.)

  Lawson, Nigel

  Clark, Alan (Plymouth, S)

  Gray, Hamish

  Le Marchant, Spencer

  Clark, William (Croydon, S.)

  Grieve, Percy

  Lester, Jim (Beeston)

  Clarke, Kenneth (Rushcliffe)

  Griffiths, Eldon

  Lewis, Kenneth (Rutland)

  Cockcroft, John

  Grimond, Rt Hon J.

  Lloyd, Ian (Havant)

  Cooke, Robert (Bristol W)

  Grist, Ian

  Loveridge, John

  Cope, John

  Grylls, Michael

  Luce, Richard

  Cordle, John H.

  Hall, Sir John

  McAdden, Sir Stephen

  Cormack, Patrick

  Hall-Davis, A. G. F.

  McCrindle, Robert

  Corrie, John

  Hamilton, Michael (Salisbury)

  Macfarlane, Neil

  Costain, A. P.

  Hannam, John

  MacGregor, John

  Crouch, David

  Harrison, Sir Harwood (Eye)

  Macmillan, Rt Hon M. (Farnham)

  Crowder, F. P.

  Harvie Anderson, Rt Hn Miss

  McNair-Wilson, M. (Newbury)

  Davies, Rt Hon J. (Knutsford)

  Havers, Sir Michael

  McNair-Wilson, P. (New Forest)

  Dean, Paul (N. Somerset)

  Hawkins, Paul

  Madel, David

  present Government, together with other Community Governments, sought to table an amendment to a United Nations resolution on compensation for the expropriation of rights. It is an irony—but a just irony—that we are now faced with this unjustifiable guillotine and are censuring the Government for breaching international law and upsetting contractual rights in relation to which previous Governments issued licences.
  The amendment, which confines itself solely to compensation for revocation of licences in circumstances where those licences could not have been revoked under reasonable terms, is eminently reasonable and I invite my right hon. and hon. Friends to support it.
  Question put, That the amendment be made:
  The House divided: Ayes 248, Noes 293.

  Marshal, Michael (Arundel)

  Pym, Rt Hon Francis

  Stanbrook, Ivor

  Marten, Nell

  Raison, Timothy

  Stanley, John

  Mates, Michael

  Rathbone, Tim

  Steel, David (Roxburgh)

  Mather, Carol

  Rawlinson, Rt Hon Sir Peter

  Steen, Anthony (Liverpool)

  Maude, Angus

  Rees, Peter (Dover & Deal)

  Stewart, Ian (Hitchin)

  Mawby, Ray

  Rees-Davies, W. R.

  Stokes, John

  Maxwell-Hyslop, Robin

  Renton, Rt Hn Sir D. (Hunts.)

  Stradling Thomas, J.

  Mayhew, Patrick

  Renton, Tim (Mid-Sussex)

  Tapsell, Peter

  Meyer, Sir Anthony

  Rhys Williams, Sir Brandon

  Taylor, R. (Croydon NW)

  Miller, Hal (Bromsgrove)

  Ridley, Hon Nicholas

  Taylor, Teddy (Glasgow C.)

  Mills, Peter

  Ridsdale, Julian

  Tebbitt, Norman

  Mitchell, David (Basingstoke)

  Rifkind, Malcolm

  Temple-Morris, P.

  Moate, Roger

  Rippon, Rt Hon Geoffrey

  Thatcher, Rt Hon M.

  Monro, Hector

  Roberts, Michael (Cardiff N.W.)

  Thomas, Rt Hon P. (Barnet)

  Montgomery, Fergus

  Roberts, Wyn (Conway)

  Townsend, Cyril D.

  Moore, John (Croydon C)

  Rodgers, Sir John (Sevenoaks)

  Trotter, Neville

  More, Jasper (Ludlow)

  Ross, Stephen (Isle of Wight)

  Tugendhat, Christopher

  Morgan, Geraint

  Rost, Peter (SE Derbyshire)

  van Straubenzee, W. R.

  Morgan-Giles, Rear-Admiral

  Royle, Sir Anthony

  Vaughan, Dr Gerard

  Morris, Michael (Northants)

  Sainsbury, Tim

  Viggers, Peter

  Morrison, Charles (Devizes)

  St. John-Stevas, Norman

  Wainwright, Richard (Colne V)

  Morrison, Hon Peter (Chester)

  Scott, Nicholas

  Wakeham, John

  Mudd, David

  Shaw, Giles (Pudsey)

  Wall, Patrick

  Neave, Airey

  Shaw, Michael (Scarborough)

  Walters, Dennis

  Nelson, Anthony

  Shelton, William (Lambeth St.)

  Warren, Kenneth

  Neubert, Michael

  Shepherd, Colin

  Weatherill, Bernard

  Newton, Tony

  Shersby, Michael

  Wells, John

  Normanton, Tom

  Sims, Roger

  Whitelaw, Rt Hon William

  Oppenheim, Mrs Sally

  Sinclair, Sir George

  Wiggin, Jerry (Weston-s-Mare)

  Page, John (Harrow West)

  Skeet, T. H. H.

  Winterton, Nicholas

  Page, Rt Hon R. Graham (Crosby)

  Smith, Cyril (Rochdale)

  Wood, Rt Hon Richard

  Pattie, Geoffrey

  Smith, Dudley (Warwick)

  Young, Sir G. (Ealing, Acton)

  Penhaligon, David

  Spence, John

  Younger, Hon George

  Percival, Ian

  Spicer, Jim (W Dorset)

  Peyton, Rt Hon John

  Spicer, Michael (S. Worcester)

  TELLERS FOR THE AYES:

  Pink, R. Bonner

  Sproat, Iain

  Mr. Fred Silvester and

  Price, David (Eastleigh)

  Stainton, Keith

  Mr. Russell Fairgrieve.

  NOES

  Allaun, Frank

  Conlan, Bernard

  Ford, Ben

  Anderson, Donald

  Cook, Robin F. (Edin C)

  Forrester, John

  Archer, Peter

  Corbett, Robin

  Fowler, Gerald (The Wrekin)

  Armstrong, Ernest

  Cox, Thomas (Tooting)

  Fraser, John (Lambeth, N)

  Ashley, Jack

  Craigen, J. M. (Maryhill)

  Freeson, Reginald

  Ashton, Joe

  Crawshaw, Richard

  Garrett, John (Norwich S.)

  Atkins, Ronald (Preston N)

  Cronin, John

  Garrett, W. E. (Wallsend)

  Atkinson, Norman

  Crosland, Rt Hon Anthony

  George, Bruce

  Bagier, Gordon A. T.

  Cryer, Bob

  Gilbert, Dr John

  Bain, Mrs Margaret

  Cunningham, G. (Islington S.)

  Ginsburg, David

  Barnett, Guy (Greenwich)

  Cunningham, Dr J. (Whiteh.)

  Golding, John

  Barnett, Rt Hon Joel (Heywood)

  Dalyell, Tam

  Gould, Bryan

  Bates, Alf

  Davidson, Arthur

  Gourlay, Harry

  Bean, Robert E.

  Davies, Bryan (Enfield N.)

  Graham, Ted

  Benn, Rt Hon Anthony Wedgwood

  Davies, Denzil (Llanelli)

  Grant, George (Morpeth)

  Bennett, Andrew (Stockport N)

  Davies, Ifor (Gower)

  Grant, John (Islington C.)

  Bidwell, Sydney

  Davis, S. Clinton (Hackney C.)

  Grocott, Bruce

  Bishop, E. S.

  Deakins, Eric

  Hamilton, James (Bothwell)

  Blenkinsop, Arthur

  Dean, Joseph (Leeds West)

  Hamilton, W. W. (Central Fife)

  Boardman, H.

  de Fraitas, Rt Hon Sir Geoffrey

  Harrison, Walter (Wakefield)

  Booth, Albert

  Delargy, Hugh

  Hart, Rt Hon Judith

  Boothroyd, Miss Betty

  Dell, Rt Hon Edmund

  Hatton, Frank

  Bottomley, Rt Hon Arthur

  Dempsey, James

  Hayman, Mrs Helene

  Boyden, James (Bish Auck.)

  Doig, Peter

  Healey, Rt Hon Denis

  Bradley, Tom

  Douglas-Mann, Bruce

  Heffer, Eric S.

