Commons Sitting of 5 November 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  BROOKWOOD CEMETERY BILL [Lords]
  As amended, considered.
  Ordered,
  That Standing Order No. 205 (Notice of third reading) be suspended and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]
  Bill accordingly read the Third time and passed, with amendments.

  SHARD BRIDGE BILL [Lords]
  As amended, considered.
  Ordered,
  That Standing Order No. 205 (Notice of third reading) be suspended and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]
  Bill accordingly read the Third time and passed, with amendments.

ORAL ANSWERS TO QUESTIONS
  ENVIRONMENT

    M5 (Report)
    Mr. Whiteheadasked the Secretary of State for the Environment if he will now publish the report by Messrs. George Corduroy Ltd. into alleged contractual irregularities concerning the M5 motorway.
    The Minister for Transport (Dr. John Gilbert): I hope to publish the report later this month.
    Mr. Whitehead: I am grateful for that reply. Is my hon. Friend aware that it is now more than 15 months since the hon. Member for Gloucester (Mrs. Oppenheim) and I first approached the Department about this matter? Will my hon. Friend undertake to publish the Corduroy Report in full and not merely in extract form, in view of the serious nature of the allegations, the reputation of the firm and the representations of the individuals who brought forward the allegations?
    Dr. Gilbert: There have been certain technical problems about publishing the report. We received the results of the investigation in September last and the final report was received only a few days ago. However, I think that I can give my hon. Friend the assurance that he seeks.

    Caravan Sites (Area Designation)
    Mr. Goodhewasked the Secretary of State for the Environment if he will introduce legislation to amend the Caravan Sites Act to enable areas smaller than counties to be designated thereunder.
    The Minister for Planning and Local Government (Mr. John Silkin): No, Sir.
    Mr. Goodhew: Is the right hon. Gentleman aware that, under the law as it stands, when a local authority provides an authorised caravan site, that provision is rapidly followed by unauthorised users occupying adjacent land, such as the present site in my constituency adjacent to the Park Street roundabout, land that is owned by the right hon. Gentlemans Department? The filthy state of such sites merely antagonises those who might otherwise be in favour of producing

    375
    further authorised sites. Will the right hon. Gentleman consider this matter again? If he wants the policy to succeed and to have sites provided legally throughout the land, something must be done to ensure that a difficult situation is not created, for that merely produces objections to legal sites.
    Mr. Silkin: I do not think that there will be much disagreement in the House about the importance of the problem and the difficulties that are involved. The question is whether the suggestion made by the hon. Gentleman would help or hinder the situation. I understand that in the hon. Gentleman's area it is the county that has responsibility. Incidentally, it is a county that has done very well in tackling this problem. However, if we are to tackle the problem in the way he suggests—namely, by the designation of smaller areas—I think that the effect will be wrong in that we shall create a patchwork quilt of designation, which will mean that thereafter travelling people will be camping in unauthorised camps. That is exporting the problem. That is not the way in which to proceed. The problem needs to be considered, for undoubtedly there are many people who are engaged in this way of life. I do not think that the splitting up of designation is the right answer. There is a school of thought that believes that counties are too small an area to be designated and that it might be worth considering larger areas.
    Mr. Ward: As the largest London borough—namely, Bromley—has an area of about 40,000 acres and possesses these powers, does my right hon. Friend agree that a district such as Peterborough, which has 82,000 acres and which has energetically pursued proposals to look after the gipsies in its area, should not have to wait for extra powers for controlling travellers on the highway because the rest of the county area is perhaps slow to respond?
    Mr. Silkin: It is clear that this is a genuine difficulty. There is the danger that we may be exporting the problem to someone else. It is easy to consider the matter only from a relatively narrow point of view. I understand the problems and I sympathise with those affected, but I believe that the answer is the provision of more sites.
    Mr. Beith: In view of the situation at Berwick-upon-Tweed, in which he has taken a close personal interest, does the right hon. Gentleman recognise that special difficulties arise if a large number of caravans are imported into an area so as to inflate the demand for a site? Does the right hon. Gentleman recognise that unless some kind of estimate can be made of the number of people for whom the local authorities are obliged to provide, there is potentially no limit to the number of people who might like to park a caravan in an attractive seaside place?
    Mr. Silkin: It is a difficult problem, but the point about the nomadic way of life is that people are imported, or import themselves, from one part of the country into another. That is exactly what has happened in Berwick.

    British Railways
    Mr. Walter Johnsonasked the Secretary of State for the Environment what discussions he has had with the Chairman of British Railways concerning the reduction and curtailment of services; and if he will make a statement.
    Dr. Gilbert: The Chairman has informed me of the general lines of the management action the board proposes to take so as to meet its financial targets.
    Mr. Johnson: Is the Minister aware that the Government's railways policy is having a disastrous effect on passenger and freight receipts, despite an increase in charges of 48 per cent. last year? Does he realise that the Government are on a collision course with the railway unions and the public over any cut-back in services? I warn the Government that they will face a fight from the unions and the public, not only on any cut-back, but on any reduction in services. There must not be another Beeching.
    Dr. Gilbert: My hon. Friend will be aware that the passenger deficit this year is running at £330 million and the freight deficit at £70 million. I assure him that all the trade unions represented in the railway industry are being consulted, and will be further consulted, in the preparation of a fundamental review of transport policy now being undertaken by my right hon. Friend the Secretary of State for the Environment and myself.
    Mr. Raison: Is it not increasingly clear that the Government are moving towards the abandonment of the transport policies on which they fought the last two elections? Will the Minister say when we can expect a White Paper—a document that is clearly becoming more and more urgent? Will he also say specifically what the Government intend to do about the unauthorised freight deficit?
    Dr. Gilbert: As my right hon. Friend has made clear, no decision has yet been taken on whether the results of the transport policy review will be published in White Paper or some other form, but we hope to bring it out to the public probably very early in the New Year. The question of the freight deficit of British Rail is under consideration on the lines of reducing it to zero—in other words, of eliminating it—by 1978.
    Mr. Bagier: Will the Minister take note of the fact that Conservative Front Bench spokesmen seem to be implying that they would agree to some form of increased public expenditure on public transport? Will he ensure that, whatever the Treasury's view on this matter, any action taken will not be the thin edge of the wedge towards any further cutback in British Rail services leading to the placing of more and more traffic on our already overcrowded roads?
    Dr. Gilbert: I am grateful for my hon. Friend's earlier comments. On the question of the funds available to British Rail, part of the problem is that so much is going out in subsidies on current account to freight and passenger services that less money is available for investment—which is where we should like that money to go.
    Mr. Stephen Ross: Will the Minister have a word with the Chairman of British Rail to ensure that transport users' consultative committees and local authorities are consulted about the cuts, of which we read daily in the Press? Will he say whether these consultations will take place before cuts are imposed?
    Dr. Gilbert: I am sure that the hon. Gentleman has been around long enough to know that he should not believe everything he reads in the Press. There is a great deal of speculation about what is involved. The Chairman of British Rail is well aware of the need to keep in touch with the transport users' consulta-
    378
    tive committees, and I recently met their central committee.
    Mr. MacCormick: Will the Minister assure the people in the Highlands of Scotland that the cuts will not extend to the closing of railways in Oban, the Kyle of Lochalsh, Thurso and Wick?
    Dr. Gilbert: I have received no such proposals.
    Mr. Ovenden: Will the Minister confirm that British Rail has already sent to many local trade union officials proposals to close railway stations on Sundays? Does he accept that this is the beginning of a policy that will inevitably lead to no services at all for the majority of rural areas outside peak hours? Will he, while we still have a public transport system, abandon the targets he has set?
    Dr. Gilbert: The service cuts to which my hon. Friend refers are a matter of management responsibility for the British Rail Board [HON. MEMBERS: 'Oh."] My hon. Friends may not like it, but it is a fact. In view of the continuing deficit, which last year reached a figure on passenger account of £330 million, the choice we have to make is between some retrenchment and some economies in services and fares.
    Mr. Moate: Will the Minister explain why the proposed peak hour cuts in the Southern Region will save a meagre £760,000, according to proposals put to the unions, whereas next year British Rail will cost public funds £500 million, including support for pension schemes? Therefore, will he stop tinkering with the problem and consider a major shake-up of the British Rail Board and institute a full inquiry into the whole operation of British Rail?
    Dr. Gilbert: I cannot see any need for a full inquiry into the operations of British Rail. The facts of the situation are well appreciated. It is for the board to manage the railway system within the constraints set by the Government.

    New Towns (Sale of Houses)
    Mr. Michael Morrisasked the Secretary of State for the Environment if he will now lift the ban on the sale of new town houses to sitting tenants.
    Mr. John Silkin: No, Sir.
    Mr. Morris: That is a tragic answer. Why does the Minister persist in pursuing in Northampton and other development corporation areas a policy that is against the wishes of his own chairmen appointed by him, against his own general managers, and indeed against the desires of my tenants and my constituents? [HON. MEMBERS: "My tenants?"] Will the Minister just for once put aside party policy and bear in mind the wishes of the tenants in new towns who wish to buy their own homes?
    Mr. Silkin: The problem that faced us in March last year was that under the previous Conservative administration the waiting list periods in all the new towns had reached intolerable proportions. To some extent this was a result of the sale of rented houses to sitting tenants under the doctrinaire policies of the Conservative Government. Up to 30 per cent. of the rented stock had been so sold. I shall be prepared to lift the ban when I know that the waiting list period has gone down sufficiently to enable those who are on waiting lists to benefit.
    Mr. Moonman: Will the Minister confirm the date when legislation will be introduced to ensure the transfer of housing assets from the development corporations to local authorities—which has been Labour Party policy for many years and which has been given recent support by a Select Committee?
    Mr. Silkin: The traditional answer is that I am sure my hon. Friend would not wish me to anticipate anything that may or may not be in the Queen's Speech.
    Mr. Carlisle: Will the Minister confirm that all the chairmen of the new town development corporations have jointly asked him to remove this ban on the sale of council houses? If that is the case surely it is a matter that he should bear in mind. Furthermore, will he explain how, if a person remains in a new town house as an owner rather than a tenant, that makes any difference to the length of waiting list?
    Mr. Silkin: Conversations between a Minister and the chairmen are confidential. I cannot confirm what the hon. and learned Gentleman said, because it is not strictly true. In regard to his second point, can he explain to me—although I appreciate that he is not
    380
    allowed to do so now, but I hope that he will take the opportunity to explain on some other occasion—how it is possible to increase the stock when one is selling off rented accommodation?
    Mrs. Hayman: Will the Minister continue to reject suggestions from Opposition spokesmen that will do nothing to add to the stock of rented accommodation which is needed in new towns? Instead, will he concentrate on making sure that the Bill to transfer housing assets and housing-related assets from the Commission to democratically-responsible local authorities will take priority next Session?
    Mr. Silkin: I am grateful for the support my hon. Friend has given, and I shall bear her second suggestion strongly in mind.

    Housing
    Mr. Matherasked the Secretary of State for the Environment on which areas of housing expenditure the cuts of £50 million in subsidies and £65 million in capital expenditure will fall.
    The Minister for Housing and Construction (Mr. Reginald Freeson): The £65 million cut in housing subsidies announced in the April Budget has been restored as part of the counter-inflation policy announced in Cmnd 6151. I have not yet decided the capital expenditure programmes for 1976–77.
    Mr. Mather: How does the Minister explain the increase of subsidies of some £80 million under the Remuneration, Charges and Grants Act to hold down housing rents? Does not that mean that, far from there being a cut, there is an increase of £30 million? How will the hon. Gentleman explain that to those who are expecting home loans and who are now suffering from a cut of £100 million and half of whom will be disappointed?
    Mr. Freeson: The latter point does not relate to the first. The £80 million is the total national figure. The figure for subsidies in England and Wales is £65 million, which is not an increase. It maintains the figure that was in this year's Estimates. It was to have been cut in the figures for 1976 but will now be retained.
    Mr. Heffer: Will my hon. Friend state once again that there is no reason why local authorities in areas requiring local authority housing should hold up the local authority programme and that they can get on with the job and build the houses required? In this matter the Government are doing a first-class job.
    Mr. Freeson: I thank my hon. Friend. I am happy to confirm that that is Government policy. We have introduced a whole series of measures during the past 18 months to enable the house-building programme to improve, and it has done so by about one-third during that time. We wish to see local authorities, particularly in stress areas, such as the one I know my hon. Friend represents, go ahead with a much bigger building programme than there has been over a number of years in the recent past.

    Expanded Towns
    Mr. Spearingasked the Secretary of State for the Environment if he will now take steps to establish the appropriate level of public investment in expanded towns in South-East England in the next three years.
    Mr. John Silkin: No, Sir. The Government have no special control over the development programmes of expanding towns. Like other local authorities, each decides its own priorities.
    Mr. Spearing: Although the Government may not have the responsibility, surely it is public money. As my right hon. Friend has said that he will publish a Green Paper on the future of the South-East Regional Plan, an announcement that is widely welcomed, it is necessary to know the amount of public expenditure already committed in the South-East, so that those areas from which people and jobs have gone, such as the docklands of London, can get their fair share of future investment.
    Mr. Silkin: The major point that my hon. Friend makes is important. We must ensure that there is the right balance between the amount of money going to expanding towns and new towns and the amount preserved in the conurbations from which these people come. I accept that part of what my hon. Friend says. The difficulty about expanding towns is twofold. First, resources coming to them
    382
    come not only for their development but for their general purposes. Secondly, the expanding towns are rather larger than they were two or three years ago, because of the local government reorganisation, which has totally altered the administrative districts of some of them. But I agree that what we need is a proper assessment of whether we are using resources wisely in the inner cities as against the new towns, which I take to be my hon. Friend's point.
    Mr. Arthur Jones: Is the Minister saying that expenditure within the overall limits is open-ended for the new towns? If not, how do the Government control the expenditure? Will the right hon. Gentleman comment on the balance between public and private expenditure in new towns and the use of those joint resources? Will he have in mind what was said earlier about the sales of council houses and development corporation houses in new towns, sales which produced not less than £199 million? That had a considerable beneficial effect on the funding of the operations of new towns as a whole.
    Mr. Silkin: I think that the hon. Gentleman is talking about new towns. My hon. Friend's Question was about expanded towns, which are financed somewhat differently.

    Housing Developments (Public Services)
    Mr. Newtonasked the Secretary of State for the Environment what arrangements exist within his Department to ensure that major housing developments are accompanied by an adequate expansion of health, education and other public services.
    Mr. John Silkin: The regulation of development is the statutory responsibility of local planning authorities. Proposals for development, including housing, are considered by these authorities on their individual merits. Authorities take into account the availability of the necessary infrastructure.
    Mr. Newton: Is the Minister aware that, however well the plans are supposed to work, there is no evidence on the ground that they do, and that these problems are likely to grow steadily worse

    383
    with the growing financial crisis throughout public services? Will he consult his right hon. and hon. Friends to make sure that future plans at least give proper priority to the areas where the population has already expanded—for example, in Essex?
    Mr. Silkin: I am not aware that there is any particular difficulty in the hon. Gentleman's constituency, but if there is perhaps he would care to write to me, when I shall certainly look into it. This is a question which has been previously dealt with. Circular 122/73 gave advice to local authorities about infrastructure. But the wider problem is how local authorities deal with needs and priorities in their areas, and it is with precisely this that the Community Land Bill is designed to deal. Therefore, I sincerely hope that in a day or two we shall have the hon. Gentleman's support in the Lobbies.
    Mrs. Renée Short: Is my right hon. Friend aware that my right hon. Friend the Secretary of State for Education and Science recently sent a circular to local authorities advising them where cuts and savings could be made in their building programmes and including a paragraph—paragraph 12, I think—advising them to cut back on their nursery education plans? Is my right hon. Friend aware that that advice has caused enormous concern throughout the country? Does he not think that in order to keep architects' teams together and architects employed it would be a jolly good idea if he were to do as the hon. Member for Braintree (Mr. Newton) suggests?
    Mr. Silkin: I am sure that my right hon. Friend the Secretary of State for Education and Science would be delighted if my hon. Friend were to ask him an appropriate Question on the matter.
    Mrs. Short: That is dodging the question.

    Building Programme
    Mr. Frank Allaunasked the Secretary of State for the Environment what recent steps he has taken to encourage the public and private building programme.
    The Secretary of State for the Environment (Mr. Anthony Crosland): The public expenditure provision for local autho-
    384
    rity housing has been sharply increased, the levels of the cost yardstick raised substantially and guidance given to local authorities on ways of speeding up the house-building process. The measures taken to stabilise mortgage lending are restoring confidence in the private housing sector. As a result, private starts, public starts, private completions and public completions are all significantly higher than a year ago.
    Mr. Allaun: Does my right hon. Friend support the TUC call for a massive housing programme, and does he agree that it would not be inflationary? How could it be, with 180,000 unemployed building workers, who, with their families, cost £2,000 a year each to keep in social security benefits and in loss of income tax to the Treasury, when they could be fully employed for very little more turning out the houses that the people need?
    Mr. Crosland: If what my hon. Friend is suggesting is a crash housing programme, I am not in agreement with him, for two reasons. First, it would mean imposing an even greater element of stop-go on the house-building industry. Secondly, a massive crash programme, given present demographic trends, would imply the demolition of existing houses on a massive scale, something that I and many other hon. Members think has already gone too far. I want to see a sustainable increase in the programme, and I think that we are in sight of achieving that.
    Mr. Raison: Will the Minister explain why, when the Question referred to the building programme, he answered it only in terms of the house-building programme? Can it be that he did so as there are great difficulties in the rest of the building programme? Will he say whether he will extend his action and give close attention to the private rented sector, which is languishing as a result of the Rent Act 1974?
    Mr. Crosland: I answered the Question in terms of house building, as I understood that my hon. Friend the Member for Salford, East (Mr. Allaun) referred to that. Indeed, he nods affirmatively and confirms that understanding. I shall be happy to discuss the private rented sector, the decline of which long

    385
    predates this Labour administration. Indeed, it proceeded with exceptional rapidity in periods of Conservative Government.
    Mr. Lee: Does my right hon. Friend agree that although there has been a commendable increase in housing starts, there is considerable danger, under the take-over by the housing authorities in the spring, that his efforts will be stultified by their sabotaging activities? Will he ensure that the ban on the sale of council houses, which applies in the new towns, is extended universally to all local authorities so as to stop the Conservatives in Birmingham, for example, from wrecking the programme?
    Mr. Crosland: The Conservatives are not in power in Birmingham. As I informed the House three weeks ago, the sale of council houses is under close review. I have not taken a decision. I am watching the situation. My hon. Friend is right. If there were any considerable change—which I think and hope there will not be—in the political control of housing authorities, that would constitute the biggest imaginable threat to the council house-building programme.
    Mr. Michael Latham: As my hon. Friend the Member for Aylesbury (Mr. Raison) said that the question concerned all building, not just house-building, why has there been a drop of 47 per cent. in private industrial building over the past three months? Could that be a clear indication of the lack of confidence by industry in the Government's economic policies?
    Mr. Crosland: I am glad that the hon. Gentleman has not repeated the grossly misleading statement that he made when he last asked a supplementary question.
    Mr. Latham: I did not.
    Mr. Crosland: I thought that he did. He stated, contrary to the facts, that new orders for council house building were falling. In fact, they are rising.
    If the hon. Gentleman puts down a Question on the wider matter of industrial investment, I shall be happy to answer it.

    Caravan Sites (Electrical Installations)
    Mr. Bryant Godman Irvineasked the Secretary of State for the Environment if he will take steps to amend the Caravan Sites and Control of Development Act 1960 by adding a requirement before a licence is given to a caravan site that the electrical installation must be of such a standard that it will create no hazard to life.
    Mr. John Silkin: One of the aims of the Caravan Sites and Control of Development Act 1960 is to ensure that caravan sites are properly equipped and run. Accordingly, local authorities have the power to attach wide-ranging conditions to site licences. When they are deciding what conditions to impose they must have regard to the model standards specified by my right hon. Friend. A model standard with respect to the electrical installation on caravan sites is being prepared as a matter of urgency.
    Mr. Godman Irvine: Is the Minister aware of a tragedy in my constituency when an eight-year-old girl was electrocuted on such a site? Is he further aware that the Rother District Council was advised by his Department that it would be exceeding its powers if it took steps to attach conditions of electrical safety to a licence? Will he therefore speed up the steps that he is taking so that this matter can be dealt with?
    Mr. Silkin: I promise that I shall do my best to speed this matter. There must be discussions with the Secretary of State for Energy. I share the hon. Gentleman's concern. I understand that there are two fatalities a year as a result of faulty electrical installations on caravan sites. I shall see that we get a move on.
    Mr. Wells: Is my right hon. constituent aware, from knowledge of conditions in his village, that he is talking utter nonsense? The entire problem, as the Minister will know from his personal experience, is that the nomadic population is rising much more sharply than the house-dwelling population. Far more sites of a lower and simple standard are required. That is what the bona fide nomad wants. He wants a water pipe, clean water, and not much else Does

    387
    the Minister agree that this discussion of electricity is rubbish? Will the Minister amend the regulations and provide more sites?
    Mr. Silkin: The hon. Gentleman, for whom I regret I did not vote on two occasions, should get together with his hon. Friend the Member for Rye (Mr. Godman Irvine), whose Question referred mainly to holiday sites.
    Mr. Wigley: Is the Minister aware of the difficulties encountered by many local authorities in monitoring small sites, especially those on farms of over five acres that operate for 28 days per year? Would it be helpful if owners of such sites had to state for which 28 days of the year they were applying so that at least some measuring rod could be applied to the sites when in operation?
    Mr. Silkin: That is an interesting suggestion. I shall consider it and write to the hon. Gentleman.

    Immingham Docks
    Mr. Brothertonasked the Secretary of State for the Environment if he will pay an official visit to Immingham Docks.
    Mr. Crosland: I have no immediate plans to do so, although I am frequently in that area.
    Mr. Brotherton: That reply will be received with regret in Immingham. Does the Minister realise that in the ports of Immingham and Grimsby there is great concern about the constant increase in port and dock charges? Will he use his influence with the British Transport Docks Board to explain that raising charges in profitable ports such as Immingham, which may thereby become non-competitive, is a foolish policy? Does he agree that it is not for the profitable ports such as Immingham and Grimsby to subsidise ports such as Hull, on the north bank of the Humber, which make losses?
    Mr. Crosland: I am sorry to hear that I should not be welcome in Immingham.
    Mr. Brotherton: No. The right hon. Gentleman would be welcome.
    Mr. Crosland: The hon. Gentleman is extremely welcome in Grimsby, where we like to catch a glimpse of so eminent an eccentric.
    388
    I strongly disagree with most of the hon. Gentleman's views, as reported in the Grimsby Evening Telegraph. If I formed the slightest suspicion that the policy of the British Transport Docks Board was to penalise Immingham or Grimsby in favour of Hull, I should march arm in arm with the hon. Gentleman at the head of a demonstration.

    Construction Industry
    Mr. Michael Lathamasked the Secretary of State for the Environment what recent discussions he has held with representatives of the construction industry regarding workload, output and employment; and what action he has taken in the light of those discussions.
    Mr. Freeson: These topics have been discussed recently in the National Consultative Council for the Building and Civil Engineering Industries and in the Construction Industry Liaison Group. The industry will benefit from the measures recently announced by the Government, in particular the additional expenditure for public sector construction programmes, for factory building and for the encouragement of industrial investment.
    Mr. Latham: Is the Minister aware that the NFBTE will report tomorrow that two-thirds of all building firms axe now operating at less than three-quarters capacity and that two-thirds have already substantially shed labour? How much longer will the Government continue to waste on municipalisation and land nationalisation resources that could be put to more constructive use?
    Mr. Freeson: I hoped that we should receive a slightly deeper comment from the hon. Gentleman, who should know better about these matters.
    I am well aware of the serious situation in the construction industry. Perhaps the hon. Gentleman will explain on another occasion whether he wishes us to embark upon a major expansion in public expenditure in present circumstances, bearing in mind that 50 per cent. of the building industry's workload comes from public sector requirements.
    Mr. Ward: Is the Minister aware that in some places where the industry is working and achieving a good rate of

    389
    progress there are already shortages of key materials such as bricks? Is he investigating this situation?
    Mr. Freeson: I am aware of the existence of difficulties about supplies. We are probing the problems put to us about the situation in different parts of the country. If my hon. Friend will give me further information on these matters, about which I know he is concerned, I shall probe it further.
    Mr. Tugendhat: Is the Minister aware that in Westminster the building industry could do useful work and ease the housing shortage by converting office accommodation to residential accommodation, as the Westminster City Council wishes? Why does the Minister's Department overrule the Westminster City Council's appeals when that council wishes to convert office accommodation to residential accommodation?
    Mr. Freeson: If the hon. Gentleman will write to me about the cases he has in mind, I shall examine them. As a general proposition, I wish to see the clawing back of appropriate office accommodation. I refer to accommodation designed and built originally for housing purposes. However, zoning planning matters are not directly my concern. There are economic issues involved in such clawing back and reconversion. That is a matter in which I am interested. I shall be glad to hear further from the hon. Gentleman.
    Mr. Noble: Will my hon. Friend refrain from chastising those Opposition Members who have seen the light with regard to public expenditure? Does not he agree that the main reasons for the increase in the borrowing requirement are the continuing recession, the fall in productive employment and therefore revenue to the Chancellor of the Exchequer and the increase in the unemployment benefit that has to be paid? In the light of that, will my hon. Friend do everything he can to encourage further building, both in the public and private sectors, and so reduce the level of unemployment?
    Mr. Freeson: My hon. Friend's supplementary question ranges much further afield than my direct responsibilities. I do not accept as correct the reasons my hon. Friend gives for the increased public sector borrowing requirement. Within
    390
    the budgetary limits imposed upon me by the present economic situation, I shall seek to get as wide an expansion of housing construction and other construction activities as I possibly can. I think that my hon. Friend will agree that we have achieved a great deal in that direction in very difficult circumstances during the past 18 months.

    Water Authorities (Sewerage Schemes)
    Mr. Ridleyasked the Secretary of State for the Environment if he will review the system whereby water authorities can refuse to carry out a sewerage scheme unless "requisitioned" by the local authority concerned.
    The Minister of State, Department of the Environment (Mr. Denis Howell): This is one of the matters which will be considered in the full review of the water industry which my right hon. Friend expects to initiate in the New Year.
    Mr. Ridley: I do not urge greater expenditure on sewerage when already expenditure by the Department of the Environment is far too high, but does not the hon. Gentleman agree that it is undesirable that responsibility should be passed from the water authority to the council and back again? Should not there be one authority responsible for the provision of sewerage schemes and one authority only?
    Mr. Howell: If the hon. Gentleman is not urging additional expenditure, he is certainly urging a switch in existing priorities.
    Mr. Ridley: No.
    Mr. Howell: With great respect, he must be. He is urging that when water authorities find it impossible to carry out certain sewerage schemes, the decision should not be left to the requisitioning arrangements in the Water Act 1973, for which he voted. That must mean a switch in existing priorities, which at the moment are new housing, industrial development and the maintenance of public health standards. Those priorities must remain for the time being. By the Water Act local authorities were enabled to requisition sewerage schemes, as had always been the case with water schemes, and the two systems were brought into line.
    Mr. Cryer: Will my hon. Friend assure the House that an improvement in representation on water authorities will not await a full review of the water industry? Is he aware that water authorities are subject to criticism because they wield extensive powers without representation from the local authorities that impose rates decided by the water authorities? Will my hon. Friend take drastic and urgent action to ensure that large local authorities are properly and adequately represented on water authorities?
    Mr. Howell: More than 50 per cent. of the representation on all regional water authorities is made up of local authority nominees directly elected by the local authorities involved. To change that system would require legislation. I cannot undertake to produce legislation in advance of the full inquiry that we are conducting and our study of the results. A consultative document—either a Green Paper or a White Paper—will be published early in the New Year. Like my hon. Friend, we are anxious to have the considered view of everyone about what arrangements should apply in future.
    Mr. Spearing: Does my hon. Friend agree that one objection to the Water Act is in respect of the smaller number of members of each regional water authority? Would not a modest change in the numbers meet the problems referred to by my hon. Friend the Member for Keighley (Mr. Cryer) and accord with the wishes of most people?
    Mr. Howell: That is one reason why we opposed the Water Act. The management of water on a water basin principle involves very large areas, much larger than any previously known units of local government. The difficulty is to equate the principle of managing the water cycle in that way with any form of local government democracy.

    Slum Clearance
    Mr. Thorneasked the Secretary of State for the Environment whether restrictions on spending are adversely affecting local authority slum clearance programmes for 1975–76–77.
    Mr. Freeson: No restrictions have been imposed on local authority capital spending on slum clearance, nor on their house-building programmes.
    Mr. Thorne: Will the Minister tell me why my local authority constantly offers the explanation that it is prevented from new house building by Government restrictions on this sphere of spending?
    Mr. Freeson: I am not aware of any district representations from the local authority concerned. The point having been put to me, I shall make it my business to find out the grounds for any such statements. As far as as I am concerned, there are no such grounds.
    Mrs. Knight: Does the Minister agree that it might make good financial sense at this time to issue advice to local authorities not to tie up any more land in inner city areas until the land they already own is utilised for house building? Is the Minister aware that vast tracts of land have ben standing vacant and useless for many years?
    Mr. Freeson: I wish to see the reverse. I wish to see local authorities continuing to maintain a steady policy of the assembly of land and sites for construction purposes. However, if the hon. Lady will give me details of the sites causing her concern, I shall make it my business to probe the matter.
    Mr. Heffer: I congratulate my hon. Friend on the Government's house-building programme. Will he now turn his attention to the difficulties of Merseyside, where 10,000 building workers are unemployed, 3,000 of them skilled workers? Is my hon. Friend aware that local authority modernisation programmes are being held back for various reasons, although they have had generous support? Will my hon. Friend re-examine this matter, help our local people to find employment and, at the same time, give decent homes to those who live in local authority houses built well before the war?
    Mr. Freeson: The joint working party looking into social ownership and improvement policy is about to report. On the basis of that report we shall consider how best to allocate resources around the country. In the meantime, we are making available an additional £12 million over and above the budgeted figure for improvement work. I shall make it my business to get that money allocated to areas most in need of improvement works and capable of undertaking the use of the resources. As my hon. Friend knows

    393
    from previous conversations, I am a little anxious about the position in Liverpool where there is a risk of underspending the present allocation. We are in touch with the local authority about that.
    Mr. Stephen Ross: Will the Minister ensure that local authorities that have suffered a cutback in their programmes for improvements to pre-war council houses make proper use of houses standing empty—for example, for short-stay accommodation? I welcomed the Minister's visit to my constituency last Friday. If the local authorities will not use the many empty houses in my constituency, cannot they be passed on to housing associations?
    Mr. Freeson: I see no reason why there should be large numbers of houses standing empty. There will always be a few properties standing empty at any one time, but if many houses are standing empty because it has been impossible to programme works over a period, there is something questionable about the management policies and practice leading to that. Those policies and practices need to be reviewed, and we shall do our best to encourage such a review.

    M1 (Repairs)
    Mr. Madelasked the Secretary of State for the Environment whether he is satisfied with the rate of progress in repairing the M1 between Luton and Hemel Hempstead; what lessons his Department has learnt as a result of this work; and how long it will be before further repairs on this section of the M1 are necessary.
    Dr. Gilbert: Yes, Sir. Weather permitting, it is expected that the resurfacing between Junctions 8 and 10 will be completed by mid-November. That is earlier than originally expected. There will be consequential alterations to the central reserve and safety barrier.
    Two short sections between Junctions 7 and 8 remain to be treated next year. After this, no further major repairs are likely to become necessary for about 10 years over the whole length between the M10 and Luton.
    All aspects of the performance of the work are being monitored and reviewed, but it would be inappropriate to draw conclusions yet.
    Mr. Madel: In view of the number of accidents that have occurred during this work and the huge traffic jams that have built up, will the Minister see to it that when future major work is needed, it will be done at night during the spring and summer months? Will he also look again at the contra-flow system, because it has caused great chaos and has added to the burden of the Hertfordshire police in sorting out the traffic?
    Dr. Gilbert: The hon. Gentleman has asked several supplementaries in one. First, traffic control arrangements were made with the full agreement of the police. Secondly, we are sorry for the delays, of course—I have suffered from them myself—but this problem always arises when a motorway is already saturated with traffic, as in the case of the Ml, and when necessary repairs of this sort occur. If the repairs were to be undertaken only at night, as the hon. Gentleman suggests, I am advised that in this case that would have added about £500,000 to the cost of what was expected to be 12 weeks' work and will now, it appears, be only 11 weeks' work.
    There is, unfortunately, always a certain increase in the incidence of accidents when repair work of this sort is carried out. I have no evidence yet to suggest that the increase is anything beyond what would be normally expected.
    Mr. Corbett: Will my hon. Friend take steps to congratulate both the management and the men involved in this dangerous and difficult work, which has been done under appalling conditions?
    Is my hon. Friend aware that one reason for many of the accidents during this work was the absolutely scandalous and idiotic behaviour of drivers ignoring police speed restrictions?
    Dr. Gilbert: I am grateful to my hon. Friend for his remarks and hope that the general public will take note of them.
    Mr. Les Huckfield: Although I recognise the difficulties to which my hon. Friend has referred, is it necessary to have, particularly at weekends, either one lane or two lanes coned off for mile after mile? Would not it be possible, for example, to put the cones off the roads at the weekends so that we do not have these

    395
    traffic jams for no reason at all on Friday nights and Sunday nights?
    Dr. Gilbert: I am advised that it is not practicable for work to be suspended at peak hours, as my hon. Friend suggests. The traffic arrangements are organised to take peaks into account on a weekly but not a daily basis.

    Rent Act 1974 (Survey)
    Mr. Hal Millerasked the Secretary of State for the Environment what are the results of the departmental survey into the effects of the Rent Act 1974.
    Mr. Freeson: Research has been commissioned into the detailed effects of the Act, but this will take some time to be completed.
    Mr. Miller: Is the Minister aware that there is a very great deal of dissatisfaction about the operation of this Act, and that, far from contributing in any way to security of tenure—I speak from personal experience of looking for a flat—it is impossible to obtain any furnished flat, except for a very limited period, and that the supply is extraordinarily limited directly as a result of the Act?
    Secondly, when are we to have the report to which the Minister has referred?
    Mr. Freeson: The question related to research, and I answered that.
    I think that the hon. Member will agree that the shortage of accommodation, particularly in the London area, did not start in August 1974. There was a greater loss to the private rented sector in the three and a half to four years of the previous administration than had been experienced over a period of years before. I accept that dissatisfaction has been expressed in some quarters, but there is also a great deal of satisfaction among people who now have security in their homes.
    Mr. Snape: Will my hon. Friend accept that a great many tenants will be deeply grateful to the Government for passing the Rent Act 1974? Will he tell the House whether he has yet received the missing file from the hon. Member for Hornsey (Mr. Rossi), who is still seeking evidence of the destructive effects of the Act in relation to the private landlord? Will my hon. Friend also accept that many of us here are not interested
    396
    in the protests of the landlords' apologists on the Opposition side?
    Mr. Freeson: I received the missing file, which the hon. Member for Hornsey (Mr. Rossi) had been promising me for a year, a month or two back. It consisted of a little over 400 letters, which are still in process of being examined closely. However, on first analysis it is clear that more than 200 of them relate to matters that have nothing to do with the Rent Act 1974, and that most of the other 200 relate to matters on which people have been misinformed, partly due to the activities of the hon. Member for Hornsey.
    Mr. Rossi: I cannot possibly accept that. Is the Minister aware that the letters he has received were sent as a result of advertisements in a limited number of newspapers in the Greater London area, that they were passed on to the hon. Gentleman within a short period of the replies to those advertisements being received by me, and that therefore what he has said is misleading, to say the least?
    Concerning the evidence, will he not accept that those letters, from a limited sample, all show that there has been considerable reluctance to let on the part of private landlords because of the unfairness of the law towards them at the moment? Will he accept that that is the general message coming through quite clearly from those letters?
    Finally, will the departmental survey include an inquiry into the situation of students, about whom we have been promised legislation, which has not been forthcoming?
    Mr. Freeson: The survey does not relate to any specific group occupying furnished accommodation, though no doubt students and other single people will be involved.
    Our information via my right hon. Friend the Secretary of State for Education and Science is that the position of students is not as serious as some people, including the hon. Gentleman, had feared a year or so ago, despite one or two statements to the contrary, which are still being received. The evidence is that there is no demand or need for such legislation. However, if the position changes and I receive further information

    397
    from my right hon. Friend, I shall certainly look at the matter again.
    I stand by what I said earlier about the survey of the file sent to me by the hon. Gentleman. I add only the further point that nobody has ever denied—I certainly have not—that there is some reluctance to let on the part of landlords in situations where there is legislation controlling their activities. But this is outweighed by the large number of tenants, in both unfurnished and furnished accommodation, who would otherwise have been put out in order that their properties might be sold on the market.
    The biggest single factor causing a reduction in the private rented sector for many years now has been the increase of owner-occupation in the old areas and a certain amount of speculation in the handling of property.

    Provisional Driving Licences
    Mr. Trotterasked the Secretary of State for the Environment whether there is any limit on the number of consecutive provisional driving licences which can be held by a person who has not passed a driving test.
    Dr. Gilbert: No, Sir.
    Mr. Trotter: Is the Minister aware that on Tyneside recently a motorist who was convicted of a number of motoring offences was found to have driven for over 20 years continuously on provisional licences? Is there not, therefore, a case for requiring such people to show reasonable cause before the issue of further provisional licences when it appears that they are deliberately evading the test regulations? Is not the present situation making a farce of those regulations?
    Dr. Gilbert: I am not aware of the particular case to which the hon. Gentleman has referred, but prior to 1970 it was possible for a licensing authority to refuse a third successive provisional licence if the holder had not taken a test, or booked for one in the next six months. Those provisions were virtually never invoked. On the basis of the experience of the limit before 1970, it is very unlikely that there would be any significant gain in road safety, but I shall look at the matter.

    Building Design Teams
    Mrs. Renée Shortasked the Secretary of State for the Environment what
    398
    action he is taking to assist in maintaining established design teams of consulting engineers and architects during the present period of declining contracts in the private and public sector.
    Mr. Freeson: We have recently announced action to alleviate the problems of the construction industry, and are setting up a construction exports advisory board to promote overseas work. These steps will help to maintain established design teams. We are also considering suggestions put forward by the RIBA at a meeting I held with it on 30th June.
    Mrs. Short: I thank my hon. Friend for that reply. Is he aware that the export potential of consulting engineers and architects depends on a firm home base and that they cannot operate without a steady home market? Will he consider drawing up a list of major civil and structural engineering projects required over the next 10 or 15 years and arrange feasibility studies in order to keep teams together and provide jobs for the offices?
    Mr. Freeson: I do not think that I can accept the suggestion in the form in which it is put to me by my hon. Friend. However, the underlying proposition is accepted, and we are examining the possibility of what is loosely described as "a moving shelf" of jobs. For this to be effective in any gradual upturn of the construction industry or the economy that would allow it, we should have to concentrate, at least initially, not on major but on small schemes, which could be quickly brought off the shelf and put into the pipeline of work. We discussed this and a number of other matters with the RIBA, and we are pursuing the matter further.
    Mr. Costain: Has the hon. Gentleman's attention been drawn to the Third Report of the Public Accounts Committee, published in June, making it clear that a number of public contracts have been grossly overspent because of the lack of available drawings? Is not this an excellent opportunity, during the recession, to prepare proper drawings, so that when the recession is over we can get more buildings more cheaply?
    Mr. Freeson: Without going into the hon. Gentleman's comment about the PAC Report, I think that it can be said that he has just endorsed what I said to

    399
    my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short).
    Mr. Moate: Ought not it to be Government policy to ensure that the position of consultants with teams should not be undermined by an unreasonable build-up of design teams in the regional water authorities and the regional road construction units?
    Mr. Freeson: I am not aware of any unreasonable build-up of that kind.

QUESTIONS TO MINISTERS
Mr. Tebbit: On a point of order, Mr. Speaker. You will recollect that during Questions, on Question No. 9, there were exchanges about the Minister's answer. I appreciate that it is not for the Chair to intrude into matters affecting the nature of a reply to a parliamentary Question. However, the point was raised that the Secretary of State replied not to the Question on the Order Paper but to a Question which had not been asked, the Secretary of State saying in essence that he understood through an exchange with the hon. Member for Salford, East (Mr. Allaun) that that was in fact the Question that the hon. Gentleman wanted answering—
Mr. Speaker: Order. The hon. Member for Chingford (Mr. Tebbit) must admit that his point of order is directed to the content of an answer to a parliamentary Question. It has nothing to do with me.
Mr. Tebbit: Further to that point of order, Mr. Speaker. With great respect to you, I appreciate that the matter of a Minister's reply to a Question is not for you, but surely it is for you to decide whether Ministers may choose to answer Questions which are not on the Order Paper, otherwise we can all play this hilarious game of putting down one Question on the Order Paper and arranging for the Minister to reply to a different one if he finds that the answer to the original one will embarrass him.
Mr. Speaker: I doubt whether that course would have much success with the House.

STATUTORY INSTRUMENTS
Ordered,
That the Fuel and Electricity (Control) Act 1973 (Continuation) Order 1975 (S.I. 1975, No. 1705) be referred to a Standing Committee on Statutory Instruments.—[Mr. John Ellis.]
Ordered,
That the Sea Fish Industry Act 1970 (Relaxation of Time Limits) Order 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. John Ellis.]

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, notwithstanding the provisions of Standing Order No. 4, the Motion in the name of Mr. Peter Snape may be proceeded with, though opposed, until half-past Eleven o'clock or one and a half hours after it has been entered upon, whichever is the later, and at that hour or at the end of that period Mr. Speaker shall put any Question necessary to dispose of those proceedings.—[Mr. John Ellis.]

ANTI-DUMPING
3.34 p.m.
Mr. Richard Wainwright: I beg to move,
That leave be given to bring in a Bill to amend the Customs Duties (Dumping and Subsidies) Act 1969.
From all sides of this House, especially in recent months, concern has been shown at the exposure of important and quite efficient British industries to manifest dumping by foreign exporters. Our existing law, intended to resist dumping, has proved inadequate and at the very least needs substantial amendment.
The Customs Duties (Dumping and Subsidies) Act, which my Bill would amend, is firstly a translation into law of the rules of the General Agreement on Tariffs and Trade against dumping, and it is no part of my purpose to seek to tamper with any of the GATT regulations. Secondly, the Act is an instrument of total power for the Department of Trade in administering these provisions. Wrongly, in my opinion, the Act gives the Department of Trade entire and unsupervised authority, subject only to the Prayer procedure in Parliament. For instance, the Department is free to decide whether to pursue complaints and evidence of dumping. It is free to leave as much of

401
the burden of proof as it thinks fit to the industry concerned. The Act also leaves the Department free to decide whether to make an anti-dumping Order and how to administer the provision for interim provisional anti-dumping duty. From the decisions of the Department in these matters there is no right of appeal.
This is not a firm legislative stance from which to act against a flow of artificially low-priced goods sent to this country with the likelihood, if not the purpose, of disrupting, damaging and perhaps destroying some sectors of our industry. As it stands, the Act is not even a substantial deterrent to potential dumpers.
Under the Act as it stands, the Department can and often does require relatively small industries to try to conduct delicate and highly detailed investigations overseas as to the prices being charged for the same goods in other countries or about the costs of production in the country of origin. Often this has proved an impossible task for private industry without governmental power or influence. In many cases only the most powerful of our industries have been able to approach success in this unequal task.
If and when the Department of Trade under the Act agrees to take over these investigations itself, it has been known, as in the case of footwear imports, which was regarded as a difficult one, to spend more than a year on one case and then to pronounce that, although dumping has occurred, nevertheless a further period of investigation is considered necessary; and there was nothing that the footwear industry could do in reply to that.
Since there is nothing in the Act to require reasonable speed, it is no wonder that there are at present only 10 antidumping Orders in force and that last year only one such Order was imposed and three were suspended.
The Act was consolidated in 1969 in a climate of rapidly expanding world trade in which few exporters had any desperate need to resort to artificially low prices in order to capture markets. Since 1969, of course, international trading conditions have sadly changed. The decline of world trade and the loss of confidence about future growth have proved a hothouse for the spread of dumping. There can be no doubt of the danger of what is happening. This was long
402
ago recognised in the text of the General Agreement on Tariffs and Trade. The world-wide signatories, including ourselves,
"recognise that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contacting party or materially retards the establishment of a domestic industry."
Under present conditions, some dumping could eventually give overseas suppliers a near monopoly of our home market. After a brief heyday with lower prices, the British consumer would eventually suffer from the reduction of competition after the victims of dumping had been driven out of that sector of their previous business. For example, it may at first glance seem rather attractive for the British shopper to be able to buy a check tweed imported from the Prato district of Italy at a price below the true cost of its production rather than having to pay perhaps an additional 25p a yard for the similar Yorkshire product. But if the present Italian wool textile tactics are allowed to persist in this country—I concede that no application for anti-dumping duty has been lodged formally, because the industry has had depressing experience in this sphere in the past—the Yorkshire manufacturers of similar check tweed will go out of business and the Italians will then be able to charge virtually what they like because there will remain no direct competition anywhere in Europe in fancy woollen cloth.
One response to this threatening situation is to put some sharp statutory spurs behind the anti-dumping procedure. My Bill therefore requires the establishment of a small committee of independent persons with wide experience of international trade charged with the duty of considering all applications for antidumping measures and assessing evidence provided by applicants. Where the committee decides that there is a case to investigate, the Department of Trade will have immediately a statutory obligation to pursue the work with all possible speed. If at the end of three months there has been no decision, the committee will inquire automatically into the progress and pace of the Department's work. If, when the investigation has

403
been completed, the Department declines to make an Order, under my Bill the applicant may appeal—this would give for the first time a right of appeal—to the same committee against the Department's decision. If during the investigation the Department refuses the application for a provisional and temporary anti-dumping order, the Department will have to try to satisfy the committee about that decision.
I submit that these requirements are likely to produce more decisive conduct by the Department, especially when dealing with State exporting by Iron Curtain countries or with particular overseas industries, elsewhere, with equivocal financial records. For example, it will have to decide promptly whether foreign refusal to answer its questions implies guilt in respect of dumping. The committee will require the Department to react realistically to deliberate delay by those being investigated.
There will also be realism in assessing cases where the landed price of imports is manifestly below any conceivable cost of production. For example, the 91,000 men's suits imported during the first half of this year from Romania into this country at an average landed price of £6·50 per suit and the 12,000 similar garments from East Germany at an average landed price in this country of £6 per suit would substantially condemn themselves, especially when these prices are compared with the much higher prices of other traditionally lower-cost producers such as Portugal and France.
The Department would, of course, under my Bill, continue to give foreign suppliers a proper chance to defend themselves but not to take advantage of us by prevarication, subterfuge and deliberate delay. The full legal rights of British importers to resist an applicant's case would be in no way whatever reduced by
404
my Bill. It would also remain necessary for the applicant to show that the dumping was causing or threatening material injury to his industry.
I emphasise that the Bill does not tamper in any way with the definition of dumping to which this country pledged assent in the GATT. We are not trying to introduce protectionism by any back-door method or in any other way. Parliament has always shown a strong concern down the centuries to protect those who work in our manufacturing industries and to protect ultimately the consumers themselves from the end result of dumping.
The trading nations of the world, in GATT, have condemned dumping. I submit, therefore, that Parliament should provide a system for the enforcement of these rules. Such a system should be established before the European Community takes over in this field, as it will do, so that Britain shall contribute to the Community a realistic and workmanlike anti-dumping procedure. That is what my Bill is intended to provide, and although I appreciate that time will not be available for it to proceed I hope that the House will express its concern by giving me leave to introduce the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Richard Wainwright, Mr. A. J. Beith, Mr. Clement Freud, Mr. Emlyn Hooson, Mr. Geraint Howells, Mr. John Pardoe, Mr. David Penhaligon, Mr. Stephen Ross, Mr. Cyril Smith and Mr. David Steel.

