HC Deb 05 November 1975 vol 899 cc405-31

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 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.

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 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 (Exeter)

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 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 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 (Ross and Cromarty)

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.

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 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 (Orkney and Shetland)

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 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. 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 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 (Dundee, East)

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 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 (Glasgow, Garscadden)

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 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 (Edinburgh, North)

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 (Croydon, Central)

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 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 (Rochdale)

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 (Bolsover)

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 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 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". 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 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 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 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 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 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 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: 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.

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