  Brown, Hugh D. (Glasgow Pr.)

  Dunn, James A.

  Hooley, Frank

  Brown, Robert C. (Newcastle)

  Dunnett, Jack

  Horam, John

  Brown, Ronald (Hackney S.)

  Eadie, Alex

  Howell, Denis (B'ham, Sm H)

  Buchan, Norman

  Edelman, Maurice

  Hoyle, Douglas (Nelson)

  Buchanan, Richard

  Edge, Geoffrey

  Huckfield, Leslie

  Butler, Mrs Joyce (Haringey)

  Edwards, Robert (Wolv. S.E.)

  Hughes, Rt Hon C. (Anglesey)

  Callaghan, Jim (Middleton & P.)

  Ellis, John (Brigg & Scun)

  Hughes, Mark (Durham)

  Campbell, Ian

  Ellis, Tom (Wrexham)

  Hughes, Robert (Aberdeen N.)

  Canavan, Dennis

  English, Michael

  Hughes, Roy (Newport)

  Cant, R. B.

  Ennals, David

  Hunter, Adam

  Carmichael, Neil

  Evans, Ioan L. (Aberdare)

  Irvine, Rt Hon Sir A. (L'pool)

  Carter, Rav

  Evans, John (Newton)

  Irving, Rt Hon S. (Dartford)

  Cartwright, John

  Ewing, Harry (Stirling)

  Jackson, Colin (Brighouse)

  Castle, Rt Hon Barbara

  Faulds, Andrew

  Jackson, Miss Margaret (Lincoln)

  Clemitson, Ivor

  Fernyhough, Rt Hon E.

  Janner, Greville

  Cocks, Michael (Bristol S)

  Fitch, Alan (Wigan)

  Jeger, Mrs Lena

  Cohen, Stanley

  Flannery, Martin

  Jenkins, Hugh (Wandsworth)

  Coleman, Donald

  Fletcher, Raymond (Ilkeston)

  Jenkins, Rt Hon Roy (B'ham, St)

  Concannon, J. D.

  Fletcher, Ted (Darlington)

  John, Brynmor

  1448

  1449

  Johnson, James (Hull West)

  Mulley, Rt Hon Frederick

  Stallard, A. W.

  Johnson, Walter (Derby S)

  Murray, Ronald King

  Stewart, Donald (Western Isles)

  Jones, Alec (Rhondda)

  Newens, Stanley

  Stewart, Rt Hn Michael (H'smith, F)

  Jones, Barry (East Flint)

  Noble, Mike

  Stoddart, David

  Jones, Dan (Burniey)

  Oakes, Gordon

  Stott, Roger

  Judd, Frank

  Ogden, Eric

  Strang, Gavin

  Kaufman, Gerald

  O'Halloran, Michael

  Strauss, Rt Hon G. R.

  Kelley, Richard

  O'Malley, Brian

  Summerskill, Hon Dr Shirley

  Kerr, Russell

  Orbach, Maurice

  Swain, Thomas

  Kilroy-Silk, Robert

  Ovenden, John

  Taylor, Mrs Ann (Bolton W)

  Kinnock, Neil

  Owen, Dr David

  Thomas, Jeffrey (Abertillery)

  Lambie, David

  Padley, Walter

  Thomas, Mike (Newcastle)

  Lamborn, Harry

  Palmer, Arthur

  Thomas, Ronald (Bristol N.W.)

  Lamond, James

  Park, George

  Thompson, George

  Latham, Arthur (Paddington)

  Parker, John

  Thorne, Stan (Preston)

  Leadbitter, Ted

  Parry, Robert

  Tierney, Sydney

  Lee, John

  Pavitt, Laurie

  Tinn, James

  Lestor, Miss Joan (Eton & Slough)

  Peart, Rt Hon Fred

  Tomlinson, John

  Lewis, Arthur (Newham N.)

  Pendry, Tom

  Tomney, Frank

  Lewis, Ron (Carlisle)

  Perry, Ernest

  Torney, Tom

  Lipton, Marcus

  Phipps, Dr Colin

  Tuck, Raphael

  Litterick, Tom

  Prescott, John

  Urwin, T. W.

  Lomas, Kenneth

  Price, Christopher (Lewisham W)

  Varley, Rt Hon Eric G.

  Loyden, Eddie

  Price, William (Rugby)

  Wainwright, Edwin (Dearne V.)

  Lyon, Alexander (York)

  Radice, Giles

  Walden, Brian (B'ham, L'dyw'd)

  Lyons, Edward (Bradford W)

  Richardson, Miss Jo

  Walker, Harold (Doncaster)

  McCartney, Hugh

  Roberts, Albert (Normanton)

  Walker, Terry (Kingswood)

  McElhone, Frank

  Roberts, Gwilym (Cannock)

  Watkins, David

  MacFarquhar, R.

  Robertson, John (Paisley)

  Watkinson, John

  McGuire Michael (Ince)

  Roderick, Caerwyn

  Watt, Hamish

  Mackenzie, Gregor

  Rodgers, George (Chorley)

  Weetch, Ken

  Mackintosh, John P.

  Rodgers, William (Stockton)

  Weitzman, David

  Maclennan, Robert

  Rooker, J. W.

  Wellbeloved, James

  McMillan, Tom (Glasgow C.)

  Roper, John

  White, Frank R. (Bury)

  McNamara, Kevin

  Rose, Paul B.

  White, James (Pollok)

  Madden, Max

  Ross, Rt Hon W. (Kilm'nock)

  Whitehead, Phillip

  Magee, Bryan

  Rowlands, Ted

  Whitlock, William

  Mahon, Simon

  Ryman, John

  Wlgley, Dafydd (Caernarvon)

  Mallalieu, J. P. W.

  Sandelson, Neville

  Willey, Rt Hon Frederick

  Marks, Ken

  Sedgemore, B.

  Williams, Alan (Swansea)

  Marquand, David

  Selby, Harry

  Williams, Alan Lee (Hornch'ch)

  Marshall, Dr Edmund (Goole)

  Shaw, Arnold (Redbridge, Ilf.)

  Williams, Rt Hn Shirley (Hertford)

  Mason, Rt Hon Roy

  Sheldon, Robert (Ashton-u-Lyne)

  Williams, W. T. (Warrington)

  Maynard, Joan

  Shore, Rt Hon Peter

  Wilson, Alexander (Hamilton)

  Meacher, Michael

  Short, Rt Hon Edward (Newcastle C)

  Wilson, Gordon (Dundee E.)

  Mellish, Rt Hon Robert

  Short, Mrs Renée (Wolv NE)

  Wilson, Rt Hon H. (Huyton)

  Mikardo, Ian

  Silkin, Rt Hn John (Lewish.)

  Wilson, William (Coventry S.E.)

  Millan, Bruce

  Silkin, Rt Hn S. C. (Southwk.)

  Wise, Mrs Audrey

  Miller, Mrs Millie (Redbridge)

  Sillars, James

  Woof, Robert

  Mitchell, R. C. (Soton, Itchen)

  Silverman, Julius

  Wrigglesworth, Ian

  Molloy, William

  Skinner, Dennis

  Young, David (Bolton E.)

  Morris, Alfred (Wythenshawe)

  Small, William

  Morris, Charles R. (Openshaw)

  Smith, John (N. Lanarkshire)

  TELLERS FOR THE NOES:

  Morris, Rt Hon John (Aberavon)

  Snape, Peter

  Mr Joseph Harper and

  Moyle, Roland

  Spriggs, Leslie

  Mr. J. D. Dormand

  Question accordingly negatived.
  11.8 p.m.
  Mr. Deputy Speaker: Under the orders of the House of 7th July and of today, I must now put the Question on the remaining amendments moved by a member of the Government. As these are a considerable number of amendments, and as, so far as I am aware, there is no wish in any quarter of the House to divide against any of them, I propose to put the Question on the amendments in groups, reading out the numbers of the amendments in each group.
  If any hon. Member wishes to divide the House on any amendment, I should be obliged—I do not say I should be very happy— if he would indicate that fact when I read out the number of the amendment concerned.
  It being after Eleven o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to Standing Order No. 43 (Business Committee) and Orders [7th July and this day] to put forthwith the Questions on amendments moved by a member of the Government of which notice had been given, to the remaining part of the Bill.