ANTI-DUMPING
  ANTI-DUMPING
  Mr. Richard Wainwright accordingly presented a Bill to amend the Customs Duties (Dumping and Subsidies) Act 1969; and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 249.]
ORDERS OF THE DAY

  PETROLEUM AND SUBMARINE PIPE-LINES BILL
  Lords amendments considered.
  3.43 p.m.
  Mr. Patrick Jenkin: On a minor point of order, Mr. Speaker. You have selected Lords Amendments Nos. 2 and 10 to be taken separately. I have had discussions with the Government about this and we feel that it would be sensible and would save time if those amendments could be debated together. I wonder whether you would be prepared to assent to this procedure.
  Mr. Speaker: If that is the wish of the House, I will have the provisional list amended accordingly.

  PETROLEUM AND SUBMARINE PIPE-LINES BILL
    Clause 1

      CONSTITUTION OF THE CORPORATION
      Lords Amendment: No. 1, in page 2, line 14, leave out paragraph (c).
      The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): I beg to move, That this House doth disagree with the Lords in the said amendment.
      Mr. Speaker: With this we shall take Lords Amendments Nos. 25 to 30.
      Mr. Benn: All these amendments relate to a provision which we put into the Bill when it went through the Commons that there should be two official members of the British National Oil Corporation. We thought that was right. We argued for it in Committee and on Report and we carried the House with us. Another place has thought it right to remove these two official members. I urge the House to stick to its original view, and I shall quickly rehearse the reasons for so doing.
      We want to have a civil servant as a BNOC member because we want close and continuing links between the BNOC and the Government. We think this is urgent and necessary in the case of the oil industry because of its vital economic and strategic importance. I am not necessarily drawing a parallel with other nationalised industries because they have
      406
      different problems and there is clearly a need for different types of arrangement governing nationalised industries. But in this case it is absolutely critical that the relations between the BNOC and the Government should be of the closest and that there should be a flow of information going both ways.
      If it may be argued, as it sometimes is, that this is undesirable, I would point out that there are many foreign precedents. In other countries the boards of public corporations more generally include civil servants on them. Those who are wont to criticise civil servants for lacking industrial experience might ask themselves whether this method of providing official members on the board of nationalised industries, and in this case the oil corporation, would not help to remedy that situation. In Australia, France, New Zealand, Italy and Germany there are official members on the national corporations. I know that there is sometimes a difference of administration, but in other countries civil servants serve on a variety of public corporations and these are not connected only with the oil industry. There is no reason why we should not have an equal success in this case.
      It has been argued that if this were done, some problem of confidentiality of information would arise. It is true that official members may have confidential information about private sector companies in competition with the BNOC, arising from their departmental duties, but I do not think anybody in this House—and everyone taking part in this debate knows the traditions of public service very well—would for a moment suppose that official members working with a nationalised industry would break their confidence any more than they would in respect of similar confidences as part of their normal work in the Civil Service. In any case, there is the protection of the law because the model clause in the Bill prohibits any disclosure.
      I feel that the reason why these amendments were moved was to attack the idea of public involvement through the BNOC itself. I do not think it is sensible that we should allow such a very important corporation with such enormous resources at its disposal to be entirely outside the range of daily contact with the Government. I believe that this is one of the main purposes of the Bill.

      407
      It is true that the Government may acquire information about licensees which they would not otherwise have. But part of the whole purpose of establishing the BNOC is to improve the information available to the Government about the oil industry; and the Public Accounts Committee, which criticised the earlier licensing round, did so because it said that the Government knew too little about the oil industry and the firms within it which were engaged in offshore exploration. Therefore, we think that it is absolutely right and justifiable that the Government should have more access to information about the activities of the licensees, given the fact that they are dealing with such vital resources to this country, and the licence terms, in accordance with the Public Accounts Committee observations, have been modified to permit of a better and more comprehensive flow of information.
      This will be the main source of information to the Government. But all information to which civil servants have access in the course of their duties will be protected by the Official Secrets Act. I repeat that no one has any reason to doubt that the public service in conducting its duties under this measure will behave with the normal high standards of responsibility.
      We have had throughout the passage of the Bill many strong arguments by the Opposition which we have been able to identify clearly as the views of the oil companies. I make no complaint of that. Oppositions are the natural vehicles for points to be put to the Government which they may not wish to limit solely to direct representations. But in this case the offshore operators have not made much of the official representations. They are dealing happily with the Department, and I have no reason to believe, from my contacts with them, that they have found their relations with the civil servants other than helpful. Therefore, I do not think that in this case the Opposition are even championing an important interest of the companies. I think that the companies themselves do not see it so.
      That in itself would not, of course, rule out the Lords amendments, but what lies behind the amendments, which I ask the House not to accept, is an attempt to separate the BNOC from the Government
      408
      of the day, of whichever party. That would be a great mistake.
      The Government are in earnest about the establishment of the BNOC. No one should be in any doubt at all, whatever the comment in the Press or speculation from others: there is no weakening whatever in our determination to have a BNOC, to build it and to see it become an immensely-powerful State oil company, and the more powerful it becomes the more necessary will be the requirement that the links with the Government should be close.
      Some hon. Members were in Aberdeen on Monday when the Forties oil came ashore, and the Bill, which I hope that Parliament will agree to put on the statute book next week, will be equally important for the interests of the country. Many countries have found natural resources within their territories, but not all of them have benefited from the discovery, and we are absolutely determined that the BNOC shall be able to defend and safeguard our national interest.
      I asked for a list of the countries which had national oil companies of their own. It is an enormous list. I do not know whether I should occupy the time of the House in going through it, but perhaps I should do so. It includes Abu Dhabi, Iran, Iraq, Israel, Kuwait, Qatar, Saudi Arabia, Syria, Turkey, Australia, Bangladesh, Brunei-Malaysia, Burma, India, Indonesia, Pakistan, Taiwan, Thailand, Austria, Denmark, France, Italy, Norway, Spain, Portugal, Algeria, Egypt, Libya, Nigeria, Tunisia, Canada, Argentina, Bolivia, Brazil, Chile, Columbia, Equador, Mexico, Peru, Trinidad-Tobago and Venezuela. They all have national companies. We are to have one. It is going to be strong and powerful. It is going to be linked to the Government of the day representing the national interest. For these reasons, I hope that the House will not follow the other place in attempting to separate the BNOC from accountability to Parliament through Ministers.
      Mr. John Hannam: But how many of that long list of countries insisted on majority participation?
      Mr. Benn: If the hon. Gentleman wants me to put in Hansard a list of those countries doing exploration, I point out

      409
      to him that the table from which I was reading had lists covering exploration, participation and distribution. It is lengthy. It would occupy too much time to go through it, but it would be of interest and educationally valuable to the Opposition and the public to realise that, in coming forward with the proposal to establish the BNOC, we are safeguarding the national interest and that we intend to uphold it with at least as much vigour and determination as other countries which have discovered oil and do not wish to see it controlled entirely by others over whom they have no supervision or control.
      Several hon. Members Several hon. Members rose—
      Mr. Speaker: I did not stop the Secretary of State, but I hope that we are not going to have a general debate on the clause. The amendments are a more limited matter.
      Mr. Hamish Gray: Earlier in the passage of the Bill we discussed the question of civil servants on the Board of the BNOC. We argued that such appointments were unnecessary and that to have civil servants in such a capacity was undesirable. We argued that they would be serving two masters, the Chairman of the Corporation and the Secretary of State. We pointed out the anomalous situation in which they would find themselves, with no voting powers as directors on a Board in which they might be influencing their colleagues. We argued the question of confidentiality.
      The Government unfortunately have not listened. They did not listen to our reasoning on these points, and they have insisted on going forward with their intention of appointing two civil servants to the Board. We must at least be grateful to the other place for giving us the opportunity to discuss the matter again. I hope even now to persuade the Government of the folly of their ways.
      In creating the Corporation the Government have established what we believe to be an unnecessary and money-hungry monster. Its functions could well have been carried out by the creation of a United Kingdom oil surplus authority. Parliament, however, has decided that we are to have a Corporation, and we believe that we must do all we can to try to make it work.
      410
      How can we make it work sensibly? First, we must appoint a powerful Board. At present we have the Chairman—Lord Kearton, the Lone Ranger, the general without any troops. There is no one in front of him and no one behind him. He is there in glorious solitude. When are we to have further announcements? When are we to find out who is to assist him, apart from the two civil servants we have heard so much about? Or are the Government having second thoughts? Are they perhaps getting a bit worried about the position they have taken?
      The Government still have time to change their minds. Let us hope that they will do so. Is it necessary to have civil servants on the Board at all? We believe that it is unnecessary, and certainly that it is not necessary to have two of them. Why are they there? Is it to keep an eye on each other? They have nothing else to do at present. Are they suitable for membership? Have their training or their work in the Civil Service given them special qualifications to act in a Corporation of this sort? We think not. Are they likely to fill the boardroom with ideas of profit-making ventures for the Corporation? Are they likely to give the Corporation the flair and enthusiasm it so desperately requires if it is to be successful? Are they likely to give it the entrepreneurial approach which it must have if it is to be succesful in competition?
      We are told that the Corporation will be out to make money. Therefore, it must back winners. At present we do not see much evidence of owners, trainers or jockeys likely to pick winners in this field. Let us look for a moment at what the Earl of Halsbury, himself a former civil servant, had to say in the debate in another place on 24th September:
      "If civil servants were capable of doing the work"—
      Mr. Speaker: Order. Is the hon. Gentleman quoting from a ministerial statement in the other place? It is not the custom of the House to quote the words of a Member of the other place who is not a Minister. The hon. Gentleman is at liberty to paraphrase what the noble Lord said, but it would not be in accordance with our custom to quote his words.
      Mr. Gray: I apologise, Mr. Speaker. I shall paraphrase it. In effect, Lord Halsbury said that if civil servants were capable of doing the work of such corporations, it would not be necessary to set them up at all. In this, we of course agree. We believe that the Civil Service of this country is the finest in the world, but we also believe that it should be left to get on with the work for which it was trained. Civil servants are not industrial or commercial leaders, and it is not appropriate that they should take part in this sort of body. It is a great mistake that civil servants have in the past been appointed to the chairmanship of public bodies. That is a mistake, but it is one for which there is precedent. That, however, is no excuse for having civil sevants on this body.
      4.0 p.m.
      There are two aspects of this matter which should be considered. The first is the question of responsibility to two masters and the second the question of confidentiality. In another place the Minister, Lord Balogh—I trust that this will be in order—said:
      "The official members obviously will have a double loyalty, but the double loyalty is conjuncted to the single loyalty to the State to the Government, to maximising the revenue of the BNOC, and therefore of the people of Britain from this arrangement. We have heard much about confidentiality; but the confidentiality aspect, if our plans go through—and no doubt they will do so—will be resolved because the BNOC will have all the information which the Secretary of State will have, being a member of the various consortia who will operate the oilfields."
      He went on to say:
      "…obviously it is expressly provided in the Bill that confidentiality will be preserved in all the operations of BNOC, and this includes the civil servants."
      But that is not strictly correct, because the only specific provision for confidentiality is under model clause 31—[Interruption.] Perhaps I might have the Minister's attention. We are debating something, and, although the Government have a majority which they will undoubtedly use, it would be as well if he did us the courtesy of listening to our arguments.
      The only specific provision for confidentiality is under model C, clause 31 of the licences. That is upstream. That does not meet the concern about confidentiality downstream, either that com
      412
      mercial information available to the Department might get back to BNOC or that commercial information available to the BNOC might get back to the Department. That is a worrying situation which the Minister has not dealt with completely.
      The noble Lord later tried to justify having two civil servants. He said:
      "I said that the two civil servants are necessarily there because closer contact between the on-going operations of BNOC and the Department is necessary. This is not snooping: it is communication."—[Official Report, House of Lords, 24th September 1975; Vol. 364, c. 323, 326–7.]
      That may be what the noble Lord cares to call it, but it is certainly not what we would call it. If it is not snooping, I do not known what it is.
      The right hon. Gentleman dealt at some length today with the activities of BNOC, but so that I do not go out of order I do not propose to follow him in that matter now. There are other debates to come in which we may be able to refer to matters that he has raised. But I would ask the House to consider carefully what we have said about the implications of having civil servants on such a Board, to realise that they will be in a difficult position in serving two masters and that they do not have such a great amount to contribute, particularly at this starting stage of what is to be a commercial concern.
      Much more are they likely to sit with their ears open and mouths closed, the pin-striped puppets of the Department, and to carry tales to the Minister—the "Big Brothers" of the boardroom, the inevitable product of doctrinaire Socialism in practice. I hope that the House will have nothing to do with the suggestion that we appoint them to the Board and that it will agree with the other place.
      Mr. J. Grimond: I put down the original amendment to strike out the appointment of civil servants to the board and I was joined by the right hon. Member for Wanstead and Woodford (Mr. Jenkin). The Secretary of State is right to say that I did not put it down at the behest of the oil companies. One of the most curious features of his speech was his statement that this was not a matter of great importance because it had not been raised by the oil companies. I regard

      413
      this as a matter of constitutional importance and one which could gravely damage the public administration of this country.
      Mr. Benn: I know that the right hon. Gentleman will want to be fair. What I said—and this is true—is that many of the amendments of the Opposition were known to have originated from points made by the oil companies. I said that this matter was not of concern to those companies, but I said that at the end of my speech. The rest of my speech I devoted to the substantial reasons that the civil servants should be there. My disagreement with the right hon. Gentleman is on constitutional and practical grounds and has nothing whatever to do with the views of the oil companies in this matter.
      Mr. Grimond: I am glad to hear it. It seems odd to drag the oil companies into the discussion at all, but I will let that pass. Let us be clear—I have opposed this appointment because it is damaging to the public service.
      The Secretary of State then said that, of course, confidentiality would be respected and that these civil servants would be in no way influenced by the fact that they might acquire information in their capacity as members of the Department. But how could they fail to be influenced? What is the point of putting them on the Board unless they are to be influenced by the knowledge of the industry that they acquire?
      What is the reason that Ministers, on taking office, have to give up all their directorships? What is the reason for keeping civil servants away from contact of this kind with commerce? It is just so that they can discharge their regulatory functions of advising Ministers and carrying out their decisions without any possible accusation that they might be influenced by being in particularly close contact with those with whom they have to deal. That is the whole basis of the conduct of the British public service. One might just as well say that Ministers should be on the board, that they would not be influenced by anything that they found out in their capacity as Secretaries of State.
      I am wholly unimpressed by the view that it is done in other countries. They have a different public service position.
      414
      In any case, I do not believe that any country appoints public servants and then says that they may not vote.
      The Minister said that the purpose was to increase the accountability of the BNOC. Is that so? The accountability presumably will be through the Secretary of State. Are these two civil servants to be available to be cross-examined in Parliament? If it is said that this will increase accountability, we have to look seriously at the constitutional implications of what the right hon. Gentleman apparently insists upon doing.
      I do not want to reiterate at length the arguments that I used in Committee and on Report. It has been said time and again by people distinguished by long service to this country that this provision is unnecessary. If it were not in the Bill, the Secretary of State would not be prevented from appointing civil servants. The other nationalised industries find that they have perfectly good contact with the Government without having civil servants on their boards.
      I beg the Secretary of State to look at the remarks of one of the most distinguished public servants this country has ever produced when he said exactly what was said again and again in Committee. It is wholly wrong to confuse the regulatory functions of the Civil Service with commerce. It is wholly unnecessary to have civil servants on the Board and it is obvious that they are there as watchdogs. I got into trouble for saying that they would be commissars. The difference between "commissar" and "watchdog" is that one is not parliamentary language and the other is. Their functions are broadly the same, and every argument that the Secretary of State advances makes it doubly clear why they are there. Their appointment debauches the public service in a hole-and-corner way in a Bill which does not require that approach.
      It appeared in another place that it was not even known from which Ministry the two civil servants will come. I think it was understood in the Commons that they would be appointed from the Department of Energy, but we have a right to know—
      Mr. Patrick Jenkin: The right hon. Gentleman might care to ask the Secretary of State for confirmation on this matter and whether it has already been

      415
      decided that one of the civil servants is to come from the Treasury.
      Mr. Benn: It was our intention that the Department of Energy and the Treasury should be represented on the BNOC. Certainly this issue was never kept private as far as I was concerned. We made it clear from the beginning in our discussions that we had in mind that the Treasury, in view of the enormous sums of public money involved, would be an appropriate Department to have represented.
      Mr. Grimond: I am not accusing the Secretary of State of hushing this matter up. Nevertheless, the argument was that these appointments would enable the Department of Energy to find out what goes on in the oil industry. I do not remember it ever being advanced that the Treasury should find out what was going on in that industry or that it was important for the Treasury to keep track of public money in that way. Vast sums of public money are put into all sorts of public corporations—the National Coal Board, the British Steel Corporation and so forth—but the Government have not advanced their argument in respect of those organisations.
      I hope that, simply as a matter of public propriety and for the safeguarding of the public service, the House will accept the Lords amendments.
      4.15 p.m.
      Mr. Gordon Wilson: Obviously the proposal to place civil servants on the Board of the Corporation showed that the civil servants did not quite trust the Corporation to carry out its work. Now we learn that the Treasury does not even trust the civil servants from the Department of Energy to supervise the Corporation. There will therefore be the fail-safe device at BNOC Board meetings of the Department of Energy being represented and the Treasury, like big brother, looking on. This must be disappointing to the civil servants in the Department of Energy. They produced a Bill giving them additional rights and powers but now they find that one of their toys has been taken away and that one of their members is to be replaced by a Treasury representative. Obviously the Treasury does not trust the Department, and from the way
      416
      in which the Department has been tackling things, many of the rest of us do not trust it either.
      As things are proposed, representatives of the British Civil Service will be taking part in the activities of the Corporation which will be located in Scotland. After the events of the last week we are very much involved in the momentum of devolution. On a television programme on Monday night in Scotland a professor of politics said that devolution without a Scottish Civil Service would be a fraud.
      What is to be the rôle of the Corporation? What are to be its relationships with the Assembly? Will it be a case of the Assembly operating in Scotland with powers over certain aspects of industry—electricity is one which immediately springs to mind—but having no influence over the BNOC? Should there not be Scottish representatives on this body? Unfortunately the answer appears to be "No". We are perhaps to be asked to introduce an English Trojan horse into the BNOC set-up. The last thing that we as Scotsmen want is to have spies reporting back to Westminster on what is happening in Scotland.
      These activities concern oil and gas fields off the Scottish coast, so this is overwhelmingly a Scottish matter. If the Government apply their majority to the Lords amendment and defeat it, there will be representatives of the English Civil Service on the BNOC. It is as well therefore to let the Government know at this stage that when it comes to the exercise of sovereignty, that sovereignty is vested in the Scottish people, and this piece of legislation, if it does not fit in with Scottish needs, can be completely and utterly repudiated at a later stage.
      Mr. William Small: I wish to deal with the relationship of the Civil Service with the public The innovation embodied in the Government's proposal is a good one and should be supported. I strongly support the stable framework of reference which would be provided by the Bill, and to that extent it has my maximum support.
      The right hon. Member for Orkney and Shetland (Mr. Grimond) is like Hamlet—he casts a long shadow. It is 60 years since his party enjoyed any sensation of constitutional reform. That is how long the Liberals have been out

      417
      of power, and therefore the right hon. Gentleman has failed to recognise that the Government's proposal does not represent a constitutional issue.
      The Scottish National Party illustrates the case of Dante's hell—a continually unseen object but a continually observed subject. That sums up the SNP contribution. It is the observed subject which has no power.
      I support the Government's proposal on both philosophical and historical grounds, and I therefore support my right hon. Friend the Secretary of State in seeking to reject the Lords amendments.
      Mr. Alexander Fletcher: I support the right hon. Member for Orkney and Shetland (Mr. Grimond) and my hon. Friend the Member for Ross and Cromarty (Mr. Gray). I hope that the Secretary of State will concede that the appointment of civil servants to the Board will have far-reaching implications. I hope that he will concede that there is no reason for appointing them either to this or to the other boards of public corporations. I hope that he will give us more of an insight into his reasons for proposing these appointments.
      Mr. John Moore: I could not endorse more warmly the words of the right hon. Member for Orkney and Shetland (Mr. Grimond). We are hung on one of the difficult dilemmas facing this House. A proposal has been introduced for supposedly valid reasons. We have been told by the Government in Committee that the appointment of civil servants to the Board is to be a new experiment in modern Government. After analysis and scrutiny we find that the experiment is related to the communication of information, but the information is to be confidential so that little communication will occur. We are told that the proposal is to enable control to be exercised, but anyone who has been involved with this legislation knows that the Secretary of State already has under the Bill as drafted powers exceeding any powers that would be necessary for the running of the BNOC.
      I turn to the points raised by the right hon. Member for Orkney and Shetland. This is a high constitutional matter. We demean ourselves by examining the way
      418
      in which the issue was discussed in another place and by suggesting that we are in any way denigrating the Civil Service. Quite the contrary is true. There are people who seek to maintain the essential independent nature of the Civil Service and who seek to prevent it becoming entwined with commerce and government to the extent that it is entwined in commerce in this suggestion.
      The Secretary of State may look puzzled. The degree to which our society has been unable to allow civil servants the freedom to manage effectively the governmental machine has in large part, been caused by the inter-relationships of the Government with the economy. I suggest that the last thing we should do is to allow the civil servants to become ensnared with the obvious despair which will be created by the disaster of the BNOC. I strongly support what has been said by the right hon. Member for Orkney and Shetland.
      Mr. Cyril Smith: I am astounded not only by the Government's attitude to this matter but by what has been said by the Minister who is taking the Government's line on this issue. I have often disagreed with what the Minister has said, but I have always respected what I believed to be his sincere desire for public accountability in public services. I beg him to think again about this matter. The best way to get public accountability is to clip the wings of the Civil Service and not to allow it to spread further than it has spread them already.
      Some of us are slightly suspicious about the public accountability of the Civil Service, especially the Treasury. We believe that to give it further powers and influence and to appoint civil servants to nationalised boards would be a retrograde step and certainly completely contrary to the views that the Minister has expressed about public accountability in the past.
      Mr. Dennis Skinner: I am sure that the House wants to make progress. However, I have been astounded by what I have heard during the past two or three minutes—namely, that we should set up a Corporation which will give civil servants even more power than they have already. My right hon. Friend has assumed his new mantle of Secretary of State for Energy. It is true that some

      419
      would argue that he did not want the job but was simply kicked into it. However, having taken on the job, I believe that he should have done something about this matter. When he took office the Bill was still proceeding through the House. I assumed that he would examine it from top to bottom, line by line and clause by clause, to establish whether in his own mind he could reconcile the Bill with his general attitude towards not only the House of Commons but the Labour movement generally.
      We are considering the setting up of a Corporation which will include two more civil servants. One of them will come from the Treasury, and I have not gathered from where the other one will come, but no doubt he will be of the same breed. Moreover, unless there is a sheer fluke of selection, their general view will be against the policies of the Labour movement for which my right hon. Friend is responsible. Of course, it is true that my right hon. Friend is responsible to the House of Commons, but initially he is responsible to the Labour movement. In my view it is an affront to the Labour movement for us to think in terms of having two more civil servants on the Board of this nationalised corporation.
      Reference has been made to the possibility of some civil servants being added to the National Coal Board. That idea is not as fanciful as some hon. Members might imagine. There will be several vacancies on the National Coal Board during the next 12 months. If this trend catches on I can visualise interfering civil servants becoming members of the National Coal Board. The proposal reeks of State capitalism and yet here we are setting up a brand new so-called nationalised industry and taking a step backwards instead of forwards.
      I should like to suggest to my right hon. Friend the type of people who should be members of the Corporation. Why do we not have Ron Hayward, the Secretary of the Labour Party, as a representative to ensure, as custodian of the manifesto and the Labour movement, that the interests of the Labour Party and the nation are kept well in mind, because the two go together. I also believe that there should be somebody from the National Union of Mineworkers on the Corporation, because with the North Sea oil
      420
      developments in the next few years I can visualise a situation in which, if we are not totally in control of what happens, there will be another merry-go-round of pit closures. Provided we can make the Chancellor of the Duchy of Lancaster move ahead on the participation plans, I want to see someone in the higher echelons whose natural instinct is to safeguard the interests of the coal-mining industry. I want my right hon. Friend to apply his mind to those matters.
      My right hon. Friend took over the Department of Energy when the Bill was in progress. It may well be that he was not totally happy about the way in which the matter was developing. However, I suggest to him that even at this late stage he should have a fresh look at the matter. Even if he cannot do so now, if he stays in his present job long enough he will have a duty to ensure that we do not travel along the road that has been put forward today.
      Mr. Patrick Jenkin: After that outburst of comradely love I shall return to the amendment. I point out to the right hon. Gentleman that his proposal to put civil servants on the Board of the BNOC has been supported in the House by only one of his own back benchers. It has been attacked from every corner. I beg him to think again.
      Before I raise two further questions which seem to me to cast some doubt upon what the right hon. Gentleman told us in opening this brief debate, I should like to comment on his closing words. Every time the right hon. Gentleman reaffirms his determination to have a BNOC and all the rest of this ridiculous bag of tricks, he merely serves to renew the doubts to which the Government's inaction in this whole area has given rise.
      At present BNOC totally lacks credibility. The Government have entirely failed to find anyone with any experience of the oil industry to serve on it. Until there is some evidence that the Government are persuading people of standing in the industry to give of their time and expertise to serve on this board, not even all the Government's fulminations will convince anyone that the Economist was wrong when it said that
      "the government would like to wriggle quietly out of its commitment to a 51 per cent. state participation in the North Sea fields".

      421
      The Economist went on to point out that such action would create some difficulties in
      "avoiding a back-lash from Labour's left wing".
      The right hon. Gentleman has stood up to the hon. Member for Bolsover (Mr. Skinner) before and no doubt he will do so again.
      I turn to the questions I asked about the amendment. The right hon. Gentleman sought to argue that there would be no difficulty about confidentiality with the presence of these two officials on the Board. He will know that we have argued at length that the Government have two clear, separate and distinct functions. They have their regulatory function whereby they administer the model clauses which are contained in the schedules to the Bill and they also have their function in the promotion and sponsorship of the industry, including the BNOC. Are those two functions to be kept separate within the Department of Energy or was Lord Balogh right when he said—
      Mr. Deputy Speaker (Mr. George Thomas): Order. I am sorry to interrupt the right hon. Gentleman but we are discussing the narrow point whether to leave out paragraph (c). There will be opportunity for wider discussion on wider amendments later.
      4.30 p.m.
      Mr. Jenkin: It is indeed my intention and I am about to quote from the debate in another place on this amendment. The Secretary of State sought to argue that there would be no damage to confidentiality through the appointment of civil servants to the Board of the BNOC. Yet the Government, through their regulatory function, will get a vast amount of information which ought on no account to be conveyed to the Board of the BNOC, let alone to any of its partners.
      The noble Lord Balogh said:
      "the BNOC will have all the information which the Secretary of State will have."—[Official Report, House of Lords, 24th September 1975; Vol. 364, c. 323.]
      Is that the position? I invite the right hon. Gentleman, if he is not prepared to contradict that statement, at any rate to put a gloss on it. If all the information which can be demanded by the Department of Energy, through its operation of
      422
      the regulatory function, is to be channelled through to the BNOC via the civil servants and, therefore, perhaps indirectly to the BNOC's partners through the joint committees on which the Corporation will be represented, we shall have a very serious situation. I ask the Secretary of State to deal explicitly and positively with that matter.
      The second question relates to the problem of downstream activities. The Corporation and the Department will have a lot of information on the exploration and production side. We are told that the Corporation will act strictly commercially downstream. The Government will have a lot of information through their operation of the refinery controls about the downstream activities of the companies. Is information about those activities to be made available to the BNOC through the Civil Service directors on the Board?
      The noble Lord Balogh said:
      "I do not think this problem will arise in the near future."—[Official Report, House of Lords, 24th September 1975; Vol. 364, c. 323.]
      The noble Lord is obviously not up to date. It is well known—I quote from the Scotsman—that
      "Lord Kearton, the chairman designate of the British state company, has displayed enthusiasm for the idea of BNOC becoming involved in downstream activities".
      Certain people believe that some of the downstream activities may precede some of the upstream involvement. This problem will arise, if not in the immediate future, at any rate in the very near future. The question of confidentiality about the industry's plans for downstream operation is directly threatened by the presence on the board of the BNOC of two civil servants to be appointed by the Government.
      This proposal has failed to find favour among most hon. Members who have spoken. The Government should think again. If not, I advise my right hon. and hon. Friends to divide the House in favour of retaining the provision which their Lordships have inserted into the Bill.
      Mr. Benn: This has been an important debate. Indeed, it has covered the same ground as debates in Committee and in another place. I must ask the House to set aside as being less than worthy of the

      423
      magnitude of the issues we are discussing some of the phraseology which has been used about commissars, debauching the public service, pin-striped bureaucratic puppets and English Trojan horses. We are discussing the extent to which it is possible for this country to gain some control over resources estimated to be worth £200 billion. The House, in considering this entirely new situation, should be addressing itself to whether it is sensible to have some modest innovations in the degree of supervision that we achieve.
      My hon. Friend the Member for Bolsover (Mr. Skinner) made an important speech. Yesterday some of his constituents came to see me about a colliery closure in his constituency. My hon. Friend must know very well, because he knows the mining industry, that when the Government of the day, with parliamentary approval, set up the National Coal Board, they made provision for a total separation of responsibility of the National Coal Board from the House of Commons. Indeed, many of my hon. Friends in the Labour movement, including my hon. Friend the Member for Bolsover, have put great pressure on Labour Ministers to see whether, within a nationalised industry, there could be greater accountability than there is. It is not my desire—
      Mr. Skinner Mr. Skinner rose—
      Mr. Benn: I am not seeking to avoid the strength of the point made by my hon. Friend. There are many who feel that in the ordinary nationalised industries, which we are not now discussing—this is a separate issue, but the point was made and it deserves a serious answer—the degree of accountability to Parliament is virtually non-existent.
      The hon. Member for Rochdale (Mr. Smith) criticised me on the ground that civil servants will not increase accountability. I hope to show that the hon. Gentleman is wrong. If there is no link, save this statutory arm's-length link with an independent public corporation, a Minister seeking to exercise the public interest as he sees it, subject to parliamentary control, has a statutory bar on any but the most indirect links with a nationalised industry.
      Mr. Skinner: May I take it from what my right hon. Friend has said that only
      424
      by appointing civil servants as such could he, in his capacity as Secretary of State, have any accountability or any opportunity to intervene in matters of this kind? I agree that we should have somebody there and that there should be an opportunity for the Secretary of State, if the institution or nationalised corporation is acting contrary to the wishes of the Labour Party, to which we both belong, to intervene and make changes or modifications at appropriate stages. The point is that my right hon. Friend has no need to appoint civil servants in that capacity. He can get the accountability and the intervention powers by appointing somebody else.
      Mr. Benn: My hon. Friend has raised a point of importance and substance. This is not the only way in which a Minister can exercise influence over a nationalised industry. My hon. Friend knows that in the two public corporations which the Government are setting up—the National Enterprise Board, the proposal for which I was responsible for bringing before the House earlier this year, and the British National Oil Corporation—there is a second important function; the power of specific direction. It is arguable whether it should be extended to other nationalised industries. But even if people who were acceptable to my hon. Friend, to myself or to the Labour movement generally were appointed, the statutory position is that when a man is appointed, whatever his origins or views may be, in our nationalised industries there is no accountability to a Minister and, through the Minister, to Parliament because of a statutory arm's-length relationship.
      We are concerned whether, when dealing with oil resources of this magnitude and importance to the nation, it is wise or sensible to have as remote a relationship as we have with those who run the railways and other nationalised industries. I do not believe that it is. I am not trying to bulldoze this proposal through. I am trying to persuade the House that it would be inadvisable to vest so much power in the hands of a body of people without any possibility of a Minister, on behalf of this House, knowing what was happening and being able to give instructions for which he would be answerable to the House of Commons. I genuinely believe that by having two civil servants answerable to the Minister and by having the

      425
      power of specific direction, accountability to the House of Commons is increased. If I did not believe that, I should not have advocated this provision.
      I come now to the question of confidentiality. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) has had a lot of experience in Government in both the Treasury and the Department of Energy. For him, as a former Minister, to make much of the confidentiality issue is to do less than justice to his experience.
      Mr. Patrick Jenkin Mr. Patrick Jenkin rose—
      Mr. Benn: Let me finish the point. The right hon. Gentleman said sharp things. I shall not say sharp things to him, but I must point out that he knows better than many others that Governments of any party, through the various agencies of the Civil Service and of Ministers, are the recipients of detailed information about individual firms and have executive responsibility for taking action in certain areas.
      Let me give an example by quoting the Conservatives' Industry Act 1972. The then Secretary of State for Trade and Industry, the right hon. Member for Worcester (Mr. Walker), was responsible and received an enormous amount of information from industry. He exercised executive powers under that Act which involved selecting certain firms and helping them, as was the case in the wool textile industry for which a scheme went through. To imply in Parliament that in the arrangement which we are putting forward civil servants would in some way be in breach of confidentiality is grossly irresponsible.
      The right hon. Member for Wanstead and Woodford has acted grossly irresponsibly because he knows that such a suggestion is contrary to the reputation and experience of Whitehall. He knows that his words, misunderstood abroad or elsewhere, might do damage not only to BNOC but to the reputation of the Government in the handling of confidential information. The right hon. Gentleman should withdraw his suggestion.
      Mr. Patrick Jenkin: I do not mind being attacked by the right hon. Gentleman, because we can both give it and take it. I am quoting what his junior Minister, Lord Balogh, said in the House of Lords, which was that:
      426
      "the BNOC will have all the information which the Secretary of State will have."—[Official Report, House of Lords, 24th September 1975; Vol. 364, c. 323.]
      Will that be so, or is the right hon. Gentleman ready to give an undertaking to the House that the information which reaches him and his Department through the operation of the regulatory function will not be disclosed to the BNOC or its competitors?
      Mr. Benn: I cannot comment on a single phrase from a speech. Nor is it common, and Mr. Deputy Speaker will confirm this, when considering Lords amendments for there to be an exchange of debate between the two Houses at arm's length. One of the major objects of this scheme is that the Government should know more about the oil industry than did the previous Conservative Government, who in this respect gravely betrayed the national interest—more than they allowed us to know.
      It is part of the objective of getting information that those concerned—I speak now about civil servants—should be properly influenced by the information they have. That is wholly different from saying that information received for one purpose is improperly to be conveyed for another purpose outside the strict provisions of the Official Secrets Act. Governments are always influenced by the information they have. That is quite different from implying that the information is improperly transferred.
      It is a pity that this big issue should arise on a day when there are other Lords amendments to be considered. This is a sensible change which I believe the House, on reflection and in the light of experience, will think right. I put it forward on the grounds that we need at least this system if we are to establish the degree of control and supervision over these resources which, although they will not automatically transform our future, undoubtedly offer to us great opportunities for exploitation to our benefit. It would be wise for Parliament to insist that upon the BNOC Board there should be the two civil servants at present contemplated, from the Department of Energy and from the Treasury. In this way, among others, the House should have proper accountability for the conduct of BNOC in its intended 51 per cent. participation in our offshore oil resources.
      Question put, That this House doth disagree with the Lords in the said amendment:—
      The House divided: Ayes 261, Noes 243.

      Division No. 383.]

      AYES

      [4.45 p.m.

      Allaun, Frank

      Fletcher, Ted (Darlington)

      Mallalieu, J. P. W.

      Anderson, Donald

      Foot, Rt Hon Michael

      Marks, Kenneth

      Archer, Peter

      Forrester, John

      Marquand, David

      Armstrong, Ernest

      Freeson, Reginald

      Marshall, Dr Edmund (Goole)

      Ashley, Jack

      Garrett, John (Norwich S)

      Marshall, Jim (Leicester S)

      Atkins, Ronald (Preston N)

      Garrett, W. E. (Wallsend)

      Maynard, Miss Joan

      Atkinson, Norman

      George, Bruce

      Mellish, Rt Hon Robert

      Bagier, Gordon A. T.

      Gilbert, Dr John

      Mendelson, John

      Barnett, Guy (Greenwich)

      Ginsburg, David

      Mikardo, Ian

      Barnett, Rt Hon Joel (Heywood)

      Golding, John

      Millan, Bruce

      Bates, Alf

      Gould, Bryan

      Miller, Dr M. S. (E Kilbride)

      Bean, R. E.

      Gourlay, Harry

      Miller, Mrs Millie (Ilford N)

      Benn, Rt Hon Anthony Wedgwood

      Graham, Ted

      Molloy, William

      Bennett, Andrew (Stockport N)

      Grant, George (Morpeth)

      Moonman, Eric

      Bidwell, Sydney

      Grant, John (Islington C)

      Morris, Alfred (Wythenshawe)

      Bishop, E. S.

      Grocott, Bruce

      Morris, Charles R. (Openshaw)

      Boardman, H.

      Hamilton, W. W. (Central Fife)

      Morris, Rt Hon J, (Aberavon)

      Booth, Albert

      Hardy, Peter

      Mulley, Rt Hon Frederick

      Boothroyd, Miss Betty

      Harrison, Walter (Wakefield)

      Murray, Rt Hon Ronald King

      Bottomley, Rt Hon Arthur

      Hart, Rt Hon Judith

      Newens, Stanley

      Boyden, James (Bish Auck)

      Hatton, Frank

      Noble, Mike

      Bradley, Tom

      Hayman, Mrs. Helene

      Oakes, Gordon

      Brown, Hugh D. (Provan)

      Heffer, Eric S.

      O'Halloran, Michael

      Buchan, Norman

      Hooley, Frank

      O'Malley, Rt Hon Brian

      Buchanan, Richard

      Horam, John

      Orbach, Maurice

      Butler, Mrs Joyce (Wood Green)

      Howell, Denis (B'ham, Sm H)

      Ovenden, John

      Callaghan, Jim (Middleton & P)

      Hoyle, Doug (Nelson)

      Owen, Dr David

      Campbell, Ian

      Huckfield, Les

      Padley, Walter

      Canavan, Dennis

      Hughes, Rt Hon C. (Anglesey)

      Palmer, Arthur

      Cant, R. B.

      Hughes, Robert (Aberdeen N)

      Park, George

      Carmichael, Neil

      Hughes, Roy (Newport)

      Parry, Robert

      Carter, Ray

      Hunter, Adam

      Peart, Rt Hon Fred

      Carter-Jones, Lewis

      Irvine, Rt Hon Sir A. (Edge Hill)

      Pendry, Tom

      Cartwright, John

      Irving, Rt Hon S. (Dartford)

      Prentice, Rt Hon Reg

      Castle, Rt Hon Barbara

      Jackson, Colin (Brighouse)

      Price, C. (Lewisham W)

      Clemitson, Ivor

      Jackson, Miss Margaret (Lincoln)

      Price, William (Rugby)

      Cocks, Michael (Bristol S)

      Janner, Greville

      Radice, Giles

      Cohen, Stanley

      Jay, Rt Hon Douglas

      Richardson, Miss Jo

      Coleman, Donald

      Jeger, Mrs Lena

      Roberts, Albert (Normanton)

      Cook, Robin F. (Edin C)

      Jenkins, Hugh (Putney)

      Roberts, Gwilym (Cannock)

      Corbett, Robin

      John, Brynmor

      Robertson, John (Paisley)

      Cox, Thomas (Tooting)

      Johnson, Walter (Derby S)

      Roderick, Caerwyn

      Craigen, J. M. (Maryhill)

      Jones, Alec (Rhondda)

      Rodgers, George (Chorley)

      Crawshaw, Richard

      Jones, Barry (East Flint)

      Rodgers, William (Stockton)

      Cronin, John

      Jones, Dan (Burnley)

      Rooker, J. W.

      Crosland, Rt Hon Anthony

      Judd, Frank

      Roper, John

      Cryer, Bob

      Kaufman, Gerald

      Ross, Rt Hon W. (Kilmarnock)

      Cunningham, G. (Islington S)

      Kelley, Richard

      Rowlands, Ted

      Cunningham, Dr J. (Whiten)

      Kerr, Russell

      Sandelson, Neville

      Davidson, Arthur

      Kilroy-Silk, Robert

      Sedgemore, Brian

      Davies, Bryan (Enfield N)

      Kinnock, Neil

      Shaw, Arnold (Ilford South)

      Davies, Denzil (Llanelli)

      Lambie, David

      Sheldon, Robert (Ashton-u-Lyne)

      Davies, Ifor (Gower)

      Lamborn, Harry

      Shore, Rt Hon Peter

      Deakins, Eric

      Lamond, James

      Short, Rt. Hon E. (Newcastle C)

      Delargy, Hugh

      Latham, Arthur (Paddington)

      Short, Mrs Renée (Wolv NE)

      Dell, Rt Hon Edmund

      Leadbitter, Ted

      Silkin, Rt Hon John (Deptford)

      Dempsey, James

      Lee, John

      Silkin, Rt Hon S. C. (Dulwich)

      Doig, Peter

      Lestor, Miss Joan (Eton & Slough)

      Sillars, James

      Dormand, J. D.

      Lever, Rt Hon Harold

      Skinner, Dennis

      Douglas-Mann, Bruce

      Lewis, Ron (Carlisle)

      Small, William

      Dunn, James A.

      Lipton, Marcus

      Smith, John (N Lanarkshire)

      Dunnett, Jack

      Litterick, Tom

      Snape, Peter

      Eadie, Alex

      Loyden, Eddie

      Spearing, Nigel

      Edge, Geoff

      Luard, Evan

      Spriggs, Leslie

      Edwards, Robert (Wolv SE)

      Lyon, Alexander (York)

      Stallard, A. W.

      Ellis, John (Brigg & Scun)

      Mabon, Dr J. Dickson

      Stoddart David

      English, Michael

      McCartney, Hugh

      Stonehouse, Rt Hon John

      Ennals, David

      McElhone, Frank

      Stott, Roger

      Evans, Fred (Caerphilly)

      MacFarquhar, Roderick

      Strang, Gavin

      Evans, Ioan (Aberdare)

      McGuire, Michael (Ince)

      Strauss, Rt Hon G. R.

      Evans, John (Newton)

      Mackenzie, Gregor

      Summerskill, Hon Dr Shirley

      Ewing, Harry (Stirling)

      Mackintosh, John P.

      Swain, Thomas

      Faulds, Andrew

      Maclennan, Robert

      Taylor, Mrs Ann (Bolton W)

      Fernyhough, Rt Hon E.

      McMillan, Tom (Glasgow C)

      Thomas, Jeffrey (Abertillery)

      Fitch, Alan (Wigan)

      Madden, Max

      Thomas, Ron (Bristol NW)

      Flannery, Martin

      Magee, Bryan

      Thorne, Stan (Preston South)

      Fletcher, Raymond (Ilkeston)

      Mahon, Simon

      Tierney, Sydney

      Tinn, James

      Watkinson, John

      Williams, W. T. (Warrington)

      Tomlinson, John

      Weetch, Ken

      Wilson, Alexander (Hamilton)

      Tomney, Frank

      Weitzman, David

      Wilson, William (Coventry SE)

      Torney, Tom

      Wellbeloved, James

      Woodall, Alec

      Tuck, Raphael

      White, Frank R. (Bury)

      Woof, Robert

      Urwin, T. W.

      White, James (Pollok)

      Wrigglesworth, Ian

      Wainwright, Edwin (Dearne V)

      Whitehead, Phillip

      Young, David (Bolton E)

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

      Whitlock, William

      Walker, Harold (Doncaster)

      Willey, Rt Hon Frederick

      TELLERS FOR THE AYES:

      Walker, Terry (Kingswood)

      Williams, Alan (Swansea W)

      Mr. Joseph Harper and

      Ward, Michael

      Williams, Alan Lee (Hornchurch)

      Mr. James Hamilton.

      Watkins, David

      NOES

      Adley, Robert

      Griffiths, Eldon

      Mitchell, David (Basingstoke)

      Aitken, Jonathan

      Grimond, Rt Hon J.

      Moate, Roger

      Alison, Michael

      Grist, Ian

      Monro, Hector

      Arnold, Tom

      Grylls, Michael

      Montgomery, Fergus

      Atkins, Rt Hon H. (Spelthorne)

      Hall, Sir John

      Moore, John (Croydon C)

      Awdry, Daniel

      Hall-Davis, A. G. F.

      More, Jasper (Ludlow)

      Bain, Mrs Margaret

      Hamilton, Michael (Salisbury)

      Morgan, Geraint

      Baker, Kenneth

      Hampson, Dr Keith

      Morris, Michael (Northampton S)

      Banks, Robert

      Hannam, John

      Morrison, Charles (Devizes)

      Beith, A. J.

