CONSTITUTION OF THE CORPORATION

HC Deb 28 July 1975 vol 896 cc1373-421

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—

1. (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.
2. (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.
3. (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—

1. (a) shall appoint one member to be chair man of the Corporation;
2. (b) may appoint another member or other members to be the deputy chairman or deputy chairmen of the Corporation;
3. (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;
4. (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 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 (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, 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 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 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 (Renfrewshire, West)

I agree with a great deal of the hon. Gentleman's argument, but surely 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 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 (Aberdeen, South)

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- 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 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 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.

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.

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 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 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.

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.

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 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 (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 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 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 (Fife, Central)

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 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 (Clackmannan and East Stirlingshire)

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 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 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.

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.

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 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, 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.

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 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 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 (Galloway)

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 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 (Leeds, West)

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- 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. 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 (Western Isles)

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 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, 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 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.

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 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 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 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 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- 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'. 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—

1. (a) if he is not the chairman, to the chairman;
2. (b) if he is the chairman, to the Secretary of State;
3. (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.

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 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 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 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.]