Clause 23

  ACQUISITION BY PERSONS OF RIGHTS TO USE PIPE-LINES BELONGING TO OTHERS
  Amendments made: No. 35, in page 19, line 43, leave out 'such'.
  No. 36, in page 19, line 44, after 'right', insert 'of such amounts'.—[Mr. Benn.]

Clause 24
  TERMINATION OF AUTHORISATIONS
  Amendment made: No. 38, in page 20, line 37, leave out 'that period' and insert 'its currency'.—[Mr. Benn.]
Clause 26

  SAFETY
  Amendments made: No. 39, in page 22, line 46, at beginning insert 'assembling or'.
  No. 40, in page 23, line 3, after first 'or', insert 'dismantling or'—[Mr. Benn.]

Clause 35

  AUTHORISATIONS TO CONSTRUCT OR EXTEND REFINERIES
  Amendments made: No. 44, in page 32, line 27, leave out from 'who' to end of line 28.
  No. 46, in page 32, line 29, at end insert:
  'or are so authorised if the Secretary of State consents to the execution of the works by them;'.
  No. 47, in page 32, line 30, leave out 'those' and insert 'the'.—[Mr. Benn.]

Clause 40

  THE NATIONAL OIL ACCOUNT
  Amendments made: No. 58, in page 38, line 42, after 'considers', insert 'and the Treasury agree'.
  No. 60, in page 38, line 44, leave out 'he may with the consent of the Treasury' and insert:
  'the Secretary of State shall'.—[Mr. Benn.]

Clause 41
  PAYMENTS TO PETROLEUM LICENCE HOLDERS ETC. FROM THE ACCOUNT
  Amendment made: No. 63, in page 39, line 42, leave out from 'and' to end of line 43 and insert 'petroleum revenue tax'.—[Mr. Benn.]
Schedule 2

  PRODUCTION LICENCES FOR SEAWARD AREAS
  Amendments made: No. 64, in page 49, line 9, leave out 'determined' and insert 'ascertained'.
  No. 65, in page 49, line 31, leave out
  'specify the mode of determining'
  and insert:
  'determine the mode of ascertaining'.
  No. 68, in page 54, line 36, leave out 'determining' and insert 'ascertaining'.
  No. 73, in page 60, line 50, at end insert—
  '(6) Any question arising under Clause 12A of this licence or this Clause as to what is, is not or is required in the national interest or as to what is, or is required by reason of, a national emergency shall be determined by the Ministers'.
  No. 74, in page 62, line 21, leave out from 'words' to 'and' in line 22 and insert:
  '"within three days of" there shall be substituted the words "forthwith after"'.
  No. 76, in page 62, line 24, leave out within twenty-four hours' and insert 'forthwith after the occurrence'.
  No. 80, in page 63, line 47, after 'him' insert 'at reasonable times'.
  No. 82, in page 63, line 47, after 'such', insert reasonable'.
  No. 83, in page 63, line 48, leave out 'at reasonable times'.
  No. 84, in page 64, line 24, leave out from second 'to' to end of line 31 and insert:
  , or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement has been approved in writing by the Minister either unconditionally or subject to conditions; but the preceding provisions of this paragraph do not apply to—

  (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved: and

  (b) an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum'

  No. 86, in page 64, line 40, leave out
  'such an agreement as is mentioned in'
  and insert:
  an agreement of which the terms require approval by virtue of'.
  No. 87, in page 65, line 17, leave out 'Secretary of State' and insert 'Minister'.
  No. 88, in page 65, line 17, at end insert
  '; but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved'.
  No. 89, in page 65, line 46, leave out '28 days' and insert 'three months'.
  No. 90, in page 71, line 6, leave out 'determined' and insert 'ascertained'.
  No. 91, in page 71, line 25, leave out
  'specify the mode of determining'
  and insert:
  'determine the mode of ascertaining'.
  No. 94, in page 75, line 47, leave out 'determining" and insert 'ascertaining'.
  No. 99, in page 82, line 26, at end insert—
  '(6) Any question arising under Clause 15 of this licence or this Clause as to what is, is not or is required in the national interest or as to what is, or is required by reason of, a national emergency shall be determined by the Minister'.
  No. 100, in page 85, line 14, leave out 'within twenty-four hours of' and insert 'forthwith after'.
  No. 102, in page 85, line 15, leave out 'within twenty-four hours' and insert 'forthwith after the occurrence'.
  No. 106, in page 89, line 39, after 'such', insert 'reasonable'.
  No. 107, in page 91, line 50, leave out from second 'to' to end of line 6 on page 92 and insert
  ',or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement have been approved in writing by the Minister either unconditionally or subject to conditions; but the preceding provisions of this paragraph do not apply to—

  (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved; and

  (b) an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum'.

  No. 109, in page 92, line 15, leave out
  'such an agreement as is mentioned in'
  and insert:
  'an agreement of which the terms require approval by virtue of'.
  No. 110, in page 92, line 40, leave out 'Secretary of State' and insert 'Minister'.
  No. 111, in page 92, line 40, at end insert
  '; but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved'.
  No. 112, in page 93, line 29, leave out '28 days' and insert 'three months'.— [Mr. Benn.]

Schedule 3

  PRODUCTION LICENCES FOR LANDWARD AREAS
  Amendments made: No. 113, in page 97, line 14, leave out 'determined' and insert 'ascertained'.
  No. 114, in page 97, line 36, leave out
  'specify the mode of determining'
  and insert:
  'determine the mode of ascertaining'.
  No. 115, in page 103, line 28, leave out 'determining' and insert 'ascertaining'.
  No. 116, in page 109, line 47, at end insert—
  '(6) Any question arising under Clause 12A of this licence or this Clause as to what is, is not or is required in the national interest or as to what is, or is required by reason of, a national emergency shall be determined by the Minister'.
  No. 117, in page 111, line 21, leave out from 'words' to 'and' in line 22 and insert
  '"within three days of" there shall be substituted the words "forthwith after"
  No. 118, in page 111, line 24, leave out 'within twenty-four hours' and insert 'forthwith after the occurrence".
  No. 119, in page 113, line 43, after 'such' insert 'reasonable'.
  No. 120, in page 114, line 14, leave out from 'to' to end of line 21 and insert
  ',or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement have been approved in writing by the Minister either unconditionally or subject to conditions; but the preceding provisions of this paragraph do not apply to—

  (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved; and

  (b) an agreement in so far as it provides that, after any petroleum has been won

  1455
  and saved from the licensed area, it shall be exchanged for other petroleum'.

  No. 121, in page 114, line 31, leave out
  'such an agreement as is mentioned in'
  and insert
  'an agreement of which the terms require approval by virtue of'.
  No. 122, in page 115, line 11, leave out 'Secretary of State' and insert Minister'.
  No. 123, in page 115, line 11, at end insert
  '; but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved'.
  No. 124, in page 115, line 40, leave out '28 days' and insert 'three months'.
  No. 125, in page 120, line 42, leave out 'determined' and insert 'ascertained'.
  No. 126, in page 121, line 13, leave out
  'specify the mode of determining'
  and insert
  'determine the mode of ascertaining'.
  No. 127, in page 122, line 23, leave out 'the said paragraph (1)' and insert
  'paragraph (1) of this Clause'.
  No. 128, in page 126, line 8, leave out 'determining' and insert 'ascertaining'.
  No. 129, in page 133, line 16, at end insert
  '(6) Any question arising under Clause 15 of this licence or this Clause as to what is, is not or is required in the national interest or as to what is, or is required by reason of, a national emergency shall be determined by the Minister'.
  No. 130, in page 136, line 16, leave out 'within twenty-four hours of' and insert 'forthwith after'.
  No. 131, in page 136, line 17, leave out 'within twenty-four hours' and insert 'forthwith after the occurrence'.
  No. 132, in page 140, line 11, at end insert 'reasonable'.
  No. 133, in page 142, line 5, leave out from second 'to' to end of line 11 and insert
  ',or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement have been approved in writing by the Minister either unconditionally or subject to conditions; but the preceding provisions of this paragraph do not apply to—

  (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved; and

  1456

  (b) an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum'.