      Harrison, Col Sir Harwood (Eye)

      Morrison, Hon Peter (Chester)

      Bennett, Sir Frederic (Torbay)

      Harvie Anderson, Rt Hon Miss

      Mudd, David

      Bennett, Dr Reginald (Fareham)

      Hastings, Stephen

      Neave, Airey

      Bitten, John

      Havers, Sir Michael

      Nelson, Anthony

      Biggs-Davison, John

      Hawkins, Paul

      Neubert, Michael

      Blaker, Peter

      Hayhoe, Barney

      Newton, Tony

      Boscawen, Hon Robert

      Heath, Rt Hon Edward

      Normanton, Tom

      Bottomley, Peter

      Henderson, Douglas

      Onslow, Cranley

      Bowden, A. (Brighton, Kemptown)

      Heseltine, Michael

      Oppenheim, Mrs Sally

      Braine, Sir Bernard

      Hicks, Robert

      Osborn, John

      Brittan, Leon

      Holland, Phillip

      Page, John (Harrow West)

      Brotherton, Michael

      Hooson, Emlyn

      Page, Rt Hon R. Graham (Crosby)

      Brown, Sir Edward (Bath)

      Hordern, Peter

      Pardoe, John

      Bryan, Sir Paul

      Howe, Rt hon Sir Geoffrey

      Parkinson, Cecil

      Buchanan-Smith, Alick

      Howell, David (Guildford)

      Pattie, Geoffrey

      Budgen, Nick

      Hunt, John

      Percival, Ian

      Bulmer, Esmond

      Hurd, Douglas

      Peyton, Rt Hon John

      Butler, Adam (Bosworth)

      Hutchison, Michael Clark

      Price, David (Eastleigh)

      Carlisle, Mark

      Irvine, Bryant Godman (Rye)

      Prior, Rt Hon James

      Clark, Alan (Plymouth, Sutton)

      Irving, Charles (Cheltenham)

      Pym, Rt Hon Francis

      Clark, William (Croydon S)

      James, David

      Raison, Timothy

      Cockcroft, John

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

      Rathbone, Tim

      Cooke, Robert (Bristol W)

      Johnson Smith, G. (E Grinstead)

      Rawlinson, Rt Hon Sir

      Cope, John

      Jones, Arthur (Daventry)

      Rees, Peter (Dover & Deal)

      Cordle, John H.

      Joseph, Rt Hon Sir Keith

      Rees-Davies, W. R.

      Cormack, Patrick

      Kaberry, Sir Donald

      Reid, George

      Corrie, John

      Kershaw, Anthony

      Renton, Rt Hon Sir D. (Hunts)

      Costain, A. P.

      King, Evelyn (South Dorset)

      Renton, Tim (Mid-Sussex)

      Crawford, Douglas

      King, Tom (Bridgwater)

      Rhys Williams, Sir Brandon

      Crouch, David

      Kitson, Sir Timothy

      Ridley, Hon Nicholas

      Dodsworth, Geoffrey

      Knight, Mrs Jill

      Ridsdale, Julian

      Douglas-Hamilton, Lord James

      Knox, David

      Rifkind, Malcolm

      Drayson, Burnaby

      Lamont, Norman

      Roberts, Michael (Cardiff NW)

      du Cann, Rt Hon Edward

      Langford-Holt, Sir John

      Roberts, Wyn (Conway)

      Durant, Tony

      Latham, Michael (Melton)

      Rodgers, Sir John (Sevenoaks)

      Eden, Rt Hon Sir John

      Lawrence, Ivan

      Ross, Stephen (Isle of Wight)

      Elliott, Sir William

      Lawson, Nigel

      Rossi, Hugh (Hornsey)

      Emery, Peter

      Le Marchant, Spencer

      Rost, Peter (SE Derbyshire)

      Evans, Gwynfor (Carmarthen)

      Lester, Jim (Beeston)

      Sainsbury, Tim

      Ewing, Mrs Winifred (Moray)

      Lloyd, Ian

      St. John-Stevas, Norman

      Eyre, Reginald

      Loveridge, John

      Scott, Nicholas

      Fairbairn, Nicholas

      Luce, Richard

      Shaw, Giles (Pudsey)

      Fairgrieve, Russell

      McAdden, Sir Stephen

      Shaw, Michael (Scarborough)

      Farr, John

      MacCormick, Iain

      Shelton, William (Streatham)

      Fell, Anthony

      Macfarlane, Neil

      Shepherd, Colin

      Fletcher, Alex (Edinburgh N)

      MacGregor, John

      Sims, Roger

      Fletcher-Cooke, Charles

      Macmillan, Rt Hon M. (Farnham)

      Sinclair, Sir George

      Fookes, Miss Janet

      McNair-Wilson, M. (Newbury)

      Skeet, T. H. H.

      Fox, Marcus

      McNair-Wilson, P. (New Forest)

      Smith, Cyril (Rochdale)

      Fry, Peter

      Madel, David

      Speed, Keith

      Galbraith, Hon. T. G. D.

      Mates, Michael

      Spence, John

      Gardiner, George (Reigate)

      Mather, Carol

      Spicer, Jim (W Dorset)

      Gilmour, Rt Hon Ian (Chesham)

      Maude, Angus

      Spicer, Michael (S. Worcester)

      Glyn, Dr Alan

      Maudling, Rt Hon Reginald

      Sproat, Iain

      Goodhart, Philip

      Mawby, Ray

      Stainton, Keith

      Goodhew, Victor

      Maxwell-Hyslop, Robin

      Stanbrook, Ivor

      Goodlad, Alastair

      Mayhew, Patrick

      Stanley, John

      Gorst, John

      Meyer, Sir Anthony

      Steen, Anthony (Wavertree)

      Gow, Ian (Eastbourne)

      Miller, Hal (Bromsgrove)

      Stewart, Donald (Western Isles)

      Gower, Sir Raymond (Barry)

      Mills, Peter

      Stewart, Ian (Hitchin)

      Gray, Hamish

      Miscampbell, Norman

      Stokes, John

      Stradling Thomas, J.

      van Straubenzee, W. R.

      Welsh, Andrew

      Tapsell, Peter

      Vaughan, Dr Gerard

      Wiggin, Jerry

      Taylor, R. (Croydon NW)

      Viggers, Peter

      Wigley, Dafydd

      Taylor, Teddy (Cathcart)

      Wakeham, John

      Wilson, Gordon (Dundee E)

      Tebbit, Norman

      Walder, David (Clitheroe)

      Winterton, Nicholas

      Temple-Morris, Peter

      Walker, Rt Hon P. (Worcester)

      Wood, Rt Hon Richard

      Thatcher, Rt Hon Margaret

      Wall, Patrick

      Young, Sir G. (Ealing, Acton)

      Thomas, Rt Hon P. (Hendon S)

      Walters, Dennis

      Younger, Hon George

      Thompson, George

      Warren, Kenneth

      Thorpe, Rt Hon Jeremy (N Devon)

      Watt, Hamish

      TELLERS FOR THE NOES:

      Townsend, Cyril D.

      Weatherill, Bernard

      Mr. Anthony Berry and

      Trotter, Neville

      Wells, John

      Mr. W. Benyon.

      Tugendhat, Christopher

      Question accordingly agreed to.

    Clause 3

      GENERAL DUTIES
      Lords Amendment: No. 2, in page 5, line 9, at end insert—
      "(6) In any case in which the Corporation is in competition with any private company operating in the energy sector the provisions of this and the next succeeding subsection shall have effect for the purposes of securing that such competition is fair.
      (7) Neither the Treasury nor the Secretary of State nor any other Minister nor local authority nor any public corporation conducted wholly or in part under national ownership or control shall, or shall counsel, procure or incite others to discriminate unfairly as between the Corporation and a petroleum company operating in the private sector in competition with each other in favour of the Corporation, whether in respect of the terms of any loan, or any contracts, the making available of land, buildings or equipment, the granting of contracts, the prices and other terms for supplies or purchases of petroleum, goods or services or otherwise howsoever. For the purposes of determining whether discrimination is unfair, regard may be had not only to the economic but also to the social consequences of any matter.
      (8) No criminal proceedings shall lie against any person on grounds that he has committed, or aided, abetted, counselled or procured the commission of or conspired or attempted to commit or incited others to commit any contravention of this section. But any person who suffers or apprehends that he will suffer any loss or damage by reason of any such contravention may bring civil proceedings in respect of such contravention or an apprehended contravention whether for an injunction or interdict or for the recovery of the full amount of the loss or damage or for any other appropriate relief or for any two or more of them."
      The Under-Secretary of State for Energy (Mr. John Smith): I beg to move, That this House doth disagree with the Lords in the said Amendment.
      Mr. Deputy Speaker: With this we may discuss Lords Amendment No. 10.
      Mr. Smith: I think it will be for the convenience of the House if I state the
      432
      Government's position fairly shortly. The amendment was dealt with fairly shortly in another place.
      As I understand it, the purpose of the amendment was to offer some protection against what was feared might be some form of unfair competition by the British National Oil Corporation. In asking the House not to approve the amendment, the Government are in no way saying that they will pursue a policy of preference for and subsidy to the Corporation. On the contrary, I want to make it clear—this stands on the record, as the point was made throughout Committee and throughout the various stages in this House—that we want the Corporation to become, as the British Gas Corporation and the National Coal Board already are, a respected and wholly commercial partner in licences. We want it to work in cooperation with private licensees. We have given an assurance that the Corporation shall not receive preferential treatment in public sector purchasing.
      I find it a little surprising to think that the mighty oil companies need some form of protection from the Corporation. However, that appears to have been the reasoning behind the amendment. Perhaps this reaffirmation of the Government's view will make it clear to the House that our objection to the amendment does not arise from any feeling that we want to give special subsidies or privileges for the Corporation. On the other hand, that is not to say that we do not think it appropriate that in certain circumstances the Corporation shall become a sole licensee. As we made clear earlier, we intend the Corporation to perform services for the Government. We do not think that those activities are inconsistent with the Corporation acting as a fully commercial enterprise when it is in partnership with private sector licensees. Our main objection to the amendment is that it would create practical difficulties for the Corporation.

      433
      5.0 p.m.
      Every public corporation is necessarily close to the Government and engages in a vast number of transactions with the Government. The opportunity to appeal to the courts with the prospect of compensation for the complainant will no doubt be welcomed by the unsuccessful competitor. This could happen every time the corporation borrowed from the National Loan Fund or, under Government guarantee, from private lenders at rates not available to all its competitors. The Government could be taken to court because an unsuccessful applicant for licences thought that the corporation was getting an unfair share. One cannot predict what would be likely to happen, but these are possibilities that the Government must bear in mind.
      It is not simply that the Corporation would be hobbled or weakened by these conditions, but we must bear in mind that the Corporation will be an instrument of the national interest. It will become the Government's adviser on oil matters and may manage the Department's pipeline and storage system. I hope that the House will wish to see the Corporation becoming strong and vigorous in extending its activities. That is largely the point of setting up the Corporation. We have given assurances time after time to reassure the Corporation's partners and competitors. But it is clear that, if the Lords amendment is allowed to stand, this aspect of the Corporation's functions will make it more vulnerable to vexatious litigation even than the other public corporations.
      I believe that the procedure suggested in the amendment would be excessively restrictive of the Corporation's operations. I say this in the context of an industry where most of the oil companies are fairly large enterprises, and I am sure the House would agree that they are not the least powerful of commercial enterprises operating in this country. I do not think they need the special protection that is offered to them in the amendment.
      If one examines Lords Amendment No. 10, one feels that it is difficult to see how in practice that protection would operate in the way suggested. In view of the background of Government policy, which has been made crystal clear, we believe that it would be wise for the House to resist the amendment.
      Mr. Peter Rost: The Minister's answer was disappointing and hardly did justice to the debate in another place when this amendment was agreed to. It is disgraceful that the Minister should attempt to reject an amendment without putting forward one single profound or cogent argument.
      When we look at the nationalised industries and their performance at the present time, we can be forgiven for asking why even the present Government do not seem to have the sense to have second thoughts before creating yet another monstrosity, especially where there is no justification for it on economic grounds. The British National Oil Corporation will be unnecessary, expensive and damaging to the national interest. It will have no proper commercial discipline and will be a waste of national resources. We cannot stop it, but at least we can attempt to harness it to prevent it from ravaging and ruining the thriving private sector oil and petrochemical industry and ancillary industries. We can do this by ensuring that the State industry competes fairly with the private sector.
      For these reasons, the Lords injected into the Bill two important amendments. We have not yet been given any reason to help us to understand why the Government have stubbornly resisted these amendments and are now attempting to throw out these safeguards. The safeguards are aimed at preventing the Government, in the public sector, whether it affects the nationalised industries or the BNOC, from trading unfairly. The safeguard contained in Amendment No. 10 seeks to give those who claim to have been subjected to discrimination in unfair trading the right of complaint against the Corporation.
      We believe that these amendments should remain in the legislation. Although we have had numerous verbal assurances from Ministers that the Corporation will trade fairly, we have had no written guarantees in the legislation to safeguard those verbal assurances. Why have we had no written guarantees? Why is the Minister now attempting to throw them out? Surely the reason is that the Government know, even if they dare not admit it, that in practice it will not be possible for the Corporation to trade fairly against private sector industry.

      435
      A number of apprehensions have been expressed on a number of occasions to which there have been no satisfactory answers. The first, and probably most important, is the vastness of the Corporation as it is proposed to be set up. The Secretary of State for Energy earlier this afternoon said that it was the intention of the BNOC to become an immensely powerful oil company. The very vastness that will be created in terms of power to dominate the rest of private industry and the limitless financial resources put at the disposal of the Corporation will make it a powerful organisation. It will own 51 per cent. of the whole industry by voluntary or bullying persuasion. It will take the royalty income from oil found in the North Sea, and that will be siphoned off by the Treasury into the oil accounts and put at the disposal of the Corporation. The Corporation will have a huge cash flow and wide-ranging powers.
      There are various ways in which those powers and pressures can be brought to bear on the private sector, and this can lead only to unfair trading. We all know that the Government, for political reasons, will need to justify the success of the Corporation. They cannot afford to have a flop. Therefore, there will be endless ways in which favoured treatment through the patronage system can be exercised to ensure that the Corporation has certain advantages. We need to spell them out to know what they are.
      Let me give one or two examples. First, we have the public sector as a major buyer of oil products, and power can be used to arrange special deals, if that is desired. The public sector is also a major supplier—or will be—to the nationalised state oil industry. Public authorities will have the opportunity to assist the nationalised oil industry against the interests of the private sector.
      Then we have the most important factor—namely, that the nationalised State industry will be exempt from the petroleum revenue tax, whereas the private sector will have to pay it. How can the Minister explain that there can be fair competition between two industries operating in the same area in the oil industry—one industry that has most of its profits extracted in taxation, and the
      436
      other not having to pay tax at all? Inevitably, this must lead to unfair competition. One will have a substantial cash flow and the other will have to raise its cash in the normal way, either by using what little retained profits it is allowed, or from marketing operations carried out in a normal commercial way. I believe that this can lead only to unfair competition.
      Mr. Russell Kerr: Following the rough logic of the hon. Gentleman's argument, is he suggesting that the private sector industry should now be withdrawn?
      Mr. Rost: I do not see the relevance of that intervention. The hon. Gentleman can make his own contribution to the debate, and we await it with interest.
      There are various other matters that cause concern. In particular, we must be concerned about downstream operations in the petrochemical industry. With the vast resources which will be available to the State industry, and with the declared intention to move downstream, there could be unfair competition. New refineries or petrochemical plans can be put up only if the demand exists, and as demand for them expands, the Minister will have discretion as to those to whom he grants planning consent for new refineries. One wonders to what extent those powers will be used against the private sector and in favour of the nationalised State sector, to allow it to expand into the refinery business.
      There is a great deal of uncertainy in the petrochemical industry, and uncertainty is the greatest danger to capital investment. What we need is not vague assurances but something written into the Bill to provide the safeguards to which the industry is entitled if it is to continue to plan its major capital investment projects and to insure itself against any possibility of unfair State competition.
      There are a number of other areas in which unfair competition can develop. We have already had the debate about the powers of the civil servants and how they will undoubtedly have inside expect knowledge. Even if it is not disclosed to the Board of BNOC, they will still have it. How can the Government have those civil servants on the Board without admitting that their presence must represent some

      437
      element of discrimination and possibly unfair competition with the private sector?
      If the House wants evidence, we already have the first example of jiggery-pokery by the State industry, before it has even got off the ground, in a way which involves unfair competition. BNOC is taking over from the National Coal Board for a nominal face value of £50,000 assets estimated to be worth £100 million. That must mean a hidden subsidy, which will fudge the calculations of return on capital employed, if any are to be attempted. Failure to have assets realistically valued on the balance sheet must have an effect on the calculations and assessments of proper commercial practice, and must therefore result in unfair competition. I regard that as an inauspicious start, and hardly good accounting practice. It represents the beginnings of cross-subsidisation before BNOC has even started.
      The powers to force BNOC's partners in the North Sea, perhaps under authority from the Secretary of State, to develop uncommercial fields, against the best interests of the private sector, perhaps, but to the advantage of BNOC, constitute another area in which we could see unfair trading. There are also the powers for revocation of licences which can be applied against the interests of the private sector and to the advantage of, and extension of the powers of, the State industry.
      In addition, there is the possibility that if—perhaps I should say "when"—BNOC decides to move downstream into the refineries there will be arbitrary political decisions which will create unfair trading by a nationalised concern at the expense of the private sector.
      5.15 p.m.
      Those are some of the anxieties, some of the areas in which we feel that it will be extremely difficult to draw the line between what is fair trading and what is not. For those reasons, we believe that safeguards should be retained in the Bill, and we cannot understand why the Government wish to remove the amendments made by the other place.
      The Government have given plenty of assurances—we heard more this afternoon—that BNOC will act and trade commercially. If those assurances are valid, why are the Government afraid to write them into the Bill? We believe
      438
      that there is evidence that it will not be possible for BNOC to trade fairly in every respect. Therefore, we must challenge the motives behind the Government's resistance to including these protective provisions.
      We are told that there is already a guarantee against unfair competition in the Fair Trading Act and that anybody who feels aggrieved can have a reference made to the Monopolies Commission. But the Minister will know only too well that that Act is designed especially to protect consumers and is hardly suitable for application to industries.
      Then we have the explanation from the Minister that the amendments might result in vexatious accusations of unfair trading. If the Government are to argue that we cannot have a complaints procedure because there might be vexatious complaints or chronic litigants, should not that argument apply to all independent appeals, tribunals and arbitrations—indeed, to all courts of law? Why should it be so different in this case? That argument is arrogant and suitable for a dictatorial point of view rather than one acceptable to a democratic institution.
      We believe that there is a special need to protect the smaller companies. The hon. Gentleman said that the large oil companies could look after themselves. That may be, but there are many smaller operators who will be particularly endangered by unfair trading practices by the State, and who need protection. We also need long-term assurances for the sake of the confidence needed for capital investment if the private industry is not to be smothered. The assurances by Ministers so far are not enough.
      The vastness of the proposed new nationalised industry represents a threat to fair trading in many ways. If our suspicions of Government motives are unjustified, the Government should be happy to accept the amendements. They say that BNOC will trade fairly. If that is so, there is no need to reject the amendments.
      Unless the assurances are written into the Bill and the Government remove the uncertainty about unfair competition between a State monstrosity and the private sector, future relations between the two sectors will be endangered, as

      439
      will the industry's prosperity. If our fears will prove to have been unjustified, there is no harm in accepting the amendments. The Government claim that favouritism and abuse will not occur. The removal of any risk of their occurrence would be a small price to pay for a concession by the Government in allowing the amendments to stand.
      The BNOC is being created as an entirely new nationalised industry in direct competition with the private sector, and it is starting in a privileged position. Therefore, it is not a question of justice being done but one of justice being seen to be done. I therefore urge the House not to reject these amendments.
      Mr. Ted Leadbitter: I have strong reservations about what I understand to be the nationalised industries. That does not mean that I could be persuaded to pursue a line which might be difficult to incorporate in a Bill of this kind. Even if we adopt an attitude of using phraseology which suggests that there is to be discrimination, we must still seek the best definition of what we mean.
      The word "discrimination" caused great difficulties in another context in deciding what was right and what was wrong. It is not sufficient to write into a Bill of this kind:
      "to discriminate unfairly as between the Corporation and a petroleum company operating in the private sector in competition with each other in favour of the Corporation,"
      There is something wrong with that. If that amendment were accepted, as a corollary to that language we should have to write into the Bill equivalent discriminatory restrictions on oil companies. On that count the Opposition argument falls.
      All reasonable Members of Parliament must agree that—apart from the normal political discussion which is bound to occur in the House—there cannot exist in law a purely one-sided state of discrimination. On that ground the hon. Gentleman's case fails. Much of what the hon. Gentleman said is not his own homework, as he retailed some of the concerns of the oil companies.
      The last sentence of the amendment to Clause 3(7) reads:
      440
      "For the purposes of determining whether discrimination is unfair, regard may be had not only to the economic but also to the social consequences of any matter."
      In terms of reasonable practice, how can we pursue either litigation or the actions specified in the amendment—the remedying of a complaint in a manner which would be satisfactory to all parties—when we use the words "of any matter"? But, worse than that, how do we measure the economic and social consequences?
      Having realised the impractical nature of this amendment. we should proceed to reject it so that we can pass the Bill at an early stage. The Opposition should not persist in using valuable time on an amendment such as this. Front Bench Members on both sides know that if this amendment is written into the Bill it will create problems.
      On those grounds, we should not support the amendment. We should agree with the Secretary of State. We should not agree to the Lords amendment.
      Mr. Patrick Jenkin: My hon. Friend the Member for Derbyshire, South-East (Mr. Rost) deployed a formidable case in favour of this pair of Lords amendments It would be superfluous to repeat his case. However there are one or two points which I might add and of which the Minister would be wise to take account before he replies. I shall also comment briefly on what the hon. Member for Hartlepool (Mr. Leadbitter) said.
      The issue is simple. This is a test of the Government's good faith towards the oil industry. Although the Department of Energy sponsors the BNOC, it is responsible for the whole of the oil industry. Ministers therefore have a continuing responsibility for the health and confidence of the whole industry.
      Having read the speeches of Lord Balogh in another place, I have the impression that the current attitude is that what is good for the oil industry must be bad for the British people, and vice versa. [Interruption.] I am grateful for the sedentary renunciation of that view from the Government, in view of the impression which is left with the person who reads the speeches of Lord Balogh.
      Mr. John Smith: The right hon. Gentleman must not mislead the House. I have read the speeches of Lord Balogh.

      441
      There are frequent references in them to a concern for the health of the whole oil industry, both public and private.
      Mr. Jenkin: Those sentiments are negatived by the often snide remarks made when attacking the oil industry and the frequent references to the seven sisters. Lord Campbell of Croy pointed out in debate that the effect of exempting the BNOC from petroleum revenue tax would be to leave a tax loophole, as the whole of the oil allowance would accrue to the private partners. The immediate reaction of Lord Balogh was to the effect that that suggestion would not have originated from those who were to benefit from the loophole. The fact is that that suggestion emerged from the oil industry, members of which pointed out that the exemption of petroleum revenue tax would leave a tax loophole which the Government should close. That provides an instance of the reaction of the noble Lord.
      It would be wise for Ministers to recognise, when considering this amendment about discrimination, that the industry's confidence has been badly shaken over the past 18 months. All but the mose rabid apologists for Government policy will put that down to political uncertainty. The prolonged hesitation in development is affecting jobs, the pace of exploration and orders for platforms. I beg Ministers to recognise the truth of that.
      In a recent Panorama television broadcast, Lord Balogh was at pains to point out that there was a carefully orchestrated campaign and a conspiracy of self-impoverishment by the industry in the hope that it would thereby put pressure on the Government. Does that extend to the bankers, suppliers and contractors? Of course not. It is rubbish. It is a dangerous belief. It underestimates the risk of doing lasting harm to the pace and momentum of the exploration and development which we so badly need. The fear is that, not in the next two or three years but further ahead, there will be no new exploration, no developments and no new oil fields.
      All our debates—especially the debate on the amendment about discrimination—have to be conducted against the background of two facts. One is that the Department of Energy is the sponsoring
      442
      Department for the whole industry. The second is that the confidence of the industry in the Government has been badly shaken. Here are two realistic proposals, positive steps which the Government could take to reassure the industry in a clear and practical way.
      5.30 p.m.
      I come to the speech made by the hon. Member for Hartlepool. There is a precedent in the hon. Gentleman's constituency where important parts of the steel industry are located. When the Iron and Steel Bill was going through the House in 1967 the Government yielded to Opposition pressure to insert a non-discrimination clause and to provide a remedy in the event of discrimination by the British Steel Corporation against the private sector. Further, the hon. Gentleman will know that that procedure had to be invoked.
      In 1972 the Government appointed Lord Hirshfield to examine a complaint made by the private sector that by pricing its products differently the BSC was effectively squeezing that part of the industry which remained in the hands of the private sector, namely, the special steels. It would be wrong for me to go into detail, but Lord Hirshfield found that the complaint was well founded. Mr. Richard Marsh had been wise in yielding to the arguments addressed to him to include such a clause in the Iron and Steel Bill. There is a precedent, it has been used and it has been found necessary.
      I deplore the fact that the Government are still rigid and adamant against inserting a similar clause in this Bill when it is their own desire that the BNOC should become a large, powerful and integrated oil company. I hope that even now, at the eleventh hour, the Government will accept one or other amendment, or preferably both, but if they are not prepared to yield I must advise my hon. Friends to join me in resisting the motion.
      Mr. John Smith: With the leave of the House, I shall try to reply briefly to some of the arguments put forward by hon. and right hon. Gentlemen. I was not surprised when the hon. Member for Derbyshire, South-East (Mr. Rost) began by saying that my opening remarks had been unsatisfactory. As I have become accustomed to being condemned

      443
      by the hon. Gentleman for unsatisfactory replies in Committee before I had even addressed the Committee, I am not completely surprised. In the months that have passed since we heard the hon. Gentleman's contributions in Committee, his style has become no more emollient. He remains completely devoted to the protection of every private company interest, whether British or foreign, and completely neglectful of any form of protection of the national interest against private interests. Unfortunately, that has been characteristic of the way in which the Conservative Party has approached not only the setting up of a new public corporation but the regulation of companies which is a major feature of the Bill.
      Mr. Rost: Would it not be more helpful if, instead of attacking me personally, the Minister tried to justify his attempt to throw out these Lords amendments?
      Mr. Smith: I hope that the hon. Gentleman is as good at taking criticism as he is at handing it out. The amount of criticism he has made of me and the Government over many hours of proceedings on the Bill entitles me to make the odd remark back in his direction.
      I am happy to take up his arguments. The notion that the BNOC is to be seen as a vast, powerful, economic conglomerate which will dominate the oil industry is surprising when one remembers that the BNOC will have to make its way against some of the most powerful multinational corporations that the world has seen in its economic history, corporations which have more assets at their disposal than have many nation States. The notion that the BNOC will frighten and crush these multinational corporations into submission I find laughable.
      We have given the BNOC wide powers to operate as a fully integrated oil company. Why should it not have those powers? Every one of its competitors will have those powers, and not to give a public corporation exactly the same rights would be seriously to neglect the public interest.
      Mr. Patrick Jenkins: Will the hon. Gentleman answer the point that competitors are not being fed with the royalties that all the rest of the oil industry is paying?
      Mr. Smith: The BNOC has to be financed by public funds, and that is one way in which it will be financed. I shall answer each of the criticisms that has been made in the debate in my own time and in my own way, if the right hon. Gentleman will allow me to do so.
      I noticed that the right hon. Gentleman did not speak very closely to the terms of the amendment, no doubt because he had reservations about it. The Conservative Party is not only reflecting but magnifying private worries and sometimes even distorting them in its anxiety to hobble, restrict and attack a new public corporation.
      One of the most important issues in the short debate was raised by my hon. Friend the Member for Hartlepool (Mr. Leadbitter) who drew attention to one of the provisions in the amendment and pointed out the impossibility of deciding whether any discrimination could arise on the basis of
      "the social consequences of any matter."
      I do not understand how a court would be able to make sense of that provision. That is the answer to the hon. Member for Derbyshire, South-East who asked whether the setting up of an independent appeal tribunal would encourage vexatious litigants. The way in which the supposed protection is framed could not be of more assistance to the vexatious litigant if it had been framed for that precise purpose. The vagueness of the phrasing is such that it would encourage a litigant to take up a case however doubtful might be his prospects of success. The BNOC, engaged in making its way in the world against powerful and intense competition, would have to keep on meeting complaints, some of which were totally unfounded. It would be ridiculous to expect that arrangement to work in practice. I noticed that Opposition Members were much more concerned to state the principle behind the amendments than to justify their working out in practice.
      Mr. Rost: Is the hon. Gentleman opposing the amendments on technical grounds or on principle? If he is opposing them on technical grounds, he has had the opportunity in another place, and since, to tidy them up.
      Mr. Smith: It is not opposing an amendment on technical grounds to say

      445
      that it is unworkable. I am opposing the amendments because they are completely impracticable. They could not be made to work in practice.
      Conservative Members have a wrong sense of proportion if they think that the oil industry needs protection from the BNOC. It is more likely that the BNOC might need a little care for its interests when it is facing powerful competition from private interests. Ministers have made clear that they wish to see fair trading, fair competition, co-operation and partnership when the BNOC and private interests—as licensees—work together, as they will often do. Public corporations are already working with private interests in the North Sea, and both sides are satisfied with the arrangements they have made.
      The attitude of Conservative Members is completely out of proportion. In their handling of oil policy the protection of the public interest has not figured very largely. It is inappropriate for the right hon. Member for Wanstead and Wood-ford to read to me or to my right hon. Friend the Secretary of State a lecturette about the political uncertainties of the oil industry. Perhaps he will tell his right hon. Friend the Leader of the Opposition—who made silly remarks about selling off part of the BNOC if a buyer could be found in the unfortunate event of a return to power by the Conservatives—that nothing would cause more uncer-
      tainty in the oil industry than a serious belief that the Conservative Party had a chance of electoral success. It does not lie in the right hon. Gentleman's mouth to give us lectures about uncertainty. When the right hon. Lady made that statement I imagine it was heard with dismay by the right hon. Member for Wanstead and Woodford, who had carefully refrained from making any such statement during all the months when we were engaged on the Bill. I do not think it lies at his hand to give us any lectures about political uncertainty. He knows perfectly well that the Government have made a whole series of reasonable concessions to legitimate points made by the industry—and accepted far more generously by the industry than by the Conservative Opposition in the House of Commons.
      But we have insisted on certain rights. We have insisted that the BNOC shall have an opportunity to develop into an important addition to the public sector in this country. The amendment would hobble it before it started. That is why we ask the House to reject it today.
      Question put, That this House doth disagree with the Lords in the said amendment:—
      The House divided: Ayes 264, Noes 247.

      Division No. 384.]

      AYES

      [5.41 p.m.

      Allaun, Frank

      Canavan, Dennis

      Dempsey, James

      Anderson, Donald

      Cant, R. B.

      Doig, Peter

      Archer, Peter

      Carmichael, Neil

      Dormand, J. D.

      Armstrong, Ernest

      Carter, Ray

      Douglas-Mann, Bruce

      Ashley, Jack

      Carter-Jones, Lewis

      Dunn, James A.

      Atkins, Ronald (Preston N)

      Cartwright, John

      Dunnett, Jack

      Atkinson, Norman

      Castle, Rt Hon Barbara

      Eadie, Alex

      Bagier, Gordon A. T.

      Clemitson, Ivor

      Edge, Geoff

      Barnett, Guy (Greenwich)

      Cocks, Michael (Bristol S)

      Edwards, Robert (Wolv SE)

      Barnett, Rt Hon Joel (Heywood)

      Cohen, Stanley

      English, Michael

      Bates, Alf

      Coleman, Donald

      Ennals, David

      Bean, R. E.

      Conlan, Bernard

      Evans, Fred (Caerphilly)

      Benn, Rt Hon Anthony Wedgwood

      Cook, Robin F. (Edin C)

      Evans, Ioan (Aberdare)

      Bennett, Andrew (Stockport N)

      Corbett, Robin

      Evans, John (Newton)

      Bidwell, Sydney

      Cox, Thomas (Tooting)

      Ewing, Harry (Stirling)

      Bishop, E. S.

      Craigen, J. M. (Maryhill)

      Faulds, Andrew

      Boardman, H.

      Crawshaw, Richard

      Fernyhough, Rt Hon E.

      Booth, Albert

      Crosland, Rt Hon Anthony

      Fitch, Alan (Wigan)

      Boothroyd, Miss Betty

      Cryer, Bob

      Flannery, Martin

      Bottomley, Rt Hon Arthur

      Cunningham, G. (Islington S)

      Fletcher, Raymond (Ilkeston)

      Boyden, James (Bish Auck)

      Cunningham, Dr J. (Whiteh)

      Fletcher, Ted (Darlington)

      Bradley, Tom

      Davidson, Arthur

      Foot, Rt Hon Michael

      Brown, Hugh D. (Provan)

      Davies, Bryan (Enfield N)

      Forrester, John

      Brown, Ronald (Hackney S)

      Davies, Denzil (Llanelli)

      Freeson, Reginald

      Buchan, Norman

      Davies, Ifor (Gower)

      Garrett, John (Norwich S)

      Buchanan, Richard

      Deakins, Eric

      Garrett, W. E. (Wallsend)

      Butler, Mrs Joyce (Wood Green)

      Dean, Joseph (Leeds West)

      George, Bruce

      Callaghan, Jim (Middleton & P)

      Delargy, Hugh

      Gilbert, Dr John

      Campbell, Ian

      Dell, Rt Hon Edmund

      Ginsburg, David

      Golding, John

      Gould, Bryan

      MacFarquhar, Roderick

      Shaw, Arnold (Ilford South)

      Gourlay, Harry

      McGuire, Michael (Ince)

      Sheldon, Robert (Ashton-u-Lyne)

      Graham, Ted

      Mackenzie, Gregor

      Shore, Rt Hon Peter

      Grant, George (Morpeth)

      Mackintosh, John P.

      Short, Rt. Hon E. (Newcastle C)

      Grant, John (Islington C)

      Maclennan, Robert

      Short, Mrs Renée (Wolv NE)

      Grocott, Bruce

      McMillan, Tom (Glasgow C)

      Silkin, Rt Hon John (Deptford)

      Hamilton, James (Bothwell)

      Madden, Max

      Silkin, Rt Hon S. C. (Dulwich)

      Hamilton, W. W. (Central Fife)

      Magee, Bryan

      Sillars, James

      Hardy, Peter

      Mahon, Simon

      Skinner, Dennis

      Harrison, Walter (Wakefield)

      Mallalieu, J. P. W

      Small, William

      Hart, Rt Hon Judith

      Marks, Kenneth

      Smith, John (N Lanarkshire)

      Hatton, Frank

      Marquand, David

      Snape, Peter

      Hayman, Mrs. Helene

      Marshall, Dr Edmund (Goole)

      Spearing, Nigel

      Heffer, Eric S.

      Marshall, Jim (Leicester S)

      Spriggs, Leslie

      Hooley, Frank

      Maynard, Miss Joan

      Stallard, A. W.

      Horam, John

      Mellish, Rt Hon Robert

      Stonehouse, Rt Hon John

      Howell, Denis (B'ham, Sm H)

      Mendelson, John

      Stott, Roger

      Hoyle, Doug (Nelson)

      Mikardo, Ian

      Strang, Gavin

      Huckfield, Les

      Millan, Bruce

      Strauss, Rt Hon G. R.

      Hughes, Rt Hon C. (Anglesey)

      Miller, Dr M. S. (E Kilbride)

      Summerskill, Hon Dr Shirley

      Hughes, Robert (Aberdeen N)

      Miller, Mrs Millie (Ilford N)

      Swain, Thomas

      Hughes, Roy (Newport)

      Molloy, William

      Taylor, Mrs Ann (Bolton W)

      Hunter, Adam

      Moonman, Eric

      Thomas, Jeffrey (Abertillery)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Morris, Alfred (Wythenshawe)

      Thomas, Ron (Bristol NW)

      Irving, Rt Hon S. (Dartford)

      Morris, Charles R. (Openshaw)

      Thorne, Stan (Preston South)

      Jackson, Colin (Brighouse)

      Morris, Rt Hon J. (Aberavon)

      Tierney, Sydney

      Jackson, Miss Margaret (Lincoln)

      Mulley, Rt Hon Frederick

      Tinn, James

      Janner, Greville

      Murray, Rt Hon Ronald King

      Tomlinson, John

      Jay, Rt Hon Douglas

      Newens, Stanley

      Tomney, Frank

      Jeger, Mrs Lena

      Noble, Mike

      Torney, Tom

      Jenkins, Hugh (Putney)

      Oakes, Gordon

      Tuck, Raphael

      John, Brynmor

      O'Halloran, Michael

      Urwin, T. W.

      Johnson, Walter (Derby S)

      O'Malley, Rt Hon Brian

      Wainwright, Edwin (Dearne V)

      Jones, Alec (Rhondda)

      Orbach, Maurice

      Walker, Harold (Doncaster)

      Jones, Barry (East Flint)

      Ovenden, John

      Walker, Terry (Kingswood)

      Jones, Dan (Burnley)

      Owen, Dr David

      Ward, Michael

      Judd, Frank

      Padley, Walter

      Watkins, David

      Kaufman, Gerald

      Palmer, Arthur

      Watkinson, John

      Kelley, Richard

      Park, George

      Weitzman, David

      Kerr, Russell

      Parry, Robert

      Wellbeloved, James

      Kilroy-Silk, Robert

      Peart, Rt Hon Fred

      White, Frank R. (Bury)

      Kinnock, Neil

      Pendry, Tom

      White, James (Pollok)

      Lambie, David

      Prentice, Rt Hon Reg

      Whitehead, Phillip

      Lamborn, Harry

      Price, C. (Lewisham W)

      Whitlock, William

      Lamond, James

      Price. William (Rugby)

      Willey, Rt Hon Frederick

      Latham, Arthur (Paddington)

      Radice, Giles

      Williams, Alan Lee (Hornchurch)

      Leadbitter, Ted

      Richardson, Miss Jo

      Williams, Rt Hon Shirley (Hertford)

      Lee, John

      Roberts, Albert (Normanton)

      Williams, W. T. (Warrington)

      Lestor, Miss Joan (Eton & Slough)

      Roberts, Gwilym (Cannock)

      Wilson, Alexander (Hamilton)

      Lever, Rt Hon Harold

      Robertson, John (Paisley)

      Wilson, William (Coventry SE)

      Lewis, Ron (Carlisle)

      Roderick, Caerwyn

      Wise, Mrs Audrey

      Lipton, Marcus

      Rodgers, George (Chorley)

      Woodall, Alec

      Litterick, Tom

      Rodgers, William (Stockton)

      Woof, Robert

      Loyden, Eddie

      Rooker, J. W.

      Wrigglesworth, Ian

      Luard, Evan

      Roper, John

      Young, David (Bolton E)

      Lyon, Alexander (York)

      Rose, Paul B.

      Lyons, Edward (Bradford W)

      Ross, Rt Hon W. (Kilmarnock)

      TELLERS FOR THE AYES

      Mabon, Dr J. Dickson

      Rowlands, Ted

      Mr. David Stoddart and

      McCartney, Hugh

      Sandelson, Neville

      Mr. Joseph Harper

      McElhone, Frank

      Sedgemore, Brian

      NOES

      Adley, Robert

      Brittan, Leon

      Drayson, Burnaby

      Aitken, Jonathan

      Brotherton, Michael

      du Cann, Rt Hon Edward

      Alison, Michael

      Brown, Sir Edward (Bath)

      Durant, Tony

      Arnold, Tom

      Bryan, Sir Paul

      Eden, Rt Hon Sir John

      Atkins, Rt Hon H. (Spelthorne)

      Buchanan-Smith, Alick

      Elliott, Sir William

      Awdry, Daniel

      Budgen, Nick

      Emery, Peter

      Bain, Mrs Margaret

      Bulmer, Esmond

      Evans, Gwynfor (Carmarthen)

      Baker, Kenneth

      Butler, Adam (Bosworth)

      Ewing, Mrs Winifred (Moray)

      Banks, Robert

      Carlisle, Mark

      Eyre, Reginald

      Beith, A. J.

      Chalker, Mrs Lynda

      Fairbairn, Nicholas

      Bennett, Sir Frederic (Torbay)

      Churchill, W. S.

      Fairgrieve, Russell

      Bennett, Dr Reginald (Fareham)

      Clark, Alan (Plymouth, Sutton)

      Farr, John

      Benyon, W.

      Cockcroft, John

      Fell, Anthony

      Berry, Hon Anthony

      Cooke, Robert (Bristol W)

      Fisher, Sir Nigel

      Biffen, John

      Cope, John

      Fletcher, Alex (Edinburgh N)

      Biggs-Davison, John

      Cormack, Patrick

      Fletcher-Cooke, Charles

      Blaker, Peter

      Corrie, John

      Fookes, Miss Janet

      Boscawen, Hon Robert

      Costain, A. P.

      Fox, Marcus

      Bottomley, Peter

      Crawford, Douglas

      Fry, Peter

      Bowden, A. (Brighton, Kemptown)

      Crowder, F. P.

      Galbraith, Hon. T. G. D.

      Bovson, Dr Rhodes (Brent)

      Dodsworth, Geoffrey

      Gardiner, George (Reigate)

      Braine, Sir Bernard

      Douglas-Hamilton, Lord James

      Gardner, Edward (S Fylde)

      Gilmour, Rt Hon Ian (Chesham)

      MacGregor, John

      Sainsbury, Tim

      Glyn, Dr Alan

      Macmillan, Rt Hon M. (Farnham)

      St. John-Stevas, Norman

      Goodhart, Philip

      McNair-Wilson, M. (Newbury)

      Scott, Nicholas

      Goodhew, Victor

      McNair-Wilson, P. (New Forest)

      Shaw, Giles (Pudsey)

      Goodlad, Alastair

      Madel, David

      Shaw, Michael (Scarborough)

      Gorst, John

      Mates, Michael

      Shelton, William (Streatham)

      Gow, Ian (Eastbourne)

      Mather, Carol

      Shepherd, Colin

      Gower, Sir Raymond (Barry)

      Maude, Angus

      Silvester, Fred

      Gray, Hamish

      Maudling, Rt Hon Reginald

      Sims, Roger

      Griffiths, Eldon

      Mawby, Ray

      Sinclair, Sir George

      Grimond, Rt Hon J.

      Maxwell-Hyslop, Robin

      Skeet, T. H. H.

      Grist, Ian

      Mayhew, Patrick

      Smith, Cyril (Rochdale)

      Grylls, Michael

      Meyer, Sir Anthony

      Speed, Keith

      Hall, Sir John

      Miller, Hal (Bromsgrove)

      Spence, John

      Hall-Davis, A. G. F.

      Mills, Peter

      Spicer, Jim (W Dorset)

      Hamilton, Michael (Salisbury)

      Miscampbell, Norman

      Spicer, Michael (S. Worcester)

      Hampson, Dr Keith

      Mitchell, David (Basingstoke)

      Sproat, Iain

      Hannam, John

      Moate, Roger

      Stainton, Keith

      Harrison, Col Sir Harwood (Eye)

      Monro, Hector

      Stanbrook, Ivor

      Harvie Anderson, Rt Hon Miss

      Montgomery, Fergus

      Stanley, John

      Hastings, Stephen

      Moore, John (Croydon C)

      Steen, Anthony (Wavertree)

      Havers, Sir Michael

      More, Jasper (Ludlow)

      Stewart, Donald (Western Isles)

      Hawkins, Paul

      Morgan, Geraint

      Stewart, Ian (Hitchin)

      Hayhoe, Barney

      Morris, Michael (Northampton S)

      Stokes, John

      Heath, Rt Hon Edward

      Morrison, Charles (Devizes)

      Stradling Thomas, J.

      Henderson, Douglas

      Morrison, Hon Peter (Chester)

      Tapsell, Peter

      Heseltine, Michael

      Mudd, David

      Taylor, R. (Croydon NW)

      Hicks, Robert

      Neave, Airey

      Taylor, Teddy (Cathcart)

      Holland, Phillip

      Nelson, Anthony

      Tebbit, Norman

      Hooson, Emlyn

      Neubert, Michael

      Temple-Morris, Peter

      Hordern, Peter

      Newton, Tony

      Thatcher, Rt Hon Margaret

      Howe R. Hon Sir Geoffrey

      Normanton, Tom

      Thomas, Rt Hon P. (Hendon S)

      Howell, David (Guildford)

      Onslow, Cranley

      Thompson, George

      Hunt, John

      Oppenheim, Mrs Sally

      Thorpe, Rt Hon Jeremy (N Devon)

      Hurd, Douglas

      Osborn, John

      Townsend, Cyril D.

      Hutchison, Michael Clark

      Page, John (Harrow West)

      Trotter, Neville

      Irvine, Bryant Godman (Rye)

      Page, Rt Hon R. Graham (Crosby)

      Tugendhat, Christopher

      Irving, Charles (Cheltenham)

      Pardoe, John

      van Straubenzee, W. R.

      James, David

      Parkinson, Cecil

      Vaughan, Dr Gerard

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

      Pattie, Geoffrey

      Viggers, Peter

      Johnson Smith, S. (E Grinstead)

      Percival, Ian

      Wainwright, Richard (Colne V)

      Jones, Arthur (Daventry)

      Peyton, Rt Hon John

      Wakeham, John

      Joseph, Rt Hon Sir Keith

      Price, David (Eastleigh)

      Walder, David (Clitheroe)

      Kaberry, Sir Donald

      Prior, Rt Hon James

      Wall, Patrick

      Kershaw, Anthony

      Pym, Rt Hon Francis

      Walters, Dennis

      King, Evelyn (South Dorset)

      Raison, Timothy

      Warren, Kenneth

      King, Tom (Bridgwater)

      Rathbone, Tim

      Watt, Hamish

      Kitson, Sir Timothy

      Rawlinson, Rt Hon Sir Peter

      Weatherill, Bernard

      Knight, Mrs Jill

      Rees, Peter (Dover & Deal)

      Wells, John

      Knox, David

      Rees-Davies, W. R.

      Welsh, Andrew

      Lamont, Norman

      Reid, George

      Wiggin, Jerry

      Langford-Holt, Sir John

      Renton, Rt Hon Sir D. (Hunts)

      Wigley, Dafydd

      Latham, Michael (Melton)

      Renton, Tim (Mid-Sussex)

      Wilson, Gordon (Dundee E)

      Lawrence, Ivan

      Rhys Williams, Sir Brandon

      Winterton, Nicholas

      Lawson, Nigel

      Ridley, Hon Nicholas

      Wood, Rt Hon Richard

      Le Marchant, Spencer

      Ridsdale, Julian

      Young, Sir G. (Ealing, Acton)

      Lester, Jim (Beeston)

      Rifkind, Malcolm

      Younger, Hon George

      Lloyd, Ian

      Roberts, Wyn (Conway)

      Loveridge, John

      Rodgers, Sir John (Sevenoaks)

      TELLERS FOR THE NOES:

      McAdden, Sir Stephen

      Ross, Stephen (Isle of Wight)

      Mr. Michael Roberts and

      MacCormick, Iain

      Rossi, Hugh (Hornsey)

      Mr. Richard Luce.

      Macfarlane, Neil

      Rost, Peter (SE Derbyshire)

      Question accordingly agreed to.

