HC Deb 16 February 1976 vol 905 cc919-25
7. Mr. Canavan

asked the Secretary of State for Energy when he next proposes to meet the Chairman of the BNOC.

Mr. Benn

I see Lord Kearton very frequently.

Mr. Canavan

Will my right hon. Friend discuss with the chairman of BNOC the meeting held in Edinburgh last week by shop stewards from the oil platform construction sites? In view of the grave concern about the continuing lack of orders—none has been placed in Britain for about nine months—will my right hon. Friend ask the Chairman of BNOC to ensure that our 51 per cent. participation means in future a greater degree of direction of oil jobs to areas that are most in need?

Mr. Benn

I think my hon. Friend knows that both my hon. Friend the Minister of State and I have seen the companies concerned, and I have seen the unions and the shop stewards about this problem, which is a serious and difficult one. I do not believe that BNOC can help in the short run, but one reason why we want a strong and powerful Corporation is to ensure that British interests are reflected over the whole range of oil policy decisions.

Mr. Budgen

Will the right hon. Gentleman tell the chairman of BNOC that the OPEC cartel is cracking fast and that if the price of oil drops to below $7 a barrel, a great deal of the investment in North Sea oil becomes uneconomic?

Mr. Benn

Before the hon. Gentleman rubs his hands at the possibility that the North Sea investment might be unsuccessful, let me tell him that he is wholly wrong. Whatever the short-term position during the slump, all the long-term forecasts are that oil prices are likely to rise. North Sea investment is now pouring in at a steady rate, and our oil policy is intended to get and will succeed in our getting a 51 per cent. position on the operating committees. This investment offers this country a substantial transformation of its prospects.

Mr. Alexander Fletcher

Will the right hon. Gentleman ask the chairman whether the chief executive of BNOC, temporary or otherwise, resides in Glasgow, in view of previous commitments?

Mr. Benn

The board of BNOC was appointed only last month. It is necessary for the members to be all round the United Kingdom. The chairman is often in London to discuss matters with me. I think the House knows that we have set up the Corporation's offices in Glasgow, but it will still have some work to do in London.

Mr. Gray

Will the right hon. Gentleman remind Lord Kearton that uncertainty over what 51 per cent. actually means—whether it is equity or control—may have led to the remark in today's Financial Times by the President of the Dow Commercial Company that it did not take part in the last round of licensing because the company did not know the rules, and added that, as far as he could see, it still did not know them? Will the right hon. Gentleman comment on that?

Mr. Benn

The hon. Gentleman has made it his business to repeat and amplify every anxiety that he can find in the daily newspapers, but the position is clear.

We introduced the petroleum revenue tax to make good an unforgivable gap in the legislation passed by the Conservative Government. We introduced the Petroleum and Submarine Pipe-lines Bill to provide a legal regime which allows this country to manage its oil resources. We have set up the BNOC, which is similar to what most countries outside the United States have done, and we have made it clear in the participation which we are determined to get with all the oil companies in the North Sea—[Interruption.] I hope the House will allow me to continue. We have made it clear that participation is on the basis of no better and no worse, and this is clearly understood by the companies concerned.

12. Mr. Lane

asked the Secretary of State for Energy whether he intends to appoint more members of the British National Oil Corporation.

Mr. John Smith

I intend to make further appointments in due course. Those already appointed, however, represent a well-balanced board, drawn from a wide area of expertise, and will be well able to initiate the process of establishing the BNOC as a fully integrated oil company.

Mr. Lane

I welcome the first few words of that reply, but on what possible grounds can the Government have faith in the technical competence of the Corporation as it is at present constituted?

Mr. Smith

Because of the expertise of some of the members of the Corporation—[Hon. MEMBERS: "In what?"]—particularly the expertise of the chairman in a wide range of industrial matters. The board will take care to appoint to its staff men who have high technical ability. Much of the criticism directed by members of the Opposition at the board has been totally misdirected. For instance, there are some very young members of the BNOC.