  No. 134, in page 142, line 20, leave out
  'such an agreement as is mentioned in'
  and insert
  'an agreement of which the terms require approval by virtue of'.
  No. 135, in page 142, line 45, leave out 'Secretary of State' and insert 'Minister'.
  No. 136, in page 142, line 45, at end insert:
  ';but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved'.
  No. 137, in page 143, line 39, leave out '28 days' and insert 'three months'.—[Mr. Benn.]

Schedule 4

  AUTHORISATIONS IN PURSUANCE OF SECTION 20
  Amendment made: No. 138, in page 147, line 1, leave out from 'of' to 'exploitation' in line 2 and insert
  'avoiding or reducing interference with fishing or the'.—[Mr Benn.]
  Bill to be read the Third time tomorrow.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dunn.]

NATIONAL HEALTH SERVICE (AGENCY NURSES)
11.10 p.m.
Mr. Kenneth Lewis: I am sure the Minister and I are glad that this debate is taking place after a guillotine motion, otherwise we would probably have been discussing the question of agency nurses in the National Health Service at seven o'clock tomorrow morning.
This debate arises out of Circular HSC(II) 164, sent out by the Department of Health and Social Security, of 19th June this year. It seeks to do away with

1457
agency nurses in the NHS. One sub-clause says:
"Staffing suffers from an additional clement of instability and discontinuity particularly where there are frequent changes of agency nurses and this is liable to affect patient care and staff communications adversely".
I do not object to a reduction in the number of agency nurses in the National Health Service, but I do object to any attempt to do away with them altogether. It would have a disastrous effect on the Service. If Ministers were tempted to do away with them, it would not assist stability. It would rock stability, especially, for example, during holiday periods. If there were no agency nurses, more permanent staff would have to be taken on and for most of the year they would be under-employed. That would be a more expensive operation.
Where minimum agency staff are employed, discontinuity does not matter. Permanent staff would already be there in situ and agency staff would be entirely under the control of the permanent staff—matrons, deputy-matrons, sisters, and so on.
The circular also says that agency nurses should not be involved in management because this might be harmful. Of course agency staff should not be involved in management, and they are not. Management is a matter for the nursing hierarchy or the hospital administrators.
The circular goes on to say that the employment of agency nurses has an effect on training. But agency nurses have nothing to do with training in the hospital service. They are not involved. They do not determine what should be done by other staff who are permanently employed. Student nurses are trained by the ward sister or the sister tutor at the school to which they belong.
Again in paragraph 2d. it states that the employment of agency nurses may "mask" manpower problems in the health service. In fact it might highlight the problem. If agency nurses are dropped, extra permanent staff must be recruited. Items 2 f. and g. refer to the cost of agency nurses. This is the nub of the problem for the Minister because his case rests on the argument that agency nurses are disruptive and more expensive. There has been a survey which showed that, bearing in mind the hidden costs of
1458
employing permanent staff, the cost of employing agency nurses is 6 per cent. less than the cost of employing permanent staff.
The self-employed must now pay an additional amount in their national insurance stamp which thus reduces the take-home pay of agency nurses. It is take-home pay to which the Minister refers in advancing his argument. On the other side of the coin, the National Health Service must pay an additional cost in terms of pensions. There is also the cost of sick leave which is built into the service agreement. It must also bear the cost of holidays which permanent staff enjoy as of right, while agency nurses receive no holiday pay. If all these items of the social wage are added to the wage cost figure calculated by the Department, the result is that the level of permanent staff wages goes up towards and beyond that of agency nurses.
The Minister gave figures for the cost of agency nurses in a Written Answer to my hon. Friend the Member for Harrow, West (Mr. Page) on 19th February. He said that the average cost of a permanent nurse in the health service was £3,577 a year and that the cost of an agency nurse was between £3,000 and £4,000; he did not give the exact cost. But the average of those two figures is £3,500 a year, and that means that on the Minister's own figures agency nurses cost less than permanent staff.
In 1973 there were 257,975 nurses employed in the health service in the United Kingdom. In addition 21,146 were employed in midwifery, giving an overall total in excess of 278,000. The number of agency nurses employed was 4,061–2 per cent. of that total. All this fuss is being made over 2 per cent. of nurses employed at a cost no higher than for employing staff nurses, taking into account all the fringe benefits.
Who are the people that the Minister wants to get rid of? They are married women, women who have children and who need to go out to work. They are mothers in single-parent families. They are women who look after parents or children and who have part of their time available. They are trained people who have retired from other jobs but who can make a contribution to the hospital service. They want to do a job, but they

1459
can do it only if they are allowed to work fewer hours and are not forced to go into full-time employment. The service needs them and it is already using them.
The Minister says "Once we do away with the agency nurses, the people who come from outside to work part-time in the National Health Service, we shall recreate the system by providing banks of nurses." That was what the Department's circular said. But that would not achieve any savings. A bank system in the service would have to be run by someone, and it would employ more people running it than the outside agencies employ in running their services, for which the Minister and the hospital service pay nothing. Such a system would also have to bear the cost of advertising for personnel, and the cost of advertising for personnel in the National Health Service is already high. There is no justification for adding to it, and there is no justification for the service having to pay when it is already being paid for by the agencies which provide the people whom the service needs.
The agencies have been registered since 1943. There is no complaint about the standard they provide, no complaint that they are not giving the Minister and the hospitals the kind of expertise that is needed. The agencies have to provide a service which is regulated by certain rules which make it imperative to provide the right kind of service and the right kind of people. I very much doubt whether the health service would have been using them until now if there had been any complaints about their ability or the kind of service they provide.
The truth is that in this, as in so many other matters, the Secretary of State is following and not leading. The right hon. Lady has been pressed by the unions to get rid of agency nurses. Like Lady Godiva, she says "I, too, will display my talent for appealing to popular acclaim." She did that with pay beds, and she is doing it in this matter. If she is not careful she will also, like Lady Godiva, finish up on a monument, as the Minister who destroyed the National Health Service by covering up the real deficiencies through the public display of popular but bogus statistics.
If action is taken on the circular, if the hospitals do what the Minister says they should do, what will be the result?
1460
Beds will close. The service to patients will become worse. Waiting lists will increase. Costs will rise. An already rocky health service will become even more rocky. If the hospitals carry out the terms of the circular, the part that has been played by the outside people who come to work in our hospitals will be seriously diminished. In International Women's Year the Secretary of State will make it more difficult for married women who can work only part-time to play a part in the health service. Is that what she wants?
Unions and administrators in the service are to blame in many cases for people opting for agency work. I was on the management committee of a hospital for 12 years, so I know about these matters. I know someone who wanted to work in the service part-time, and her example can be duplicated throughout the country. She had worked in it full-time, and after her marriage she wanted to continue the same work part-time. She was told, however, that she could not have the same holidays as her husband and could not have the odd day off when necessary. On pressure from the unions, the administrators provided no flexibility to allow her to work within the service permanently and meet her domestic needs. She became a permanent agency employee.
That is not necessary. What is required is additional flexibility built into the service. I make this forecast to the Minister: that in the next year—and he knows it—a great deal less money will be available for the National Health Service, as for other Government services, and hospitals will not be able to recruit up to the numbers of permanent staff allowed by their establishments. Restrictions on the employment of permanent staff, imposed not because men and women are not coming into the service but because of the lack of finance to pay for them, will cause a situation in which, if the Minister also clamps down on the employment of agency nurses, wards will be closed in many hospitals throughout the country.
Wards will be closed on the ploy normally used by management committees. I have served on one and done it. A ward is closed and the reason is said to be redecoration. It is closed for that