    Clause 6

      BORROWING POWERS ETC
      Lords Amendment: No. 3, in page 6, line 6, leave out
      "temporarily, by way of overdraft or otherwise, "
      Mr. John Smith: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this amendment we are to consider Lords Amendments No. 4 and 5.
      Mr. Smith: The effect of the amendment is to enable the BNOC to borrow long term in sterling from sources other than the Secretary of State and the organs of the European Communities. For reasons which were explained in another place, it is not usual to allow this option to nationalised industries. The view has been taken in the past by Governments of both major parties that the direct involvement of nationalised industries in the market is likely to disrupt and increase the cost of borrowing of the Government concerned. However, in the case of the BNOC there are likely to be joint financing operations with parts of

      451
      the Corporation's production licences. This may involve borrowing in sterling or having to make currency loans of which sterling is a component. We feel that the Corporation should be able to play its part in these operations like any other licensee. That is the underlying reason for this and the subsequent Lords amendments, which are felt to be a desirable addition to the Bill.
      Question put and agreed to.
      Subsequent Lords amendments agreed to.

    Clause 10

      ACCOUNTS AND AUDIT
      Lords Amendment: No. 6, in page 8, line 38, at end insert
      "and, giving separate information with respect to, and showing as far as may be the financial and operating results of, each of the main activities of the Corporation."
      Mr. Benn: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this amendment, we may consider Lords Amendments Nos. 7 and 8.
      Mr. Benn: These amendments effect minor but worthwhile changes in the provision for BNOC's accounts. They provide that the accounts should give separate information about each of the main activities of the Corporation. We always intended that the Corporation should follow the practice of other nationalised industries—for example, gas—but as there was sensitivity on the point in Committee, the Government moved the amendments in another place. The Corporation will now be required statutorily to break down its own or its consolidated accounts by main activity.
      Amendment No. 8 gives the power to the Secretary of State to call for separate accounts for the Corporation's subsidiaries. By the operation of subsections (4) and (5), these accounts, like others, must be laid before Parliament. This is in accordance with the recommendation of the Select Committee on Nationalised Industries.
      Mr. Patrick Jenkin: The Opposition welcome this change of heart on the part of the Government. It represents an
      452
      additional help in making sure that the Government's pledges about the areas in which the Corporation will operate commercially can be tested and proved. Therefore, it is wise that the Government have agreed to these amendments, especially to remove the element of discretion on the part of the Secretary of State about whether the activities should be reported upon and accounted for separately.
      Question put and agreed to.
      Subsequent Lords amendments agreed to.

    Clause 15

      ANNUAL REPORT
      Lords Amendment: No. 9, in page 12, line 3, at end insert:
      "(cc) a statement of the amount by way of petroleum revenue tax and the amount by way of corporation tax which the Corporation estimates would, but for section 9(1) of this Act, have been payable by the Corporation and relevant subsidiaries in respect of their profit for that year;".
      Read a Second time.
      Mr. Tim Renton: I beg to move, as an amendment to the Lords amendment, at end insert:
      'and a statement of the discounts, concessions and any other benefits that were, in the view of the corporation, available to the corporation by virtue of its being a public corporation'.
      It is with diffidence that I move this amendment since I was not a member of the Standing Committee which considered the Bill. The fact remains that many Opposition Members regard the BNOC as another hydra-headed monster in the public sector and fail to understand why at a time when there is so much concern about the growth of employment in the public sector and its decline in the private sector, the Government should create yet another public corporation.
      Government Ministers, notably Lord Balogh in another place, have assured us constantly that the Corporation would be efficient and that it would trade fairly. The noble Lord said on one occasion that the Government had gone out of their way to stress that when the Corporation was in competition with the private sector it would act commercially.
      In moving this amendment, therefore, I am saying, in effect, that the Corporation should declare its hand openly and

      453
      clearly in its annual report that it has acted commercially and fairly as if it were a private company, and that in cases where it obtains benefits which are not available to a competitor in the private sector, that should be set forth in the accounts.
      Before I go further I should declare an interest in this matter as a director of a company which has some interests in oil exploration.
      Ministers may say that this is purely theoretical and that it could not arise that the BNOC should obtain such special concessions or benefits. I wonder whether that is the case. I can imagine a situation developing in which, for example, the BNOC was given a monopoly to supply all the oil and gas used by Government Departments or when the Corporation was given preferential treatment in its planning applications for filling stations. These things, if they happen, should be specified in the annual report of the BNOC. I regard them as real possibilities.
      6.0 p.m.
      At present, in negotiating the 51 per cent. participation in existing licences, the Government are asking the oil companies to have regard to special factors of importance because of the Government's involvement. They are asking the oil companies to grant a discount on the purchase price because oil projects will be that much more creditworthy, they say, as a result of the Government's involvement. Alas, and without in any way wishing to be unpatriotic, I fail to see that the involvement of the Government makes these projects more creditworthy. Indeed, the opposite is the case, in my opinion. None the less, that is the argument that the Government are putting forward, that because of their involvement the cost of obtaining 51 per cent. participation should be reduced below normal.
      It is because one sees this special benefit for a public corporation, which is part of the Government's structure, continuing in the future that my hon. Friends and I, have tabled this amendment. We wish these exceptional circumstances to be brought out into the open. When the Secretary of State moves that this House should agree to the Lords amendment, stating that all that the BNOC should
      454
      theoretically pay by way of PTRT should be specified in the accounts, he will already be going some way to accepting the unusual position in which the BNOC will find itself. I think it is wrong that the BNOC should not pay PRT in the first place, but if it is not to pay, and if a figure is to be produced in the accounts of the amount of tax which it would have paid if it were liable, the Government are already ensuring that the BNOC's accounts will take an unusual form. Let the Government go further and say that in line with their commitment the BNOC will act commercially in the same way as any other independent oil company. Then let them agree that if the BNOC as a statutory corporation obtains special privileges, these should be spelt out in the annual report.
      Mr. Tim Rathbone: May I add a few words to what my hon. Friend the Member for Mid-Sussex (Mr. Renton) said about the purpose of this amendment? It is, to pick up one point in his theme, essential to enable people in this House, in industry and those outside analysing these affairs, to have a system of real comparison between these special circumstances which pertain to the BNOC and the operations of the normal commercial oil company. This is particularly important in view of the rejection of Lords Amendment No. 2 to Clause 3 earlier in the debate.
      We believe that it is essential to disclose wherever the BNOC may discriminate between purchasers of its crude oil, either to suit its own ends or because of some political end which the Secretary of State may have particularly in mind in his dealings with other countries or with other parts of the oil industry in this country. There should be disclosure wherever the BNOC may charge un-economically low prices in order to gain some advantage vis-à-vis other companies and vis-à-vis other countries by buying a share of the market or, in extreme cases, in deciding to put some other commercial oil company out of business.
      We are not arguing the pros and cons of the operation of the BNOC. We are concerned purely with the report. We maintain that if the Government were to accept this amendment it would be in the interests of more open business and more open government.
      Mr. Benn: There are two issues before the House—the amendment which has just been moved and the motion that we should agree with the Lords in the amendment about PRT. May I take the amendment first—
      Mr. Deputy Speaker: Order. I am sorry to interrupt the Minister, but there is only one question before the House, and that is the amendment.
      Mr. Benn: I apologise for linking the two issues, Mr. Deputy Speaker. Perhaps you will forgive me for not having quite understood the order in which we are taking our business. In that case, I address myself to the amendment to the Lords amendment.
      Mr. Patrick Jenkin: On a point of order, Mr. Deputy Speaker. I freely confess that this is a matter of my ignorance. Mr. Speaker has selected Lords Amendment No. 9 and the amendment in the name of my hon. Friend the Member for Mid-Sussex (Mr. Renton) for debate together. You have just ruled that because my hon. Friend's amendment is the only one that has been moved, we have to address ourselves solely to that.
      Mr. Deputy Speaker: The right hon. Gentleman has established his point. The ignorance is not on the Government Front Bench. It is in this quarter. Therefore, the Secretary of State may discuss the two together.
      Mr. Benn: I am so bewildered by confessions of guilt and offers of help that I am not quite sure what I should do. Perhaps I need be no more precise than say that I shall take the two points together. Both relate to the degree of disclosure.
      The amendment to the Lords amendment invites the BNOC to operate under—I am not quite sure how to describe it—a bubble of transparency under which no oil company in the world is asked to operate. For hon. Gentlemen opposite, one of whom has fairly disclosed an interest, to suppose that any oil company could operate under a statutory provision that all discounts, concessions or other benefits available to it should be made public, is an absurdity.
      Mr. Tim Renton Mr. Tim Renton rose—
      Mr. Benn: The hon. Gentleman has made his point. I will give way in a minute. If there is one thing that is absolutely clear about the oil industry, whether one is talking about the young John D. Rockefeller or some of the young Arabs in OPEC who are now trying to establish a commanding position in the oil industry, it is that there has not been at any stage disclosure of this character. It would be wholly wrong to ask us, who are entering this industry fresh, to operate under such a disadvantage.
      Mr. Tim Renton: I am obliged to the right hon. Gentleman for giving way. He has, not for the first time, failed to read the whole of an amendment. We are not asking the BNOC to declare all the discounts and concessions available to it. We are asking that it should declare those concessions and benefits which are available to it by virtue of its being a public corporation—not those which would be available to it if it were to become an eighth sister with the other seven sisters, but simply those which it receives by virtue of its being a statutory corporation.
      Mr. Benn: That does not very much alter the argument which the hon. Gentleman is developing. Different companies in the oil business enjoy advantages of a different character arising from their status, from the arrangements which they have inherited, their links with other Governments and the concessions which they have received from other Governments, and they are in exactly the same position as the BNOC, given that some companies receive concessions embodied in some form of treaty arrangement with the host country, and they are not empowered to disclose them in detail to the world.
      One of the great problems that we shall face as we build up expertise in the BNOC is the difficulty of getting to the core of the oil business. It is very difficult for a Government to find out what happens in these great multinational companies. One of our objects is to find out, because we think it would be in the national interest if we knew. But to saddle the BNOC with a requirement to operate under this bubble of transparency, when its partners and others would not be so doing, would greatly damage the national interest. I cannot put it higher than that.

      457
      According to the amendment, it would be only
      "in the view of the corporation",
      so one would be subject to what the Corporation thought would be an advantage to it, and generally that would not have much validity. The House should bend its mind to the fact that getting information is going to be one of the most difficult things to do, and it would be ludicrous for us to provide a requirement for the Corporation which operates in not one of the major companies, including the State companies in other countries. I hope that the House will not be tempted, therefore.
      I come now to an area where we have gone along with an appeal for greater transparency—Lords Amendment No. 9, which I commend to the House. It provides that we should make known, in public in the annual report, an estimate of the amount of petroleum revenue tax that the Corporation would have paid if it had been liable to it. We were sensitive to the arguments on this subject in Committee. We recognised that there were those who wanted the PRT to extend to the Corporation. I do not want to go over the arguments again because we had them out fully before the Bill went to another place. We have been at pains throughout these debates to point out that, given the national oil account into which all the Corporation's revenues will be payable gross, and given the financial duties which will be laid down under Clause 5, it is of no consequence to its competitors whether it pays PRT or not. I adhere to that view.
      But, having maintained that view, we have no objection to and welcome the idea of the estimate being made public so that people can see how the division of revenue lies between the notional PRT and the earnings of the Corporation. We are not proposing an audited figure but an estimate. I hope the House will recognise that we have gone as far as we feel we honestly can to meet the anxiety of those who have argued that without PRT applying there would be no possibility of sorting out how well the Corporation was doing in its own right. In that spirit, I ask the House not to accept the Opposition amendment to Lords Amendment No. 9 but to agree to the Lords amendment.
      6.15 p.m.
      Mr. Patrick Jenkin: My hon. Friend the Member for Mid-Sussex (Mr. Renton) and my hon. Friend the Member for Lewes (Mr. Rathbone) have performed a valuable service in drawing attention to the kind of advantage and benefit which a corporation set up, as this one has been, with highly novel features, not least its financing and the extent to which it exists under Government control and patronage, has as compared with those of its principal competitors.
      The Secretary of State resists our amendment on the ground that no other company is subject to the same kind of detailed scrutiny and obligations. There was also an echo of the argument that the Government need to have a State oil company in order to gain an understanding of the workings of the oil industry. This is the kind of thing which I would expect an effective regulatory authority to concern itself with. It is the sort of authority we outlined to the House earlier in the passage of the Bill, an authority which would want to make sure that companies enjoying the kind of advantage that this one will have were not competing unfairly and were subject to the same kind of constraints and operating factors as the rest of the industry.
      I can see the difficulties of trying to make the Corporation write into its own report some of the advantages and privileges that the Bill will confer upon it, but I offer this comfort to my hon. Friends—that, if they are not disposed to press their amendment, at any rate they will know that the Conservative Party has taken account of such proposals in those it has put before the country and has spelt out in the debates on an independent regulatory body. That is the way to get information about the oil industry.
      I hope that one of these days the right hon. Gentleman—whose attention we need to call for again—will make it his business to call on Mr. George Govier and his team on the Alberta Energy Resources Conservation Board to find out just how much they know about the industry operating in that Province simply because for years they have had the necessary regulatory functions under Alberta legislation.
      One does not need to own or compete with an industry in order to understand

      459
      how it works—I will go on saying that until I am blue in the face—because the waste of money involved in this exercise simply to gain information, which is the Government's only argument, is totally absurd. My hon. Friends may take comfort from the fact that our way of getting this information is likely to be a great deal more economic than that of the Government.
      I recognise that Lords Amendment No. 9 is in response to a pledge given on Report in this House and it is welcome as far as it goes. It is right that the Corporation should declare publicly the value of the PRT exemption which it is to enjoy. But I must place firmly on record that we regard it as profoundly unsatisfactory that the Lords amendment needs to be put into the Bill at all. It is necessary because the Corporation is to be exempt from the special tax which will apply to every single one of its competitors on the Continental Shelf.
      Lord Kearton, in his first public speech as Chairman of the BNOC, called upon the industry for partnership and good will. Partnership and good will are meaningless and empty concepts if the partners are to start by playing the game according to entirely different rules. Lord Balogh said in another place:
      "There is not a shred of evidence that the money can be used as a type of subsidy in whatever form. It is not a subsidy; it is a remission of tax."—[Official Report, House of Lords, 24th September 1975; Vol. 364, c. 375.]
      I suggest that that is a totally absurd argument when looked at in an economic context with commercial companies competing against each other in the market. If there are two competing firms, and one is paying a heavy impost on its upstream products and the other is free from that impost, no one will convince me that that freedom from tax is anything other than a straight subsidy.
      We must look at this once again. I must apologise if the Secretary of State and his colleagues accuse me of lecturing the Government, but the Government seem so deaf to all rational argument that we are reduced to lecturing. The context is the need to inspire the confidence of the industry and give it the reassurance that it has a viable future under this régime. It is in that context
      460
      that the exemption from PRT, which makes Lords Amendment No. 9 necessary, is deplorable.
      There are two other considerations. The first is the parliamentary control of public spending, which is surely in the forefront of all our minds. This device will over the years remove billions of pounds from effective parliamentary control. It simply means that what would have gone to the Exchequer as PRT and then have to be borrowed under borrowing powers by the BNOC will bypass that procedure and simply slide straight from the BNOC through the national oil account back into the coffers of the BNOC, which will be able to use it to finance capital and current expenditure which will make the £900 million in the borrowing powers in the Bill the mere tip of an iceberg.
      But the second argument is one about which I should have thought backbenchers opposite would have had some sensitivity. The Labour Party is already licking its lips at the thought of the huge profits which the BNOC will generate for the nation—profits which were perfectly capable of being yielded by an effective tax system. Here at last, they say, is a profitable State concern. Here will be the justification for the doctrine of nationalisation. But what value will one be able to place on that? Profitable it will be, but it will be exempt from PRT. It will not have to pay the same taxation as the rest of the industry. What faith can anyone place in a system if the only way of ensuring the profitability of the concern is to give it this colossal built-in fiscal privilege?
      In Committee, I rehearsed some of the hard practical reasons why we are against this—the conflicts that it will inevitably raise between partners, one of whom is subject to the tax and the other not, when deciding on investment programmes offshore; and the difficulties in pricing products moving downstream if one of the partners is free of PRT.
      I remain entirely unconvinced that the Lords amendment goes any way towards remedying the real evils which will flow from this monstrous fiscal privilege that the Government have thought fit to confer on their brainchild. It will go no way at all to avoid the disadvantages. The only thing that it will do—I must make it clear that this at least we welcome—is to make it plain for all to see

      461
      just what the value of this fiscal privilege is year by year, because the Corporation will have to put an estimate in its annual accounts of what it would have paid if it had been subject to the same fiscal régime as the rest of the industry.
      One might say that we should not look a gift horse in the mouth and that even a spavined old nag like this amendment should be welcomed in the context of the monstrosity which the Government are inflicting in the clause. I therefore do not advise my hon. Friends to object to the amendment. It is a help so far as it goes, but it is an amendment which, if they had been upright and honest about it, the Government should never have felt to be necessary, because the BNOC should pay the same taxes as every other oil company operating off our coasts.
      Mr. Grimond: Even if the amendment to the amendment is rejected, I hope that the BNOC will take note of some of the things said in connection with it. The House would welcome some statement in the Corporation's annual report if it gets the type of concession or contract which has been mentioned.
      In Committee, I drew down some fire on my head, not only from the Ministers but even from the right hon. Member for Wanstead and Woodford (Mr. Jenkin), by suggesting that there might conceivably be circumstances in which hypothecation might be examined. I do not think that I went any further than that. In a sense, of course, the arrangements now made with the national oil account are a species of hypothecation. I suspect that the Government are giving a hostage to the SNP—whose members are not here to take advantage of this interesting suggestion. If a Government once divert revenue from the Treasury of the United Kingdom for special purposes, they weaken the case that the revenues of the United Kingdom must be considered more or less as a whole and paid into one Treasury for the benefit of all the islands of the United Kingdom.
      I wonder whether at some point in our debates we may have some explanation by the Government of a statement made in the other place. As it is a statement by a Minister, I take it that I can quote it as official policy. I do not say that it should necessarily be dealt with on this
      462
      amendment. The noble Lord, Lord Balogh said that it had been pointed out
      "…that there is a loophole in the Oil Taxation Act whereby a company in partnership with BNOC might enjoy a larger oil allowance. I can tell the noble Lord that this matter is under consideration and that we shall have to consider amending legislation."—[Official Report, House of Lords; 29th October 1975; Vol. 356, c. 536.]
      This House should be informed before we finally part with the Bill whether even after—God knows—the 500 amendments moved by the Government to this Bill, in the next Session we shall have amending legislation. That shows the extraordinary muddle in which this matter stands and is another argument against diverting the resources of the nation at this difficult time into an exercise which, by the Government's own criteria, can only make our situation worse.
      Mr. Leadbitter: The right hon. Member for Wanstead and Woodford (Mr. Jenkin) talked about going on until he was blue in the face and said that the Government were deaf to rational argument. That is an odd and colourful situation for two Front Benches to get themselves into. The right hon. Gentleman seems to have forgotten one interesting point while pontificating about PRT. He has not put down an amendment to Clause 9(1), which says that the Corporation shall not pay petroleum revenue tax. Therefore, he was—[HON. MEMBERS: "No, no, no. "] Yes, yes, yes.
      Mr. Jenkin: The hon. Member may be on to a bad point. We are discussing Lords amendments. I imagine that their Lordships would have felt that an amendment on a financial, fiscal, matter to reverse a decision in the lower House would have been outwith the spirit of their powers. As no such amendment was on the Paper, therefore, there was nothing that we could do about it.
      Mr. Leadbitter: I am aware that the Lords were inhibited somewhat in dealing with financial matters. That is why they have contrived this particularly mild amendment, which requires a statement to be made in the accounts. What I am saying is that it was not beyond the ingenuity of the Opposition to deal with this. After all, the right hon. Gentleman has produced an amendment to an amendment. They claim that they are

      463
      ingenious; they could surely have produced some words to deal with this matter.
      Mr. John Moore: I hesitate to cross swords with someone who has made so many speeches with which I agree, but may I refresh the hon. Gentleman's memory? It was in response to an amendment that I moved in the House that the Secretary of State committed himself to the amendment which then came from the Lords. It is on the basis of a movement by this side of the House that we are committing ourselves to agreeing to this amendment.
      Mr. Leadbitter: I have no dispute with the Lords amendment. As I said, it requires a statement to be placed in the account. There is no difference of opinion here. But I was dealing with the legitimate and reasoned argument about the need for PRT to be charged on the Corporation. The right hon. Member for Wanstead and Woodford said that he would go on about it until he was blue in the face. He has been ingenious enough to put down an amendment to an amendment. Surely, with all his experience, he could have done the same here.
      6.30 p.m.
      The hon. Member for Mid-Sussex (Mr. Renton) has an oil industry interest. That explains the unreasonable bias adopted by some Conservatives. It is natural that if an hon. Member has an interest he will table amendments to sustain that interest. There is nothing immoral in that, but it is probably careless. The multinational oil companies have influence and privileges such as the BNOC can never have. Is the hon. Member suggesting that legislation should be passed requiring the Corporation to disclose all its discounts, concessions and other benefits so that they may be pronounced upon by the private oil companies?
      The Conservatives say that they want to avoid unfair discrimination and that they want fair competition. They seem to suggest that the oil companies are innocents in the real hard commercial world. One of the Government's functions is to try to persuade the oil companies to work in partnership with the
      464
      interests of the United Kingdom. I shall not, therefore, go beyond what I have already said, but the question arises whether the practices of the oil companies are more efficient than those of the BNOC will be.
      If it is right for the BNOC to declare in its accounts full details of its concessions, discounts and benefits does the hon. Member therefore accept that the multinational oil companies he seeks to represent should do the same? I shall gladly give way to the hon. Member if he wishes to reply.
      Mr. Tim Renton: I shall intervene when the hon. Member has finished.
      Mr. Deputy Speaker: I think that the hon. Member for Hartlepool (Mr. Leadbitter) was coming to a conclusion, anyway.
      Mr. Leadbitter: I was, indeed, Mr. Deputy Speaker. I was doing a spot of fishing, and I was hoping that the hon. Member for Mid-Sussex would respond to a reasonable question. If he is not prepared to respond to that invitation, does he agree that in the world of commerce, multinational interests may not be too concerned with safeguarding British interests? Does he think that the Corporation should declare its hand to its competitors—a practice which is not accepted by the oil companies? It is obviously against the interests of BNOC to do so. The Corporation seeks to work in harmony with the oil companies and to utilise our total resources for the benefit of our people.
      Mr. Tim Renton: The hon. Member for Hartlepool (Mr. Leadbitter) said that he was doing a spot of fishing, but, like so many people, he has unfortunately caught up his fly in the bush behind him. He has failed to read the amendment through. In it we specifically seek to provide that BNOC should declare those discounts and concessions which are available to it by virtue of it being a statutory corporation. We are therefore asking the Secretary of State or his successors to follow up promises made on the Floor of the House today and in Committee that BNOC would act as a commercial company, no more, no less. We want this promise put into effect through BNOC's annual report.

      465
      The Secretary of State said that we were suggesting that BNOC should operate in a transparent bubble. The only transparent thing was the right hon. Gentleman's lack of argument for rejecting the amendment. He fell into the same trap as did the hon. Member for Hartlepool. We are not asking that BNOC should be stripped of all its seven veils; simply that it should act like any other major oil company, and that when, by virtue of its being a statutory corporation, it has a special privilege or concession, that factor and that factor alone should be revealed. Nothing that I have heard from the Secretary of State today leads me to do other than suggest to my hon. Friends that they should support the amendment.
      Amendment to the Lords amendment negatived.
      Lords amendment agreed to.
      Subsequent Lords amendment disagreed to.

    Clause 19

      PROVISIONS SUPPLEMENTARY TO S. 18
      Lords Amendment: No. 11, in page 15, line 29, at end insert:
      "(3A) Where a licence is revoked on the grounds of any act or omission occurring after the licence was altered by virtue of the preceding section which act or omission would not have provided grounds for revocation of the licence had it occurred before the date of such alteration, and it is shown that the holder of the licence

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

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

      the Secretary of State shall pay to him full and prompt compensation in respect of that expenditure, loss or damage. If any dispute, difference or question shall arise between the Secretary of State and the holder of a licence issued before the coming into force of section 18 of this Act, either as to the entitlement of such holder to compensation under the provisions of this sub-clause or as to the amount of such compensation, the Secretary of State shall, if the holder of such licence so requests, refer such dispute, difference or question to arbitration by the International Centre for Settlement of Investment Disputes. In such arbitration a licensee who is controlled by a company incorporated outside the United Kingdom shall be treated as a national of the State in which that company was incorporated and subsections (2) and (4)
      466
      to (6) of section 302 of the Income and Corporation Taxes Act 1970 shall apply, for the purpose of determining whether for the purposes of this section, a licensee is controlled by another company."
      Mr. Benn: I beg to move, That this House doth disagree with the Lords in the said amendment.
      Mr. Speaker: With this amendment we may discuss Lords Amendment No. 12, in page 16, line 1, after "(3)" insert "and (3A)".
      I should inform the House that a question of privilege is involved.
      Mr. Benn: The amendment concerns a provision under which the British taxpayer would be asked to pay compensation arising from changes in the provisions under which licences are to operate. Lords Amendment No. 12 is consequential upon Lords Amendment No. 11, dealing with compensation upon revocation.
      The position is straightforward. We have found it necessary to change the existing licence terms because the terms negotiated by the previous Government were foolishly and irresponsibly given, and did great damage to our national interests. The Conservatives gave away things that should not have been given away.
      Mr. Patrick Jenkin Mr. Patrick Jenkin rose—
      Mr. Benn: The right hon. Gentleman must sit and listen. In the course of this debate he has made a great deal about the cost of the Government's proposals. The truth is that there was no firm commitment by the previous Government even to a petroleum revenue tax. I have heard him say often that the last Government had said they would introduce it. They said no such thing. They said that they would consider it. There was no commitment to a PRT—
      Mr. Gray: There was no oil.
      Mr. Benn: Of course there was oil. It was known that oil existed. If the hon. Member wants me to do so, I shall read him the Press release of the then Secretary of State for Trade and Industry in 1971, which will show that he had a clear idea of the value of the oil in the North Sea. Licences were given at that time to run for 46 years, with no provision for a whole range of safeguards for our national interest, including depletion control.

      467
      When the reckoning comes—perhaps this is not the time for it—it will turn out that what the previous Government were ready to give away so recklessly this Government are seeking to recover, in part, by proper legislative means.
      Mr. Patrick Jenkin: I shall obviously want to comment on what the right hon. Gentleman said. I ask him to bear in mind at this stage that the terms are exactly the same as those of the Government of which he was a member in 1965 during the second round of licensing and, in 1967, during the third round. If blame is to be attached it must be borne in mind that both he and I attended the Forties inauguration on Monday, and that that field was discovered as a result of a licence granted under the second round and under a Labour Government of which the right hon. Gentleman was a member. I want that point to be firmly on record.
      Mr. Benn: In due course all these issues will be put to the public. However, the right hon. Gentleman must also bear in mind that no oil had been discovered by the end of the Labour Government in 1970. The Forties field was discovered later. It is true that oil was discovered in pursuit of a licence in respect of an area where gas was first thought to be available. Under the gas provisions, the British Gas Corporation is providing the gas to the British consumers, but the circumstances were quite different.
      However, even if it were true—it is not—that, in their granting of licences for oil, the previous Labour Government had failed to take the necessary safeguards, it must be open to this Government to change the licence terms by taking proper statutory powers.
      We have Alberta thrown at us all the time, as if it were the only interesting oil province in the world. By legislation, Alberta has taken the power to change at will the rate of royalty to be paid and to require oil to be sold to the Alberta Petroleum Marketing Commission. Therefore, the Alberta club cannot be bashed on our heads in respect of this amendment. The right hon. Gentleman will not be able to shield behind Alberta when presenting his arguments.
      We are changing the régime through legislation. Moreover, we are doing so,
      468
      as anyone dealing with any British Government would expect, on the basis of good faith and good working relations with the oil companies. However, the effrontery of the Conservative Party, which failed to safeguard the national interest, but, when a successor Government corrects the position, says that compensation must be paid, is quite shattering.
      There are many occasions on which the whole circumstance in which an industry operates is changed by different Governments and by different Acts of the same Government. Tax legislation can entirely transform the prospects for an industry which is taxed. The administration of exchange controls may be necessary at some time and may make a substantial difference to the prospects for an industry.
      There is no retrospection in this case, in the strict sense in which retrospective law is held to be improper—namely, the making of illegal something which was legal when it was introduced. There is no question that in this case we are changing the forward prospects of an industry as a result of parliamentary legislation. There is nothing whatever, in a legislative form of this kind, that would merit any compensation. I have heard it argued in Committee that this is a breach of an international law. That is completely incorrect.
      Does the right hon. Gentleman suppose that when the American Government introduced prohibition, the Scotch whisky manufacturers could have claimed compensation on the grounds that they had established their business on the basis of their outlets for whisky in the United States? If the United States, in its wisdom, altered the position in such a way as to make illegal the importation and consumption of whisky in the United States, would that be contrary to international law?
      Mr. Peter Viggers Mr. Peter Viggers (Gosport) rose—
      Mr. Benn: Let me develop the argument, because it is a general one. A State may introduce safety regulations for vehicles that may make it impossible for certain vehicles built by foreign companies to be imported. Moreover, this may apply to domestic companies that have developed vehicles in the expectation that those vehicles will be allowed to operate. If the regulations are to restrict the importation or operation of

      469
      those cars, is compensation payable? The answer is, "Certainly not." A Government may decide to ban a certain product, on the ground that it is dangerous. I am just taking general examples of changes that may be needed in the law. Let us take a case which I recall well, because I was involved—namely, the banning of cigarette advertising on television. I represent a Bristol constituency that is well known for its cigarettes and the Imperial Tobacco Company, but was compensation paid in that instance? The answer is, "No, it was not." Every Government must be free to change the régime in which it operates if it believes it to be in the national interest.
      Mr. William Clark Mr. William Clark (Croydon, South) rose—
      6.45 p.m.
      Mr. Benn: I shall be happy to give way, because this is an important matter. I point out that I am not using any of these arguments as a justification for what we are doing. Whether it is wise or not is a matter of opinion. We have heard all the arguments, and I have alluded to them, but I have not repeated them at any great length. I am arguing that there is no conceivable justification for saying that in a case in which an incoming Government, with the consent of Parliament, remedies the defects of its predecessors in dealing with the régime within which an industry operates, compensation is due. Were such a principle accepted, every time any Government, Minister or Parliament made a change in what might be called the legitimate expectations of firms, the claims for compensation would neutralise the position.
      I shall give way now. I wanted to get my argument on the record first.
      Mr. Viggers: I am extremely grateful to the right hon. Gentleman for giving way. He is known to have an agile and quick mind. Is he telling the House that he does not understand the distinction between regulations which a Government normally lay for carrying out the conduct of business and the vested contractual rights that the Government are proposing?
      Mr. William Clark: I find the right hon. Gentleman's argument fairly specious, because the position of oil is not analogous to the matters about which he has been talking. I should like to
      470
      bring him back to the realm of planning permission. If planning permission is granted and then, for one reason or another, it is cancelled, surely compensation is payable.
      Mr. Benn: I do not know whether I should wait until the end of the debate, if there is one, to deal with these points. However, on the argument that was raised by the hon. Member for Croydon, South (Mr. Clark), I point out that I cannot deal with planning permission.
      Mr. William Clark: Why not?
      Mr. Benn: I do not believe that I am qualified to deal with a planning permission parallel. That is my answer. By legislation we are changing the régime within which a particular industry is operated. In my view it is a reductio ad absurdum to deal with the point which the hon. Gentleman has raised. Let us suppose that the previous Government had given, in perpetuity, total rights, in a contractual form, to explore for all the oil off our islands. Are the Opposition saying that an incoming Government would be able to do nothing whatever about it, in perpetuity? That is a manifest absurdity. The reason why the argument is being advanced is that the previous Government's failure in handling this precious resource has come to light. We are seeking to remedy the position in our relations with the oil companies. The real safeguard is wholly different in character. We need the oil companies for the development of the resources, and they need good relations with the host Government. Thus, there will be a good faith between us, which is worth having because it is based upon a common interest.
      For the Opposition to elevate into a legal principle a failure of their own that has come to light and been remedied by legislation, and to use it as a compensation argument, does not stand a moment's examination. This is clearly understood by the oil companies. I believe that our relations with the companies are wholly realistic in character. The argument about compensation does not bear examination. Therefore, I invite the House to disagree with the Lords in the said amendment.
      Mr. Grimond: I do not want to go over the arguments that were deployed in Committee. It is becoming a habit

      471
      with the Secretary of State, when important general principles are disputed, to wave them aside and to say "After all, it is nothing to do with us. It is a mistake made by the Conservative Government." I do not take that view.
      I think that we should have the advice of lawyers on this matter, because the Government are proposing a breach of contract. It is all very well to say that if the United States Government brought in prohibition the Scotch whisky manufacturers would have no right to compensation. I speak subject to correction, but if the American Government, having given a concession to a particular Scottish company to supply Scotch whisky to the American Armed Forces, then broke the contract, I believe that at least there would be a case for compensation. Therefore, we are talking about a more important matter than the errors of the Conservative Government. We are considering whether the British Government have an arrogant right to break a contract when they feel that it is in their interests to do so.
      Is it to be argued that if the British Government enter into a contract which a future Government find unsatisfactory but which turns out well for the other contractual party, they have a right to break it by calling upon the public interest? That appears to be the doctrine.
      I do not wish to go into all the arguments against it, because they are self-evident. They are to do not with retrospective legislation, or with the right of the Government to make or alter the general laws, but with the question whether, the Government having entered into a contract with the Corporation, they are entitled to break it without compensation whenever they feel so inclined. That is the proposition before the House.
      As I pointed out in Committee, the Government enter into leases. They may enter into a lease, as many of us do, at a rent which proves to be less than might have been obtained. Is it to be argued that any Government have the right to break the lease and demand other terms without compensation?
      This doctrine, apart from being shabby, is dangerous. We, above all nations, have an interest in upholding the sanctity of
      472
      contract. Considering our size, we are probably more dependent on trade than is any other nation. We have large concessions in various parts of the world for minerals, oil, and so forth. It will be noted that any Government can say, "Our national interest demands that the concession freely given a year or two ago is at an end, and that there will be no compensation.".
      There is no allegation that the oil companies have behaved badly, or that the Government were conned into this situation. They may have been foolish, but many Governments are foolish. Having entered into these contracts freely, they are now saying that because the contracts do not suit them they can be abrogated without compensation. That is a dangerous doctrine to preach in world conditions today.
      Mr. Benn: I want to be sure that I understand the right hon. Gentleman on this important issue. In 1972, licences were given to the oil companies for 46 years without any power to control the rate of depletion. Is the right hon. Gentleman seriously saying that between 1972 and 2017 a sovereign Parliament is unable to control depletion by legislation, general in character and not limited to particular oil companies, without paying compensation to the oil companies for what they would have gained had they continued to exploit those resources without any limit, up to end of the 46 years? If so, he is saying something of enormous constitutional importance—namely, that the British people have no right to control assets under the North Sea until the licences have expired. If the right hon. Gentleman is saying that, will he spell it out clearly, so that we may know the Liberal Party's position?
      Mr. Grimond: Of course, the British Parliament is sovereign and can do anything, short of making a man into a woman, or the other way round. The question is: what are the Government doing? They are proposing to break contracts because it suits them to do so. They have the power to do that. I am saying that it may be necessary to control extraction from the North Sea, but that it is also desirable, to put it at its lowest, to pay compensation if the Government feel that it is necessary to exercise this power.
      Mr. Viggers: I must declare my interest in the oil industry, which is duly recorded.
      The Secretary of State and his hon. Friends are fond of attempting to show, by direct reference or innuendo, that Opposition Members are speaking for the oil industry. Indeed, the right hon. Gentleman suggested that one point was not of substance because it was not put forward by the oil industry. I believe that all my hon. Friends are speaking for the best interests of all people in this country. If the Government and certain of their back-bench supporters could rid themselves of their pathological dislike and envy of oil companies in general, and of the multinationals in particular, they would cause less suspicion and less of a rundown in offshore exploration and production and of employment in the services and supply sectors of the industry.
      This is a crucially important amendment. The Government by the Bill are changing the terms upon which licences for offshore exploration and production were granted. They are doing so retrospectively so that the new licence terms are imposed on existing licensees in substitution for the contracts originally given.
      The new licence terms include a right for the Government, in certain circumstances, to revoke licences. This is a new right that the Government have given themselves and, as the Bill stands, the revocation will not give rise to any compensation for the licensee.
      The Lords amendment proposes that where a licence is altered, giving rise to the Government's right to revoke, and where the licensee finds this new power of revocation is used against him, he shall be entitled to reasonable compensation for his loss.
      The Government have sought to justify their action in two ways. First, the right hon. Gentleman said that the Government need to give themselves wide discretionary powers, which include the revocation of licences. We must remind the Government that the wide discretionary powers which appeal to Ministers and civil servants appear harsh and arbitrary in the eyes of prospective licensees and foreign Governments.
      Secondly, the Government have sought to justify their high-handed approach by quoting the national interest. It is so
      474
      easy and apparently blameless to involve the national interest that it may be thought difficult to argue against it, but the most basic of our national interests is a respect for law and for binding contractual relationships.
      How dare the Government invoke the national interest to break contracts entered into by them and to undermine respect of the word of the British Government? Neither of those excuses withstands examination.
      7.0 p.m.
      Although the principle at stake is a broad one, the circumstances in which the point will arise are, I hope, unusual. Licensees can be trusted to obey their best commercial judgment. I do not think that anyone in Government would dispute that. But under the new terms they will become subject to the Government's direction. A licensee can thus be compelled by the Government to do things which are contrary to his commercial interest simply to preserve his prior investment in a licensed area. If the licensee agrees with the Government's direction, no question arises. I am talking only about situations in which the Government are in dispute with a licensee who feels that his best commercial interests are not served by the Government's direction.
      I am referring to the case in which the Government seek to overrule a licensee—who must, presumably, be the best judge of his commercial interest—the dispute cannot be resolved, and the Government revoke the licence. The licensee may have spent thousands, even millions, of pounds, in the exploration and development of the licensed area, yet the Government are giving themselves powers to revoke the licence.
      This situation is not without historical precedent. A similar situation arose in the Water Resources Act 1963. In that case it was properly decided that compensation should be paid when a licence was revoked or varied. The Lords amendment follows Section 46 of the Water Resources Act 1963 and provides that fair compensation shall be paid in these circumstances. I emphasise that the occasions upon which compensation will arise will be rare, and the grounds for obtaining it narrow. Under the Lords amendment, compensation will arise only if the

      475
      licence terms are varied by the Government—giving a right to revocation—and revocation takes place. Moreover, compensation will be paid only when the licensee has incurred expenditure in carrying out work which is rendered abortive by revocation, or where he otherwise sustains loss or damage directly attributable to the revocation. There is provision for arbitration on the amount of compensation.
      The circumstances we are considering, in which revocation may take place, may be unusual, and the grounds narrow, but the principle is a broad and vital one. First, no national interest is more important than the rule of law and the observance of contractual arrangements. Second, countries and companies dealing with the United Kingdom Government have always been able to rely on the integrity of the United Kingdom. Unless we agree to this amendment, this measure will undermine that respect and trust. Indeed, contrary to what the right hon. Gentleman has said, the Bill, as unamended, is in my submission a clear contravention of international law.
      Third, we are a trading nation, and it is crucially important that we should be able to maintain the principles of international justice in our dealings with foreign Governments. The right hon. Gentleman talked about his proposed action in the unamended Bill and said that it was appropriate for him to take proper statutory powers. These are clearly improper statutory powers. I regret having to use an argument of expediency to persuade the Government to uphold a moral principle, yet it is actually contrary to our interests to abrogate our international obligations. I can quote many examples of the United Kingdom's posture in cases where foreign Governments have sought to upset vested rights.
      It is right that I should quote some at length. The first is a Note to Indonesia in 1965, which reads:
      "Her Britannic Majesty's Embassy are therefore instructed to request the Indonesian Government either to restore this property promptly to the British owners, or to acknowledge their obligation in accordance with international law, to provide prompt, adequate and effective compensation."
      Command 5758, of 1938, dealing with the affairs of Mexico says:
      476
      "The British Government cannot but regard the failure of the Mexican Government to discharge their existing obligation as in itself rendering unjustified an expropriation, an essential condition of the validity of which would be the payment of full and adequate compensation amounting in this case to a very large sum."
      The right hon. Gentleman has referred to Alberta. I have to put it to him that on the information I have been given he is misinformed. As I understand it. Alberta and the other Canadian Provinces have changed royalty rates but are not in breach of the licence terms. The Canadian Provinces other than Alberta—I am informed—have no maximum royalty rates specified in the lease terms, and royalties are established by regulations issued from time to time. Alberta leases issued prior to June 1962 had a maximum royalty specified only for crude of and for the initial 21-year term, that is, not for gas or renewal periods. Alberta leases issued after June 1962 had maximum royalties set for both oil and gas during the initial period of 10 years. At the time when Alberta increased royalty rates there were very few leases which were not in renewal periods. Consequently, in all but these few cases there was no question of a breach of the lease term.
      The most important and leading case dealing with international obligations—it happens to concern oil—is the Anglo-Iranian Oil Company case—that of the United Kingdom v. Iran. I quote from the record of the Memorial of the United Kingdom, page 83 of which says that
      "The Government of the United Kingdom does not consider it necessary to elaborate the proposition that rights acquired by foreign nationals by virtue of concessionary contracts are property rights and that as such they are entitled to the same protection as international law grants to the property rights of foreigners. This proposition is generally recognised and to the knowledge of the Government of the United Kingdom has never been seriously challenged."
      This is exactly what the Government are proposing to do.
      I have too much respect for the ability of the right hon. Gentleman and his hon. Friends to imagine that they can possibly think that this is anything other than a breach of a vested contractual right. I do not accept that the right hon. Gentleman cannot perceive, if he concentrates his mind upon the subject, that there is a complete difference between a vested

      477
      contractual right and statutory regulations dealing with such things as whisky imports—the example he chose to put forward. This is a grave matter. We on the Conservative side of the House must urge the Government to think again before they allow this Bill to be enacted in its present form.
      Some of the cases that I have quoted stretch back over 30 years. This is indicative of the historical importance of this issue. If the Government persist in their proposals they will sin in haste but we shall repent at leisure.
      Mr. Patrick Jenkin: There is no single act of this Government in the whole of their oil policy which has done more to undermine the confidence of the industry than the unilateral abrogation of the accrued contractual rights without compensation. The Secretary of State sought to justify what he is doing in a combative speech. I do not criticise that. I am sorry to have to tell him that in that speech he gravely misrepresented the true facts.
      The right hon. Gentleman sought to argue that the terms he was dealing with were solely the responsibility of the previous Conservative Government. They were not. The second and third licensing rounds were carried out by the last Labour Government, after there had been substantial finds of gas—although, of course, the companies were looking for oil. The 1969 licensing round occurred when there had been substantial finds of gas and the 1971–72 round was on the same terms.
      The right hon. Gentleman went on to say that the Conservative Government were to blame. This point was dealt with at length in Committee and I will deal with it only briefly now. The right hon. Gentleman's main argument hinged on the need for depletion control. He referred to the Public Accounts Committee. Is the right hon. Gentleman aware that nowhere in the report of that Committee, published in February 1973, nor, as far as I can see, in any of the evidence tendered to the Committee, is there any reference to depletion control? Even as late as February 1973 no one was contemplating that by the 1980s we might have a sufficient flow of oil to justify the use of depletion control. That situation came about during 1973 and 1974.
      478
      The sole concern of the Public Accounts Committee was Government take. On that score there are two points to be made. Firstly, we must have regard to the sequence of events. The third round applications were invited on 22nd June 1971 and the closing date for applications was 20th August. The first British oil field was declared commercial in November 1971. The Government were committed by the terms on which they had issued the applications. The tender bids had already opened before BP declared its field commercial. It was the first major commercial field in the North Sea. Subsequently, allocations were made at the beginning of 1972, but on the same terms on which the companies had already bid on the tenders. Therefore, the then Government quite rightly felt that it would have been grossly improper to allow the bids to go ahead and to prevent applications to renegotiate the terms. That argument was put to the PAC and it is somewhat surprising that it did not attach more weight to it.
      Mr. John Smith: Surely the right hon. Gentleman recognises that the PAC was concerned with take rather than depletion. After all, it is the Public Accounts Committee. It was not concerned with issues such as depletion. I quote a small part of one of the Committee's conclusions, which reads:
      "The second and third rounds of licensing had been framed on the initial expectation that offshore petroleum would be in the form of natural gas, but the position was materially altered before the fourth round by the discovery of oil which would be handled and distributed by private companies and not by a nationalised industry."
      The Public Accounts Committee supports the distinction between the previous round and the fourth round.
      Mr. Jenkin Mr. Jenkin rose—
      Mr. Gordon Wilson: I am grateful to the right hon. Gentleman for giving way. Will he accept from me that in Scotland over the past four years considerably more attention has been paid to depletion and the overall control of production of this resource than has been the case in the United Kingdom? Does he accept that the subject of depletion is not strange to us?
      Mr. Jenkin: I recognise what the hon. Gentleman says about depletion, but when the SNP started talking about the matter

      479
      it was anticipating a very much lower figure. The SNP talked in terms of 50 million tons a year. It was not until 1973 that anyone began seriously to recognise the need for depletion control. Let us hear no more about that.
      The first commercial find of oil in the British sector of the North Sea came after the Government were committed in 1971 to the terms of the fourth round. I have never disputed that in the new circumstances following the dramatic finds of 1972 and 1973, which went through into 1974, there is a need for the Government to take depletion control. Perhaps the right hon. Gentleman will give me credit for acknowledging that. We have said that if the Government interfere with an accrued contractual right in this way, compensation is required to be paid under international law and in the national interest.
      7.15 p.m.
      My hon. Friend the Member for Gosport (Mr. Viggers) gave some extremely telling quotations from the views taken by successive Governments. The view has been taken that interference with an accrued contractual right is just as much an interference with a proprietary right requiring compensation as is the taking of property. We are dealing with a most extreme case where an act done by a company under an existing licence in breach of a new obligation imposed by the Bill will lead to the revocation of the licence. That is the only circumstance to which the amendment is directed. A licensee might lose his licence by doing something which was never a breach when the licence was first issued. The licensee may act on the faith on which he spent large sums, but he may lose his licence because he is in breach of a regulation which has since been added to the original terms.
      My hon. Friend the Member for Gosport has stressed the element of legality and the practical effects. I cannot usefully add to his extremely comprehensive and persuasive statement on international law. This is the expropriation of a property right that has been established over and over again. It was established as recently as last year by the Government's amendment that they supported at the Sixth General Assembly in common with their Common Market colleagues. By
      480
      changing the terms and imposing onerous new obligations upon the licensees, the Government are interfering with established property rights.
      The examples that the Secretary of State has given include cigarette advertising. I have never known it to be an accrued proprietary right to be able to advertise cigarettes. The right hon. Gentleman also referred to tax changes. There is no accrued legal right that means that it is not possible to impose additional taxes. There has never been an accrued right to have prohibition. The right hon. Gentleman put forward an absurd argument.
      The key to the matter is the national interest. The practical argument is that the national interest destroys the Government's case for arguing against expropriation without compensation whenever United Kingdom firms are threatened overseas. This Bill is a direct incitement to foreign Governments—there is no shortage of candidates—to imitate us. The Bill will undermine the national interest. It will provide a precedent for those Governments that are ambitious to expropriate United Kingdom concerns. What could be more of a precedent than that which is now before us?
      The changes to the licence terms are necessary, but where they could result in the loss of a licence under terms that were never contemplated when the licences were first issued it seems that compensation should be paid. It is a matter of profound national interest to uphold the rule of law and to ensure that our interests are safeguarded in the rest of the world. I hope that my right hon. and hon. Friends will feel it right that we should support that high principle in the Lobby.
      Mr. Benn: I have heard this case several times before, and each time I hear it it becomes less credible. I must tell the right hon. Member for Wanstead and Woodford (Mr. Jenkin) that it was a pathetic presentation of an argument that may have political merit but has no legal basis. I understand that in the right hon. Gentleman's view it would be proper for us to tax 100 per cent. any revenue that might accrue to an oil company in a particular field from now to the end of the licence, but that it would not be right to change the general régime under which the licence should operate. That cannot be a credible argument.