1461
reason because it is not wanted to reduce the beddage, which is maintained until the management committee can no longer afford to pay for the nurses to man it.
If agency nurses are to be used only for emergencies—perhaps the Minister will explain what he means by "emergency", which is the term used in the circular—what will happen about filling in for holidays, which are not emergencies but normal events? Are permanent nurses to be employed for this purpose, so that they are kept underemployed for the rest of the year? What is to be done about filling in for sickness periods? Are permanent staff to be employed for that purpose, so keeping them underemployed for the rest of the year? What about filling in for the heavy winter months experienced by every hospital?
If hospitals do not have agency nurses, they will need to employ extra permanents. If they have to do that and if at the same time, because of Treasury finance not being available, the Minister imposes a clamp-down, the hospitals will have to reduce their service to the public. They will have to close more wards. They will have to give an inferior service. They will have to lengthen their waiting lists. Fewer patients will be given the treatment they require.
The circular is ill advised. It poses a political posture. Political postures when dealing with health are never good, and the Minister should seek to withdraw it or hope that it is not implemented.
11.29 p.m.
The Under-Secretary for Health and Social Security (Mr. Michael Meacher): I welcome the opportunity to discuss the use of agency nurses in the National Health Service. Perhaps I should say how pleased I am that the subject has been raised by the hon. Member for Rutland and Stamford (Mr. Lewis), who played a very important rôle in regulating the work of employment agencies generally and who promoted the Employment Agencies Act 1973. He will remember that we supported that when we were in opposition.
I noted that the hon. Member said at the start of his speech that he supported a reduction in the use of agency nurses, though not their elimination, but his comments afterwards scarcely bore out even
1462
his acknowledged belief that there should be some reduction, and I hope that I shall be able to persuade him of its merits.
I do not want to belittle the excellent work that individual agency nurses and nurses' agencies have contributed over recent years. But the problem is that our dependence on them, though it is still very small over the country as a whole, has increased substantially in certain areas of the country, especially in London, over recent years. It was clear to us that the time had come to make some move to halt this development, and I do not think that the hon. Gentleman necessarily disagrees with that.
Perhaps I might illustrate the problem with two or three significant figures. The hon. Gentleman perhaps underestimates the extent of coverage of agency nurses. Whereas in 1965 the number of agency nurses and midwives in English hospitals was only about 1,450 in whole-time equivalents, by April 1974—we have no more recent figures—it had risen to about 4,850. That is rather higher than the figure which the hon. Gentleman mentioned of a little over 4,000. The number of qualified nurses has of course risen over this period, but in percentage terms the number of agency nurses has risen more sharply and they constituted not 2 per cent. as the hon. Gentleman said but 3·6 per cent. of all qualified nurses in April 1974—and the proportion probably has increased since then—compared with 1·5 per cent. 10 years ago. That is a substantial increase.
The real impact of agency nursing has been in London and the South-East, as I am sure the hon. Gentleman realises. One in five of all staff nurses in the Thames region is employed by an agency. In our view, this is quite unacceptable in the interests of good management.
I know that in a number of quarters, particularly the agencies which have nearly trebled in number since 1968, there is a belief that the Government have decided to act for ideological or administrative reasons without real regard to the needs of the service and of the patient. The hon. Gentleman made some play of our paying regard to the attitude of the trade unions. I put it to him, however, that this emphasis is not fair and that what he says simply is not true. There are very real problems associated with

1463
agency nurses, and we set them out in the recent circular to health authorities. The most important is that where agency nurses are employed, especially if there is frequent change, continuity and stability in the working environment for all nurses are affected, and the patients suffer in consequence of the continued change in the nurses who are attending them.
Agency nurses tend to be less willing or able to play a full part in administrative work, and the training and supervision of student and pupil nurses may also suffer, precisely for the reason to which the hon. Gentleman drew attention. It puts the responsibility for these important parts of the work on to the remainder of the nurses, and that is why it breeds considerable resentment. Secondly, the morale of nurses employed by the hospital itself may also be lowered.
For many young people the agency way of life is attractive in giving them the opportunity to choose their own hours and periods of work. But those with a more responsible and caring attitude who are employed by the hospital are naturally from time to time resentful of the apparent privileges of the agency nurses, with their higher take-home pay—I acknowledge the point that the hon. Gentleman made there—and greater freedom. On the subject of higher pay, my right hon. Friend the Chancellor of the Exchequer has made proposals in the Finance (No. 2) Bill which will ensure that in future agency nurses along with other agency employees pay income tax through the PAYE system under Schedule E. We have also advised health authorities that they should not pay more than the Whitley Council rates. We think that these two measures should reduce the disparity, which was in most cases more apparent than real, in the pay of the two types of nurses.
Mr. Kenneth Lewis: The hon. Gentleman has just made the extraordinary suggestion that advice has been given to the effect that agencies should not pay more than Whitley rates. On what basis can any Minister tell an agency—people who, after all, are self-employed—what rates they should pay?
Mr. Meacher: It is a matter for the health authorities as to the rate they
1464
will pay nurses who are subcontracted to them from agencies. That is the point I am making. That is the advice we have given health authorities.
Mr. Patrick Cormack: I should briefly declare an interest. Will these measures take account of holidays, sick pay and the other things, so that they do not penalise the agency nurse?
Mr. Meacher: They take account of total employment costs. To that extent there is inevitably built into it some disadvantage for the agency nurse. I should add that the agency nurse will still be exempt from superannuation contributions.
For many years successive Governments have felt the need to reduce the use of agency nurses in the health service. Ten years ago, in 1965, the Department imposed a ceiling at the then current levels of employment on the numbers of agency nurses, but by 1971 the numbers were once again causing anxiety and the Department again advised health boards to review their use and to plan both short-and long-term reductions. I hope the hon Gentleman will accept this substantially bipartisan policy. But as the figures show, far from reducing its dependence on them the NHS has increased its use of them. It was clearly time for us to make another concerted effort with authorities. The recent improvement in nurses' pay, following the recommendations of the committee of inquiry chaired by Lord Halsbury, and the present financial constraints which make efficient use of manpower a prime objective seem also to favour our present efforts.
After consultation with staff as well as management interests, my right hon. Friend issued a circular in June asking health authorities as a matter of urgency to reduce and, where practicable, eliminate the use of agencies and to report to the Department on the targets they have set themselves, the progress being made and any problems encountered, including any effects on services to patients. We have called for these reports by the end of October this year and will take stock then in case any further action is necessary. This is obviously essential if our present effort is not to go the way others have gone.

1465
To achieve the long-term objective of a more stable nursing force of directly employed nurses, with its consequential benefit for patients, my right hon. Friend has explicitly accepted that there could be some risk of a temporary reduction of services in some areas. It will be for local decision how best to proceed with phasing out agency nurses and, of course, authorities will endeavour to eliminate agency nurses to the maximum degree possible without incurring such reductions of services. At the end of the day, however, they may be necessary in certain areas if the long-term benefits are to be reaped. By adopting a restrictive approach on the use of agency nurses we hope to give the necessary stimulus to a number of nurses to give up the agency way of life and return to the NHS.
My right hon. Friend thought it right to show authorities that she accepted that they might have to make hard decisions involving temporary reductions of services, and would support them, but we

PETROLEUM AND SUBMARINE PIPELINES BILL
Divisions 305 and 306

Division No. 305.]

AYES

[5.58 p.m.

Adley, Robert

Davies, Rt Hon J. (Knutsford)

Harrison, Col Sir Harwood (Eye)

Aitken, Jonathan

Dean, Paul (N Somerset)

Harvie Anderson, Rt Hon Miss

Alison, Michael

Douglas-Hamilton, Lord James

Havers, Sir Michael

Amery, Rt Hon Julian

Drayson, Burnaby

Hawkins, Paul

Arnold, Tom

Durant, Tony

Hayhoe, Barney

Atkins, Rt Hon H. (Speithorne)

Eden, Rt Hon Sir John

Heseltine, Michael

Awdry, Daniel

Edwards, Nicholas (Pembroke)

Holland, Philip

Baker, Kenneth

Elliott, Sir William

Hordem, Peter

Banks, Robert

Emery, Peter

Howe, Rt Hon Sir Geoffrey

Benyon, W.

Eyre, Reginald

Howell, David (Guildford)

Berry, Hon Anthony

Fairgrieve, Russell

Howell, Ralph (North Norfolk)

Biffen, John

Fell, Anthony

Hunt, John

Biggs-Davison, John

Finsberg, Geoffrey

Hurd, Douglas

Blaker, Peter

Fisher, Sir Nigel

Irvine, Bryant Godman (Rye)

Body, Richard

Fletcher Alex (Edinburgh N)

James, David

Boscawen, Hon Robert

Fletcher-Cooke, Charles

Jenkin, Rt Hon P. (Wanst'd&W'df'd)

Bottomley, Peter

Fookes, Miss Janet

Jessel, Toby

Bowden, A. (Brighton, Kemptown)

Fowler, Norman (Sutton C'f'd)

Johnson Smith, G. (E Grinstead)

Boyson, Dr Rhodes (Brent)

Fox, Marcus

Jopling, Michael

Braine, Sir Bernard

Fry, Peter

Kaberry, Sir Donald

Brittan, Leon

Galbraith, Hon T. G. D.

Kellett-Bowman, Mrs Elaine

Brotherton, Michael

Gardiner, George (Reigate)

Kimball, Marcus

Brown, Sir Edward (Bath)

Gardner, Edward (S Fylde)

King, Evelyn (South Dorset)

Bryan, Sir Paul

Gilmour, Rt Hon Ian (Chesham)

King, Tom (Bridgwater)

Buchanan-Smith, Alick

Gilmour, Sir John (East Fife)

Kirk, Peter

Buck, Antony

Glyn, Dr Alan

Knight, Mrs Jill

Budgen, Nick

Godber, Rt Hon Joseph

Knox, David

Bulmer, Esmond

Goodhart, Philip

Lamont, Norman

Butler, Adam (Bosworth)

Goodhew, Victor

Lane, David

Carlisle, Mark

Goodlad, Alastair

Langford-Holt, Sir John

Chalker, Mrs Lynda

Gorst, John

Latham, Michael (Melton)

Channon, Paul

Gow, Ian (Eastbourne)

Lawrence, Ivan

Clark, Alan (Plymouth, Sutton)

Gower, Sir Raymond (Barry)

Lawson, Nigel

Clark, William (Croydon S)

Grant, Anthony (Harrow C)

Lester, Jim (Beeston)

Clegg, Walter

Gray, Hamish

Lewis, Kenneth (Rutland)

Cockcroft, John

Grieve, Percy

Loveridge, John

Cooke, Robert (Bristol W)

Griffiths, Eldon

Luce, Richard

Cope, John

Grist, Ian

McAdden, Sir Stephen

Cordle, John H.

Grylls, Michael

McCrindle, Robert

Cormack, Patrick

Hall, Sir John

Macfarlane, Neil

Corrie, John

Hall-Davis, A. G. F.

Macmillan, Rt Hon M. (Farnham)

Costain, A. P.

Hamilton, Michael (Salisbury)

McNair-Wilson, M. (Newbury)

Crouch, David

Hannam,John

McNair-Wilson, P. (New Forest)

hope that this would not normally be necessary, and we have advised authorities of the need to examine carefully their staffing needs, to keep them under constant review and to ensure that available staff are economically deployed. This would be important at any time, but it is particularly so when the country is facing such severe economic difficulties.
How, then, do we see the future? As I have said, we certainly hope that a number of agency nurses will return to direct full-time employment in the NHS. But agency nursing is not the only way that nurses, who either have responsibilities—
The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty minutes to Twelve o'clock.

Madel, David

Prior, Rt Hon James

Sproat, Iain

Marshall, Michael (Arundel)

Pym, Rt Hon Francis

Stainton, Keith

Marten, Nell

Raison, Timothy

Stanbrook, Ivor

Mates, Michael

Rathbone, Tim

Stanley, John

Mather, Carol

Rawlinson, Rt Hon Sir Petet

Steen, Anthony (Wavertree)

Maude, Angus

Rees, Peter (Dover & Deal)

Stewart, Ian (Hitchin)

Mawby, Ray

Rees-Davies, W. R.

Stokes, John

Maxwell-Hyslop, Robin

Renton, Rt Hon Sir D. (Hunts)

Stradling Thomas, J.

Mayhew, Patrick

Ronton, Tim (Mid-Sussex)

Tapsell, Peter

Meyer, Sir Anthony

Rhys Williams, Sir Brandon

Taylor, R. (Croydon NW)

Miller, Hal (Bromsgrove)

Ridley, Hon Nicholas

Taylor, Teddy (Cathcart)

Mills, Peter

Ridsdale, Julian

Tebbit, Norman

Mitchell, David (Basingstoke)

Rifkind, Malcolm

Temple-Morris, Peter

Moate, Roger

Rippon, Rt Hon Geoffrey

Thomas, Rt Hon P. (Kendon S)

Monro, Hector

Roberts, Wyn (Conway)

Townsend, Cyril D.

Montgomery, Fergus

Rodgers, Sir John (Sevenoaks)

Tugendhat, Christopher

Moore, John (Croydon C)

Rost, Peter (SE Derbyshire)

Van Straubenzee, W. R.

More, Jasper (Ludlow)

Royle, Sir Anthony

Vaughan, Dr Gerard

Morgan, Geraint

Sainsbury, Tim

Viggers, Peter

Morris, Michael (Northampton S)

St. John-Stevas, Norman

Wakeham, John

Morrison, Charles (Devizes)

Scott, Nicholas

Walker-Smith, Rt Hon Sir Derek

Morrison, Hon Peter (Chester)

Shaw, Giles (Pudsey)

Wall, Patrick

Mudd, David

Shaw, Michael (Scarborough)

Walters, Dennis

Neave, Alrey

Shelton, William (Streatham)

Warren, Kenneth

Nelson, Anthony

Shepherd, Colin

Weatherill, Bernard

Neubert, Michael

Shersby, Michael

Whitelaw, Rt Hon William

Newton, Tony

Silvester, Fred

Wiggin, Jerry

Normanton, Tom

Sims, Roger

Winterton, Nicholas

Oppenhelm, Mrs Sally

Sinclair, Sir George

Wood, Rt Hon Richard

Page, John (Harrow West)

Skeet, T. H. H.

Young, Sir G. (Ealing, Acton)

Page, Rt Hon R. Graham (Crosby)

Smith, Dudley (Warwick)

Younger, Hon George

Parkinson, Cecil

Speed, Keith

Percival, Ian

Spence, John

TELLERS FOR THE AYES:

Peyton, Rt Hon John

Spicer, Jim (W Dorset)

Mr. Spencer Le Marchant and

Pink, R. Bonner

Spicer, Michael (S Worcester)

Mr. Michael Roberts.

NOES

Abse, Leo

Craigen, J. M. (Maryhill)

Freud, Clement

Allaun, Frank

Crawshaw, Richard

Garrett, John (Norwich S)

Anderson, Donald

Cronin, John

Garrett, W. E. (Wallsend)

Archer, Peter

Cryer, Bob

George, Bruce

Armstrong, Ernest

Cunningham, G. (Islington S)

Gilbert, Dr John

Ashley, Jack

Cunningham, Dr J. (Whiten)

Ginsburg, David

Ashton, Joe

Dalyell, Tam

Golding, John

Atkins, Ronald (Preston N)

Davidson, Arthur

Gould, Bryan

Atkinson, Norman

Davies, Bryan (Enfield N)

Gourlay, Harry

Bagier, Gordon A. T.

Davies, Denzil (Llanelli)

Graham, Ted

Bain, Mrs Margaret

Davies, Ifor (Gower)

Grant, George (Morpeth)

Barnett, Rt Hon Joel (Heywood)

Davis, Clinton (Hackney C)

Grant, John (Islington C)

Bates, Alf

Deakins, Eric

Grimond, Rt Hon J.

Bean, R. E.

Dean, Joseph (Leeds West)

Grocott, Bruce

Beith, A. J.

de Freitas, Rt Hon Sir Geoffrey

Hamilton, James (Bothwell)

Benn, Rt Hon Anthony Wedgwood

Delargy, Hugh

Hamilton, W. W. (Central Fife)

Bennett, Andrew (Stockport N)

Dell, Rt Hon Edmund

Harrison, Walter (Wakefield)

Bidwell, Sydney

Dempsey, James

Hart, Rt Hon Judith

Bishop, E. S,

Doig, Peter

Hatton, Frank

Blenkinsop, Arthur

Dormand, J. D.

Hayman, Mrs Helene

Boardman, H.

Douglas-Mann, Bruce

Healey, Rt Hon Denis

Booth, Albert

Duffy, A. E. P.

Henderson, Douglas

Boothroyd, Miss Betty

Dunn, James A.