      481
      The hon. Member for Gosport (Mr. Viggers) referred to the Mexican and Indonesian Governments in cases where confiscation had taken place. No such question arises in this instance. We are not altering the law, there is no retrospection. We are laying down a general framework that is not discriminatory against any of the licensees from any country or against our own national oil interests.
      We are saying that it is necessary for us to have certain depletion controls. That is not arbitrary action involving confiscation or anything of that kind. I do not believe that the exaggeration contained in the lectures that have been delivered, or the pomposity with which these arguments are always accompanied, constitute justification for the erection of a completely vague legal argument. It would be very much better if the Conservative Party was prepared to argue the case on grounds of merit, and then we should know where we were.
      We then heard the right hon. Member for Orkney and Shetland (Mr. Grimond) laying down some great, immutable principle about the sacredness of contracts—when he voted for legislation that broke contractual obligations to pay increases in salaries due under agreements reached some months before the Government's new incomes policy came into effect. The Liberals have always argued for statutory powers over incomes, regardless of the contractual rights of those who may have made long-term provisions. We heard no high moral arguments then and there are no high moral arguments to be sustained now.
      The right hon. Member for Wanstead and Woodford said that that there had been an error of judgment which was not discovered until 1973. He was edging as near as he could to the election date in early 1974. An error occurred. There should have been depletion control. It does not matter whether the error was spotted by the SNP, or whether it first appeared in the Report of the Public Accounts Committee, the Petroleum Times, or the New Scientist. It does not
      482
      matter when it was discovered. The fact is that it was discovered, and that we have brought forward a remedy to protect the people of this country and their interests.
      At that point the right hon. Member for Wanstead and Woodford should have seen where the national interest lay. He should have rallied round the legislation and said, "Perhaps we should have done better. We made a mistake, and we must blame the previous Labour Government." When the matter is identified, surely he has a clear duty to support the national interest in correcting the error. But when that error comes to light, he tries to elevate it into a breach of an international obligation comparable to some of the most extreme cases that can be found in the world. The right hon. Gentleman does less than justice to his own credibility. Even on this issue the Conservative Party is more interested in compensation for oil companies than in safeguarding the national interest. There is no basis whatever for the amendment, and I hope that the House will disagree with it.
      Mr. Patrick Jenkin: I remind the right hon. Gentleman that he has not said a word about the fact that a legal principle is involved—a principle that seeks to protect British interests throughout the world. What an example he is setting to Governments who are only too anxious to expropriate British property!
      Mr. Benn: There is no legal argument whatever. The standing of this country rests on the good faith of successive Governments and the way in which they behave in their contacts with other Governments and the companies with which they deal. The ultimate guarantee of our good faith lies in the conduct of our relation with the oil companies, and indeed with everybody else. But the Conservative Party, for purposes of narrow advantage, seeks to elevate the correction of a past defect in legislation into something with which it can beat the Government abroad. The Conservatives have done great damage by what they have attempted to do and there is no basis for their argument.
      Question put, That this House doth disagree with the Lords in the said amendment:—
      The House divided: Ayes 271, Noes 227.

      Division No. 385.]

      AYES

      [7.24 p.m.

      Allaun, Frank

      Fernyhough, Rt Hon E.

      Maclennan, Robert

      Anderson, Donald

      Fitch, Alan (Wigan)

      McMillan, Tom (Glasgow C)

      Archer, Peter

      Flannery, Martin

      Madden, Max

      Armstrong, Ernest

      Fletcher, Raymond (Ilkeston)

      Magee, Bryan

      Ashley, Jack

      Fletcher, Ted (Darlington)

      Mahon, Simon

      Atkins, Ronald (Preston N)

      Foot, Rt Hon Michael

      Mallalieu, J. P. W.

      Atkinson, Norman

      Forrester, John

      Marks, Kenneth

      Bagier, Gordon A. T.

      Freeson, Reginald

      Marquand, David

      Bain, Mrs Margaret

      Garrett, John (Norwich S)

      Marshall, Dr Edmund (Goole)

      Barnett, Guy (Greenwich)

      Garrett, W. E. (Wallsend)

      Marshall, Jim (Leicester S)

      Barnett, Rt Hon Joel (Heywood)

      George, Bruce

      Maynard, Miss Joan

      Bates, Alf

      Gilbert, Dr John

      Mellish, Rt Hon Robert

      Bean, R. E.

      Ginsburg, David

      Mendelson, John

      Benn, Rt Hon Anthony Wedgwood

      Golding, John

      Mikardo, Ian

      Bennett, Andrew (Stockport N)

      Gould, Bryan

      Millan, Bruce

      Bidwell, Sydney

      Gourlay, Harry

      Miller, Dr M. S. (E Kilbride)

      Bishop, E. S.

      Graham, Ted

      Miller, Mrs Millie (Ilford N)

      Boardman, H.

      Grant, George (Morpeth)

      Moonman, Eric

      Booth, Albert

      Grant, John (Islington C)

      Morris, Alfred (Wythenshawe)

      Boothroyd, Miss Betty

      Grocott, Bruce

      Morris, Charles R. (Openshaw)

      Bottomley, Rt Hon Arthur

      Hamilton, W. W. (Central Fife)

      Morris, Rt Hon J. (Aberavon)

      Boyden, James (Bish Auck)

      Hardy, Peter

      Moyle, Roland

      Bradley, Tom

      Harper, Joseph

      Mulley, Rt Hon Frederick

      Brown, Hugh D. (Provan)

      Harrison, Walter (Wakefield)

      Murray, Rt Hon Ronald King

      Brown, Robert C. (Newcastle W)

      Hart, Rt Hon Judith

      Newens, Stanley

      Brown, Ronald (Hackney S)

      Hatton, Frank

      Noble, Mike

      Buchan, Norman

      Hayman, Mrs. Helene

      Oakes, Gordon

      Buchanan, Richard

      Heffer, Eric S.

      O'Halloran, Michael

      Butler, Mrs Joyce (Wood Green)

      Henderson, Douglas

      O'Malley, Rt Hon Brian

      Callaghan, Jim (Middleton & P)

      Hooley, Frank

      Orbach, Maurice

      Campbell, Ian

      Horam, John

      Ovenden, John

      Canavan, Dennis

      Howell, Denis (B'ham, Sm H)

      Padley, Walter

      Cant, R. B.

      Hoyle, Doug (Nelson)

      Palmer, Arthur

      Carmichael, Neil

      Huckfield, Les

      Park, George

      Carter, Ray

      Hughes, Rt Hon C. (Anglesey)

      Parker, John

      Carter-Jones, Lewis

      Hughes, Robert (Aberdeen N)

      Parry, Robert

      Cartwright, John

      Hughes, Roy (Newport)

      Peart, Rt Hon Fred

      Castle, Rt Hon Barbara

      Hunter, Adam

      Prentice, Rt Hon Reg

      Clemitson, Ivor

      Irvine, Rt Hon Sir A. (Edge Hill)

      Price, C. (Lewisham W)

      Cocks, Michael (Bristol S)

      Irving, Rt Hon S. (Dartford)

      Price, William (Rugby)

      Cohen, Stanley

      Jackson, Colin (Brighouse)

      Radice, Giles

      Coleman, Donald

      Jackson, Miss Margaret (Lincoln)

      Rees, Rt Hon Merlyn (Leeds S)

      Conlan, Bernard

      Janner, Greville

      Reid, George

      Cook, Robin F. (Edin C)

      Jay, Rt Hon Douglas

      Richardson, Miss Jo

      Corbett, Robin

      Jeger, Mrs Lena

      Roberts, Albert (Normanton)

      Cox, Thomas (Tooting)

      Jenkins, Hugh (Putney)

      Roberts, Gwilym (Cannock)

      Craigen, J. M. (Maryhill)

      John, Brynmor

      Robertson, John (Paisley)

      Crawford, Douglas

      Johnson, Walter (Derby S)

      Roderick, Caerwyn

      Crawshaw, Richard

      Jones, Alec (Rhondda)

      Rodgers, George (Chorley)

      Crosland, Rt Hon Anthony

      Jones, Dan (Burnley)

      Rodgers, William (Stockton)

      Cryer, Bob

      Judd, Frank

      Rooker, J. W.

      Cunningham, G. (Islington S)

      Kaufman, Gerald

      Roper, John

      Cunningham, Dr J. (Whiteh)

      Kelley, Richard

      Rose, Paul B.

      Davidson, Arthur

      Kerr, Russell

      Ross, Rt Hon W. (Kilmarnock)

      Davies, Bryan (Enfield N)

      Kilroy-Silk, Robert

      Rowlands, Ted

      Davies, Denzil (Llanelli)

      Kinnock, Neil

      Sandelson, Neville

      Davies, Ifor (Gower)

      Lambie, David

      Sedgemore, Brian

      Dean, Joseph (Leeds West)

      Lamborn, Harry

      Shaw, Arnold (Ilford South)

      Delargy, Hugh

      Lamond, James

      Sheldon, Robert (Ashton-u-Lyne)

      Dell, Rt Hon Edmund

      Latham, Arthur (Paddington)

      Shore, Rt Hon Peter

      Dempsey, James

      Leadbitter, Ted

      Short, Rt. Hon E. (Newcastle C)

      Doig, Peter

      Lee, John

      Silkin, Rt Hon S. C. (Dulwich)

      Dormand, J. D.

      Lever, Rt Hon Harold

      Sillars, James

      Douglas-Mann, Bruce

      Lewis, Ron (Carlisle)

      Skinner, Dennis

      Dunn, James A.

      Lipton, Marcus

      Small, William

      Dunnett, Jack

      Litterick, Tom

      Smith, John (N Lanarkshire)

      Eadie, Alex

      Loyden, Eddie

      Spearing, Nigel

      Edge, Geoff

      Luard, Evan

      Spriggs, Leslie

      Edwards, Robert (Wolv SE)

      Lyon, Alexander (York)

      Stallard, A. W.

      Ellis, John (Brigg & Scun)

      Lyons, Edward (Bradford W)

      Stewart, Donald (Western Isles)

      English, Michael

      Mabon, Dr J. Dickson

      Stoddart, David

      Ennals, David

      McCartney, Hugh

      Stott, Roger

      Evans, Fred (Caerphilly)

      MacCormick, Iain

      Strang, Gavin

      Evans, Gwynfor (Carmarthen)

      McElhone, Frank

      Strauss, Rt Hon G. R.

      Evans, John (Newton)

      MacFarquhar, Roderick

      Summerskill, Hon Dr Shirley

      Ewing, Harry (Stirling)

      McGuire, Michael (Ince)

      Swain, Thomas

      Ewing, Mrs Winifred(Moray)

      Mackenzie, Gregor

      Taylor, Mrs Ann (Bolton W)

      Faulds, Andrew

      Mackintosh, John P.

      Thomas, Jeffrey (Abertillery)

      Thomas, Ron (Bristol NW)

      Watkins, David

      Williams, W. T. (Warrington)

      Thompson, George

      Watkinson, John

      Wilson, Alexander (Hamilton)

      Thorne, Stan (Preston South)

      Watt, Hamish

      Wilson, Gordon (Dundee E)

      Tierney, Sydney

      Weetch, Ken

      Wilson, William (Coventry SE)

      Tinn, James

      Weitzman, David

      Wise, Mrs Audrey

      Tomlinson, John

      Wellbeloved, James

      Woodall, Alec

      Tomney, Frank

      Welsh, Andrew

      Woof, Robert

      Torney, Tom

      White, Frank R. (Bury)

      Wrigglesworth, Ian

      Tuck, Raphael

      White, James (Pollok)

      Young, David (Bolton E)

      Urwin, T. W.

      Whitehead, Phillip

      Wainwright, Edwin (Dearne V)

      Whitlock, William

      TELLERS FOR THE AYES:

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

      Wigley, Dafydd

      Mr. James Hamilton and

      Walker, Terry (Kingswood)

      Willey, Rt Hon Frederick

      Mr. Tom Pendry.

      Ward, Michael

      Williams, Alan Lee (Hornchurch)

      NOES

      Adley, Robert

      Gorst, John

      Mills, Peter

      Aitken, Jonathan

      Gow, Ian (Eastbourne)

      Miscampbell, Norman

      Alison, Michael

      Gower, Sir Raymond (Barry)

      Moate, Roger

      Arnold, Tom

      Gray, Hamish

      Monro, Hector

      Atkins, Rt Hon H. (Spelthorne)

      Griffiths, Eldon

      Montgomery, Fergus

      Banks, Robert

      Grimond, Rt Hon J.

      Moore, John (Croydon C)

      Beith, A. J.

      Grist, Ian

      More, Jasper (Ludlow)

      Bennett, Sir Frederic (Torbay)

      Grylls, Michael

      Morgan, Geraint

      Bennett, Dr Reginald (Fareham)

      Hall, Sir John

      Morris, Michael (Northampton S)

      Berry, Hon Anthony

      Hall-Davis, A. G. F.

      Morrison, Charles (Devizes)

      Biffen, John

      Hamilton, Michael (Salisbury)

      Morrison, Hon Peter (Chester)

      Biggs-Davison, John

      Hampson, Dr Keith

      Mudd, David

      Blaker, Peter

      Hannam, John

      Neave, Airey

      Boscawen, Hon Robert

      Harrison, Col Sir Harwood (Eye)

      Nelson, Anthony

      Bottomley, Peter

      Harvie Anderson, Rt Hon Miss

      Neubert, Michael

      Bowden, A. (Brighton, Kemptown)

      Hastings, Stephen

      Newton, Tony

      Boyson, Dr Rhodes (Brent)

      Havers, Sir Michael

      Onslow, Cranley

      Braine, Sir Bernard

      Hawkins, Paul

      Oppenheim, Mrs Sally

      Brittan, Leon

      Hayhoe, Barney

      Osborn, John

      Brotherton, Michael

      Heath, Rt Hon Edward

      Page, John (Harrow West)

      Brown, Sir Edward (Bath)

      Heseltine, Michael

      Page, Rt Hon R. Graham (Crosby)

      Bryan, Sir Paul

      Hicks, Robert

      Pardoe, John

      Buchanan-Smith, Alick

      Holland, Phillip

      Pattie, Geoffrey

      Budgen, Nick

      Hooson, Emlyn

      Percival, Ian

      Bulmer, Esmond

      Howell, David (Guildford)

      Pink, R. Bonner

      Burden, F. A.

      Hunt, John

      Price, David (Eastleigh)

      Butler, Adam (Bosworth)

      Hurd, Douglas

      Prior, Rt Hon James

      Carlisle, Mark

      Hutchison, Michael Clark

      Pym, Rt Hon Francis

      Chalker, Mrs Lynda

      Irvine, Bryant Godman (Rye)

      Raison, Timothy

      Churchill, W. S.

      Irving, Charles (Cheltenham)

      Rathbone, Tim

      Clark, Alan (Plymouth, Sutton)

      James, David

      Rawlinson, Rt Hon Sir Peter

      Clark, William (Croydon S)

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

      Rees, Peter (Dover & Deal)

      Cockcroft, John

      Johnson Smith, G. (E Grinstead)

      Rees-Davies, W. R.

      Cooke, Robert (Bristol W)

      Jones, Arthur (Daventry)

      Renton, Rt Hon Sir D. (Hunts)

      Cope, John

      Joseph, Rt Hon Sir Keith

      Renton, Tim (Mid-Sussex)

      Cordle, John H.

      Kaberry, Sir Donald

      Rhys Williams, Sir Brandon

      Cormack, Patrick

      Kershaw, Anthony

      Ridley, Hon Nicholas

      Corrie, John

      Kimball, Marcus

      Ridsdale, Julian

      Costain, A. P.

      King, Evelyn (South Dorset)

      Rifkind, Malcolm

      Crouch, David

      King, Tom (Bridgwater)

      Rippon, Rt Hon Geoffrey

      Crowder, F. P.

      Kitson, Sir Timothy

      Roberts, Michael (Cardiff NW)

      Dodsworth, Geoffrey

      Knight, Mrs Jill

      Roberts, Wyn (Conway)

      Douglas-Hamilton, Lord James

      Knox, David

      Rodgers, Sir John (Sevenoaks)

      Drayson, Burnaby

      Lamont, Norman

      Ross, Stephen (Isle of Wight)

      du Cann, Rt Hon Edward

      Langford-Holt, Sir John

      Rossi, Hugh (Hornsey)

      Durant, Tony

      Latham, Michael (Melton)

      Rost, Peter (SE Derbyshire)

      Eden, Rt Hon Sir John

      Lawrence, Ivan

      Sainsbury, Tim

      Elliott, Sir William

      Lawson, Nigel

      Scott, Nicholas

      Emery, Peter

      Le Merchant, Spencer

      Shaw, Giles (Pudsey)

      Eyre, Reginald

      Lester, Jim (Beeston)

      Shaw, Michael (Scarborough)

      Fairbairn, Nicholas

      Lloyd, Ian

      Shelton, William (Streatham)

      Fairgrieve, Russell

      Loveridge, John

      Shepherd, Colin

      Farr, John

      Luce, Richard

      Silvester, Fred

      Fell, Anthony

      McAdden, Sir Stephen

      Sims, Roger

      Fisher, Sir Nigel

      Macfarlane, Neil

      Sinclair, Sir George

      Fletcher, Alex (Edinburgh N)

      MacGregor, John

      Skeet, T. H. H.

      Fletcher-Cooke, Charles

      Macmillan, Rt Hon M. (Farnham)

      Smith, Cyril (Rochdale)

      Fookes, Miss Janet

      McNair-Wilson, M. (Newbury)

      Speed, Keith

      Fox, Marcus

      McNair-Wilson, P. (New Forest)

      Spence, John

      Freud, Clement

      Mates, Michael

      Spicer, Jim (W Dorset)

      Fry, Peter

      Mather, Carol

      Spicer, Michael (S. Worcester)

      Gardner, Edward (S Fylde)

      Maude, Angus

      Sproat, Iain

      Gilmour, Rt Hon Ian (Chesham)

      Maudling, Rt Hon Reginald

      Stainton, Keith

      Glyn, Dr Alan

      Mawby, Ray

      Stanbrook, Ivor

      Godber, Rt Hon Joseph

      Maxwell-Hyslop, Robin

      Stanley, John

      Goodhart, Philip

      Mayhew, Patrick

      Steen, Anthony (Wavertree)

      Goodhew, Victor

      Meyer, Sir Anthony

      Stewart, Ian (Hitchin)

      Goodlad, Alastair

      Miller, Hal (Bromsgrove)

      Stokes, John

      Stradling Thomas, J.

      van Straubenzee, W. R.

      Wiggin, Jerry

      Tapsell, Peter

      Vaughan, Dr Gerard

      Winterton, Nicholas

      Taylor, Teddy (Cathcart)

      Viggers, Peter

      Wood, Rt Hon Richard

      Temple-Morris, Peter

      Wainwright, Richard (Colne V)

      Young, Sir G. (Ealing, Acton)

      Thatcher, Rt Hon Margaret

      Wakeham, John

      Younger, Hon George

      Thomas, Rt Hon P. (Hendon S)

      Walder, David (Clitheroe)

      Thorpe, Rt Hon Jeremy (N Devon)

      Walker, Rt Hon P. (Worcester)

      TELLERS FOR THE NOES:

      Townsend, Cyril D.

      Wall, Patrick

      Mr. W. Benyon and

      Trotter, Neville

      Weatherill, Bernard

      Mr. Cecil Parkinson.

      Tugendhat, Christopher

      Question accordingly agreed to.
      Subsequent Lords amendment disagreed to.

    Clause 21

      AUTHORISATIONS FOR PIPE-LINES
      Lords Amendment: No. 13, in page 17, line 1, leave out from "authorisation" to end of line 2 and insert:
      ", the design and capacity of the pipe-line or of part of it and the steps to be taken to avoid or reduce interference by the pipe-line with fishing or with other activities connected with the sea or the sea bed or subsoil;".
      Mr. John Smith: I beg to move, That this House doth agree with the Lords in the said amendment.
      The amendment redeems a pledge given to the right hon. Member for Orkney and Shetland (Mr. Grimond) in Committee and on Third Reading. It makes manifest our intention that full consideration shall be given to fishing and other relevant interests in the planning and construction of pipelines. We recognise, as I believe the oil industry does, that, important commodity as oil is, its extraction must not be conducted without due regard to those who have traditionally earned their livelihood from, or exercised rights in, the sea, and, particularly in the case of fishing, performing a valuable service for the community.
      Question put and agreed to.

    Clause 22

      COMPULSORY INCREASES IN CAPACITY ETC. OF PIPE-LINES
      Lords Amendment: No. 14, in page 18, line 26, after "pipe-line" insert "can and".
      Mr. John Smith: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a small drafting change to make explicit that the Secretary of State is to
      488
      consider whether a pipeline "can" be modified as well as "should" be modified before he can exercise his power. It brings the drafting of the subsection (1)(b) into line with that of subsection (1)(a), as amended in Committee.
      Mr. Patrick Jenkin: Without quoting the actual words of the noble Lord, Lord Balogh, I can say that when my noble Friends moved the amendment in another place he addressed them as if they had gone out of their minds. I am delighted to see that wiser counsels have prevailed and that the Government have accepted that it was a very sensible drafting amendment.
      Question put and agreed to.

    Clause 23

      ACQUISITION BY PERSONS OF RIGHTS TO USE PIPE-LINES BELONGING TO OTHERS
      Lords Amendment: No. 15, in page 20, line 13, leave out from beginning to "payments" in line 17 and insert:
      "so as to secure to the owner recovery of an equitable proportion of the relevant capital and operating costs of the pipeline;

      (d) for securing to the applicant the right to have a pipe and apparatus of his connected to the pipe-line by the applicant or the owner;

      and such a notice may also authorise the owner to recover from the applicant reasonable commercial".
      Mr. John Smith: I beg to move, That this House doth disagree with the Lords in the said amendment.
      The amendment provides that a pipeline owner should always be reimbursed an equitable proportion of the capital as well as the operating costs of the line by a third party admitted to the line by the Secretary of State.
      I should like to recapitulate on the present position. A pipeline owner cannot incur extra costs because of the admission of a third party. If he has to re-route or enlarge his pipeline at the

      489
      planning stage he must be reimbursed the costs of these changes by the third party in whose interest they are to be made. If he has to modify an existing line, he must similarly be reimbursed. Both of these provisions are in the Bill.
      In addition we have given the two following undertakings: first, if there are incidental costs, for example, disruption of the owner's supply or accidental damage to his line in the course of admitting a third party, these costs will also be reimbursed in full. Secondly, after entry the third party will be required in every case to pay his fair share of the running costs.
      The owner will therefore be at least as well off as if there were no third party user. I stress "at least" because we have given a third undertaking—that with two exceptions the financial arrangements made by the Secretary of State will take account of the basic capital cost of the line. One of the exceptions is technical, that is where the contribution to basic capital costs is dealt with by some other means such as an adjustment in the price received by the owner for gas. Only the second exception remains—the case of marginal supply.
      Lord Lovell-Davis explained in another place why we may—not necessarily shall—want a different régime to apply in this case. It is in the national interest to develop marginal fields as long as they are viable. Pipelines are very expensive—at least £1 million per mile—and the cost of a line could well mean the difference between exploitation and abandonment. Does it make sense to stand by and see valuable resources left unexploited where a neighbouring pipeline has spare capacity? That is the raison d'être of this clause which I do not think is controversial.
      Can it be contended that it is so unfair to the owner to require him to accept the third party when at worst he will be no worse off than without the third party and better off to the extent that the third party makes a contribution to basic costs? It may not be the solution the owner would choose but I do not think that it can reasonably be held to be unfair.
      For those reasons I hope that the House will accept that we should not agree with the Lords in this amendment.
      490
      I now refer to the question of the owner-installed spare capacity for his own future use. I can reassure the House on this. It is already provided—at the request of the industry—in Clause 23(2) that the Secretary of State may admit a third party—any third party, marginal producer or otherwise—only where he is satisfied that the admission would not prejudice the operation of the line for the quantities which the owner
      "requires or may reasonably be expected to require"
      to be conveyed. There is no question of depriving an owner of the capacity he has prudently provided for his own needs. The provision is directed towards genuine spare capacity.
      This is not a major issue. I hope that the House will accept the motion to disagree with the Lords amendment.
      Mr. Alexander Fletcher: This question, which is of considerable importance, was fully debated in another place. Despite that it seems that the Government have failed to recognise the significance and importance of this aspect of the Bill.
      The central question is whether a company should be required by the Secretary of State to subsidise the development of a field, marginal or otherwise, which is controlled by another company. That question has not been properly recognised by the Government. The Government spokesman in another place limited his response to the important points raised, by giving assurances on the exercise of new powers. Those assurances on the owner of the pipeline not being out of pocket, and similar comments, are hardly likely to form any basis of confidence among owners of pipelines. In any contractual situation which may be considered, following the future evidence of the attitude of the Secretary of State to contracts which we have witnessed today, it is unlikely that people will feel confident about assurances given by the Government on operations in the North Sea or elsewhere.
      The vague intentions stated by the Government spokesman in another place have not been included in the Bill. Therefore their validity as commercial criteria by which companies may make sharing arrangements in pipelines is questionable, as is their worth in the accounting and financial terms which the noble Lord

      491
      used when giving these assurances in another place.
      It is our view that assurances are required within the Bill for several reasons. The first is the sheer magnitude of the pipeline construction and investment in the North Sea, where for current operations it is unlikely that any figure of less than £100 million is likely to be involved. Secondly, I should have thought that there was a need to encourage companies to lay pipelines and to do so with reasonable commercial confidence for future operations. Thirdly, the Bill should contain the conditions and assurances stated in the debate in another place on 29th October, when the Government spokesman, Lord Lovell-Davis, said:
      "I must also remind the House that we are here talking about only those cases where the Secretary of State is called upon to intervene in the setting of charges—a situation which we hope and expect will be the exception and not the rule."—[Official Report, House of Lords, 29th October 1975; Vol. 365, c. 590.]
      It is reasonable to contend that such conditions may be tantamount to the Secretary of State touting for cases to judge. They might encourage companies to disagree or to strike a mean bargain with a pipeline owner in the hope of a soft settlement or soft judgment emanating from the Secretary of State. This amendment puts these fears and dangers into words. The Government should accept the amendment as providing a means of giving confidence to those risking money and reputation in the difficult business of laying pipelines in the North Sea.
      We hope that the Government, even at this late hour, will reconsider their position on this amendment.
      Mr. Deputy Speaker (Mr. Oscar Murton): The Question is—
      Mr. Patrick Jenkin: I hope the Minister feels that my hon. Friend the Member for Edinburgh, North (Mr. Fletcher) made a reasonable case. Usually on these occasions the Government move the rejection of an amendment and the Opposition state why the amendment should be accepted. I should have thought that the Minister might have given a brief reply, as these are points of substance.
      The point is whether a company should be committed to subsidising a competitor
      492
      by giving up its spare capacity for less than its full market value. The company might think that a more viable operator will appear later who will be able to pay the full cost of sharing the pipe-line. It seems to me that the Government have not wholly addressed their minds to that point.
      7.45 p.m.
      Mr. John Smith: I hope that the Opposition will acquit me of any discourtesy in not replying to the debate. I should have replied more readily had specific questions been asked or assurances required. Such points were not included in the speech of the hon. Member for Edinburgh, North (Mr. Fletcher). I assumed that he was content, in view of my long explanation, to let matters stand, having stated the position of the Opposition. Although I may have misunderstood him, I did not notice a look of surprise on his face when I did not rise to reply.
      Mr. Alexander Fletcher: The Minister must not be fooled by my poker face. Such vague assurances as we have received would have more effect and give more confidence if they were included in the Bill. That is the critical point.
      Mr. Smith: The Government reflected on this at some length. We referred to the debate which occurred in another place. We are satisfied that we should not make further changes to the Bill. We made a number of changes on this aspect of the Bill in Committee. There is a national interest involved which we think should be preserved. I have gone over the ground in some detail deliberately so that there should be no question that incomplete consideration had been given to it and no misunderstanding of the reasons which prompted the Government's attitude. To reiterate those reasons at length would be hardly profitable. At the heart of our case is the necessity for the development of the marginal fields. There will be pockets of gas in oilfields throughout the North Sea. The Department of Energy has commissioned a study on a gas-carrying pipeline and this shows the importance we attach to the economic use of pockets of gas which might not be economic to those who find them, particularly if they do not have an extra pipe. That is the underlying basis of our concern.

      493
      I have made clear, without challenge by the Opposition, that the owner of the pipeline can be no worse off by the admission of a third party, and I have given an assurance that it is genuine spare capacity that we wish to see utilised. I must, therefore, adhere to the Government's position and ask the House to disagree with the Lords in the said amendment.
      I do not say that there is not a point of issue which Conservative Members have argued. I recognise that there is an issue, although it is not of fundamental importance, as are some of the great issues we have been discussing. We examined the exchanges in the House of Lords with considerable care before coming to the conclusion that we should disagree with the amendment.
      Question put and agreed to.

    Clause 24

      TERMINATION OF AUTHORISATIONS
      Lords Amendment: No. 16, in page 22, line 16, at end insert:
      "Provided that if the contravention is capable of remedy by or on behalf of the holder the authorisation shall not cease to remain in force unless such contravention has not been remedied within the period specified in the notice or any extension thereof which is reasonable having regard to all the relevant circumstances appertaining to the notice. "
      Mr. John Smith: I beg to move, That this House doth disagree with the Lords in the said amendment.
      That is not quite as bad as it sounds from the Opposition's point of view, because I shall ask the House to accept the Government amendment in lieu of the Lords amendment, the basis of which is a difference in wording.
      The Lords amendment seeks to import into the Bill a principle to which we have very little objection, but we feel that it insufficiently covers a number of points. It does not define what constitutes a remedy. For example, a major consequence, that is to say, large-scale pollution, could flow from failure to observe proper standards of maintenance. Clearly, in such a case revocation would be the right penalty, but it could be argued that the breach could be remedied by taking steps to improve maintenance. I do not say that it would be a valid
      494
      argument, but it might be used, if for no other reason, as a means of preventing the Secretary of State from taking the action which every reasonable person would agree ought to be taken.
      The amendment precludes the option of immediate revocation where a breach can be remedied, but there could be cases in which an opportunity for remedy might not be appropriate—for example, a flagrant disregard of safety requirements. The Lords amendment does not adequately deal with the possibility of repeated breaches.
      We have tried to meet these points by rewording, and I hope that the House will disagree with the Lords in this amendment.
      Mr. Patrick Jenkin: The Under-Secretary of State argued in his most beguiling way that we should accept the Government's wording rather than that which the other place sought to put in the Bill. On the whole, he made out a good case. It is wise to give the holder of the authorisation a locus poenitentiae, so that he can put right what has gone wrong without the Secretary of State's having an automatic right of revocation.
      It is a pity that a similar power has not been written into the schedules, in relation to the revocation of a licence or part of a licence. That was argued in another place, but it was resisted on grounds which are equally applicable to pipelines authorisation. I remind the Government that under the provision in the schedule they have power to amend the model clauses without an elaborate parliamentary procedure, and I ask the Under-Secretary of State to examine this again. It seems right that in a matter which could be even more important than an authorisation for a pipeline, namely, the exercise of rights under a licence, the same opportunity to put matters right should be given. At the moment it is not. The statutory relief which the Government amendment gives for pipelines does not exist for licences.
      Mr. John Smith: I am grateful to the right hon. Gentleman for his comments on the Government amendment. The issue he raises is another matter, and the test I can do is to undertake to consider it further. The Government will re-examine the position in the light of

      495
      the concession that has been made on this branch of the Bill. We shall have to look at it with some care to see whether the case is genuinely on all fours, and this we shall do.
      Question put and agreed to.
      Amendment made to the Bill in lieu thereof: In page 22, line 16, at end insert:
      '; but the Secretary of State shall not serve such a notice on the holder in consequence of a contravention if the Secretary of State considers that, having regard to the nature and consequences of the contravention and to any previous contravention, it would be unreasonable to terminate the authorisation in consequence of the contravention and that the holder has taken adequate steps to prevent similar contraventions in future'.—[Mr. John Smith.]

    Clause 26

      SAFETY
      Lords Amendment: No. 17, in page 23, line 41, after "44" insert "(1)".
      Mr. John Smith: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may take Lords Amendment No. 23.
      Mr. Smith: These are simple drafting amendments, consequent upon amendments made in another place. As the amendments are self-explanatory, I need say no more.
      Question put and agreed to.

    Clause 40

      THE NATIONAL OIL ACCOUNT
      Lords Amendment: No. 18, in page 39, line 34, leave out
      "Secretary of State considers and the Treasury agree",
      and insert "Treasury considers".
      Read a Second time.
      Mr. Deputy Speaker: I have to call the attention of the House to the fact that privilege is involved in this amendment.
      Mr. Rathbone: I beg to move, as an amendment to the Lords amendment, after 'Treasury', insert:
      'having consulted the Secretary of State'.
      My hon. Friend the Member for Mid-Sussex (Mr. Renton) and I take cognisance of the stated intention of the Government to disagree with the Lords amendment.
      The flow of funds under the control and management of the Secretary of State is enormous. The funds represent about £900 million in borrowing and between £700 million and £750 million in revenue. Those are the funds which flow in and out of the National Oil Account. The Lords amendment has been drawn because of the requirement for special surveillance of these funds. The Secretary of State has decided to disagree with the Lords amendment and in doing so to deny proper surveillance on behalf of the taxpayers. Without disagreeing with the Lords amendment, but noting the disagreement expressed by the Secretary of State, my hon. Friend and I have tried to strike common ground between the position of the noble amenders and the Government.
      8.0 p.m.
      We hope that the amendment will allow the Government better to appreciate that the Treasury has responsibility for the proper management of the total funds of the United Kingdom and must therefore be in a position of direct influence and management of the huge National Oil Account.
      There are and there will be necessary investments by the BNOC as its rôle develops under the Bill. I deplore these developments, but it will inevitably develop after this evening. We have particularly to take cognisance of developments of alternative sources of power, through nuclear fission and from the oceans, against the future day of diminished oil resources. That is why this amendment suggests consultation by the Treasury with the Secretary of State before transferring surplus BNOC funds to the Exchequer. What, I suggest, could be more reasonable? But control must be by and with the Treasury in consultation with the Secretary of State, and not by the Secretary of State in consultation with the Treasury.

      497
      The Government almost admitted the need for Treasury control when the Minister himself said in Committee that the oil account
      "will make the BNOC's revenues available to the Government immediate and direct."—[Official Report, Standing Committee D, 26th June, 1975; col. 914.]
      Without Treasury responsibility, I submit that this availability might never happen.
      The importance of proper financial control has never been argued on either side. The Minister drew attention to it in Committee, in terms of the amounts of moneys involved. The amount he cited at that time was between £2 billion and £3 billion in terms of the responsibilities due to the exemption from the petroleum revenue tax, which we have already discussed this afternoon, and in terms of the enormous importance to the national economy.
      In moving the amendment, I sincerely hope that it may humbly make the Lords amendment not only correct in principle but acceptable to the Secretary of State and to his right hon. and hon. Friends. I hope that they will support its reasonableness, its moderation and—dare I say?—its good sense.
      Mr. Tim Renton: I support the amendment which has just been moved so ably by my hon. Friend the Member for Lewes (Mr. Rathbone).
      I have always thought it extraordinary that Clause 40 is the first in the Bill to come under the heading "Miscellaneous". There could be nothing less miscellaneous than the National Oil Account and the revenues that will flow from oil.
      The first point to establish is that by no manner of means will all the money from the North Sea, to use a loose term, flow into the National Oil Account. Assuming that by 1980 half the investment write-offs have been taken, and taking oil at $12 a barrel—and assuming, further, that inflation in oil prices is set off against inflation in operating costs, the figure of £3 billion by 1980 does not seem an unreasonable estimate of the annual total that will flow to the Government. Of that sum, approximately £700 million will go across into the National Oil Account through royalties, and the balance of £2·3 billion will flow to the Treasury by virtue of PRT and corporation tax.
      498
      There is no question of money from the North Sea being solely under the determination and discretion of the Secretary of State for Energy. If that were so, there might be some commercial logic in saying that one Minister alone should be responsible for this vast sum of money, but that is not the case.
      The £700 million of gross revenue, that will come into the National Oil Account, will clearly put the Secretary of State for Energy in a very powerful position. He will be, perhaps, the only Minister who will have at his behest a positive cash flow, to use as he wishes in terms of downstream diversification of BNOC, or whatever other ambition he wishes to pursue.
      This prospect, particularly when £700 million is to be in the hands of the present Secretary of State for Energy, is an alarming one. One has only to look back at the track record of the Secretary of State for Energy—the RB211, NVT and other notable failures with which he has been associated—to wonder how he will spend that £700 million. Other than the fact of giving the Secretary of State for Energy a positive cash flow for him to disburse, I have seen no reasonable argument advanced by the Government Ministers to show why this part of revenue from the North Sea should flow into an account that is controlled and administered by the Secretary of State rather than follow the traditional method of control, as my hon. Friend has just set forth, of flowing to the Treasury.
      One other argument has occurred to me, which I have not seen put forward by Ministers. I have wondered whether the reason that the royalty income is to come into the National Oil Account is that the foreign lenders—from whom BNOC may in the years immediately ahead borrow up to £900 million—are themselves insisting that the known revenue from royalties in those years should come into the National Oil Account, so that they can be certain, having made loans to BNOC, that there will be revenue from which they can be repaid. If this is the reason, and this is being done at the suggestion of overseas lenders, Ministers should come clean and tell us so.
      One can well understand that, with such a wildly profligate Government as this one, creditors do not wish to see the

      499
      royalty income disappearing into the general maw of Government money but want to see it in the separate account from which they can know that the loans they make now will be repaid in future years.
      I have no great sympathy with the Treasury but, as my hon. Friend has just said, ours is a very modest amendment. All that we are suggesting is that the Treasury, having consulted the Secretary of State for Energy, should pay over the surplus funds into the Consolidated Fund.
      We heard earlier this afternoon that there are to be two civil servants on the board of BNOC—one from the Treasury and one from the Department of Energy. Is it really impossible to imagine that these two, with their political masters, will consult together to decide what are the surplus funds? Surely it will be by the co-operation of these two civil servants that the decision will be made to return surplus money to the Consolidated Fund.
      Is the Treasury lion never to lie down with the Energy lamb? I suggest that it can, and that in accepting our amendment—I find it very hard to see how the Minister can refuse it—the Minister will be putting the onus where it properly should be, so that the Treasury will first consult the Department of Energy, and will then pay over the National Oil Account surplus to the Consolidated Fund.
      Mr. Leadbitter: I want to attack what I believe is the lack of logic in the argument of the hon. Member for Mid-Sussex (Mr. Renton). He has wasted some time—this is often a temptation to certain hon. Members on the Opposition benches—in talking about the Secretary of State's track record. If we want to enter into confessions on either side of the House, I admit that some track records look pretty dim, but it is not a proper debating point—on a matter of some importance, as the hon. Member has suggested this is—for the National Oil Account to be referred to in personal terms of a sort which I find completely distasteful.
      The Opposition are always attempting to tell the people that they are the only respectable Members of this House. I do not want to be drawn into that argu-
      500
      ment now, but surely in this House we should have less of this nonsense of personal attacks of this kind upon Government supporters—
      Mr. Tim Renton: What pomposity!
      Mr. Leadbitter: We have had some pompous interventions from the Opposition benches about my right hon. Friend the Secretary of State not paying attention to their arguments. I hope that the hon. Member for Mid-Sussex will realise that this time I have not got my fishing line caught in a bush. If he knows anything about fishing, he will know that the man who holds his fishing line firmly will catch what he is after. I hope that the hon. Gentleman will do me the courtesy of listening to what I have to say.
      Here we have a remarkable situation. We are discussing Clause 40, and Opposition speakers have so far refrained from making it clear that they know that the Secretary of State has powers over a wide range of the oil account. For example, subsection (1) says:
      "There shall be an account, to be called the National Oil Account (and hereafter in this section referred to as 'the Account'), which subject to the following provisions of this section shall be under the control and management of the Secretary of State…".
      That has not been questioned by the Opposition and they have tabled no amendment to deal with it. Their distaste for the Secretary of State has not made them question my right hon. Friend's ability to deal with and to control the oil account.
      Subsection (2) says:
      "There shall be paid into the Account, in addition to any sums required to be paid into it by virtue of any other provision of this Act. "
      —and then there is a reference to
      "All sums received by the Corporation".
      Mr. Rathbone: On a point of order, Mr. Deputy Speaker. At the moment we are discussing the Opposition amendment tabled by me and by my hon. Friend the Member for Mid-Sussex (Mr. Renton) which is an amendment to the amendment passed in the other place, and that has no bearing on what the hon. Member for Hartlepool (Mr. Leadbitter) is now discussing.
      Mr. Deputy Speaker: Perhaps we had better wait to see how the hon. Member

      501
      for Hartlepool (Mr. Leadbitter) develops his argument.
      Mr. Leadbitter: We are dealing with what is virtually the last act concerning the oil account, which is how the surpluses shall be dispensed with and how they shall be transferred into the Consolidated Fund. If the case is put, as it has been, purely on the basis that the Secretary of State should be deprived of the right to consider solely because of the Opposition's dislike of the Secretary of State, they should be honest about it and table an amendment dealing with every kind of responsible action which the Secretary of State is empowered to take in connection with this fund. That is my point.
      The Opposition refrained from pointing out that the Secretary of State has certain other powers to dispense moneys in this account. They appear in subsection (3). Again, the Opposition have not questioned them.
      Mr. Rathbone: On a point of order, Mr. Deputy Speaker. I apologise for intervening yet again. It may be that I have misunderstood the procedures under which we are operating. I thought that we were discussing the Opposition amendment to the Lords amendment and that it was not possible for my hon. Friend the Member for Mid-Sussex and myself, assuming that we had wished to do so, to table amendments to those parts of the Bill to which the hon. Member for Hartlepool is referring.
      Mr. Deputy Speaker: Perhaps I can enlighten the hon. Member for Lewes (Mr. Rathbone). We are discussing Lords Amendments Nos. 16 and 18 and the Opposition amendment thereto. They are being discussed together. The argument of the hon. Member for Hartlepool is germane to the point.
      Mr. Leadbitter: Putting aside for the moment the fact that the hon. Member for Lewes (Mr. Rathbone) obviously cannot read, I have just referred to subsection (3) and to the very line to which his amendment to the Lords amendment relates. He should attend to our business more precisely rather than showing the extent to which his dislike of the strength of my argument illustrates how irresponsibly he is behaving.
      502
      Throughout our debate today we have had a fairly poor response from the Opposition. We expected a better standard from them. They have become more and more embarrassed as we have approached the matter now under discussion.
      I come now to the precise matter that I was about to discuss before the hon. Member for Lewes intervened. It seems wrong, having got in this Bill extreme powers for the Secretary of State—powers rightly agreed to by this House, because there are no amendments tabled to say that this should not be the case—which are essential to the oil account, for the Opposition then to say that when the surpluses in the account have to be transferred to the Consolidated Fund the Secretary of State should have no say in the matter. That is illogical.
      The basis of determining surpluses in the account is written into the Bill. I should have thought that agreement was a matter of technicality. I should have thought that it was a matter about which there would be complete agreement between the Secretary of State and the Treasury. I cannot imagine a situation where the Secretary of State could devise for himself definitions of surpluses which were not in the Bill. For that reason, I suggest that the hon. Member for Lewes and the hon. Member for Mid-Sussex have again moved an amendment which will not gain very much support from their colleagues.
      8.15 p.m.
      Mr. John Smith: When I read the amendments tabled by the hon. Member for Lewes (Mr. Rathbone) and the hon. Member for Mid-Sussex (Mr. Renton), I was tempted to think that they were motivated by a sense of genuine compromise and that they were trying to mediate between the Government and another place. What is more, the beguiling speech of the hon. Member for Lewes seemed to confirm that that was his intention. It was a pity that the hon. Member for Mid-Sussex took part in the debate because, after he had spoken, he and his hon. Friend seemed like two witnesses who went into court to support a case without first consulting about the story that they would tell. The hon. Member for Lewes was anxious to be moderate and sensible in his proposal,

      503
      but the hon. Member for Mid-Sussex let the cat out of the bag and indulged in a certain amount of personality bashing which was quite unnecessary and added nothing to the argument.
      The truth is that the Opposition amendment makes very little difference to the situation and does not to any substantial extent alter the amendment which came from the other place.
      Perhaps I might remind the House that the National Oil Account is to be under the control and management of the Secretary of State. That is right. Its function is to act as the banker of the BNOC for which the Secretary of State will be the sponsoring Minister, as we were reminded by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) in an earlier debate. It will also account for royalties and other payments connected with licences issued by the Secretary of State.
      Because the Secretary of State is responsible, it is right that he should have the clear duty to oversee and to account for all the operations of the National Oil Account and that he and his Department should be responsible for being accountable to Parliament for them. To introduce the Treasury in this one respect would give rise to confusion and split responsibilities, and even from the point of view of effective accountability to Parliament it is undesirable. Nor do I think that it is right to place a duty on the Treasury and its accounting officer when the day-to-day accounting will be conducted in the Department of Energy, and the Treasury officials would not independently have details of the transactions.
      I wish to deal with the apparent belief in the minds of some hon. Members opposite that the National Oil Account and the Secretary of State's management of it confers a benefit on the Secretary of State or the British National Oil Corporation which this amendment would somehow remove. The expenditure of the BNOC will be determined not by the size of the National Oil Account but as part of the Government's decision on public expenditure as a whole in which the Treasury, to say the least, will play some rôle. The National Oil Account is not hypothecated revenue in the sense of
      504
      revenue earmarked exclusively for the BNOC. The surplus will be transferred to the Consolidated Fund. As soon as money comes into the oil account, it will be available for reducing the Government's day-to-day calls in the market. Without the nationalised industry structure, the money would not be available. In that sense the National Oil Account helps the Treasury rather than hinders it.
      The most important point of all is that in important decisions about public expenditure it is an illusion to think that Ministers in the Department take decisions independently. The right hon. Member for Wanstead and Woodford, as a former Treasury Minster, knows that the Treasury is involved in all decisions on sizeable public expenditure. The Government are involved, through the Cabinet and Cabinet Committee system, in collective decisions of this kind. To suggest that there is some fiefdom in the Department of Energy, and that there are other completely different sectors of responsibility in other Government Departments, is to fail to understand the nature of government—and not only the nature of government now but the nature of government in this country over many years.
      We have an illusion of a debate here, for it does not affect the reality very much. I hope the House will support the motion that we disagree with the Lords in this amendment, and will agree that the proposed amendment to the Lords amendment does not take us much further forward.
      Mr. Patrick Jenkin: I was fascinated to hear the hon. Gentleman use the word "fiefdom" in connection with what is being set up here. The right hon. Gentleman the Secretary of State, in one of his earlier speeches, referred to Indonesia. From a recent article in the Guardian, we now know that Pertamina has brought "shame on Suharto" and, according to the article in the Guardian,
      "Under what has been described as a 'personal fiefdom', Pertamina was run by General Ibnu Sutowo, a close associate of General Suharto."
      We are obviously setting up the same sort of thing here.
      Mr. Smith: I do not think the right hon. Gentleman expects to be taken seriously in a remark of that sort. To get