Hooley, Frank

Bottomley, Rt Hon Arthur

Dunnett, Jack

Horam, John

Boyden, James (Bish Auck)

Dunwoody, Mrs Gwyneth

Howell, Denis (B'ham Sm H)

Bradley, Tom

Edelman, Maurice

Howells, Geraint (Cardigan)

Brown, Hugh D. (Provan)

Edge, Geoff

Hoyle, Doug (Nelson)

Brown, Robert C. (Newcastle W)

Edwards, Robert (Wolv SE)

Huckfield, Les

Brown, Ronald (Hackney S)

Ellis, John (Brigg & Scun)

Hughes, Rt Hon C. (Anglesey)

Buchan, Norman

Ellis, Tom (Wrexham)

Hughes, Mark (Durham)

Buchanan, Richard

English, Michael

Hughes, Robert (Aberdeen N)

Butler, Mrs Joyce (Wood Green)

Ennals, David

Hughes, Roy (Newport)

Callaghan, Jim (Middleton & P)

Evans, Fred (Caerphilly)

Hunter, Adam

Campbell, Ian

Evans, Ioan (Aberdare)

Irvine, Rt Hon Sir A. (Edge Hill)

Canavan, Dennis

Ewing, Harry (Stirling)

Irving, Rt Hon S. (Dartford)

Cant, R. B.

Faulds, Andrew

Jackson, Colin(Brighouse)

Carmichael, Neil

Fernyhough, Rt Hon E.

Jackson, Miss Margaret (Lincoln)

Carter, Ray

Fitch, Alan (Wigan)

Janner, Greville

Cartwright, John

Flannery, Martin

Jeger, Mrs Lena

Castle, Rt Hon Barbara

Fletcher Raymond (Ilkeston)

Jenkins, Hugh (Putney)

Clemitson, Ivor

Fletcher, Ted (Darlington)

Jenkins. Rt Hon Roy (Stechford)

Cocks, Michael (Bristol S)

Foot, Rt Hon Michael

John, Brynmor

Cohen, Stanley

Ford, Ben

Johnson, James (Hull West)

Conlan, Bernard

Forrester, John

Johnson, Walter (Derby S)

Cook, Robin F. (Edin C)

Fowler, Gerald (The Wrekin)

Johnston, Russell (Inverness)

Corbett, Robin

Fraser, John (Lambeth, N'w'd)

Jones, Alec (Rhondda)

Cox, Thomas (Tooting)

Freeson, Reginald

Jones, Barry (East Flint)

1468

1469

Jones, Dan (Burnley)

Murray, Rt Hon Ronald King

Stewart, Donald (Western Isles)

Judd, Frank

Newens, Stanley

Stewart, Rt Hon M. (Fulham)

Kaufman, Gerald

Noble, Mike

Stoddart, David

Kelley, Richard

Oakes, Gordon

Stott, Roger

Kerr, Russell

O'Halloran, Michael

Strang, Gavia

Kilroy-Sllk, Robert

Orbach, Maurice

Strauss, Rt Hon G. R.

Kinnock, Nell

Orme, Rt Hon Stanley

Summerskill, Hon Dr Shirley

Lambie, David

Ovenden, John

Swain, Thomas

Lamborn, Harry

Owen, Dr David

Taylor, Mrs Ann (Bolton W)

Lamond, James

Palmer, Arthur

Thomas, Jeffrey (Abertillery)

Latham, Arthur (Paddington)

Park, George

Thomas, Mike (Newcastle E)

Leadbitter, Ted

Parker, John

Thomas, Ron (Bristol NW)

Lee, John

Parry, Robert

Thompson, George

Lestor, Miss Joan (Eton & Slough)

Pavitt, Laurie

Thorne, Stan (Preston South)

Lewis, Arthur (Newham N)

Peart, Rt Hon Fred

Thorpe, Rt Hon Jeremy (N Devon)

Lewis, Ron (Carlisle)

Pendry, Tom

Tierney, Sydney

Lipton, Marcus

Perry, Ernest

Tinn, James

Lomas, Kenneth

Phipps, Dr Colin

Tomlinson, John

Loyden, Eddie

Price, William (Rugby)

Tomney, Frank

Luard, Evan

Radice, Giles

Torney, Tom

Lyon, Alexander (York)

Reid, George

Tuck, Raphael

Lyons, Edward (Bradford W)

Richardson, Miss Jo

Urwln, T. W.

McCartney, Hugh

Roberts, Albert (Normanton)

Wainwright, Edwin (Dearne V)

McElhone, Frank

Robertson, John (Paisley)

Walden, Brian (B'ham, L dyw'd)

MacFarquhar, Roderick

Roderick, Caerwyn

Walker, Harold (Doncaster)

McGuIre, Michael (Ince)

Rodgers, George (Chorley)

Walker, Terry (Kingswood)

Mackenzie, Gregor

Rodgers, William (Stockton)

Ward, Michael

Mackintosh, John P.

Rooker, J. W.

Watkins, David

Maclennan, Robert

Roper, John

Watkinson, John

McMillan, Tom (Glasgow C)

Rose, Paul B.

Watt, Hamish

McNamara, Kevin

Ross, Stephen (Isle of Wight)

Weetch, Ken

Magee, Bryan

Ross, Rt Hon W. (Kilmarnock)

Weitzman, David

Mahon, Simon

Rowlands, Ted

Wellbeloved, James

Mallalieu, J. P. W.

Sandelson, Neville

White, James (Pollok)

Marks, Kenneth

Sedgemore, Brian

Whitehead, Phillip

Marquand, David

Selby, Harry

Whitlock, William

Marshall, Dr Edmund (Goole)

Shaw, Arnold (Ilford South)

Willey, Rt Hon Frederick

Mason, Rt Hon Roy

Sheldon, Robert (Ashton-u-Lyne)

Williams, Alan (Swansea W)

Maynard, Miss Joan

Shore, Rt Hon Peter

Williams, Alan Lee (Hornch'ch)

Meacher, Michael

Short, Rt Hon E. (Newcastle C)

Williams, Rt Hon Shirley (Hertford

Mellish, Rt Hon Robert

Short, Mrs Renée (Wolv NE)

Wilson, Alexander (Hamilton)

Mendelson, John

Silkln, Rt Hon John (Deptford)

Wilson, Gordon (Dundee E)

Mikardo, Ian

Silkin, Rt Hon S. C. (Dulwich)

Wilson, Rt Hon H. (Huyton)

Millan, Bruce

Sillars, James

Wilson, William (Coventry SE)

Miller, Dr M. S. (E Kilbride)

Silverman, Julius

Wise, Mrs Audrey

Miller, Mrs Millie (Ilford N)

Skinner, Dennis

Woodall, Alec

Mitchell, R. C. (Solon, Itchen)

Small, William

Woof, Robert

Molloy, William

Smith, Cyril (Rochdale)

Wrlgglesworth, Ian

Morris, Alfred (Wythenshawe)

Smith, John (N Lanarkshire)

Young, David (Bolton E)

Morris, Charles R. (Openshaw)

Snape, Peter

Morris, Rt Hon J. (Aberavon)

Spriggs, Leslie

TELLERS FOR THE NOES:

Moyle, Roland

Stallard, A. W.

Mr. Joseph Harper and

Mulley, Rt Hon Frederick

Steel, David (Roxburgh)

Mr. Donald Coleman.

Division No. 306.]

AYES

[9.30 p.m.

Beith, A J.

Ross, Stephen (Isle of Wight)

Wigley, Dafydd

Grimond, Rt Hon J.

Smith, Cyril (Rochdale)

Wilson, Gordon (Dundee E)

Hooson, Emlyn

Steel, David (Roxburgh)

Howells, Geraint (Cardigan)

Stewart, Donald (Western Isles)

TELLERS FOR THE AYES:

Johnston, Russell (Inverness)

Thompson, George

Mrs. Margaret Bain and

Penhaligon, David

Wainwright, Richard (Colne V)

Mr. Douglas Henderson.

Reid, George

Watt, Hamish

NOES

Abse, Leo

Bishop, E. S.

Carmichsel, Neil

Allaun, Frank

Blenkinsop, Arthur

Carter, Ray

Anderson, Donald

Boardman, H.

Cartwright, John

Archer, Peter

Booth, Albert

Castle, Rt Hon Barbara

Armstrong, Ernest

Bottomley, Rt Hon Arthur

Clemitson, Ivor

Ashley, Jack

Boyden, James (Bish Auck)

Cocks, Michael (Bristol S)

Ashton, Joe

Bradley, Tom

Cohen, Stanley

Atkins, Ronald (Preston N)

Brown, Hugh D. (Glasgow, Pr)

Coleman, L,

Atkinson, Norman

Brown, Robert C. (Newcastle)

Concannon, J. D.

Bagier, Gordon A. T.

Brown, Ronald (Hackney S)

Conian, Bernard

Barnett, Guy (Greenwich)

Buchan, Norman

Cook, Robin F. (Edln C)

Barnett, Joel (Heywood)

Buchanan, Richard

Corbett, Robin

Bates, Alt

Butler, Mrs Joyce (Haringey)

Cox, Thomas (Wands, Toot)

Bean, R. E.

Callaghan, Jim (Mlddleton & P)

Craigen, J. M. (Maryhill)

Benn, Rt Hon Anthony Wedgwood

Campbell, Ian

Crawshaw, Richard

Bennett, Andrew (Stockport N)

Canavan, Dennis

Cronin, John

Bidwell, Sydney

Cant, R. B,

Crosland, Rt Hon Anthony

1470

1471

Cryer, Bob

John, Brynmor

Radice, Giles

Cunningham, Dr J. (Whiteh)

Johnson, James (Kingston W)

Richardson, Miss Jo

Dalyell, Tam

Johnson, (Derby S) Walter

Rifkind, Malcolm

Davidson, Arthur

Jones, Alec (Rhondda)

Roberts, Albert (Normanton)

Davies, Bryan (Enfield N)

Jones, Barry (East Flint)

Roberts, Gwilym (Cannock)

Davies, Denzil (Llanelli)

Jones, Dan (Burnley)

Robertson, John (Paisley)

Davies, Ifor (Gower)

Judd, Frank

Roderick, Caerwyn

Davis, S. Clinton (Hackney C)

Kaufman, Gerald

Rodgers, George (Chorley)

Deakins, Eric

Kelley, Richard

Rodgers, William (Teesside)

Dean, Joseph (Leeds West)

Kerr, Russell

Rooker, J. W.

de Freitas, Rt Hon Sir Geoffrey

Kilroy-Silk, Robert

Roper, John

Delargy, Hugh

Kimball, Marcus

Rose, Paul B.

Dell, Rt Hon Edmund

Klnnock, Neil

Ross, Rt Hon W. (Kilm'nock)

Dempsey, James

Lambie, David

Rowlands, Ted

Doig, Peter

Lamborn, Harry

Ryman, John

Dormand, J. D.

Lamond, James

Sedgemore, B.

Douglas-Mann, Bruce

Latham, Arthur (Paddington)

Selby, Harry

Dunn, James A.

Leadbitter, Ted

Shaw, Arnold (Redbridge, Ilf)

Dunnett, Jack

Lee, John

Sheldon, Robert (Ashton-u-Lyne)

Eadie, Alex

Lewis, Arthur (Newham N.)

Shore, Rt Hon Peter

Edelman, Maurice

Lewis, Ron (Carlisle)

Short, Rt Hon Edward (Newcastle C)

Edge, Geoffrey

Lipton, Marcus

Short, Mrs Renée (Wolv NE)

Edwards, Robert (Wolv SE)

Litterick, Tom

Silkin, Rt Hn John (Lewish)

Ellis, John (Brig & Scun)

Lomas, Kenneth

Silkin, Rt Hn S. C. (Southwk)

Ellis, Tom (Wrexham)

Loyden, Eddie

Sillars, James

English, Michael

Lyon, Alexander (York)

Silverman, Julius

Ennals, David

Lyons, Edward (Bradford W)

Skinner, Dennis

Evans, Ioan L. (Aberdare)

McCartney, Hugh

Small, William

Evans, John (Newton)

McElhone, Frank

Smith, John (N Lanarkshire)

Ewing, Harrv (Stirling)

MacFarquhar, R.

Snape, Peter

Fairgrieve, Russell

McGuire, Michael (Ince)

Spriggs, Leslie

Faulds. Andrew

Mackenzie, Gregor

Sproat, Iain

Fernyhough, Rt Hon E.

Mackintosh, John P.

Stallard, A. W.

Fitch, Alan (Wigan)

McMillan, Tom (Glasgow C.)

Stewart, Rt Hn Michael (H'smith, F)

Flannery, Martin

McNamara, Kevin

Stott, Roger

Fletcher, Alex (Edinburgh N)

Madden, Max

Strang, Gavin

Fletcher, Raymond (Ilkeston)

Magee, Bryan

Strauss, Rt Hon G. R.

Fletcher, Ted (Darlington)

Mahon, Simon

Summerskill, Hon Dr Shirley

Ford, Ben T.

Mallalieu, J. P. W.

Swain, Thomas

Forrester, John

Marks, Ken

Taylor, Mrs Ann (Bolton W)

Fowler, Gerald (The Wrekin)

Marquand, David

Thomas, Jeffrey (Abertillery)

Fraser, John (Lambeth, N)

Marshall, Dr. Edmund (Goole)

Thomas, Mike (Newcastle)

Freeson, Reginald

Mason, Rt Hon Roy

Thomas, Ron (Bristol NW)

Garrett, John (Norwich S)

Maynard, Miss Joan

Thorne, Stan (Preston)

Garrett, W. E. (Wallsend)

Hellish, Rt Hon Robert

Tierney, Sydney

George, Bruce

Mendelson, John

Tinn, James

Gilbert, Dr John

Mikardo, Ian

Tomlinson, John

Ginsburg, David

Millan, Bruce

Tomney, Frank

Golding, John

Miller, Mrs Millie (Redbridge)

Torney, Tom

Gould, Bryan

Mitchell, R. C. (Soton, Itchen)

Tuck, Raphael

Gourlay, Harry

Molloy, William

Urwin, T. W.

Grant, George (Morpeth)

Monro, Hector

Varley, Rt Hon Eric G.

Grant, John (Islington C.)

Morris, Alfred (Wythenshawe)

Wainwright, Edwin (Dearne V)

Grocott, Bruce

Morris, Charles R. (Openshaw)

Walden, Brian (B'ham, L'dyw'd)

Hamilton, James (Bothwell)

Morris, Rt Hon John (Aberavon)

Walker, Harold (Doncaster)

Hamilton, W. W. (Central Fife)

Moyle, Roland

Walker, Terry (Kingswood)

Harper, Joseph

Mulley, Rt Hon Frederick

Watkins, David

Harrison, Walter (Wakefield)

Murray, Ronald King

Watkinson, John

Hart, Rt Hon Judith

Newens, Stanley

Weetch, Ken

Hatton, Frank

Noble, Mike

Weitzman, David

Hayman, Mrs Helene

Oakes, Gordon

Wellbeloved, James

Healey, Rt Hon Denis

Ogden, Eric

White, Frank R. (Bury)

Heffer, Eric S.

O'Halloran, Michael

White, James (Glasgow, P)

Hooley, Frank

O'Malley, Rt Hon Brian

Whitehead, Phillip

Horam, John

Orbach, Maurice

Whitlock, William

Howell, Denis (B'ham, Sm H)

Ovenden, John

Willey, Rt Hon Frederick

Hoyle, Doug (Nelson)

Owen, Dr David

Williams, Alan, Lee (Haver'g)

Huckfield, Leslie

Padley, Walter

Williams, Rt Hn Shirley (Hertford)

Hughes, Rt Hon C. (Anglesey)

Palmer, Arthur

Williams, W. T. (Warrington)

Hughes, Mark (Durham)

Park, George

Wilson, Alexander (Hamilton)

Hughes, Robert (Aberdeen N)

Parker, John

Wilson, Rt Hon H. (Huyton)

Hughes, Roy (Newport)

Parry, Robert

Wilson, William (Coventry SE)

Hunter, Adam

Pavitt, Laurie

Wise, Mrs Audrey

Irvine, Rt Hon Sir A. (L'pool)

Peart, Rt Hon Fred

Woof, Robert

Irving, Rt Hon S. (Dartford)

Pendry, Tom

Wrigglesworth, Ian

Jackson, Colin (Brighouse)

Perry, Ernest

Young, David (Bolton E)

Jackson, Miss Margaret (Lincoln)

Phipps, Dr Colin

Janner, Greville

Prescott, John

TELLERS FOR THE NOES:

Jenkins, Hugh (Wandsworth)

Price, Christopher (Lewisham W)

Miss Betty Boothroyd and

Jenkins, Rt Hon Roy (B'ham, St)

Price, William (Rugby)

Mr. David Stoddart.