      505
      the matter clear, I was referring to the view of the Opposition, not of the Government. One matter on which the right hon. Gentleman should be congratulated is the fact that during the course of the debate today, until just now, he has not had to use a quotation at all. Those of us who are accustomed to him papering the Standing Committee rooms with endless quotations have observed that lapse with a certain amount of regret.
      Mr. Rost: Can the hon. Gentleman explain how the National Oil Account can be, as the noble Lord Balogh said, under the overall control of the Treasury? How can this be, under a structure which is set up with the Secretary of State having discretion as to how its finances are used?
      Mr. Smith: I believe that the answer is that which I have given earlier. The hon. Gentleman does not understand the collective nature of government. Important decisions about what leaves the National Oil Account and goes to the Consolidated Fund will be made collectively, and the precise statutory responsibility for accounting to Parliament is much less important than the hon. Gentleman imagines.
      Mr. Hannam: I find it very disappointing that, despite the magnitude of the financial crisis facing the country, the Government should still conduct these doctrinaire and ideological arguments. In this debate about the National Oil Account we have another symptom of what I call the Socialist disease. We have the National Oil Account or what is known in the industry as the "Oil Slush Fund". We find ourselves committed to a State oil company which, even before it has started, has resulted in a slowing up in North Sea oil developments.
      The Government, having set up the BNOC, begin to take fright at the costs in which they will be involved in obtaining their 51 per cent. participation. Thinking of the number of Finance Bills which would have to be passed through the House to obtain consent for the thousands of millions of pounds which will be required to obtain the 51 per cent. participation, the Government had to think of another dodge to present to Parliament in order to try to avoid the reality of these sums coming home to the people in the country. The dodge is the National Oil Account. The account is designed to grab
      506
      hold of the royalties and the revenue and feed them back on the BNOC for the Government, who are hungry for their 51 per cent. participation. The borrowing requirement of £2½ billion is apparently being reduced by this device to about £900 million, which appears in the Bill. The deception is in the Financial Memorandum, which refers to the £900 million limit on the borrowing. I hope that Ministers will listen to these points, because they are important.
      Mr. John Smith: This is the fourth or fifth time that Ministers have been reminded that they should listen to remarks from Opposition Members. We are indeed paying attention to the debate.
      Mr. Hannam: I am reassured to know that the Minister has been listening intently. It did not appear so. I apologise if I gained the wrong impression.
      The figure of £900 million is a deception. The figure is in reality nearly three times that amount. It is money which would normally have gone to the Exchequer but which will now be going to the National Oil Account. In Committee we fought against this hypothecation of revenue, but we were unsuccessful by a one vote margin. Our concern now is to have necessary control over the "slush fund". To my hon. Friends and myself it is vital that when the oil account has more revenue coming in than has been taken out for BNOC purposes, these surplus funds should immediately go to the Consolidated Fund. In other words, the Treasury, which at times we regard as the guardian of our national coffers, should have the right to call on these funds. But the Bill states otherwise. It is only when the Secretary of State considers that the funds in the oil account exceed the amount required by the BNOC that the excess should be paid into the Consolidated Fund.
      This sensible Lords amendment gives the initiative back to the Treasury and, therefore, back into our hands in this House, rather than into the hands of the Secretary of State who, regardless of the strictures of the hon. Member for Hartlepool (Mr. Leadbitter) on my hon. Friend the Member for Mid-Sussex (Mr. Renton), has not got the best of track records in his past history in relation to expenditure in his own Ministry. There

      507
      is no point in going further than that. There have been attacks from both sides of the House on the performance of Ministers, and that is the only point that I am making. We all have our brushes with the Treasury over various matters. Usually, we are disappointed when we have been unsuccessful in squeezing more money out of the Treasury for particular constituency or other projects.
      Those days are over. In the present economic situation, we must all fervently hope that, in the next few years at least, the Treasury will be able to curb our excessive and out-of-control level of public expenditure. But how can the Treasury do it in a massive area like the National Oil Account if it is deprived of the power to do so? It was interesting that in the debates in another place, support for this Lords amendment came from senior and respected ex-civil servants. One referred to a downgrading of the Treasury and the undesirable innovation of the Government's proposals.
      8.30 p.m.
      The Government seem to base their case for rejection of the amendment on the ground that adequate parliamentary control will rest with the Public Accounts Committee and the Comptroller and Auditor General. But by the time they pinpoint any discrepancies in the use of this fund, a large amount of damage will have been caused. Apart from the possible misuse of the surplus funds by the corporation, there will be delay in payment to the Consolidated Fund. The Ministers argue that the chief purpose of the account is to make funds quickly available. That may be true as far as the Corporation is concerned, but once the surplus begins to build up there will be inevitable delay to the nation, because, first, the Secretary of State has to consider whether the fund really represents a surplus over the BNOC requirements, and the Corporation in addition has to agree with the Treasury before handing over the fund to the Exchequer.
      How can the Treasury achieve a proper budgetary programme if it is unable to estimate accurately how much of this money will be available, and when? The argument for the account seems to be that it is to fund the Corporation in its early stages. I do not like the Corpora-
      508
      tion— I have made that clear. But if we have to have it, let us at least ensure that we have adequate control over the vast amount of taxpayers' money being diverted towards it. The cumbersome procedure of the Public Accounts Committee cannot provide the specific control that we need.
      The Corporation will be rather like the canine companion of the hon. Member for Isle of Ely (Mr. Freud) which we see on television. It is a hungry animal. It will be gobbling up billions of pounds of oil and royalty revenue in its pursuit of an unnecessary 51 per cent. participation. Those revenues could and should be going towards industrial investment and energy research. As my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) said in Committee, much more expenditure should be directed towards developing alternative energy resources, such as solar, wind and wave power and geothermal power.
      In the South-West, we have the best regional opportunities for the use of such energy resources. When we approached the Department during the summer for assistance in setting up a small research group, combining the efforts of scientists in universities in the South-West, we received a blank and non-committal reply. The Department said that it had no idea where the money could be found and had no resources to offer. Yet the whole South-West region could have energy provision in this way which could be taken off the back of the nation, and that is where the money should be going.
      The National Oil Account is not the best way to deal with the revenues from the North Sea. All this structure is not necessary to ensure national control of oil and oil revenues. The oil revenues would have continued to flow into the Treasury as they have done under four licensing rounds under both Governments. The amount can be controlled easily and determined by the Department of Energy.
      All the other arguments about control over participation revenue, and the separation of offshore oil revenues have not stood up to close examination. As the nation begins to grapple with the problem of bringing our inflated public expenditure under control, surely in this one area, this hypothecation of the oil account, Treasury restraint should be exercised and seen to be exercised. It is all very well for Ministers to put on

      509
      injured expressions of astonishment at the idea that the Corporation could ever possibly misuse the revenues in rash and uncontrolled ways. In a harassed moment earlier today, the Secretary of State admitted that it was envisaged that one of the two civil servants appointed to the Corporation would come from the Treasury. He gave as the reason that Treasury representation would be needed because of the vast amount of public money being handled by the Corporation. Surely that statement is the strongest possible support for the Lords amendment. It made clear to me the necessity for Treasury control of BNOC funds. I hope that the Government will therefore withdraw their opposition to the amendment. It is sensible and safe, and in our precarious financial state it is surely better to be safe than sorry.
      Mr. John Moore: It is sad that when we come, at the end of a lengthy year's study of the Bill, to the key issue, the minority party benches are empty. That shows how only the two major parties contend in the realities of responsible politics.
      The National Oil Account is something that we shall have cause to regret. I can imagine, 20 years from now, people saying, rather as they did 100 years after the foundation of the National Debt, "How can we control this colossus?" We are creating an out-of-control colossus. I am not concerned about individual Ministers but about the mechanisms of government which we are seeking to change, for the worse. Any Secretary of State in charge of a spending Department, whatever his political affiliation, will seek to enlarge his area of responsibility. It is irrelevant which side he sits—he will spend and spend and spend because that is the nature of the modern beast.
      I am therefore interested in having spending Department heads meeting in Cabinet and competing for scarce resources—
      Mr. John Smith: That is what will happen.
      Mr. Moore: Although I respect the Minister's sincerity, that is patent nonsense. There is no way to control the beast in modern society. My criticisms relate to Governments of both parties. It is clear from the comments of Wynne
      510
      Godley two days ago that no party in power, with present mechanisms, seems to be able to control modern spending Departments. So we are doing the last thing we should do—we are creating a Corporation with the right to go downstream and become the greatest petrochemical and petroleum giant in the nation—with hypothecated revenues.
      The Minister of State says that the surplus will be shifted straight into the Exchequer. What surplus? How many hon. Members have heard about surpluses in discussion of expenditure of nationalised organisations? Is this a new weapon? There is no such thing. We know what surplus there will be.
      Where are the Treasury Ministers and other spending Ministers today, when we are creating a situation in which scarce resources, marked down as revenue for the expenditure of the State, which could have been used for housing and health, are being committed to the expenditure patterns of the BNOC? That is the destructive nature of this form of hypothecation and this legislation. I hope that we can defeat this Government attempt to disagree with the Lords amendment.
      Mr. Rost: I wish to raise only two points. By allowing the National Oil Account to siphon off these vast funds from the Treasury the Government will be aggravating their own problems, which will probably lead to their downfall. Cuts are having to be made today in vital areas of Government spending because the money just is not there. The British National Oil Corporation is given a top priority in spite of its irrelevance. It means that there will be more unemployment in the building industry, the social services and amongst teachers, simply in order that money can be saved to finance the extravagance of the BNOC. Additional cuts will have to be made to those already planned, in order to provide the finance which will be sucked up by this irrelevance.
      My second point is related to the first. Because of the allocation of funds to the National Oil Account, other areas of higher priority for spending in the energy industries will be starved of finance. The Government have had time to study the report produced by the Select Committee on Science and Technology, dealing with

      511
      energy resources, and I declare an interest in having been a contributor to it. It is clear from the report that if, over the years ahead, we are to consider the alternative sources of energy when North Sea oil begins to run down, we must begin now with sensible energy conservation programmes. That means that we should not be having parliamentary replies which say that there is no money to finance thermal insulation or to develop wind, wave or tidal power. We cannot be told that the Government cannot afford to promote a more efficient use of our energy which will produce a positive return for the balance of payments and increase the efficiency of the economy.
      Instead of allocating this money through the National Oil Account to the BNOC, for an irrelevant extension of State ownership, the money should be put to producing a positive return to the economy. The money will have to be spent in future years, anyway, and we could begin to make a start now to produce the return to society as a whole.
      Mr. Gray: I was surprised that the Under-Secretary was not a little more gracious in his initial remarks about the amendment which stands in the names of my hon. Friends the Members for Lewes (Mr. Rathbone) and Mid-Sussex (Mr. Renton). The amendment was moved in a very temperate fashion, and I would have thought it headed towards the Government's point of view. It is surprising that the Minister should have taken such exception to it.
      There is the question of control over the National Oil Account. The question of Treasury control was highlighted this afternoon, when the Secretary of State indicated that one of the civil servants to be appointed to the BNOC board would come from the Treasury. This is surely indicative of the Government's feeling that there should be a Treasury involvement in this matter.
      My hon. Friend's amendment and the amendment made in another place both indicate the fear in everyone's mind about the whole question of spending by the BNOC and the fact that the National Oil Account will be under the control of the Secretary of State. There is no intention that when the account reaches a certain level a proportion of it will have to be
      512
      transferred to the Treasury. I believe that most people find that fact worrying. What is highlighted is the danger of the National Oil Account and the income of the BNOC rising without a proper check. Of course, I do not suggest that its activities will not be supervised by the Government, but if there were a need for money to be transferred to the Treasury, to the Consolidated Fund, at any given period, in our view it would be an extra check. What is to prevent an ambitious Secretary of State's indulging some of his wilder ideas in projects for the BNOC which business sense would indicate the BNOC should not embark upon?
      8.45 p.m.
      The Minister and the hon. Member for Hartlepool (Mr. Leadbitter) were aggravated by criticisms of the Secretary of State. They accused my hon. Friends of being personal. I am sure that my hon. Friends did not mean to be personal. However, we must accept, as must every Minister, that our track records will follow us around. If one's track record indicates association with a number of not too successful ventures, one cannot be too annoyed if those ventures are, from time to time, referred to during debates. The right hon. Gentleman made no complaint. I am quite sure that he would be prepared to defend his actions. The fact remains that in the eyes of many people the right hon. Gentleman has been associated with a number of ventures which, to say the least, did not go too well.
      Mr. Benn: I did not hear the comments, but I have never taken the view that any references are personal. They are attacks on the policy that is pursued. That is what I have always understood. Another reason why I should not be anxious is that the results of the various industrial ventures with which I have been concerned are as nothing compared with the outrageous transfer of our national resources to the oil companies during the 1972 round of licensing, which we are remedying in this legislation. I have nothing to be shy about. The hon. Member for Ross and Cromarty (Mr. Gray) might be embarrassed if his track record were examined.
      Mr. Gray: I realise that the right hon. Gentleman is prepared to stand up and defend himself. However, I remind him that it is his track record which is under surveillance, and not mine. I accept what

      513
      he says about his own activities, but I do not accept what he says about the 1972 round of licensing.
      An important Scottish point comes into the whole question of the National Oil Account and the Treasury—namely, that the Scottish Development Agency, which we all hope will play an important part in Scotland, will be funded from the Treasury and not from the National Oil Account. Therefore, it is in the interests of those who have Scotland at heart—those who have Scotland at heart are present tonight—that Scotland should be protected in this way.
      The hon. Member for Dundee, East (Mr. Wilson) has arrived in time to defend himself. It is important that the Treasury should have access to as great an amount of the income as possible, and that it should not be left indefinitely in
      the oil account, which is in the hands of the Secretary of State. I hope that the House will agree with the recommendations of the other place concerning this issue.
      Mr. Rathbone: My hon. Friend the Member for Ross and Cromarty (Mr. Gray) and I have allowed right hon. and hon. Gentlemen opposite, in the new spirit of conviviality which has crept into the debate, to take a sensible and reasonable step, if they support the amendment, without in any way having to eat their own words. I urge them to do so.
      Question put and negatived.
      Motion made, and Question put, That this House doth disagree with the Lords in the said amendment:—
      The House divided: Ayes 258, Noes 239.

      Division No. 386.]

      AYES

      [8.52 p.m.

      Allaun, Frank

      Davies, Denzil (Llanelli)

      Hooley, Frank

      Anderson, Donald

      Davies, Ifor (Gower)

      Horam, John

      Archer, Peter

      Davis, Clinton (Hackney C)

      Howell, Denis (B'ham, Sm H)

      Armstrong, Ernest

      Deakins, Eric

      Hoyle, Doug (Nelson)

      Ashley, Jack

      Dean, Joseph (Leeds West)

      Huckfield, Les

      Atkins, Ronald (Preston N)

      Delargy, Hugh

      Hughes, Rt Hon C. (Anglesey)

      Atkinson, Norman

      Dell, Rt Hon Edmund

      Hughes, Robert (Aberdeen N)

      Bagier, Gordon A. T.

      Dempsey, James

      Hughes, Roy (Newport)

      Barnett, Guy (Greenwich)

      Doig, Peter

      Hunter, Adam

      Barnett, Rt Hon Joel (Heywood)

      Dormand, J. D.

      Irvine, Rt Hon Sir A. (Edge Hill)

      Bates, Alf

      Douglas-Mann, Bruce

      Irving, Rt Hon S. (Dartford)

      Bean, R. E.

      Dunn, James A.

      Jackson, Colin (Brighouse)

      Benn, Rt Hon Anthony Wedgwood

      Dunnett, Jack

      Jackson, Miss Margaret (Lincoln)

      Bennett, Andrew (Stockport N)

      Eadie, Alex

      Janner, Greville

      Bidwell, Sydney

      Edge, Geoff

      Jay, Rt Hon Douglas

      Bishop, E. S.

      Edwards, Robert (Wolv SE)

      Jeger, Mrs Lena

      Boardman, H.

      Ellis, John (Brigg & Scun)

      John, Brynmor

      Booth, Albert

      English, Michael

      Johnson, Walter (Derby S)

      Boothroyd, Miss Betty

      Ennals, David

      Jones, Alec (Rhondda)

      Bottomley, Rt Hon Arthur

      Evans, Fred (Caerphilly)

      Jones, Dan (Burnley)

      Boyden, James (Bish Auck)

      Evans, John (Newton)

      Judd, Frank

      Bradley, Tom

      Ewing, Harry (Stirling)

      Kaufman, Gerald

      Brown, Hugh D. (Provan)

      Faulds, Andrew

      Kelley, Richard

      Brown, Robert C. (Newcastle W)

      Fernyhough, Rt Hon E.

      Kerr, Russell

      Brown, Ronald (Hackney S)

      Fitch, Alan (Wigan)

      Kilroy-Silk, Robert

      Buchan, Norman

      Flannery, Martin

      Kinnock, Neil

      Buchanan, Richard

      Fletcher, Raymond (Ilkeston)

      Lambie, David

      Butler, Mrs Joyce (Wood Green)

      Fletcher, Ted (Darlington)

      Lamborn, Harry

      Callaghan, Jim (Middleton & P)

      Foot. Rt Hon Michael

      Lamond, James

      Campbell, Ian

      Forrester, John

      Latham, Arthur (Paddington)

      Canavan, Dennis

      Freeson, Reginald

      Leadbitter, Ted

      Cant, R. B.

      Garrett, John (Norwich S)

      Lee, John

      Carmichael, Neil

      Garrett, W. E. (Wallsend)

      Lever, Rt Hon Harold

      Carter, Ray

      George, Bruce

      Lewis, Ron (Carlisle)

      Carter-Jones, Lewis

      Gilbert, Dr John

      Lipton, Marcus

      Cartwright, John

      Ginsburg, David

      Litterick, Tom

      Clemitson, Ivor

      Golding, John

      Loyden, Eddie

      Cocks, Michael (Bristol S)

      Gould, Bryan

      Luard, Evan

      Cohen, Stanley

      Gourlay, Harry

      Lyon, Alexander (York)

      Coleman, Donald

      Graham, Ted

      Lyons, Edward (Bradford W)

      Conlan, Bernard

      Grant, George (Morpeth)

      Mabon, Dr J. Dickson

      Cook, Robin F. (Edin C)

      Grant, John (Islington C)

      McCartney, Hugh

      Corbett, Robin

      Grocott, Bruce

      McElhone, Frank

      Craigen, J. M. (Maryhill)

      Hamilton, W. W. (Central Fife)

      MacFarquhar, Roderick

      Crawshaw, Richard

      Hardy, Peter

      McGuire, Michael (Ince)

      Crosland, Rt Hon Anthony

      Harper, Joseph

      Mackenzie, Gregor

      Cryer, Bob

      Harrison, Walter (Wakefield)

      Maclennan, Robert

      Cunningham, G. (Islington S)

      Hart, Rt Hon Judith

      McMillan, Tom (Glasgow C)

      Cunningham, Dr J. (Whiteh)

      Hatton, Frank

      Madden, Max

      Davidson, Arthur

      Hayman, Mrs. Helene

      Magee, Bryan

      Davies, Bryan (Enfield N)

      Heffer, Eric S.

      Mahon, Simon

      Mallalieu, J. P. W.

      Rees, Rt Hon Merlyn (Leeds S)

      Tierney, Sydney

      Marks, Kenneth

      Richardson, Miss Jo

      Tinn, James

      Marquand, David

      Roberts, Albert (Normanton)

      Tomlinson, John

      Marshall, Dr Edmund (Goole)

      Roberts, Gwilym (Cannock)

      Tomney, Frank

      Marshall, Jim (Leicester S)

      Robertson, John (Paisley)

      Torney, Tom

      Maynard, Miss Joan

      Roderick, Caerwyn

      Tuck, Raphael

      Mellish, Rt Hon Robert

      Rodgers, George (Chorley)

      Urwin, T. W.

      Mendelson, John

      Rodgers, William (Stockton)

      Wainwright, Edwin (Dearne V)

      Mikardo. Ian

      Rooker, J. W.

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

      Millan, Bruce

      Roper, John

      Walker, Terry (Kingswood)

      Miller, Dr M. S. (E Kilbride)

      Rose, Paul B.

      Ward, Michael

      Miller, Mrs Millie (Ilford N)

      Ross, Rt Hon W. (Kilmarnock)

      Watkins, David

      Moonman, Eric

      Rowlands, Ted

      Watkinson, John

      Morris, Alfred (Wythenshawe)

      Sandelson, Neville

      Weetch, Ken

      Morris, Charles R. (Openshaw)

      Sedgemore, Brian

      Weitzman, David

      Morris, Rt Hon J. (Aberavon)

      Shaw, Arnold (Ilford South)

      Wellbeloved, James

      Moyle, Roland

      Sheldon, Robert (Ashton-u-Lyne)

      White, Frank R. (Bury)

      Mulley, Rt Hon Frederick

      Shore, Rt Hon Peter

      White, James (Pollok)

      Murray, Rt Hon Ronald King

      Short, Rt. Hon E. (Newcastle C)

      Whitehead, Phillip

      Newens, Stanley

      Sillars, James

      Whitlock, William

      Noble, Mike

      Skinner, Dennis

      Willey, Rt Hon Frederick

      Oakes, Gordon

      Small, William

      Williams, Alan (Swansea W)

      O'Halloran, Michael

      Smith, John (N Lanarkshire)

      Williams, Alan Lee (Hornchurch)

      O'Malley, Rt Hon Brian

      Spearing, Nigel

      Williams, Rt Hon Shirley (Hertford)

      Orbach, Maurice

      Spriggs, Leslie

      Williams, W. T. (Warrington)

      Ovenden, John

      Stallard, A. W.

      Wilson, Alexander (Hamilton)

      Padley, Walter

      Stoddart, David

      Wilson, William (Coventry SE)

      Palmer, Arthur

      Stott, Roger

      Wise, Mrs Audrey

      Park, George

      Strang, Gavin

      Woodall, Alec

      Parker, John

      Strauss, Rt Hon G. R.

      Woof, Robert

      Parry, Robert

      Summerskill, Hon Dr Shirley

      Wrigglesworth, Ian

      Peart, Rt Hon Fred

      Swain, Thomas

      Young, David (Bolton E)

      Pendry, Tom

      Taylor, Mrs Ann (Bolton W)

      Prentice, Rt Hon Reg

      Thomas, Jeffrey (Abertillery)

      TELLERS FOR THE AYES:

      Price, C. (Lewisham W)

      Thomas, Ron (Bristol NW)

      Mr. James Hamilton and

      Price, William (Rugby)

      Thorne, Stan (Preston South)

      Mr. Thomas Cox.

      Radice, Giles

      NOES

      Adley, Robert

      du Cann, Rt Hon Edward

      Hayhoe, Barney

      Aitken, Jonathan

      Durant, Tony

      Heath, Rt Hon Edward

      Alison, Michael

      Dykes, Hugh

      Henderson, Douglas

      Arnold, Tom

      Eden, Rt Hon Sir John

      Heseltine, Michael

      Atkins, Rt Hon H. (Spelthorne)

      Elliott, Sir William

      Hicks, Robert

      Bain, Mrs Margaret

      Emery, Peter

      Higgins, Terence L.

      Banks, Robert

      Evans, Gwynfor (Carmarthen)

      Holland, Phillip

      Beith, A. J.

      Eyre, Reginald

      Hooson, Emlyn

      Bennett, Sir Frederic (Torbay)

      Fairbairn, Nicholas

      Howell, David (Guildford)

      Bennett, Dr Reginald (Fareham)

      Fairgrieve, Russell

      Hunt, John

      Benyon, W.

      Farr, John

      Hurd, Douglas

      Biffen, John

      Fell, Anthony

      Hutchison, Michael Clark

      Biggs-Davison, John

      Finsberg, Geoffrey

      Irvine, Bryant Godman (Rye)

      Blaker, Peter

      Fisher, Sir Nigel

      Irving, Charles (Cheltenham)

      Boscawen, Hon Robert

      Fletcher, Alex (Edinburgh N)

      James, David

      Bottomley, Peter

      Fletcher-Cooke, Charles

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

      Bowden, A. (Brighton, Kemptown)

      Fookes, Miss Janet

      Johnson Smith, G. (E Grinstead)

      Boyson, Dr Rhodes (Brent)

      Fox, Marcus

      Jones, Arthur (Daventry)

      Braine, Sir Bernard

      Freud, Clement

      Kershaw, Anthony

      Brittan, Leon

      Fry. Peter

      Kimball, Marcus

      Brotherton, Michael

      Gardner, Edward (S Fylde)

      King, Evelyn (South Dorset)

      Brown, Sir Edward (Bath)

      Gilmour, Sir John (East Fife)

      King, Tom (Bridgwater)

      Bryan, Sir Paul

      Glyn, Dr Alan

      Kitson, Sir Timothy

      Buchanan-Smith, Alick

      Godber, Rt Hon Joseph

      Knight, Mrs Jill

      Budgen, Nick

      Goodhart, Philip

      Knox, David

      Bulmer, Esmond

      Goodhew, Victor

      Lamont, Norman

      Burden, F. A.

      Goodlad, Alastair

      Langford-Holt, Sir John

      Butler, Adam (Bosworth)

      Gorst, John

      Latham, Michael (Melton)

      Carlisle, Mark

      Gow, Ian (Eastbourne)

      Lawrence, Ivan

      Chalker, Mrs Lynda

      Gower, Sir Raymond (Barry)

      Lawson, Nigel

      Churchill, W. S.

      Gray, Hamish

      Le Marchant, Spencer

      Clark, Alan (Plymouth, Sutton)

      Griffiths, Eldon

      Lester, Jim (Beeston)

      Clark, William (Croydon S)

      Grimond, Rt Hon J.

      Lloyd, Ian

      Cockcroft, John

      Grist, Ian

      Loveridge, John

      Cooke, Robert (Bristol W)

      Grylls, Michael

      Luce, Richard

      Cope, John

      Hall, Sir John

      McAdden, Sir Stephen

      Cordle, John H.

      Hall-Davis, A. G. F.

      MacCormick, Iain

      Cormack, Patrick

      Hamilton, Michael (Salisbury)

      Macfarlane, Neil

      Corrie, John

      Hampson, Dr Keith

      MacGregor, John

      Costain, A. P.

      Hannam, John

      Macmillan, Rt Hon M. (Farnham)

      Crouch, David

      Harrison, Col Sir Harwood (Eye)

      McNair-Wilson, M. (Newbury)

      Crowder, F. P.

      Harvie Anderson, Rt Hon Miss

      McNair-Wilson, P. (New Forest)

      Dodsworth, Geoffrey

      Hastings, Stephen

      Madel, David

      Douglas-Hamilton, Lord James

      Havers, Sir Michael

      Mates, Michael

      Drayson, Burnaby

      Hawkins, Paul

      Mather, Carol

      Maudling, Rt Hon Reginald

      Raison, Timothy

      Steen, Anthony (Wavertree)

      Mawby, Ray

      Rathbone, Tim

      Stewart, Donald (Western Isles)

      Maxwell-Hyslop, Robin

      Rawlinson, Rt Hon Sir Peter

      Stewart, Ian (Hitchin)

      Mayhew, Patrick

      Rees, Peter (Dover & Deal)

      Stokes, John

      Meyer, Sir Anthony

      Rees-Davies, W. R.

      Stradling Thomas, J.

      Miller, Hal (Bromsgrove)

      Reid, George

      Tapsell, Peter

      Mills, Peter

      Renton, Rt Hon Sir D. (Hunts)

      Taylor, Teddy (Cathcart)

      Miscampbell, Norman

      Renton, Tim (Mid-Sussex)

      Temple-Morris, Peter

      Moate, Roger

      Rhys Williams, Sir Brandon

      Thatcher, Rt Hon Margaret

      Monro, Hector

      Ridley, Hon Nicholas

      Thomas, Rt Hon P. (Hendon S)

      Montgomery, Fergus

      Rifkind, Malcolm

      Thompson, George

      Moore, John (Croydon C)

      Rippon, Rt Hon Geoffrey

      Townsend, Cyril D.

      More, Jasper (Ludlow)

      Roberts, Wyn (Conway)

      Trotter, Neville

      Morgan, Geraint

      Rodgers, Sir John (Sevenoaks)

      Tugendhat, Christopher

      Morris, Michael (Northampton S)

      Ross, Stephen (Isle of Wight)

      van Straubenzee, W. R.

      Morrison, Charles (Devizes)

      Rossi, Hugh (Hornsey)

      Vaughan, Dr Gerard

      Morrison, Hon Peter (Chester)

      Rost, Peter (SE Derbyshire)

      Viggers, Peter

      Mudd, David

      Sainsbury, Tim

      Wainwright, Richard (Colne V)

      Neave, Airey

      Scott, Nicholas

      Wakeham, John

      Nelson, Anthony

      Shaw, Giles (Pudsey)

      Walder, David (Clitheroe)

      Neubert, Michael

      Shaw, Michael (Scarborough)

      Warren, Kenneth

      Newton, Tony

      Shelton, William (Streatham)

      Watt, Hamish

      Normanton, Tom

      Shepherd, Colin

      Weatherill, Bernard

      Onslow, Cranley

      Silvester, Fred

      Wells, John

      Oppenheim, Mrs Sally

      Sims, Roger

      Welsh, Andrew

      Osborn, John

      Sinclair, Sir George

      Wiggin, Jerry

      Page, John (Harrow West)

      Skeet, T. H. H.

      Wigley, Dafydd

      Page, Rt Hon R. Graham (Crosby)

      Smith, Cyril (Rochdale)

      Wilson, Gordon (Dundee E)

      Pardoe, John

      Speed, Keith

      Winterton, Nicholas

      Parkinson, Cecil

      Spence, John

      Wood, Rt Hon Richard

      Pattie, Geoffrey

      Spicer, Jim (W Dorset)

      Young, Sir G. (Ealing, Acton)

      Percival, Ian

      Spicer, Michael (S. Worcester)

      Younger, Hon George

      Pink, R. Bonner

      Sproat, Iain

      Price, David (Eastleigh)

      Stainton, Keith

      TELLERS FOR THE NOES:

      Prior, Rt Hon James

      Stanbrook, Ivor

      Mr. Anthony Berry and

      Pym, Rt Hon Francis

      Stanley, John

      Mr. Michael Roberts.

      Question accordingly agreed to.

    Clause 44

      EXTENSION OF MINERAL WORKINGS (OFFSHORE INSTALLATIONS) ACT 1971
      Lords Amendment: No. 19, in page 42, line 17, leave out from "installation" to end of subsection and insert
      "subsection (4) of section 3 of that Act (which includes the concession owner among the persons having the duty to ensure that regulations under that section relating to an installation are complied with) shall have effect as if references to the concession owner were omitted."
      Mr. John Smith: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords Amendments Nos. 20 and 21.
      Mr. John Smith: I can deal with these amendments briefly because they are technical amendments to a technical clause. The clause is designed to established a boundary for safety purposes between the Bill and the Mineral Workings (Offshore Installations) Act, 1971. Broadly, pipelines as such will be dealt with under this Bill, but manned apparatus and installations on pipelines or
      518
      connected with them will be dealt with under the 1971 Act, which contains provisions specially relevant to manned installations. The setting of the boundary and the application of the 1971 Act provisions to manned apparatus on pipelines carrying substances from outside the United Kingdom area has proved complex and these amendments are necessary to round off some rough edges which came to light in the earlier versions.
      I do not think that the amendments raise any matters of controversy. I believe that the House will find them acceptable.
      Question put and agreed to.
      Lords Amendments: No. 20, in page 42, line 21, leave out "other" and insert "offshore".
      No. 21, in page 42, line 24, leave out from "persons" to "shall)" in line 28 and insert "the said subsection (4)".
      Mr. Deputy Speaker: I propose to put formally to the House Lords Amendments Nos. 20 and 21, but before I do so I wish to draw attention to a typographical error in the first line of Lords Amendment No. 21. I understand that a comma has been struck out after the word "shall". I shall put the Question, That this House doth agree with the Lords in the said amendment.
      Mr. Patrick Jenkin: On a point of order, Mr. Deputy Speaker. I think what has gone wrong is that a bracket has been put in the wrong place. I believe the bracket should appear before the word "shall" rather than after it.
      Mr. Deputy Speaker: We must be certain exactly where the bracket and the comma go.
      Mr. Benn: Perhaps I may be allowed to take advice on the matter.
      Mr. Deputy Speaker: We shall not suspend the sitting while the Secretary of State takes advice, but I hope the House will be patient because this is a matter of some importance.
      I have now been informed that the bracket should appear before the word "shall".
      Question put and agreed to.

    Clause 45

      AMENDMENTS OF ENACTMENTS
      Lords Amendment: No. 22, in page 43, line 16, at beginning insert—
      "(1) It is hereby declared that the reference to pipe-lines under the high seas in section 8(1) of the Continental Shelf Act 1964 (which among other things relates to the punishment of persons who damage such pipe-lines) includes pipe-lines under the territorial sea adjacent to the United Kingdom."
      Mr. John Smith: I beg to move, That this House doth agree with the Lords in the said amendment.
      I understand that there is no difficulty in regard to the brackets in this amendment. It is a declaratory provision to make clear the situation in regard to the Submarine Telegraphs Act 1885 for operations within territorial waters. The amendment seeks to clarify the situation, and I imagine that there will be no opposition to it.
      Question put and agreed to.
      Subsequent Lords amendment agreed to.

    Clause 48

      INTERPRETATION ETC.—GENERAL
      Lords Amendment: No. 24, in page 45, line 13, at end insert—
      "(d) permits the Secretary of State to exercise or not to exercise any power or authority
      520
      or to withhold any consent, approval or authorisation or to make provisions terms or conditions pursuant to this Act or a licence for the time being in force by virtue of the Petroleum (Production) Act 1934 with a view to securing participation by the Government of the United Kingdom, or by the Corporation or any other body on behalf of the Government, in activities connected with petroleum beneath controlled waters."
      Mr. Benn: I beg to move, That this House doth disagree with the Lords in the said amendment.
      This amendment relates to a substantial point. I shall keep my remarks brief, and I shall seek the leave of the House to respond at the conclusion of the debate.
      If the amendment is accepted, the situation will be tantamount to the Government's being told that they can have their Bill but must not, when armed by Parliament with any powers, under any circumstances have in mind in the exercise of those powers the implementation of the policy that lies at the heart at the Government's objectives.
      The amendment is not acceptable because it attacks the whole concept of participation, which we regard as absolutely essential. The provision will give us the title to oil, access to information, a complete capability in oil terms and will in future increase the return to the British people when the Corporation acquires licences as sole licensee.
      Because we are seeking to deal in the first instance with licences negotiated in 1972, we are seeking to reach agreement and to have voluntary participation, but the House should be under no misapprehension about the matter. The Government are determined that their policy will be a success and we have engaged in voluntary discussions. Nobody should be misled by Press reports, rumours or speculation to the effect that the Government's intent is other than serious. Our intent is serious, and there will be a continued intent by the Government that such a move should take place with the companies with which we have agreement in principle—namely, BP, Burmah, Deminex, Tricentrol, Blackfriars, London and Scottish, Marine Oil, Scottish Canadian Oil and Transportation. But the Government intend to press forward with participation to cover the majors, including the Shell and Exxon companies, which have important interests.

      521
      The amendment says that in the negotiation, which is voluntary, we shall not be in a position to use the cards that Parliament is putting in our hands by giving us this legislation, if Parliament chooses so to do. It is a genuine negotiation that we have in mind. We do not intend to use our powers improperly. That would be wrong. We do not intend to use them in a way that would be a breach of good faith or of good partnership relations with the companies. But we intend to have participation.
      My understanding of the oil industry is that from its very early days right up to the present it has put up a sturdy and robust defence of its interests, and that by the Governments concerned there has also been a sturdy and robust defence of their interests. We intend to be no less sturdy and no less robust than anyone else in our pursuit of participation. The amendment would entirely disarm us.
      It would be wrong for us to use any powers given by Parliament in such a way as to commit a breach of faith or a breach of proper relations. Perhaps I may give one example of how the powers might be improperly used. We are seeking in the Bill to take power to require that operators be approved. It might be argued that we might use that to drive back on to the principle of participation. We do not intend to do so, because it is technical competence that we seek there. But if there were a suggestion that the licence should be assigned to another company it would be right for the Government to say that, in the light of an assignation, the powers available to us in approval should have regard to the broad objective of participation.
      Similarly, when we come to the fifth round, about which I am not in a position to make any further statement than was made in my speech and in the statement by my noble Friend, Lord Balogh, participation will be a major objective. I do not want there to be any doubt about our determination. In the course of the negotiations the Conservative Party will no doubt make a great deal of the time we are taking to build up a BNOC board, with proper membership. But nobody should mistake that for weakness of intent or second thoughts about the BNOC. We intend to have a BNOC, and we intend it to develop on the 51
      522
      per cent. participation basis. We intend quite properly and responsibly to use the powers that Parliament is now considering giving the Government to secure our policy objectives. Nothing less than that would be responsible.
      I was not the architect of this legislation. I came in when it was already formulated. Therefore, I have no reason to say what I have said other than that I would not take part in any charade or appearance of being serious. We are in deadly earnest about it. I am not saying this in an aggressive or hostile way to the Opposition or any one else. But I regret that the Leader of the Opposition should have chosen to go abroad and make statements which she may have hoped would win her popularity but which were designed to undermine the credibility of our policy. The Leader of the Opposition made speeches in the United States which were designed to undermine the credibility of this policy. That is entirely a matter for her. No one should assume that an attempt to curry popularity in the United States by means of such speeches, or by giving ill-considered pledges which might be greatly regretted, will cause misunderstanding or confusion about the reality of the Government's determination.
      The Bill will enable the Government to secure their objective declared and made clear before two General Elections that we would seek 51 per cent. participation in offshore oil. I say that seriously and quietly. I hope that those who listen to these debates and report on the flow of argument one way and the other, wherever they may be, will realise that the Government are in earnest in the implementation of this Bill. It therefore follows that this amendment is neither sensible nor correct and I ask the House to disagree with the Lords.
      9.15 p.m.
      Mr. Patrick Jenkin: It is obvious from the way in which the Secretary of State commended his motion to the House that he has been deeply disturbed by Press speculation to the effect that the Government were wisely having second thoughts. We also gain the impression that he is anxious to stake out his claim against some of his colleagues who are beginning to have the gravest doubts about the wisdom of his policy.

      523
      The Minister may not know this. However, I am sure that some of his colleagues realise that no act of the Government does greater damage to our offshore prospects than the continuing demand for 51 per cent. participation. It has injected a major element of uncertainty at a time when the maximum of certainty is required. With the promise of 51 per cent. participation, but without any idea of what the terms will be, the Government have rendered the financing of new development impossible.
      Mr. Benn: Rubbish.
      Mr. Jenkin: The Minister continues to shout "Rubbish" from a sedentary position. Perhaps he will say why for over a year there has been no single deal to finance the development of platforms. Perhaps he will explain why in answer to a Question in the House today he says that he does not expect any platform orders for the rest of this year.
      This is not the occasion to rehearse in detail all the arguments which the Opposition deployed throughout the discussions on the Bill against the policy of 51 per cent. participation. The Opposition see no point in spending the thousands of millions of pounds that will be needed to buy out the oil companies in the manner proposed by the Government. At this juncture of their economic management the Government cannot afford to buy out the oil companies. The finance required by the Exchequer can be raised by taxation. The controls sought by the Government may be secured by legislation, but the existence of the BNOC and participation add not one whit to what the Government seek.
      The right hon. Gentleman's predecessor told us that the Government had a political commitment and that there must be participation.
      Mr. Dennis Canavan: What are we here for?
      Mr. Jenkin: The hon. Gentleman who interrupts is doubtless keeping an eye on his right hon. Friend to see that he does not waiver. As the Economist correctly pointed out on 1st November, one of the Government's difficulties is to avoid the backlash from the left wing of the Labour Party. That is why it is being done.
      524
      The amendment is concerned with the narrow but vital point whether the negotiations are to be voluntary. I will take the House quickly through what has been said by the Government on this issue. In his statement on 11th July 1974 the previous Secretary of State for Energy, the right hon. Member for Chesterfield (Mr. Varley), said:
      "Thirdly, we shall be inviting the companies to enter into discussions with us about majority State participation in existing licences for commercial fields."
      I asked:
      "Will he give the House a categorial assurance that this will be a voluntary negotiation with the perfect right for members of these consortia to refuse?"
      The right hon. Gentleman replied:
      "My statement means that we are inviting the companies to discuss the question of participation in existing licences. We are inviting them to have meaningful discussions with us, and we hope that these talks will go ahead as quickly as possible."—[Official Report, 11th July 1974; Vol. 876, c. 1559–61.]
      On the same day the right hon. Gentleman gave a Press conference at which he said:
      "We in Britain do not go in for coercion like some other oil producing countries."
      So notable was that statement that the Observer quoted it in its "Sayings of the Week" column. So negotiations were to be voluntary.
      There was a hint of the mailed fist inside the velvet glove when the Chancellor of the Duchy of Lancaster was questioned about this by my hon. Friend the Member for Bedford (Mr. Skeet). The right hon. Gentleman said that if the Cabinet—
      "were unable to satisfy its objectives, which seem to us fair and reasonable and not incompatible with the interests of the oil companies, by voluntary agreement with them, to nationalise—
      Mr. SKEET: Blackmail.
      Mr. LEVER: The hon. Member should permit me to answer the question."
      So there was the threat to nationalise, but for the present—
      Mr. Benn: Is the right hon. Gentleman suggesting that the Chancellor of the Duchy represent the wild Left wing to which all have to bow?
      Mr. Jenkin: No doubt the main point which the Chancellor of the Duchy was

      525
      anxious to get on record was what he said a little later:
      "I made it absolutely plain, however, that if the Government did so—and I could not say whether they would or would not—there would be full and fair compensation as we have always provided on such occasions."—[Official Report, 19th February 1975; Vol. 886, c. 1341.]
      That was the reassurance. The knowledge that the right hon. Gentleman the Secretary of State for Energy is in the Cabinet is enough to frighten many oil companies. The statement about fair compensation might have reassured some of them. For the present it is to be voluntary negotiation.
      It is clear that the Government are facing grave difficulties. The Chancellor of the Duchy is rarely here to submit himself to parliamentary Questions, so we have to rely on Written Answers. On Monday 3rd November he gave Written Answers to many of my hon. Friends. My hon. Friends the Members for Derbyshire, South-East (Mr. Rost) and Mid-Sussex (Mr. Renton) asked for the names of the companies with which agreement in principle had been reached. The right hon. Gentleman gave the names of the seven companies which the Secretary of State has just recited to the House: BP, Burmah, Deminex, Tricentrol, Blackfriars Oil, London and Scottish Marine Oil and Scottish Canadian Oil and Transportation. Those are the companies which have agreed in principle.
      One finds that those companies have certain features in common. BP is a company of which the Government are currently a majority shareholder. Therefore, the Government can tell BP what to do and the company is obliged to do it. Burmah resorted to the Bank of England as part of the rescue operation and thereby put itself in the hands of the Government and was unable to resist the duress. Deminex bought in several interests. The first was from the Canadian company United Canso, a partner in the Thistle field. We find that company in the list because it would not have got the consent to the assignment if it had not agreed to the 51 per cent.
      Tricentrol, a small company with a good record, sought guarantees for its investment because, in the prevailing uncertainty, it was unable to raise money
      526
      without them. It, too, was forced to concede participation.
      Blackfriars Oil, London and Scottish Marine Oil, and Scottish Canadian Oil and Transportation have in one way or another sought consents for assignments or other consents necessary from the Secretary of State, and each one of them has had to concede 51 per cent.
      Every single one of those companies—with the exception of BP, in its special position—has had to go to the Department of Energy for the exercise of some power or consent in its favour. Therefore the suspicion has grown up that the Government are using these powers, given by the House for a wholly different purpose—these are powers under existing legislation, not under this Bill—to blackmail the companies into surrendering the 51 per cent. to the BNOC. It is an absolute nonsense to regard these as voluntary negotiations. They turn into a sick joke the assurances which the right hon. Gentleman the previous Secretary of State gave at his Press conference in July last year.
      That was why a number of noble Lords tabled the amendment we are now discussing. What was interesting about the amendment was the Government's first reactions to it. In the words of the old song, they did not say "Yes" and they did not say "No".
      There might have been two possible reactions. One might have been, "Yes, of course, we shall do anything we can to twist the companies' arms. We have it in our power to make their operations impossible and we intend to use that power in order to screw 51 per cent. out of them." They could have reacted in that way. Or they could have said, "These suspicions are quite unfounded. These are truly voluntary negotiations. There is no question of coercion." They might have quoted Lord Kearton's words in his only speech since being appointed:
      "…the first aim of BNOC must be participation in field exploitation—not only voluntarily on the part of existing licensees, but I trust willingly and cheerfully."
      That is what he wants and that is the answer which the noble Lord, Lord Balogh, might have given, but it was not the answer that he gave. He used some fairly strong words:
      "We are negotiating with the most powerful economic interests in the country. It would

      527
      be a dereliction of duty on the part of Ministers—to be punished by being put in the Tower, and not in the Jewel Tower, either—if we did not use our strongest cards, if we went into negotiations without the strongest cards we have."—[Official Report, House of Lords, 24th September, 1975; Vol. 364, c. 359.]
      Quite apart from whether the metaphor of gambling is an appropriate one or not in the circumstances, these were weasel words, because they did not answer the question whether the Government were using their powers in the way in which my right hon. and noble Friends had suggested.
      In the debate on 15th October, the noble Lord said:
      "None of this means the Government are putting undue or illegitimate pressure on the companies. We are now in negotiation with several companies. Some of them would surprise noble Lords opposite, but I am not going to make any further revelations. We expect to use to the full the arguments and bargaining power that we have; but we are not going beyond what is fair and supportable. "—[Official Report, House of Lords, 15th October, 1975; Vol. 364, c. 975.]
      The question is: what is illegitimate pressure? On that we have still to hear an answer from the Government.
      Then on Third Reading—
      Mr. Benn: The right hon. Gentleman is using very colourful language again, but may I remind him that in Committee he made a specific allegation that improper pressure had been brought to bear by a civil servant upon an oil company? Throughout the whole of the Committee stage we asked him to provide evidence. He did not provide evidence. If he is going to revert to charges of illegitimacy and improper pressures, will he kindly place before the House any evidence he has that this has occurred in the past? It was only by reason of the courtesy, good will and good manners of our side that he was not pressed to withdraw specifically what he said in Committee. He is very loose in the language he uses. This is damaging and has never been substantiated.
      9.30 p.m.
      Mr. Jenkins: The right hon. Gentleman knows that I wrote to him shortly afterwards telling him that unfortunately the evidence on which I was hoping to rely was not available, and, of course. I immediately withdraw any allegation. However, that intervention was a complete red herring, of course.
      528
      On 31st October the noble Lord, Lord Balogh, again defending what he had said commented,
      "I can only say that our special agreement negotiations are normal commercial negotiations in which all sides obviously, use their full bargaining power. Nothing on earth would lead me to abjure that power because it has to be used in the national interest."
      Then my noble Friend. Lord Strathcona, asked:
      "Is that what the noble Lord calls 'voluntary', though, my Lords?",
      to which the noble Lord, Lord Balogh, replied:
      "Of course, my Lords. Voluntary agreements between big oil companies are also sometimes influenced by bargaining power. They are called voluntary, of course; but, as some people said, some are more voluntary than others."—[Official Report, House of Lords, 31st October 1975; Vol. 365, c. 773.]
      Clearly what the noble Lord had in mind here was the words of George Orwell in "Animal Farm", to the effect that all animals are equal but that some are more equal than others.
      The attitude of the noble Lord, Lord Balogh, is cynical to the point of hypocrisy. While continuing to mouth soothing words about voluntary negotiations, he makes it plain that he is prepared to use whatever duress or blackmail comes to hand to achieve his object. In effect, he is saying, "You want to farm out? Yes, if you give up 51 per cent. You want to assign? Yes, if you give up 51 per cent. You need a guarantee? Yes, if you give up 51 per cent." That is not voluntary negotiation. More important, it is a cynical misuse of the powers granted to the Government by this House. The powers were given to regulate offshore operations and to regulate the oil-winning activities of the operators. The purpose was not to advance the cause of Socialism, which is how they are being used now.
      This is yet another nail in the coffin of the rule of law. It is yet another sight of the unacceptable face of Socialism.
      What is the consequence of adopting this style of so-called voluntary negotiation? It is that no company can ever again trust this Government not to use their new powers to secure even greater concessions outside the scope of the powers being given.

      529
      There are vast new powers in this Bill. I shall not go through them all but they include powers to give directions, to require this, to consent to that, to approve this, to specify that, to authorise the other, to issue an authorisation, to determine sums, to determine a dispute, to revoke licences, and so on. There is an enormous plethora of powers to ensure the proper operation by the licensees of their offshore interests. They are not given to advance the cause of Socialism.
      By choosing to renege on their pledge of "no coercion", to quote the right hon. Member for Chesterfield, the Government have dealt another hammer blow to confidence. It will inflict incalculable harm not merely on the good name of Governments but on prospects for the North Sea.
      Lord Balogh took part in a Panorama programme on 27th October. He was asked by the interviewer:
      "What is the Government doing positively to speed up the development of North Sea oil?"
      The noble Lord replied:
      "At the moment we cannot do anything."
      Nothing could be further from the truth. There is an enormous amount that they could do. They could abandon the purposeless BNOC. They could abandon the damaging 51 per cent. participation. They could pay compensation. At the very least, they could forswear the blackmailing tactics that they are using to secure their nefarious purposes. They could keep faith with the pledges given.
      That is why I ask my right hon. and hon. Friends to join me in voting to keep this amendment in the Bill.
      Question put, That this House doth disagree with the Lords in the said amendment:—
      The House divided: Ayes 272, Noes 228.

      Division No. 387.]

      AYES

      [9.35 p.m.

      Allaun, Frank

      Crawshaw, Richard

      Gould, Bryan

      Anderson, Donald

      Crosland, Rt Hon Anthony

      Gourlay, Harry

      Archer, Peter

      Cryer, Bob

      Graham, Ted

      Armstrong, Ernest

      Cunningham, G. (Islington S)

      Grant, George (Morpeth)

      Ashley, Jack

      Cunningham, Dr J. (Whiteh)

      Grant, John (Islington C)

      Atkins, Ronald (Preston N)

      Davidson, Arthur

      Grocott, Bruce

      Atkinson, Norman

      Davies, Bryan (Enfield N)

      Hamilton, James (Bothwell)

      Bagier, Gordon A. T.

      Davies, Denzil (Llanelli)

      Hamilton, W. W. (Central Fife)

      Bain, Mrs Margaret

      Davies, Ifor (Gower)

      Hardy, Peter

      Barnett, Guy (Greenwich)

      Davis, Clinton (Hackney C)

      Harrison, Walter (Wakefield)

      Barnett, Rt Hon Joel (Heywood)

      Deakins, Eric

      Hart, Rt Hon Judith

      Bates, Alf

      Dean, Joseph (Leeds West)

      Hatton, Frank

      Bean, R. E.

      Delargy, Hugh

      Hayman, Mrs. Helene

      Benn, Rt Hon Anthony Wedgwood

      Dell, Rt Hon Edmund

      Healey, Rt Hon Denis

      Bennett, Andrew (Stockport N)

      Dempsey, James

      Heffer, Eric S.

      Bidwell, Sydney

      Doig, Peter

      Henderson, Douglas

      Bishop, E. S.

      Dormand, J. D.

      Hooley, Frank

      Boardman, H.

      Douglas-Mann, Bruce

      Horam, John

      Booth, Albert

      Dunn, James A.

      Howell, Denis (B'ham, Sm H)

      Boothroyd, Miss Betty

      Dunnett, Jack

      Hoyle, Doug (Nelson)

      Bottomley, Rt Hon Arthur

      Eadie, Alex

      Huckfield, Les

      Boyden, James (Bish Auck)

      Edge, Geoff

      Hughes, Rt Hon C. (Anglesey)

      Bradley, Tom

      Edwards, Robert (Wolv SE)

      Hughes, Robert (Aberdeen N)

      Brown, Hugh D. (Provan)

      Ellis, John (Brigg & Scun)

      Hughes, Roy (Newport)

      Brown, Robert C. (Newcastle W)

      English, Michael

      Hunter, Adam

      Brown, Ronald (Hackney S)

      Ennals, David

      Irvine, Rt Hon Sir A. (Edge Hill)

      Buchan, Norman

      Evans, Fred (Caerphilly)

      Irving, Rt Hon S. (Dartford)

      Buchanan, Richard

      Evans, Gwynfor (Carmarthen)

      Jackson, Colin (Brighouse)

      Butler, Mrs Joyce (Wood Green)

      Evans, John (Newton)

      Jackson, Miss Margaret (Lincoln)

      Callaghan, Jim (Middleton & P)

      Ewing, Harry (Stirling)

      Janner, Greville

      Campbell, Ian

      Faulds, Andrew

      Jay, Rt Hon Douglas

      Canavan, Dennis

      Fernyhough, Rt Hon E.

      Jeger, Mrs Lena

      Cant, R. B.

      Fitch, Alan (Wigan)

      John, Brynmor

      Carmichael, Neil

      Flannery, Martin

      Johnson, Walter (Derby S)

      Carter, Ray

      Fletcher, Raymond (Ilkeston)

      Jones, Alec (Rhondda)

      Carter-Jones, Lewis

      Fletcher, Ted (Darlington)

      Jones, Dan (Burnley)

      Cartwright, John

      Foot, Rt Hon Michael

      Judd, Frank

      Clemitson, Ivor

      Forrester, John

      Kaufman, Gerald

      Cocks, Michael (Bristol S)

      Freeson, Reginald

      Kelley, Richard

      Cohen, Stanley

      Garrett, John (Norwich S)

      Kerr, Russell

      Conlan, Bernard

      Garrett, W. E. (Wallsend)

      Kilroy-Silk, Robert

      Cook, Robin F. (Edin C)

      George, Bruce

      Kinnock, Neil

      Corbett, Robin

      Gilbert, Dr John

      Lambie, David

      Cox, Thomas (Tooting)

      Ginsburg, David

      Lamborn, Harry

      Craigen, J. M. (Maryhill)

      Golding, John

      Lamond, James

      Latham, Arthur (Paddington)

      O'Malley, Rt Hon Brian

      Summerskill, Hon Dr Shirley

      Leadbitter, Ted

      Orbach, Maurice

      Swain, Thomas

      Lee, John

      Ovenden, John

      Taylor, Mrs Ann (Bolton W)

      Lever, Rt Hon Harold

      Padley, Walter

      Thomas, Jeffrey (Abertillery)

      Lewis, Ron (Carlisle)

      Palmer, Arthur

      Thomas, Ron (Bristol NW)

      Lipton, Marcus

      Park, George

      Thompson, George

      Litterick, Tom

      Parker, John

      Thorne, Stan (Preston South)

      Loyden, Eddie

      Parry, Robert

      Tierney, Sydney

      Luard, Evan

      Peart, Rt Hon Fred

      Tinn, James

      Lyon, Alexander (York)

      Pendry, Tom

      Tomlinson, John

      Lyons, Edward (Bradford W)

      Prentice, Rt Hon Reg

      Tomney, Frank

      Mabon, Dr J. Dickson

      Price, C. (Lewisham W)

      Torney, Tom

      McCartney, Hugh

      Price, William (Rugby)

      Tuck, Raphael

      MacCormick, Iain

      Radice, Giles

      Urwin, T. W.

      McElhone, Frank

      Rees, Rt Hon Merlyn (Leeds S)

      Wainwright, Edwin (Dearne V)

      MacFarquhar, Roderick

      Reid, George

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

      McGuire, Michael (Ince)

      Richardson, Miss Jo

      Walker, Terry (Kingswood)

      Mackenzie, Gregor

      Roberts, Albert (Normanton)

      Ward, Michael

      Mackintosh, John P.

      Roberts, Gwilym (Cannock)

      Watkins, David

      Maclennan, Robert

      Robertson, John (Paisley)

      Watkinson, John

      McMillan, Tom (Glasgow C)

      Roderick, Caerwyn

      Watt, Hamish

      Madden, Max

      Rodgers, George (Chorley)

      Weetch, Ken

      Magee, Bryan

      Rodgers, William (Stockton)

      Weitzman, David

      Mahon, Simon

      Rooker, J. W.

      Wellbeloved, James

      Mallalieu, J. P. W.

      Roper, John

      Welsh, Andrew

      Marks, Kenneth

      Rose, Paul B.

      White, Frank R. (Bury)

      Marquand, David

      Ross, Rt Hon W. (Kilmarnock)

      White, James (Pollok)

      Marshall Dr Edmund (Goole)

      Rowlands, Ted

      Whitehead, Phillip

      Marshall, Jim (Leicester S)

      Sandelson, Neville

      Whitlock, William

      Maynard, Miss Joan

      Sedgemore, Brian

      Wigley, Dafydd

      Mellish, Rt Hon Robert

      Shaw, Arnold (Ilford South)

      Willey, Rt Hon Frederick

      Mendelson, John

      Sheldon, Robert (Ashton-u-Lyne)

      Williams, Alan (Swansea W)

      Mikardo, Ian

      Shore, Rt Hon Peter

      Williams, Alan Lee (Hornchurch)

      Millan, Bruce

      Short, Rt. Hon E. (Newcastle C)

      Williams, Rt Hon Shirley (Hertford)

      Miller, Dr M. S. (E Kilbride)

      Silkin, Rt Hon John (Deptford)

      Williams, W. T. (Warrington)

      Miller, Mrs Millie (Ilford N)

      Sillars, James

      Wilson, Alexander (Hamilton)

      Moonman, Eric

      Skinner, Dennis

      Wilson, Gordon (Dundee E)

      Morris, Alfred (Wythenshawe)

      Small, William

      Wilson, William (Coventry SE)

      Morris, Charles R. (Openshaw)

      Smith, John (N Lanarkshire)

      Wise, Mrs Audrey

      Morris, Rt Hon J. (Aberavon)

      Spearing, Nigel

      Woodall, Alec

      Moyle, Roland

      Spriggs, Leslie

      Woof, Robert

      Mulley, Rt Hon Frederick

      Stallard, A. W.

      Wrigglesworth, Ian

      Murray, Rt Hon Ronald King

      Stewart, Donald (Western Isles)

      Young, David (Bolton E)

      Newens, Stanley

      Stoddart, David

      Noble, Mike

      Stott, Roger

      TELLERS FOR THE AYES:

      Oakes, Gordon

      Strang, Gavin

      Mr. Donald Coleman and

      O'Halloran, Michael

      Strauss, Rt Hon G. R.

      Mr. Joseph Harper.

      NOES

      Adley, Robert

      Cordle, John H.

      Gorst, John

      Aitken, Jonathan

      Cormack, Patrick

      Gow, Ian (Eastbourne)

      Alison, Michael

      Corrie, John

      Gower, Sir Raymond (Barry)

      Arnold, Tom

      Costain, A. P.

      Gray, Hamish

      Atkins, Rt Hon H. (Spelthorne)

      Crouch, David

      Griffiths, Eldon

      Banks, Robert

      Crowder, F. P.

      Grimond, Rt Hon J.

      Beith, A. J.

      Dodsworth, Geoffrey

      Grist, Ian

      Bennett, Sir Frederic (Torbay)

      Douglas-Hamilton, Lord James

      Grylls, Michael

      Bennett, Dr Reginald (Fareham)

      Drayson, Burnaby

      Hall, Sir John

      Benyon, W.

      du Cann, Rt Hon Edward

      Hall-Davis, A. G. F.

      Berry, Hon Anthony

      Durant, Tony

      Hamilton, Michael (Salisbury)

      Biffen, John

      Dykes, Hugh

      Hampson, Dr Keith

      Biggs-Davison, John

      Eden, Rt Hon Sir John

      Hannam, John

      Blaker, Peter

      Elliott, Sir William

      Harrison, Col Sir Harwood (Eye)

      Boscawen, Hon Robert

      Emory, Peter

      Harvie Anderson, Rt Hon Miss

      Bottomley, Peter

      Eyre, Reginald

      Havers, Sir Michael

      Bowden, A. (Brighton, Kemptown)

      Fairbairn, Nicholas

      Hawkins, Paul

      Boyson, Dr Rhodes (Brent)

      Fairgrieve, Russell

      Hayhoe, Barney

      Braine, Sir Bernard

      Farr, John

      Heath, Rt Hon Edward

      Brittan, Leon

      Fell, Anthony

      Heseltine, Michael

      Brotherton, Michael

      Finsberg, Geoffrey

      Hicks, Robert

      Brown, Sir Edward (Bath)

      Fisher, Sir Nigel

      Higgins, Terence L.

      Buchanan-Smith, Alick

      Fletcher, Alex (Edinburgh N)

      Holland, Phillip

      Budgen, Nick

      Fletcher-Cooke, Charles

      Hooson, Emlyn

      Bulmer, Esmond

      Fookes, Miss Janet

      Hordern, Peter

      Burden, F. A.

      Fox, Marcus

      Howell, David (Guildford)

      Butler, Adam (Bosworth)

      Freud, Clement

      Hunt, John

      Carlisle, Mark

      Fry, Peter

      Hurd, Douglas

      Chalker, Mrs Lynda

      Gardner, Edward (S Fylde)

      Hutchison, Michael Clark

      Churchill, W. S.

      Gilmour, Rt Hon Ian (Chesham)

      Irvine, Bryant Godman (Rye)

      Clark, Alan (Plymouth, Sutton)

      Glyn, Dr Alan

      Irving, Charles (Cheltenham)

      Clark, William (Croydon S)

      Godber, Rt Hon Joseph

      James, David

      Cockcroft, John

      Goodhart, Philip

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

      Cooke, Robert (Bristol W)

      Goodhew, Victor

      Johnson Smith, G. (E Grinstead)

      Cope, John

      Goodlad, Alastair

      Jones, Arthur (Daventry)

      Kershaw, Anthony

      Mudd, David

      Sinclair, Sir George

      Kimball, Marcus

      Neave, Airey

      Skeet, T. H. H.

      King, Evelyn (South Dorset)

      Nelson, Anthony

      Smith, Cyril (Rochdale)

      King, Tom (Bridgwater)

      Neubert, Michael

      Speed, Keith

      Kitson, Sir Timothy

      Newton, Tony

      Spence, John

      Knight, Mrs Jill

      Normanton, Tom

      Spicer, Jim (W Dorset)

      Knox, David

      Onslow, Cranley

      Spicer, Michael (S. Worcester)

      Lamont, Norman

      Oppenheim, Mrs Sally

      Sproat, Iain

      Langford-Holt, Sir John

      Osborn, John

      Stainton, Keith

      Latham, Michael (Melton)

      Page, John (Harrow West)

      Stanbrook, Ivor

      Lawrence, Ivan

      Page, Rt Hon R. Graham (Crosby)

      Stanley, John

      Lawson, Nigel

      Pardoe, John

      Steen, Anthony (Wavertree)

      Le Marchant, Spencer

      Parkinson, Cecil

      Stewart, Ian (Hitchin)

      Lester, Jim (Beeston)

      Pattie, Geoffrey

      Stokes, John

      Lloyd, Ian

      Penhaligon, David

      Stradling Thomas, J.

      Loveridge, John

      Percival, Ian

      Tapsell, Peter

      Luce, Richard

      Pink, R. Bonner

      Taylor, R. (Croydon NW)

      McAdden, Sir Stephen

      Price, David (Eastleigh)

      Taylor, Teddy (Cathcart)

      Macfarlane, Neil

      Prior, Rt Hon James

      Tebbit, Norman

      MacGregor, John

      Pym, Rt Hon Francis

      Temple-Morris, Peter

      Macmillan, Rt Hon M. (Farnham)

      Raison, Timothy

      Thatcher, Rt Hon Margaret

      McNair-Wilson, M. (Newbury)

      Rathbone, Tim

      Thomas, Rt Hon P. (Hendon S)

      McNair-Wilson, P. (New Forest)

      Rawlinson, Rt Hon Sir Peter

      Townsend, Cyril D.

      Madel, David

      Rees, Peter (Dover & Deal)

      Trotter, Neville

      Mates, Michael

      Rees-Davies, W. R.

      Tugendhat, Christopher

      Mather, Carol

      Renton, Rt Hon Sir D. (Hunts)

      van Straubenzee, W. R.

      Maudling, Rt Hon Reginald

      Renton, Tim (Mid-Sussex)

      Vaughan, Dr Gerard

      Mawby, Ray

      Rhys Williams, Sir Brandon

      Viggers, Peter

      Maxwell-Hyslop, Robin

      Rifkind, Malcolm

      Wakeham, John

      Mayhew, Patrick

      Rippon, Rt Hon Geoffrey

      Walder, David (Clitheroe)

      Meyer, Sir Anthony

      Roberts, Wyn (Conway)

      Warren, Kenneth

      Miller, Hal (Bromsgrove)

      Rodgers, Sir John (Sevenoaks)

      Weatherill, Bernard

      Mills, Peter

      Ross, Stephen (Isle of Wight)

      Wells, John

      Miscampbell, Norman

      Rossi, Hugh (Hornsey)

      Wiggin, Jerry

      Moate, Roger

      Rost, Peter (SE Derbyshire)

      Winterton, Nicholas

      Monro, Hector

      Sainsbury, Tim

      Wood, Rt Hon Richard

      Montgomery, Fergus

      Scott, Nicholas

      Young, Sir G. (Ealing, Acton)

      Moore, John (Croydon C)

      Shaw, Giles (Pudsey)

      Younger, Hon George

      More, Jasper (Ludlow)

      Shaw, Michael (Scarborough)

      Morgan, Geraint

      Shelton, William (Streatham)

      TELLERS FOR THE NOES:

      Morris, Michael (Northampton S)

      Shepherd, Colin

      Mr. Michael Roberts and

      Morrison, Charles (Devizes)

      Sims, Roger

      Mr. Fred Silvester.

      Morrison, Hon Peter (Chester)

      Question accordingly agreed to.
      Subsequent Lords amendments disagreed to.

    Schedule 2

      PRODUCTION LICENCES FOR SEAWARD AREAS
      Lords Amendment: No. 31, in page 56, line 29, at end insert:
      "and where it is determined in consequence of any reference to arbitration in pursuance of sub-paragraph (a) of this paragraph that the programme in question does not satisfy the relevant requirements the Licensee shall submit to the Minister, as soon as possible after the date of the determination, a further programme which satisfies the relevant requirements."
      Mr. John Smith: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: I understand that it will be convenient to discuss at the same time Lords Amendments Nos. 40, 48 and 56.
      Mr. Smith: These are drafting amendments, which provide that where a dispute
      534
      about an additional exploration programme has been submitted to arbitration and the arbitrator decides that the programme does not measure up to what is required, the applicant shall submit a programme which does measure up. It removes any possible doubt.
      Question put and agreed to.
      Subsequent Lords amendments agreed to.
      Lords Amendment: No. 34, in page 61, line 10, after "programme" insert
      "and the quantity so specified in such further notice shall not be less than four-fifths of the proven production capacity of the field for the period specified in that further notice;"
      Mr. John Smith: I beg to move, That this House doth disagree with the Lords in the said amendment.
      It may be more convenient for the Opposition to make their comments on the amendment and then for me to reply at the end.
      Mr. Speaker: With this amendment we may also discuss Lords Amendments Nos. 43, 51 and 59.
      Mr. John Moore: Though I sense the desire of the House to get into headlights, there are one or two points with which I must detain hon. Members. Basically, in the clause concerned with production control, the Government created a four-fifths' depletion pattern, and we cannot disagree with that. We recognise the need for depletion controls. We note the need for high levels of output in cases of emergency, but we are not quite so sure that the Government and perhaps some Opposition Members have taken full account of the needs of conservation in depletion on the lower side. There were two major flaws in the original clause, but these have basically been taken care of. We have considered the considerable financial uncertainty which would be created for licensees and their bankers, and the technical uncertainties arising from the percentage of possible depletion that the Government might make in a change notice. The changes were made to the Bill in Committee, and the clause was improved considerably. The upper and lower limits were established in the depletion notice procedure.
      In the face of the considerable uncertainty created in the last 18 months it is reasonable for us to ask for a greater degree of certainty for the industry, especially in the light of the assurances given by the previous Secretary of State on 6th December 1974, when he sought to confirm the figure of 20 per cent. for depletion. We are seeking to isolate even more precisely, if possible, the possibilities of a four-fifths' pattern of depletion.
      Mr. John Smith: I am grateful to the hon. Member for Croydon, Central (Mr. Moore) for recognising the way in which the Government have sought to meet realistic points raised by both the Opposition and the industry. In this amendment the hon. Member is seeking to put the policy statement into legislative form. We think that it would be far better if the Government were free to make policy statements as and when required. We stand by the policy statement of 6th December last. There are great limitations to putting this sort of thing into legislation, because it would leave the Government with much less flexibility. In the present circumstances, I hope that the House will agree that the amendment is unsuitable.
      Question put and agreed to.
      Subsequent Lords amendments agreed to.
      Lords Amendment: No. 39, in page 66, line 32, at end insert
      "and an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum."
      Mr. John Smith: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: With this we may take Lords Amendments Nos. 47 to 55 and No. 63.
      Mr. Smith: This amendment is not only fairly formal but meets with general agreement.
      Question put and agreed to.
      Lords Amendment: No. 40, in page 79, line 17, at end insert
      "and where it is determined in consequence of any reference to arbitration in pursuance of subparagraph (a) of this paragraph that the programme in question does not satisfy the relevant requirements the Licensee shall submit to the Minister, as soon as possible after the date of the determination, a further programme which satisfies the relevant requirements."
      Mr. John Smith: I beg to move. That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: With this we may take Lords Amendments Nos. 41 and 42, which have already been discussed.
      Mr. Patrick Jenkin: I suggest that the rest of the amendments are put formally, because they repeat in substantial part the schedule amendments which we have already taken. It would be convenient for the House to deal with them together.
      Mr. Speaker: I cannot do that, but we can take Nos. 41 and 42 together.
      Question put and agreed to.
      Subsequent Lords amendments agreed to.
      Lords Amendment: No. 43, in page 83, line 11, after "programme" insert
      "and the quantity so specified in such a further notice shall not be less than four-fifths of the proven production capacity of the field for the period specified in that further notice;"
      Mr. John Smith: I beg to move, That this House doth disagree with the Lords in the said amendment.
      Question put and agreed to.
      Subsequent Lords amendments agreed to.

    Schedule 3

      PRODUCTION LICENCES FOR LANDWARD AREAS
      Lords Amendment: No. 51, in page 110, line 42, after "programme" insert
      "and the quantity so specified in such a further notice shall not be less than four-fifths of the proven production capacity of the field for the period specified in that further notice;"
      Mr. Smith: I beg to move, That this House doth disagree with the Lords in the said amendment.
      Question put and agreed to.
      Subsequent Lords amendments agreed to.
      Lords Amendment: No. 59, in page 134, line 34, after "programme" insert
      "and the quantity so specified in such a further notice shall not be less than four-fifths of the proven production capacity of the field for the period specified in that further notice;"
      Mr. Smith: I beg to move, That this House doth disagree with the Lords in the said amendment.
      Question put and agreed to.
      Subsequent Lords amendments agreed to.
      Committee to draw up Reasons.
      Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their Amendments to the Bill: Mr. Wedgwood Benn, Mr. Dormand, Mr. Hamish Gray, Mr. Patrick Jenkin and Mr. John Smith; Three to be the quorum.—[Mr. Mellish.]
      To withdraw immediately.
      Reasons for disagreeing to certain of the Lords Amendments reported, and agreed to; to be communicated to the Lords.

ROAD VEHICLES (LIGHTING REGULATIONS)
Motion made, and Question proposed,
That an humble Address be presented to Her Majesty' praying that the Road Vehicles Lighting (Amendment) (No. 2) Regualtions 1975 (S.I., 1975, No. 1736), dated 24th October 1975, a copy of which was laid before this House on 27th October, be annulled.—[Mr. Snape.]
9.59 p.m.
Mr. Marcus Fox: I speak to Early-Day Motion No. 721 which is more explicit than the Prayer which we are also debating. I realise that the vote to annul this statutory instrument will be on that Prayer.
It is encouraging to know that the hon. Member for West Bromwich, East (Mr. Snape) is supporting me. I hope that this is not the last occasion, when considering transport matters, that we shall be in agreement. We find the Minister's behaviour in all this matter precipitate, to put it mildly, or perhaps, as some of my hon. Friends might suggest, slightly arrogant. Whether one supports driving with headlamps or not, we all agree that the time allowed for consultation has been ludicrous and totally inadequate. We must remember that the decision will affect every driver in the land.
Often we feel that we are, in a sense, ridden over roughshod, but it is incredible that, on an issue such as this, this kind of charge should have been made. Not only Members of Parliament but certain experts in this sphere complain about lack of consultation. I am aware that the Minister will point out that about 150 bodies have been consulted in five weeks, but even those who say they are in support of what he is doing complain that the time given for consultation was far too short. We came back after the Summer Recess to discover that these Regulations would have been law by 31st October, but at least there is a breathing space until 17th November.
I must be careful in this debate, as a number of my hon. Friends may not altogether support me on everything that I say—that is not unusual in matters relating to road safety—to put the case for both the pedestrian and the motorist. It is too easy to be passionately pro or
540
anti if one takes a point of view dominated by one of these two groups. But we must at all times seek the best balance in matters of this kind.
With that in mind, I trust that right hon. and hon. Members have seen the statistics for road casualties issued by the Department of the Environment within the last few days. They show a total 77,600 casualties. Of these, 17,000 were pedestrians and more than three times that number were people injured in vehicles. It would be ridiculous to take any action which would make the motorists' situation worse than it is now. I do not want to talk in terms of one set of accident figures, but of the total, and to seek a reduction in that number.
I turn to the matter of consultation. Did the Minister consult Professor Robert Weale of the Department of Visual Science at the London Institute of Ophthomology? Professor Weale said:
"Dipped headlamps will be an added irritant, especially for the elderly, to pedestrians and drivers alike. The Minister's reasons make sense from no point of view at all."
The Association of Optical Practitioners, which is opposed to this measure, said:
"Pedestrians, particularly the elderly and infirm, would find glaring headlamps very confusing when trying to cross the road."
Concerning drivers, the Association states:
"If eyes are continually subjected to glaring headlamps, the time taken for them to readjust to the dark will be significantly increased. The result will be a slowing down of motorists' reactions to the point where they may possibly only see obstacles when it is too late to avoid an accident. The effect of this will be even greater among elderly drivers."
That could well include the Government Chief Whip.
Not all the police are in favour of this proposal. The Secretary of the Police Superintendents Association complains that the Association has not been consulted. He further expresses reservations about the plan, complaining that it will damage police-public relations regarding enforcement. The police have informed the Richmond on Thames council that they have not the manpower to enforce certain traffic regulations already in force. Therefore, it is incredible that we should seek to introduce further legislation. If hon. Members are not concerned about

541
police reaction to these proposals, I am surprised, to say the least.
The Minister will no doubt make the point that some of the police are with him. We shall wait and see. We wait with bated breath to hear what he may say about the new information which has made him seek to legislate in this area. The right hon. Member for Blackburn (Mrs. Castle), the present Secretary of State for Social Services, who is never hesitant to legislate, refused to legislate on this matter when she was Minister of Transport. No doubt we shall hear what additional factors have come to light.
I should like to mention two points made by the Minister in the publicity hand-out of 23rd September as his reasons for taking action. The first is parking without lights on well-lit roads. The hon. Gentleman talks about an appreciable rise in accidents and makes the point that headlights would pick up the reflectors on parked vehicles. I will resist the temptation to inquire what happens about cars facing oncoming traffic. Might not the answer be to look again at the whole practice of parking without lights? If the accident figure is as high as some imagine, perhaps that is a course of action we should take rather than seeking to legislate in this way.
It is interesting to note that the proportion of accidents to which parked vehicles contributed was 8 per cent. in daylight and 5 per cent. at night. These figures are taken from statistics supplied by the Department. I am bound to admit that they related to 1973. We are now told that there is an increase of 75 per cent. Such an increase on minimal figures of this kind is hardly the sort of evidence with which to justify the action the Minister proposes. There is also the problem of vehicles travelling with only one sidelight. Out of 2,000 carefully investigated accidents only four could be attributed to this condition. I suggest that the Minister consults Professor Smeed of University College London on this point. He has had about 20 years' experience as Deputy Director of the Road Research Laboratory.
No doubt the Minister will call in aid the Birmingham experiment. I have looked carefully at the results of that experiment as analysed by the Read Research Laboratory and find that the data are confusing, to put it mildly. Certainly
542
a beneficial effect on the number of pedestrian casualties was noticed. There was a small adverse effect on the more numerous non-pedestrian casualties. Overall a negligible effect on total casualties was noted. The police said:
"It would be wrong to make any comparisons with accident figures now because of the big increase in traffic and the extensive redevelopment that has taken place in Birmingham."
I move on quickly—[HON. MEMBERS: "Hear, hear."] I appreciate that this is not pleasant music for the Government. If they had looked carefully at this proposal they would never have introduced it. It is not unreasonable to suggest that street lighting has a part in this debate. A dangerous by-product can be observed in these Government proposals. My experience in local government is that street lighting is intended to get rid of the shadows at night. Now we are told that the use of dipped headlamps will help in this respect.
The Association of Street Lighting Engineers says that quite the opposite is true. Experience shows what happens if street lights are switched off, as may be the case if this legislation goes through. The Minister shakes his head, but my information is that a number of authorities have already contacted his Department with a view to doing this. Street lighting was switched off under the Conservative Government prior to the February election during the state of emergency. The increase in accidents was about 260 at a cost of £6 million. The saving in electrical energy was approximately £100,000. This is important because it is in the built-up areas that most accidents occur.
No one seeks to disadvantage the motorist. We can make a case for improving lighting in many areas, but we cannot escape the fact that massive improvements have been made. I am concerned about the effect of dazzle and glare. We already experience this from time to time from inconsiderate motorists. We have heard the view of opticians.
There is another problem to do with the fact that a large number of cars have improperly aligned headlights. It is not encouraging when we hear from the Consumers Association that a recent survey showed that out of 66 new cars, only 22 had headlamps which had beams which could be dipped to meet the necessary

543
standards. The AA conducted an experiment on cars emerging from vehicle testing stations that showed the tests on headlamps to have been widely inaccurate. Should not the Minister attend to that deficiency before seeking to introduce this kind of legislation?
I suggest that the Minister should consider lighting standards on new and used cars. He could do so quite easily through his own Department and MOT tests. Misaligned headlamps could cancel out any benefits that might be gained by these proposals. One solution is a course of action which would meet with universal approval—namely, to improve the present vehicle lighting system so as to give a less intensive beam than dipped headlights for use in well-lit streets but a more effective beam than sidelights. It is disappointing that we have to turn to a foreign car to find a manufacturer who has already acted in that direction. Is it beyond the bounds of the ingenuity of British industry to proceed in that direction? It should have been done a long time ago.
Mr. A. J. Beith: I hope the hon. Gentleman has not forgotten that the British Leyland Mini has a sidelight arrangement in advance of many other cars. The sidelights of the Mini are contained within the headlamp unit, thus providing a large area of light which may be seen by pedestrians relatively easily. That serves some of the purpose that the Minister is trying to serve by taking this misguided step.
Mr. Fox: The hon. Gentleman is quite right. The old type of sidelight could be improved considerably. I have given one example and the hon. Gentleman has mentioned another. It might be said "It is all very well for new cars, but what about those already on the road?" Amongst the many letters that I have received—overwhelmingly they have been against this legislation—there is one from a constituent of my hon. Friend the Member for Pudsey (Mr. Shaw) who is an associate member of the Institution of Electrical Engineers. For some 10 years he has marketed an adaptor at a cost of about £5. That is the sort of matter we should be considering.
It is no wonder, on the evidence, that the Minister has given the impression that
544
he is inflexible. It seems that he is pushing through a pet theory on the basis of his experience in the United States, where there is widespread use of headlamps against a background of just about the poorest system of road lighting in the world. If this is not a pet theory, the Minister must tell us who has advised him to take this course. There are some who complain that he has paid too little attention to his experts. At worst it is suggested that he has acted in disregard of their advice.
I am the first to admit that many measures that improve road safety are controversial because they compel road users to act contrary to their desires. These proposals are controversial for another reason—namely, that many of the people who have studied these matters feel it desirable that headlamps should be used on poorly lit roads but that they should not be used in all circumstances as their use is likely to increase accidents rather than diminish them. It cannot be denied that such doubts exist. They must be removed by clear evidence before legislation is introduced.
It is not unreasonable to suggest that there should be open government, and participation and consultation that is seen to take place on matters of road safety. Further, there should be the fullest possible discussion inside and outside Parliament. I hope that the Minister, on reflection, will agree that these Regulations be annulled. We all accept that more needs to be done to persuade drivers to comply with the provisions contained in the highway code and to use headlamps unless the street lighting is exceptionally good. Tonight we must show the red light to this proposal without denying that one day we might well change to amber or green.
10.15 p.m.
The Minister for Transport (Dr. John Gilbert): The Regulations which are the subject of the Prayer we are debating tonight have as their genesis one worrying area of traffic casualties—namely, the increase in the number of accidents involving parked vehicles. This type of accident outside London between 1970 and 1974 increased by no less than 75 per cent.
Hon. Members will recall that in 1972 one of my predecessors in office, the then

545
Minister for Transport Industries, the right hon. Member for Yeovil (Mr. Peyton), made Regulations permitting the parking of certain vehicles without parking lights in built-up areas. That proposal was supported by both sides of the House and those Regulations were in draft form before the right hon. Gentleman assumed office.
However, it is hard to argue that there was not a direct link between the right hon. Gentleman's actions and the subsequent rise in the number of accidents of this type. I wish to make clear that I think the right hon. Gentleman's decision, which was neither debated nor voted upon in the House, was correct. I think the right hon. Gentleman took the only possible decision. The previous law had become quite unenforceable. One of the principal purposes of the Regulations, though far from the sole purpose, is to require drivers when using headlights at night to ensure that the beams pick out reflective material on parked vehicles and so stem, and possibly reverse, the serious trend in this type of accident.
It has been suggested by some members of the public that we should revert to the pre-1972 situation and require all vehicles to have parking lights. The reason that led the right hon. Gentleman to his decision in 1972, on strong police advice, is precisely the reason that compelled me to the conclusion that the re introduction of parking lights was not the solution to the problem. Such Regulations would be just as unenforceable in 1975 as they were in 1972.
Mr. Raphael Tuck: The Minister says that Regulations in respect of parking lights would be unenforceable. If he made the penalties high enough, does he not believe that we could enforce this law?
Dr. Gilbert: The answer is—no. I do not.
These Regulations were abandoned in London as long ago as 1955 for the same reason—namely, unenforceability. The reason some people have suggested that we should go back to parking lights is that there has been understandable concern about the increase in dazzle arising from widespread use of headlights. I recognise the strength of this concern, as appears from correspondence I have
546
received, and I am sure that other hon. Members have also had a heavy postbag on this matter. It is part of the MOT test that cars should be tested for dazzle, and I know that there is a feeling that this test should be tightened.
There are three methods by which this part of the MOT test can be carried out. The first is by visual observation; secondly, by placing the vehicle a certain distance from a wall and measuring the distance of the centre of the beam from the ground; thirdly, by the use of a special beam-setting device. These devices cost from £200 to £300. Any of these methods has been acceptable up to the present time, although the beam-setting device is by far the most efficient. All new MOT testing stations are now required to have a beam-setting device. All existing stations will have to acquire them as part of the overall upgrading of MOT testing requirements. I am looking into ways of accelerating this part of the upgrading programme. I do not pretend that this will solve the problem of dazzle completely overnight. The problem will be with us until all vehicles are fitted with automatic self-adjusting mechanisms to deal with differences in loading. Clearly, that will be a long way in the future.
The question I had to decide was whether the known risks of increased dazzle were outweighed by the introduction of increased visibility of parked and empty vehicles. In coming to a decision, I was assisted by the results of a statutory research exercise carried out by my Department. The hon. Member for Shipley (Mr. Fox) asked me a question about that exercise. I am sure that he is aware that it has never been the practice to disclose the results of individual inquiries or to give a list of those consulted, because confidentiality is part of the exercise. Bodies are free, if they wish, to disclose the replies they have given.
The results of that consultation show that 70 per cent. of those who responded positively take the view that the Regulations should be made. That figure of 70 per cent. includes organisations representing every type of road user. Needless to say, the normal procedures have been observed. Although consultation is in no way a referendum, I was bound to be influenced by that powerful expression of opinion.

547
However, there is one myth that has gained some currency, and the hon. Gentleman afforded it further publicity tonight. It is that the Regulations were brought forward without the support of, or even contrary to, the advice of my technical advisers. In that connection, I cannot do better than to quote a statement that has been agreed with the Transport and Road Research Laboratory, which is as follows:
"The TRRL tell me that their main concern is that something should be done about the highly unsatisfactory state of affairs at present obtaining in lit areas where a mix of both headlights and parking lights is permitted for moving vehicles and where the accident hazards have increased since unlit parking was allowed. This does not mean, however, that the TRRL would favour the use solely of parking lights in lit areas. Far from it. Like the majority of the scientific community both here and abroad, the TRRL favour the mandatory use of dipped headlights in less well lit streets, but would prefer a beam of lower intensity—but still brighter than a parking light—called a town light to be used in the very well-lit streets. I am entirely in agreement with this approach and am working towards such a development, although we have to recognise that it will take some time before such a system can be comprehensively introduced in the United Kingdom. In the meantime, the TRRL would support the adoption of mandatory dipped headlights everywhere as the Government's first step towards this ultimate goal."
I emphasise the last sentence.
When we talk of accidents and accident statistics, we are not just talking of dented mudguards and fenders or broken headlights. Every accident statistic involves one of our constituents having been killed, maimed, scarred or possibly blinded. It is a very serious matter.
Proposals for changing traffic law are not made lightly. They are not brought forward without full consultation, and the weight of the evidence must be taken fairly into account before any Minister would dream of making such proposals.
However, having said that, and having made it quite clear that the full consultation procedures were gone through in this case, I recognise that the House would prefer further discussion of the matter. Therefore, I recommend to my hon. Friends that they do not divide on the Question. I shall have further discussions with all interested Members, and I hope after those consultations to bring
548
the Regulations back before the House early in the next Session.
10.23 p.m.
Mr. Geoffrey Finsberg: It might satisfy the Minister, having eaten humble pie, that the rest of the House should not say anything. The Patronage Secretary seems rather upset that I rise to speak, as he frequently is on such occasions.
I rise because there are three things that need to be said clearly. My hon. Friend the Member for Shipley (Mr. Fox), who moved the motion, was right to say that the Minister should state his reasoning—
Mr. Speaker: Order. We are now discussing the motion moved by the hon. Member for West Bromwich, East (Mr. Snape).
Mr. Finsberg: I was making a passing reference to the speech of my hon. Friend, who helped the House considerably. I hope that there will be many more speeches of that kind. [Interruption.] In putting my views, I am having some difficulty in competing with the odd voices coming from below the Bar.
The first thing that needs to be said is that the statement agreed with the Transport and Road Research Laboratory, which the Minister quoted, will not satisfy many people, because it was full of qualifications: "I am working upon something…. It may take some time…." That is not good enough.
Secondly, the Minister said that he had consulted all sections of road users. Did the Minister consult the taxi drivers on this issue? They are amongst some of the busiest users of the London streets. It is right to give a brief quotation from a letter which I received from the Licensed Taxi Drivers Association, which says:
"This Association is responsible for insuring some 3,000 London taxi-cabs for its members. Obviously we have considerable information in respect of the accidents that these vehicles become involved in and there is no evidence to suggest that such a piece of legislation as this would reduce the accident rate, in fact we believe that it would have the opposite effect."
—[Interruption.]
I do not know whether you, Mr. Deputy Speaker, can hear me. I have difficulty in hearing myself.
Mr. Deputy Speaker (Sir Myer Galpern): The disturbance may be due to the fact that some hon. Members may believe that there is no need to debate the matter further. That is a matter for the hon. Member.
Mr. Finsberg: This may well be one of the reasons. However it is right when back benchers have representations made to them—when those representations will not have been taken into account by the Minister—that those representations should be made known to the House.
Mr. W. R. Rees-Davies: On a point of order, Mr. Deputy-Speaker. I should like your clarification on this point. Although the Minister has acceded to the facts and has said that the Regulations will not be pressed tonight, he indicated his intention to take the matter away, to look at it carefully, and to bring it back to the House. Would it not be right therefore to use this occasion to put forward representations for his further consideration before he comes back to the House? Otherwise there will be no opportunity for the House to make representations in the further consultations which the Minister will hold.
Mr. Deputy Speaker: I suggest that there are other methods of making representations which may be more successful than a short debate in the House. I am sure that the Minister will willingly receive the hon. Member so that he can put his representations in greater detail than he may be able to do this evening.
Mr. David Crouch: On a point of order, Mr. Deputy Speaker. I was discouraged to hear your ruling.
Mr. Deputy Speaker: Let me make it abundantly clear that this debate can go on until 11.30 p.m. The Minister agreed to take the matter back, to receive further representations, to take another look, and to do everything possible to satisfy hon. Members. However, if hon. Members wish to participate in the debate they may do so. I shall not rule them out of order.
Mr. Crouch: Further to the point of order raised by my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies), there is a reason why the House should debate the subject,
550
notwithstanding the fact that the Patronage Secretary is sitting on the edge of the bench, giving the impression that he wishes to intervene and to cut short the debate once more. I am concerned that we have had only half an hour for the consideration of the thoughts of the Minister and representations from the Opposition. I am not sure how much time we may be given by the Government on a future occasion. Will the next debate last for one and a half hours or for six hours? A debate lasting one and a half hours would not be long enough. If the next debate is to last only one and a half hours I shall continue to make representations that we need more than one and a half hours in which to pray. I demand that we debate this subject fully and listen to the learned, skilled and technical evidence that may be forthcoming in the next few weeks.
It is no good the Patronage Secretary looking at me in an angry way. I shall not be put off by him. I shall be put off only by you, Mr. Deputy Speaker.
Mr. Deputy Speaker: It appears as though all the available time will be taken up with points of order. I have no objection to that. Earlier this afternoon the House agreed to the following motion:
"That, at this day's sitting, notwithstanding the provisions of Standing Order No. 4, the Motion in the name of Mr. Peter Snape may be proceeded with, though opposed, until half-past Eleven o'clock or one and a half hours after it has been entered upon, whichever is the later, and at that hour or at the end of that period Mr. Speaker shall put any Question necessary to dispose of those proceedings."
I am concerned only that the debate should finish at 11.30 p.m. If hon. Members wish to continue the debate, it is entirely a matter for them.
Mr. Finsberg: I do not intend to be long, Mr. Deputy Speaker, but I intend to put this point. The Licensed Taxi Drivers Association—the largest organisation of taxi drivers in the Metropolis—points out that there is no evidence to suggest that this legislation would reduce the accident rate and that it would have the opposite effect—
"as the continuous contrast of bright light forward and to one's right would put the driver at risk of having an accident with pedestrians or unlit parked vehicles on his near side."

551
The Minister does not seem to be interested. The Patronage Secretary having left, the Deputy Patronage Secretary is distracting him. That is a discourtesy to the House. The LTDA further states:
"The situation would become even worse in wet weather when the road ahead of the driver would be completely distorted by oncoming headlights and their reflections on the road, together with the raindrops from the windscreen."
The Minister said that 70 per cent. of the views expressed to him were in favour of his decision to lay the Regulations. He is not prepared to tell us which organisations were consulted. Just to give us percentages is no help. He does not tell us that the AA is in favour and the RAC against. It is necessary to weigh up the relative importance of the organisations.
I asked the Minister whether he had consulted the licensed taxi trade, but he has not answered my question. I assume, therefore, that he has not consulted the LTDA. His Department received a letter from that organisation, but we do not know whether it has been taken into account.
Dr. Gilbert: The hon. Gentleman has no basis for making an assumption one way or the other.
Mr. Finsberg: In that case, I assume that the Minister has not consulted the London taxi drivers.
Back benchers on both sides of the House have come along to debate the Regulations only to be told that the Minister is withdrawing them. It is wrong for him to expect hon. Members not to put forward their views. The Minister and the Patronage Secretary should not expect to get away with that.
The Minister apparently does not carry much weight in the Cabinet, as he was unable to get an Adjournment debate on seat belts. He was unable to get us a day to debate the draft highway code, but he managed to get time to slip through this nasty little piece of legislation.
Mr. Jerry Wiggin: Will my hon. Friend go outside and count the number of cars going past the Palace of Westminster with their headlights on, and will he tell the House whether the Licensed Taxi Drivers Association has complained about this alleged danger?
Mr. Finsberg: That is not the most helpful of interjections. My hon. Friend is usually much more helpful than that. Any sensible motorist will use his headlights when road conditions demand it. The TRRL does not recommend the use of headlights in brightly lit streets. It is wrong to enforce Regulations requiring bright headlights simply because there is nothing better. I ask my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) to consider that. We are all entitled to a view, but what he said in his intervention is wrong. I come back to the last comment I was going to make, which would have been five minutes ago if I had not given way. Accidents are caused through negligence and misjudgment or by drivers taking what they consider to be calculated risks, and not because every vehicle on the road is driving with sidelights. What the Minister has tried to put to us in the Regulations is that because some accidents are caused for the reasons he mentioned, other motorists should be obliged to have headlights at all times, when the road conditions might be made more dangerous by the reflection.
I am glad that the Minister has conceded on this matter. It will be interesting to see what comes back in due course. But at least he has seen that the House of Commons, on both sides, is able to make a Minister who tries to put legislation through without proper consultation think again.
10.36 p.m.
Mr. Anthony Berry: I am glad to follow my hon. Friend the Member for Hampstead (Mr. Finsberg) because he and I are London Members, and like others, when we leave this place tonight we shall drive through the streets of London, and therefore we all ought to have an opinion on whether we should have compulsory headlights.
We are grateful to the Minister for the view he has taken. I disagree with the way he introduced the Regulations, but he has now shown himself a big man in withdrawing them and agreeing to further consultation. The record of Labour Governments over the last 10 years on transport matters has not been good. Under both the last Labour Government and this one, transport appears to have been something to put aside and discuss late at night, if at all. Inevitably, transport

553
debates seem to take place after 10 o'clock, with a one and a half hour guillotine hanging over us.
I remember in 1968 taking part in a debate to increase the cost of taking driving tests. That was pushed through late at night after a statement to the Press before Parliament even knew about it. In 1969 we discussed the new highway code, when even the Patronage Secretary was not able to keep enough Government supporters present, and when the closure was put at 11.30 p.m., fewer than 50 Members were present and the debate was adjourned. Then, Mr. Richard Marsh, who was a distinguished Minister of Transport, agreed that, in future, whenever a new highway code was to be introduced it should be debated in Parliament before it was published as an official Government paper.
The present Government honoured that pledge, but only to a certain extent. We had the Green Paper on the highway code nearly 12 months ago, and despite the mass of legislation and the long hours of this Session, we still have not debated it. I hope that the Minister will secure time for that debate early in the new Session.
We have not completed our debate on the Bill to make seat belts compulsory. Whatever our views, we all agree that this is something that Parliament should decide and that the Bill should not have been left in limbo for 12 months.
I had hoped that the Minister, having come from the Treasury to his present post, would have been able, even in these days of financial restrictions, to find ways of increasing the money spent on transport, but perhaps I was a little optimistic and was asking too much.
This debate is very important, because this is a House of Commons matter. We all have our views on whether these lights should be compulsory at night, and our constituents feel very strongly about it, too. It is a question we should discuss before the Government make up their mind.
In the case of the highway code, the Government thought they could decide before Parliament gave its views. They were wrong and they accepted that. I hope that the Minister will pay full attention to our views in this short debate and will be ready to receive the comments
554
of our constituents and of the various organisations during the next month or two. I hope that he will then, with the leave of the House, allow a debate before a final decision is made.
There are suggestions that cars should have an extra light, for example, between the headlamp and the side lamp. I am sure that the Minister is considering this kind of suggestion in his Department with his experts. A statement that I received from the Greater London Council this morning refers to accidents to pedestrians in poorly-lit streets. There should be no poorly-lit streets. Either they should be lit or they should not be lit. Any street that is lit should be fully lit and should be adequately lit in all circumstances. We know from going round the country that not all streets are properly lit.
I hope that the Minister, who has the advantage of a big Department, with influence on local authorities all over the country, will bring pressure to bear to ensure that streets are lit adequately. We are all very seriously concerned with the safety of our constituents and I hope that he will bear that in mind.
10.43 p.m.
Mr. Peter Snape: I had not originally intended to intervene, after formally moving the Prayer to annul the Order. It is only because hon. Gentlemen opposite seem to wish to continue the debate that I have intervened.
My hon. Friend the Minister of Transport would agree that there is a deep feeling in the House about this issue. Consultation was lacking in two particularly vital areas—first, the Parliamentary Labour Party, of which he is a member, and, second, the House of Commons, of which he is a Member. Members on both sides were rather concerned about the fact that this fairly Draconian measure was being introduced without any consultation at all.
I hope that my hon. Friend and his hon. and right hon. Friends on the Front Bench will remember that there are those of us in the House who continually face the task of defending legislation introduced in the House over which we are neither consulted nor have our views considered.

555
As for the attitude of the motoring organisation to this measure, while the Automobile Association has come out already in favour of it, the Royal Automobile Club has come out rather strongly against it. I quote from a letter which I understand the Assistant Secretary of the Road Safety (Vehicles) Division of my hon. Friend's Department received quite recently from the RAC:
"…the RAC is not satisfied that it would be desirable to introduce the proposed regulations. The time allowed for consideration of this matter is very short. In our view, it would be premature to make such a decision without a thorough investigation of all the implications of this measure which would be extremely controversial as revealed by comments received from many RAC members and views expressed in press reports."
The fact that our senior motoring organisation expresses some concern is indicative of the concern felt in the country generally at my hon. Friend's proposed measure.
The subject of vehicle lighting is not one which has only recently been discussed and only recently become a matter of controversy. As long ago as 1967, the Ministry of Transport formed a Lighting Working Party to look into this very issue. It was made up of representatives of some very distinguished organisations, ranging from the Society of Motor Manufacturers and Traders, through bodies such as the AA and the RAC, to the road haulage industry and the Transport and General Workers' Union. There were also seven representatives of the Ministry of Transport. Surprisingly enough, there was a great deal of unanimity amongst the members of that committee eight years ago that this proposal was neither essential nor desirable.
Referring briefly to the conclusions of the working party, I see that para. 21 recommends that
"The existing regulations regarding the dipping of headlights and the avoidance of dazzle be looked at as a matter of urgency to see whether they can be modified in such a way as to reduce glare."
As far as I am aware, no action has been taken since 1967.
The final conclusion of the report is probably the most important and most relevant to this matter. It says:
"Further research should be undertaken with a view to evolving a more satisfactory beam or lighting system which might in due course become obligatory for new vehicles."
556
Eight years after that recommendation, as far as I am aware, no such research has been undertaken, and the variety of motor vehicle lighting, even amongst British-made vehicles, is immense.
I accept my hon. Friend's view that parking lights, as he calls them, or sidelights, as they are more usually referred to, are not particularly safe on some vehicles and are extremely dangerous on many roads. But that again is a matter for legislation. It is matter for his Department. Why does not his Department lay down minimum required standards of lighting? Why does not it come up with the suggested prototype town lamp to which my hon. Friend referred? It has not done so.
In the original order, my hon. Friend is saying that all vehicles regardless of type must use dipped headlights regardless of road conditions, which, in my opinion, is inherently dangerous at certain times of the day and under certain road conditions. Only last week, I went to speak, as a loyal back bencher, to the Harrow Constituency Labour Party—
Mr. John Page: There was very little publicity.
Mr. Snape: When Harrow voters read about the hon. Member for Harrow, West (Mr. Page), they say that they do not particularly like to read anything about politics in their local newspapers.
I drove along the A30 to Harrow during the tail-end of the rush period. All three lanes of the road were very busy, with the usual traffic to be found at that time. I estimate that about 80 per cent. of the cars on that road were driving on sidelights, perfectly safely.
Mr. Timothy Raison: The hon. Gentleman is an ardent supporter of the rail system. There are excellent rail services to Harrow. Why did he not go by train?
Mr. Snape: If that is the best that the hon. Member for Aylesbury (Mr. Raison) can do, he would be well advised to put up his feet and relax.
As I was saying, about 80 per cent. of cars on the A30 were being driven on sidelights in perfect safety. The road is well lit. If any vehicles had used headlights, in my view there would have been

557
not only a dazzle problem but an inherent safety risk.
If my hon. Friend's Regulations had been laid and had come into force before 17th November, everyone driving along the A30 on sidelights would have been breaking the law. I suppose that it could be argued that the police would use their discretion and natural common sense and that where traffic was very heavy they would not expect every moving vehicle to have its headlights on. But the view is expressed frequently by the police that they are there to enforce the law and not to interpret it. Therefore, I think it is reasonable to assume that a bright young policeman would have felt quite free to fill his note book because of the number of vehicles using that road at that time with only their sidelights on.
Despite my hon. Friend's Regulations, I think that situation would continue because common sense alone would dictate that with heavy traffic, particularly in wet weather, it is not practicable, sensible or desirable to use headlights at all times.
On the question of enforcement, what such a proposal would do to police-public relations I shudder to think.
Mr. Wiggin: Oh, come on!
Mr. Snape: The hon. Gentleman says "Come on!" If he catches the eye of the Chair, he may be able to enlighten us. Apart from the difficulty of enforcement in a large city, I do not see the slightest justification for such a proposal where road lighting is adequate.
The Minister will be aware that the M5 and M6 motorways run through my constituency skirting Birmingham, and that they are very well lit. In the West Midlands where the headlights campaign lingers on from the 1960s, 50 per cent. of the vehicles using those motorways, particularly in heavy traffic periods, have only their sidelights on because the motorway lighting is extremely modern and efficient. I find that on the very rare occasions on which I use my motor car on those motorways, in wet weather, when a vehicle approaches from the rear with dipped headlights, it is impossible, especially with the dazzle from the road, to judge exactly how fast that vehicle is travelling and how far it is behind me. It is particularly difficult because of the
558
optical effects of the heavy rain. Like most hon. Members, despite my railway connections and my preference for travelling by rail, I do not think that I could be classed as an inexperienced driver.
I am grateful to my hon. Friend for seeing sense in this matter. I should not like to have an argument with the hon. Member for Shipley (Mr. Fox) about who is supporting whom this evening. I rest my case on the fact that had a Division been called it would have been my Prayer that the Opposition would have been supporting. I trust that this is the first and last time that I shall find the Opposition on my side on any issue.
10.53 p.m.
Mr. Stephen Ross: I congratulate the hon. Member for West Bromwich, East (Mr. Snape). I do not know whether he was about to join the Bishop of Southwark in some sort of prayer, but I congratulate him on tabling the motion, which has had its effect on the Government. I also congratulate the Minister, who has had the common sense and courage to say that he will look at this matter again.
The Minister referred to his research department at Crowthorne and spoke about the town beam—a light of intermediate intensity between that of sidelights and the normal dipped beam, which enables vehicles to be seen in well-lit streets without causing dazzle. I hope that he will study this system in more depth. I do not think the Minister referred to what is known as the dim-dip system, which employs a dip filament, with only 10 per cent. intensity of the normal dipped beam. It is a cheap system to install. I understand that it costs about £5 to fit on an existing vehicle and about £1 to install on a new vehicle. There are, unfortunately drawbacks, because both systems are manual.
I also understand that the Minister has consulted about 150 organisations. I should like to know whether he is satisfied that the 40 organisations which are said to be in favour of his proposal are all qualified to speak. Has he consulted the Illuminating Engineering Society and the Association of Public Lighting Engineers, which, I believe, have some views on this subject? I agree that the Minister has been in a dilemma.

559
The AA has been in favour of the proposal and the RAC has been against it. We read the other day that eminent policemen were worried about it. When the Minister has considered the proposal more deeply, I hope that we shall have another chance to debate this matter again.
10.55 p.m.
Mr. Stanley Newens: I congratulate the Minister on his decision. It is extremely important to reduce accidents, so we must consider carefully his point about the increase in the number of accidents involving parked vehicles and those driven on sidelights only. Research shows an increase in this type of accident, but there is no information relating increased accidents to different qualities of street lighting.
In Britain, street lighting has codes which discriminate between Group A and Group B lighting, the former on main traffic routes and the latter on residential streets. It would be a mistake to compel the use of dipped headlights on main traffic routes if the problem arises primarily—as I believe—on residential roads. It is particularly important not to introduce regulations of this sort if dipped headlights diminish visibility on well-lit roads, as I believe they do.
Street lighting is emitted on to a road surface without the source of the light being beamed into a driver's eyes. However, even dipped headlights project the beam directly into a driver's eyes and thus cause him instinctively to adjust his eyes so that other unlit objects are not so visible. I invite those hon. Members who, like me, are drivers to test this for themselves. That is why it is possible to see the outline of an oncoming car lit only by sidelights whereas it is frequently obscured when the headlights are on.
Dipped headlights produce what we describe as "visibility glare", limiting the powers of vision in conditions in which street lighting is good. That means that a driver's ability to see a pedestrian or any other object before it is picked up by his own headlights is probably less when dipped headlights rather than sidelights are used in well-lit streets.
There have been three significant studies of this question in recent years—
560
by the British Road Research Laboratory, the Netherlands Institute for Road Safety Research and the Australian Road Research Board. All show that the detectability of objects near the centre line of the road, 100 ft–400 ft ahead, is reduced when dipped headlights are used on well-lit roads. This sort of information must be carefully considered before we permit such Regulations as this to be introduced.
What I have said detracts in no way from the need to use dipped headlights where road lighting is of a poor quality, but this should be left to the discretion of the driver. Drivers should be strongly encouraged to drive in a manner that will secure the maximum degree of safety, and that includes using the appropriate amount of lighting.
There are several other points which should be considered, although I suspect that other hon. Members will dismiss them as worthless. I hope that my hon. Friend the Minister will deal with them. I am informed that the use of dipped headlights requires an increased consumption of petrol. It is only a marginal amount, but with dipped headlights needing the generation of 90 watts, petrol consumption is increased by between 1 per cent. and 2 per cent. In the course of a year it is calculated that this would require an additional 2·5 million-5 million gallons of petrol. Hon. Members may think that this is inaccurate, but if it is we should be told so. That calculation was made by people who should know their job.
If there is to be an improvement in lighting it must be in the form of a dimmed and dipped town beam. That has already been commented on this evening. It would have been a mistake to make these Regulations tonight, and I am grateful to the Minister for taking note of the pressure and withdrawing them. I hope that before any further effort is made to introduce this change there will be opportunity for a debate, so that a decision may be made which takes account of all available information on the subject.
11.3 p.m.
Mr. Hall Miller: I very much regret the Prayer that we are debating this evening. I do not believe that the hon. Member for West Bromwich, East (Mr. Snape) helped his case very much by the remarks he

561
made. If he had been driving on dipped headlights he might have taken the correct road to Harrow. The A30 leads in the opposite direction. I think that the A40 was the road that he should have taken.
Mr. Snape: The road to Harrow is as obscure as the Member of Parliament for the district in which I was due to speak.
Mr. Miller: I understood the hon. Member to be saying that no Regulations of any kind were enforceable, and that motorists therefore should not be required to drive on any form of lighting. The working party report that he seemed to be referring to appeared to be dated considerably earlier even than the Regulations abolishing the need for lights on parked cars. It is therefore not entirely relevant.
A further matter for regret is that the Minister has had to bow to pressure and withdraw the Regulations. Some of my hon. Friends were considering forcing a vote. The danger was that the Minister might be forced to vote against his own proposal—the unhappy state of affairs that beset his predecessor over the compulsory wearing of seat belts. The Government had supported a similar measure in the other place, and several Opposition Members supported the Bill here in the Division Lobby.
The important question that we are discussing tonight is how to improve road safety and get the necessary legislation through the House. The present state of affairs does the House no credit. Indeed, it is doing nothing to advance road safety. I hope that the Lord President, in conjunction with the Minister, will bend his mind to considering how the Government should get the necessary road legislation through the House with the required measure of support.
I agree with the remarks of my hon. Friend the Member for Hampstead (Mr. Finsberg), to the effect that we should have a debate on the new draft of the Highway Code; and then introduce a comprehensive measure to include seat belts and driving with dipped headlights. A great point has been made about the dazzle of these lights. Other countries, notably France, seem to have solved the problem. I hope that the Minister, as part of his comprehensive legislation for road safety, which is so badly needed,
562
will consider amendments to the Vehicles (Construction and Use) Regulations regarding the fitting of headlights which would eliminate dazzle.
The police have been called into question. I am pleased to say that my own chief constable is unreservedly in favour of driving with dipped headlights, and that all members of his force do so. Therefore, there is no reason to fear lack of police support in this matter.
I hope that I have the Lord President's attention and that the Government will give serious consideration to introducing the necessary package of measures in the next Session. I hope that the necessary consent will be forthcoming from both sides of the House on this important matter.
11.7 p.m.
Mr. Bob Cryer: I did not intend to participate in this debate, as the Minister had adopted the sensible course of accepting the Prayer, so that debate became somewhat superfluous. However, I shall make a speech in greater detail when, I hope this matter is raised under the Affirmative Resolution procedure. Clearly, a matter of such importance, which affects many millions of people, would be better discussed under that procedure rather than under the annulment procedure.
In future it may be prudent for consultative documents which are circulated to outside bodies—I know that the Minister has engaged in long and diligent consultations—to be available to hon. Members at the Vote Office. Although long and detailed discussions take place, it often happens that Members of Parliament read about the nature only of those documents which are circulated in the Press. As the Labour Party believes firmly in open government, I expect it to seize the opportunity and to provide its Members of Parliament with more information. Many Opposition Members will not bother to take advantage of the information, but I believe that it should be available.
I look forward to consultations, certainly within the Parliamentary Labour Party. Our aim is to improve the safety of motor vehicles. However, it does not necessarily follow that the compulsory use of dipped headlights in well lit areas would increase safety standards.

563
My hon. Friend the Member for West Bromwich, East (Mr. Snape), who signed the Prayer with me, mentioned a Ministry of Transport document, "The Use of Headlamps. A Working Party on the Lighting of Motor Vehicles", which the then Minister of Tranport instituted in 1967. I shall not quote from it extensively, because I am looking forward to a further debate in the House on this matter. However, I should like to quote from one of the conclusions about the objections to the use of dipped beams in well-lighted streets.
The House should bear in mind that this report represents the most comprehensive study of the problem by a representative body. It states:
"Apart from the general objection to the use of dipped headlamps mentioned in the previous paragraph, there is the more sophisticated objection to their use in well lighted streets. This objection is that the use of headlamps in well lighted streets would impair the value of the street lighting. This is because modern street lighting is based upon lighting the carriageway and the background so that vertical objects (e.g. pedestrians) on the road ahead show up in black silhouette against the lighted road surface. A vehicle's headlamp by lighting the object reduces this contrast. This cogent objection can be demonstrated on a stationery object and is confirmed by the experience of police on traffic duty who feel they are in greater danger because motorists will not see them. "
Whatever the view of the police—presumably they have been consulted—certainly at that stage it was very different from an uncritical acceptance of dipped headlamps.
These Regulations involve criminal sanctions. The laying of an Order on 27th October and its being brought into operation on 17th November allows only a short time in which to make the public aware that the law is an obligatory force upon them, and that breach of it will involve them in criminal penalties and sanctions. I suggest that before the Minister reconsiders the introduction of statutory enforcement he should introduce a campaign for motorists to use some element of discretion—which is not a bad thing—in the use of dipped headlamps and ensure that the measures for the accurate measurement of headlamp beams—measures which he said are only partial—are brought into much wider use. The apparatus to which he referred tonight is used for vehicles when loaded. Neither
564
the Regulations nor the Minister's statement tonight referred to the fact that the headlamp beam is considerably altered when the vehicle is loaded at the rear. Neither the Regulations nor any of the apparatus referred to by my hon. Friend, although it can measure deflections of this kind, involves a statutory requirement. Perhaps this point could be considered in conjunction with any future Statutory Instruments that the Minister intends to lay before us.
I look forward to the debate when I can enlarge in greater detail on this matter. Meanwhile, I hope that the Minister will accept the many representations from both sides of the House on this matter. I welcome my hon. Friend's acceptance of the Prayer. He has shown a sensible and reasonable attitude to the legitimate representations of the Members of the Labour Party, who together put down the Prayer and made representations to him. Acceptance of it in a true democratic spirit reflects great credit on the Minister.
Several Hon. Members Several Hon. Members rose—
Mr. Deputy Speaker: Order. As I have already indicated, I shall put the Question at 11.30 p.m. The hon. Members for Harrow, West (Mr. Page) and Wellingborough (Mr. Fry) wish to take part in the debate. I think that between them 15 minutes will be sufficient.
11.15 p.m.
Mr. John Page: I shall be very quick, Mr. Deputy Speaker. I am extremely grateful to you for giving me the opportunity to reply to the disgraceful smear placed against my name by the hon. Member for West Bromwich, East (Mr. Snape) who said that my views were obscure. I pride myself on the fact that my views are always crystal clear. It is usually because of that fact that complaints are made against me.
The hon. Member for West Bromwich, East paid a visit to Harrow recently, and I am sure that his political education was improved while he was there. We in Harrow have taken a great interest in the education of Parliamentarians. There have been Peel, Palmerston, Winston Churchill, Pandit Nehru—and myself. This debate is an educative moment for the Minister for Transport. If he had

565
come here in a previous incarnation and asked us to increase the Government's borrowing powers by £2,000 million, it would probably have gone through on the nod, or with a poisoned dart from my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). Once the Minister starts mucking about with the headlights he will realise that the willing horses have changed into the turning worms in the grass roots.
Before the debate closes, I would like to know the answer to the important question asked by my hon Friend the Member for Canterbury (Mr. Crouch), about how long we shall have for a debate. We ought to have a day, or at least half a day.
Will the Minister tell us what manufacturing possibilities there are for "dipped-in" systems? I used to have one, but forgot to take it off my car when I sold it. The system was excellent. I now have the ordinary system again.
Will the hon. Gentleman deal with the question of increased petrol consumption and reduced battery life in Sweden, where, day and night, the Swedes drive around with full headlights on, like Zombies?
The hon. Gentleman is introducing a new protocol, to the effect that he must not tell the House the names of those with whom he has had consultations. I agree that the Minister should not give the views of those he consults if he has not obtained their permission, but if permission has been given there is no reason why he should not disclose the names of those with whom he speaks. I hope that in the later debate the hon. Gentleman will be able to tell us what those people think.
I am glad that you have given me the opportunity to defend my honour tonight. Mr. Deputy Speaker.
11.18 p.m.
Mr. Peter Fry: I should first declare a tenuous interest. Since that interest was in favour of approving the Regulations tonight and I was opposed to them, I do not think that my judgment will be affected in any way.
We have had a useful debate. Despite the behaviour of the Patronage Secretary at the beginning, there was strong feeling
566
that it was the stifling of comment and debate which caused much of the opposition to these Regulations.
We welcome the Minister's statement. I shall take one or two moments to make plain the official view of the Opposition. We were not totally committed to oppose the Regulations on any grounds. We are ready to consider the situation again, when longer and deeper thought has been given to them.
I want to be assured that the likely results of any further Regulations will be effectively assessed. This will mean that a certain amount of research will have to take place before and after Regulations come into force. Without such research and assessment many of the questions which hon. Members and outside organisations will ask cannot be answered. I also ask that outside organisations which are concerned with this subject should be given the opportunity to put their views. Here I refer specifically to the National Association of Driving Instructors.
We have had a useful debate. Two points made by the Minister deserve comment. He spoke of the increase in the number of accidents involving parked vehicles, particularly after dark. The road accident statistics provided by the Department of the Environment for 1973 show that only 5 per cent. of all accidents at night were partly the result of parked vehicles. Even with a 75 per cent. increase the figure is only about 8 per cent. or 9 per cent. However, in 1973, 8 per cent. of all daytime accidents were caused by parked vehicles. Therefore, too much can be made of such statistics.
The other point relates to dazzle. No one, so far, has mentioned that it is possible to be dazzled by a vehicle travelling behind one. Far too few cars are properly equipped with an interior rear mirror that can be adjusted to deal with this dazzle. A strong campaign should have been mounted—perhaps even Regulations introduced—to require the fitting of such mirrors in all new vehicles.
It would be wrong if we did not make it plain to the Minister that he has aroused opposition mainly because there was a strong feeling, shared by many members of the public as well as hon. Members, that this issue had been rushed. As my hon. Friend the Member for

567
Shipley (Mr. Fox) has said, these Regulations will affect millions of people. Yet without the motion and the Prayer, and despite widespread concern, the Regulations would have become law without an opportunity for adequate public or parliamentary debate. Those hon. Members who tabled the motion and the Prayer, and those who added their names to them, have done the country a constitutional service.
One of the reasons for this reaction to the Regulations is that we read in newspapers comments to the effect that dipped headlights would be compulsory on 17th November. It is such comments that make many of us feel that this is not the way to treat this House or to introduce legislation. Many of us feel that far too much legislation slips through with too little discussion and investigation. We ought to consider why the Minister has put himself in what can only be described as an invidious position. Why, one wonders, with all the enormous problems facing transport, has he chosen to bring forward these Regulations? This is a rather puny matter in comparison with the great difficulties that his Department is facing.
Is it not the case that in many parts of the country, especially in the rural areas, bus services are being slashed? Is it not true that there is a danger of conflict between the unions and management in British Rail over plans for service cuts and possible redundancies? Is not the whole future of public transport in the balance, to a certain extent?
With all these problems, the Minister has chosen to bring these Regulations before us. This is surprising, because we have had a number of Press conferences and ministerial briefings threatening all kinds of action. Yet these Regulations are the first fruit. Undoubtedly, the Minister wishes to save life. It has been reported—whether it is apocryphal I do not know—that he had a narrow escape from a vehicle displaying only sidelights. If that has sharpened his interest in the matter, we can understand it. All politicians must possess a strong sense of self-preservation. We appreciate that his desire to decrease accidents is genuine, and we give him full credit for that.
We have some doubts, however. We wonder whether the flurry of publicity is
568
a cover for something else—for example, a realisation that there will be little money left to solve our future transport problems. Perhaps the hon. Gentleman was wondering what his future record as Minister for Transport will look like. Over the next few months it is obvious that he will not always please Opposition Members. Judging from Question Time today, he will not please some of his hon. Friends, either. Perhaps the hon. Gentleman saw himself as an energetic Minister, coming new to his job and anxious to get something on the statute book. We have no quarrel with the hon. Gentleman showing energy, but we are worried whether that energy is misapplied. We feel that there may be an element of wanting to get something done. We wonder whether his eagerness to do something has created the situation in which we find ourselves in difficulty.
We welcome the hon. Gentleman's decision, because it has been shown already that there are many points which make it clear that some degree of caution and delay is wise. It has already been mentioned that there is a likelihood that increased loss of life will ensue from introducing the Regulations, even if some accidents are avoided. There is also the need to see that road users' equipment is up to standard to ensure that the Regulations succeed. There is a need to evaluate more fully all the technical problems, as well as the possibility of a change to a new form of lighting. There is a need to allow the fullest consultation, and to allay the fears that have been aroused by the Minister's rather precipitate action. Above all, there is a need to show a proper deference to the House. That is why, to quote one of the Minister's own staff, he was "shattered"—that was the word used in the daily papers—by the opposition that ensued from his proposal.
The matters that I have mentioned are only some of the many reasons for the Minister's being right to delay the implementation of this measure. I make it clear that we are not against some form of legislation at some stage. Our position is that we do not feel that the necesssary safeguards and the full implications have been fully appreciated. We shall not be dogmatic. We are glad that the Minister has thought again. We take his point about human life. We want to be convinced that more lives will be saved and

569
more injuries prevented by bringing these Regulations into force. Until we have that assurance it would be wrong to agree to the Regulations. It would have been wrong not to have opposed them tonight.
We thank the Minister for what he has had to say, and we look forward to being given a longer period in which to discuss the Regulations when he brings them before the House again in the new Session.
11.28 p.m.
Mr. David Crouch: What I want to say has nothing to do with headlights. In the two minutes that remain I want to talk about the House of Commons and its Members. It has been said by Members from both sides of the House that we have not been sufficiently consulted, and that our constituents have not had the opportunity to make their representations to us. We have not had sufficient time to consider the problem. We welcome the fact that the Minister and the Government have had second thoughts and have decided to give us more time.
Notwithstanding all the good will that has been showered upon the hon. Gentleman tonight, will he please remember that when he lays the Regulations again it is not the Regulations we want to hear about, but a debate. We want to hear the detailed arguments. We have had but a glimpse of the arguments tonight, and we want to know more. It is only right that the feelings of our constituents should be represented.
The Regulations represent a matter of life and death for hundreds of people during one year. This is a vital matter. It has been a valuable hour and a half, but I hope that the Minister will not go away complacently. In fact, I am sure he will not do so. However, I hope that he will remember that we want full time to discuss this important measure.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that the Road Vehicles Lighting (Amendment) (No. 2) Regulations 1975 (S.I., 1975, No. 1736), dated 24th October 1975, a copy of which was laid before this House on 27th October, be annulled.
To be presented by Privy Councillors or Members of Her Majesty's Household.

STATUTORY INSTRUMENTS
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments),
STATUTORY INSTRUMENTS
  LEGAL AID AND ADVICE
  That the Legal Advice and Assistance (Financial Conditions) (No. 4) Regulations 1975, a copy of which was laid before this House on 27th October, be approved.—[Mr. Arthur Davidson.]
  LEGAL AID AND ADVICE
  That the Legal Aid (Financial Conditions) (No. 2) Regulations 1975, a copy of which was laid before this House on 27th October, be approved.—[Mr. Arthur Davidson.]
  LEGAL AID (SCOTLAND)
  That the Legal Advice and Assistance (Scotland) (Financial Conditions) (No. 4) Regulations 1975, a copy of which was laid before this House on 30th October, be approved.—[Mr. Arthur Davidson.]

  LEGAL AID (SCOTLAND)
  That the Legal Aid (Scotland) (Financial Conditions) (No. 2) Regulations 1975, a copy of which was laid before this House on 30th October, be approved.—[Mr. Arthur Davidson.]
  Question agreed to.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Miss Margaret Jackson.]

WILLIAM TYNDALE JUNIOR SCHOOL, ISLINGTON
11.30 p.m.
Mr. George Cunningham: The subject I am raising tonight relates to the William Tyndale Junion School, Islington. In the form in which this matter appears on the Order Paper, I am asking the Secretary of State to order a special inspection of the school, but I am sure that my hon. Friend the Under-Secretary of State for Education and Science understands that I have taken this course to bring the matter within the rules of order because I want to raise the important general subject and not merely the proposal that there should be a special inspection.
I fully understand that my hon. Friend must feel somewhat circumscribed in what

571
she will be able to say in reply to the debate, because the matter is now in the hands of the Inner London Education Authority and an inquiry is taking place. I hope that some of the general issues to which I draw attention will be noted by the Secretary of State and by the Department, and that some quiet work on these matters can be done while the inquiry is proceeding.
The basic facts of the case are these: the school's roll has been falling fast for some time because parents have been choosing to send their children to other schools; for some time, managers and parents have been disturbed about the standards of teaching at the school; one manager who sought to investigate was denied access to the classes by the headmaster; the head and some teachers claimed that the content and manner of teaching was entirely a matter for them, and was no concern of the managers; eventually the ILEA decided to hold an inquiry.
This affair, which The Guardian's education correspondent has said might become the cause célèbre of educational administration, throws up a number of wide issues which have been disturbing people for some time. There is the question of the rôle of managers and governers of maintained schools. I know that that is the subject of the Taylor Committee, which I hope will regard the William Tyndale School affair as something of a case study.
We must also consider the conflict between traditional and less-structured methods of teaching, but I hasten to add that I do not regard it as accurate to think that that aspect is the substance of the disagreement between teachers in this school and others who criticise them. There is the question of the decline in the frequency and authority of school inspections; there is the means by which disputes of this kind should be resolved; and, finally, there is the part of the Department in the affair.
We have never clearly addressed ourselves in modern times to the question of who should decide matters of curricula and teaching methods in our schools. We pour scorn on stories that in Paris the French know, each day, the exact page over which pupils throughout
572
France are poring, but it can be argued that we go to the opposite extreme of having no curriculum control or influence by the Department of Education. The Department excludes itself from consideration of that subject, and it is generally taken as the accepted wisdom of Parliament that the Department of Education and Science should keep out of these matters. But local education authorities also tend not to interfere in curriculum matters. The result is that, traditionally, that area has been left to the head teacher—but to a great extent it is left not to the head teacher but to individual teachers. It is arguable that many children move from one class to another and from one teacher to another, and are expected to conform to different methods. It is arguable that it is necessary for the Department to take a much more positive rôle in those matters.
I do not think that there is any God-given truth as regards these matters of judgment, but, just as we drive on the left of the road simply because we must drive on one side or the other, and all do the same thing, there is a case for some elements of curricula and teaching method to be accepted as standard. We should not inflict on our children the confusion that results from frequent changes in educational fashion.
One of the most fundamental responsibilities of the Department is to introduce proposals on who should run our schools, not in the easy area of financial control but in the difficult area of teaching method and content. It should put behind it the old bogy that if it interferes in this matter we shall have a sort of Hitler Youth system in Britain. We do not suffer from too much central control in education. I argue that we suffer a great deal from having too little.
Coming to the Tyndale affair, it would be trite to say that the school exists for the benefit of the children and not for the benefit of the Inner London Education Authority or the teachers, but I want to stress the extent to which the interests of the children are being buried under a mountain of formal procedure, which is growing daily, in this case.
This is what the pupils of that school have had to undergo in the last few weeks. On 22nd September, the head and most of the teachers went on strike because ILEA, the authority responsible

573
for the school and the education of the children in it, decided to carry out an inspection and inquiry. The school was closed for two days while that strike was on. Then the inspectors acted as teachers for three days, The following week a temporary team of teachers and a temporary head took over, the permanent team being still on strike and offering their services to pupils in a nearby hall.
The temporary team, for whom I have heard nothing but the highest praise, continued for two and a half weeks, until the striking teachers decided that they would like to return to work on 16th October. The teachers who had been on strike taught for seven days, until they were given paid leave of absence to attend the inquiry, and then another temporary team was installed in the school, and is still there.
Imagine, Mr. Deputy Speaker, the disruption that that series of events means to the children in their class work, quite apart from the unsettlement caused by seeing their teachers picketing outside their school and the school made the subject of massive Press and television coverage. But the uncertainty is not over. The teachers who went on strike have inquired about the question of going back to the school during the prolonged period of the inquiry. They are on leave of absence not until the inquiry reports but until it ceases to require their attendance. So the children may have to have the old team back for at least one other period.
I do not want to be unfair to teachers who are the subject of an inquiry and who may be the subject of disciplinary proceedings—and anyone will appreciate the problem for an education authority in this situation—but I say that the interests of the teachers, even if it turned out that they had been entirely blameless, are as nothing compared to the interests of the children.
In this situation, whoever is at fault it is not the children, but it is they and they alone who are suffering, and they are suffering very greatly. These children are, for the most part, those who need, more than most, good, stable tuition in the basic human skills. If they do not get through the basics at school, that deficiency will not, for most of them, be made up by parental activity in the home.
574
The parents desperately want their children to be taught, and the parents cannot be expected to substitute for the school.
The series of events comes on top of a situation which clearly disturbed the ILEA inspectors who inspected the school while the teachers were on strike. They criticised a number of aspects. I shall not quote the criticisms, because they have had a good deal of Press coverage, but the inspectors concluded their report by saying that the condition of the school as presented to them was such as to warrant a full inspection at the earliest opportunity.
I want to make it quite clear that I am talking about the junior school, and that the report on the infants' school was a very favourable one. The staff of the infants' school, and the ILEA, in respect of its responsibility for the infants' school, are to be congratulated on the good quality of that report.
It is the duty of the ILEA to get the junior school staffed on a permanent basis now, without waiting until the end of the inquiry. If, at the end of the inquiry, the teachers are found to have been blameless, the inquiry can easily make that fact clear by public statement and ensure that their careers do not suffer in the future. The public would then understand—as would the teaching profession—that the children have to be put first.
I come to the manner in which the ILEA has dealt with the situation. There are those who say that the authority should have been active on the alleged deficiencies of the school long ago, but I shall pick up the story only from the time of the decision to hold the inquiry.
On the day that the inspectors arrived at the school to carry out the inspection which was to be the basis of the inquiry, the head and most of the teachers went on strike, picketed the school, set themselves up in a neighbouring hall, and invited and encouraged some of the children to go with them. That action was taken in protest against the holding of the inquiry.
The teachers went on strike because the local education authority, set up by Parliament to run the school, decided to investigate one of its schools. Of course, teachers have a right to strike, just like anyone else, but teachers who did so because the education authority did what it had the right and duty to do should have been suspended. For reasons that I

575
do not comprehend, the ILEA decided not to suspend them, so when the inspectors had done what they could to keep the school going, and when a temporary team had been in charge for two and a half weeks, the striking teachers were free to stop their strike and return to the class rooms, which is what they did. Hence the constant chopping and changing to which I have referred.
Apart from the failure to suspend the teachers there have been several changes of plans for the inquiry. First, the inquiry was to be carried out by the ILEA's Schools Committee. Then it was agreed that there should be an independent chairman along with members of the Schools Committee. Then it was decided that members of the Schools Committee would not be appropriate people to serve on the inquiry because questions of the ILEA's behaviour might have to be raised. Also, what had been thought likely to be a one-week inquiry began to look like taking several weeks, and members of the Schools Committee could not spare that amount of time. Now, the inquiry is in the hands of an independent chairman and a couple of advisers. That decision was announced as late as the morning when the inquiry was due to begin.
Since then there has been confusion over the availability of documents in the inquiry. The inquiry was suspended for a day or two, and later for a whole week. It is now expected that it will not be completed before next year.
Not only has the time taken by the inquiry escalated; the formality of the proceedings has become increasingly intimidating. Legal counsel paid for by the ILEA are representing the main parties—the authority, the managers and the teachers. There has been a claim for legal representation of the parents, which, so far, has been rejected by the authority. In that formal setting the parents will have a problem in putting over their point of view. The inquiry is being held at County Hall, not in the area of the school, which means that parents will have difficulty in attending. Even if they go to County Hall it is possible that they will not get in, because the 50 or so seats are taken up by the Press and television. The whole inquiry operation is taking off into the stratosphere, and I find it hard to see how it will get back on the ground within a reasonable period. It is
576
almost like a fashionable murder trial at the Old Bailey.
Meanwhile, back in Islington, the temporary teachers are valiantly struggling to do their best for the education of the children—who are what the whole thing is about.
I want the Minister to take this point on board. There just has to be some simpler and quicker way of settling disputes of this kind. There needs to be a way of picking up these matters at an earlier stage, when they can be resolved by conciliation and administrative action rather than by a grand public trial.
There can be strong criticism of the old-style school inspectors and the fact that the old teachers were telling the young teachers to stick to the old ways. But what we have done is run down that system and put nothing in its place except the idea that each teacher is his own master, and entitled to do his own thing.
If cases like this are allowed to grow into causes célèbres, the likelihood is that they will end up with the closing down of schools which could have been saved. We saw this, in the same area, with Risinghill, and I fear that the ILEA will find itself resolving the William Tyndale issue by the same device. Yet we need that school in Islington, if only because the infants' school in the building has such a good record and has been reported on so well.
I hope that I have said enough to convince my hon. Friend that, whatever protestations she feels obliged to make about her semi-independence from the matter, and non-involvement in it, there are points which ought to disturb her, and matters which call for action. It is for that reason that I repeat what I have said to her and the Secretary of State before, namely, that a representative of the Department of Education ought to be present as an observer at the inquiry.
I do not think it would be appropriate at this stage for the Department to be involved actively in the inquiry but, to put it at the lowest, the Department will look very foolish if this matter ends up in its lap without its having a direct source of knowledge about the conduct of the inquiry. No verbatim record is being kept, and, therefore, the only alternative source of information will be from

577
the authority itself. For that reason, I ask my hon. Friend to arrange that there should be a Department of Education and Science presence, known to the ILEA, of course, by means of an observer, for the remaining part of the inquiry, and I hope, too, that the Department will set about considering some of the wider issues that are raised by the affair.
11.48 p.m.
The Under-Secretary of State for Education and Science (Miss Joan Lestor): As my hon. Friend has said, because an inquiry is taking place on this school it is difficult for me to comment on some of the matters that he has raised. But I am grateful to him for drawing the attention of the House and others concerned to this very difficult situation, which has arisen as a result of the dispute at the William Tyndale Junior School.
My hon. Friend is right to be concerned, and I have listened with great interest to everything he said. The tragedy is, of course, that the children at the school at present are caught up in a dispute not of their making but out of which they are likely to suffer. I am sure that no one would disagree when I say that their future well-being must be the concern of all of us, and I am sure that is my hon. Friend's concern and that that is why he raised the matter. The immediate task is to create conditions in which good relations can prevail between all those concerned with the school in order that the education of these children can be conducted in a relatively calm fashion.
My hon. Friend has already outlined in full the problems which have arisen. I can reassure him that my right hon. Friend and I are by no means unaware of the situation or by no means uninformed of it. Not only have we seen the considerable publicity given in the Press to events at the school, but my Department is keeping abreast of these developments. Nevertheless, it is understandable that my hon. Friend should consider it appropriate and important that a special inspection of the school should be conducted. I shall try to explain to him what are the difficulties in respect of this at the present time.
As my hon. Friend and others are aware, William Tyndale School is a school falling under the terms of the
578
Education Act 1944, which brings it within the responsibility of the local education authority—the ILEA. It is, therefore, for the ILEA to meet all the costs of running the school and to make the instrument providing for the appointment of the managing body—although Section 18 of the Education Act 1944 specifically provides that a proportion of the managers should be appointed by the minor authority for the area.
I understand that in this case the London borough of Islington appoints a proportion of the managers. The effect of these arrangements, as I am sure my hon. Friend will appreciate, is that the ILEA is responsible for the school and that this responsibility extends to ensuring that the education offered by the school is efficient and is suitable for the age, ability and aptitude of all the pupils in it. This is an important position to establish at this time.
It would be quite wrong for me to comment on the detailed circumstances of the situation at a time when a public inquiry is being conducted into those very circumstances. Not only might any such comments be prejudicial to the course of the inquiry; they might also have the effect of prejudicing any subsequent decision that my right hon. Friend might have to take in accordance with his statutory powers.
An approach has already been made to my right hon. Friend requesting him to use his powers to set up a public inquiry into the general situation, and, once the conclusions of the present inquiry are known, it will obviously be necessary for my right hon. Friend to reach a formal decision on this request.
I am sure, therefore, that my hon. Friend will realise why I cannot make any detailed comment on some of the things he has said in relation to the subject being discussed at this inquiry.
My hon. Friend is quite right to point out that, under the provisions of Section 77 of the Education Act 1944, my right hon. Friend has the power to cause an inspection of the school to take place if he so wishes. No request for such an inspection has been made to my right hon. Friend by the ILEA, the managers or, indeed, the teachers at the school. My right hon. Friend was, however, officially informed by the ILEA, in August, that, in the light of the events at the

579
school, it was the Authority's intention to arrange for an inquiry to be held in public, under an independent chairman, into the teaching, organisation and management of the school. My right hon. Friend was further informed that the inquiry would be preceded by an inspection of both the infants' and junior schools by ILEA inspectors, and that he would, in due course, be informed of the findings of the inquiry and of any consequent actions proposed by the Authority.
In the light of this information, it would have been quite inappropriate for my right hon. Friend to cause a special inspection to be made at that time. My right hon. Friend does, of course, know about the events that took place when ILEA officials commenced their inspection, and the present position, I understand, is that the inquiry is under way and the teachers concerned are not in the school. Consequently, it would not have been appropriate, as I have said, for a further inspection to take place at this time.
Quite apart from these points, however, there is a more general reason why it would have been inappropriate to set up another inquiry. Despite the national publicity that recent events have caused, problems have originated at the local level between the staff, the managers, the parents and the local education authority. It is, therefore, only common sense that in the first instance it is they who must try to find a solution. They recognise this and they are endeavouring to do so. If after the inquiry has reported and the Authority has deliberated its conclusions, no satisfactory outcome seems likely to emerge, it may become necessary for my right hon. Friend to consider what action on his part, if any, could help.
Mr. George Cunningham: The trouble is that this inquiry will go on for weeks and weeks, and it may be impossible to shorten the process without some intervention by the DES. If there were an intervention, formal or informal, it would prove to have been useful for the Department to be informed. Does the Department feel that it can provide a presence at the inquiry, on an observer basis? If my hon. Friend's answer is "Yes", I shall be delighted. If it is "No", will she please not give the answer
580
now, but take the point on board and think about giving me a favourable answer after considering it?
Miss Lestor: I shall take on board my hon. Friend's point. At the moment, it is fair to say that the view of my right hon. Friend and the Department is that we wish to do nothing that is likely in any way to put us in a position of non-neutrality in respect of any action that we may be asked to take on the basis of the report of the inquiry. My hon. Friend asks me not to answer "No". I am always anxious to please him. But he understands the very delicate nature of this matter, bearing in mind that at some stage the Secretary of State may be asked to comment on it.
I was a little concerned to hear my hon. Friend say that no verbatim account of the inquiry is being kept. I am not sure whether he is implying that it will not be a very full account. I should like to know more about this, and I shall look into it.
I hope that my hon. Friend will recognise that we would not wish to intervene in any way to influence the course of events at this stage. Most people have formed opinions about what has taken place at the school, based on Press reports and other comments. We are doing our best to make no comment and to form no opinion until the inquiry has ended. Only then shall we be in a position to make a judgment if we are called upon to do so.
We are concerned to see, as soon as possible, the fairest and most satisfactory outcome, both for the school and for all the children in it. I am a little disturbed about the length of time that the inquiry may take.
There are one or two other matters that it is difficult to comment on at this stage. The question of more central control of curriculum content in our schools is often discussed in the House and in various parts of the country, but it is not a matter on which any governmental view has been reached or which we have discussed in great detail. It is a topic that someone may wish to raise in the House as a general point at some time.
The point is well taken, also, that we might seek to find a way of settling disputes of this kind more quickly than the

581
present system permits. However, the interim inquiry report has been published and the full inquiry is under way. I can assure my hon. Friend that, without missing any of the information and discussion that is taking place, the Department must keep a profile of neutrality, in case
582
it is called upon to make a judgment at the end of the day.
Question put and agreed to.
Adjourned accordingly at two minutes to Twelve o'clock.