Mr. Gordon Wilson

Will the Minister note that great dissatisfaction is felt in Scotland because the BNOC has already opened a London suite of offices for the convenience of the England-based chief executive? When appointing other members to the board, will he make sure that the Government's promise is honoured and that there will be full de- centralisation of decision-making to Scotland, not keeping it in London?

Mr. Smith

I do not think that the hon. Gentleman has got over his disappointment at the fact that the present Government set up the BNOC and put it in Glasgow in the West of Scotland. I know that he and his colleagues wished it to go somewhere else, but the fact that it was sited in Glasgow was widely acceptable in the West of Scotland. There are three Scots on the board of the BNOC and they are making a signal contribution to its success. The hon. Gentleman's sniping arose from the fact that in this matter the Labour Government have done much more for Scotland than the Scottish National Party ever thought of.

Ms. Colquhoun

Will my hon. Friend tell the House how many women members he has appointed to the board of the BNOC?

Mr. Smith

None so far, but no doubt my right hon. Friend will bear that point in mind when he makes future appointments.

Mr. Gray

Will the hon. Gentleman bear in mind that it is necessary to retain a certain number of staff in London because, however many may be moved to Glasgow, the main financial decisions will still be taken in London, and, as a result, it is in the interests of the people of Scotland that there should be a staff in London for this purpose?

Mr. Smith

Anyone who is concerned to make the BNOC a success will deploy staff wherever necessary. There will, of course, be staff in London as well as in Glasgow and any other part of the United Kingdom where it is desirable to have them. The important point is that the Government have acted to secure the national interest and, through the setting up of the Corporation, have benefited Scotland by putting the headquarters in Glasgow. The Scottish National Party has not yet become reconciled to this.

Mr. Viggers

Will new appointees to the BNOC board have experience of the oil industry?

Mr. Smith

That is a factor that will certainly be taken into account. Hon. Members opposite have shown a predisposition to attack every member of the Corporation since appointment. They have ignored the wide knowledge of the oil and gas industries possessed by people like Mr. Denis Rooke, for example.

15. Mr. Biffen

asked the Secretary of State for Energy if he will make a statement on the composition of the British National Oil Corporation board and the salary structure proposed for senior executives.

Mr. John Smith

The board so far consists of Lord Kearton, the full-time Chairman, Lord Balogh, a part-time deputy chairman, and 10 part-time members, two of whom are civil servants. The salary of senior executives is a matter for the board.

Mr. Biffen

But does not the hon. Gentleman realise that the salary structure is of prime public importance? Since the Secretary of State has rightly gone on record as deploring any pressure and arm-twisting in relationships between Secretaries of State and the chairmen of nationalised industries, will the hon. Gentleman say whether it is his expectation that the salary structure of the chief executive and his lieutenants will correspond more approximately to the going rate of the oil industry or to the going rate of other executives of nationalised industries?

Mr. Smith

My difficulty in answering that question is that I do not wish to anticipate the proper consideration of this matter which is taking place within the British National Oil Corporation itself. No doubt, the salary structure and the salaries paid to other people in the oil industry will be one of the factors which it will take into account. The BNOC was set up to run itself in these matters, and I cannot anticipate what decisions it will reach.

Mr. Donald Stewart

As the chairman and, no doubt, the civil servants are apparently to be based in London, may we be told how many executives will be based in Scotland and in England respectively?

Mr. Smith

The hon. Gentleman is following the practice of his SNP colleagues in taking every available opportunity to snipe at the British National Oil Corporation. He cannot yet swallow the fact that the Labour Government established its headquarters in Glasgow. We shall have officials and offices in London and elsewhere in the United Kingdom wherever it is useful so to do. If the hon. Gentleman would for once recognise the important devolution of decision-taking which was made when the British National Oil Corporation headquarters were sent to Glasgow, I should listen to him with more sympathy.

Mr. Palmer

Will my hon. Friend publish the amounts of these salaries in due course, giving the information to the House, since they are of the greatest importance to the salary structure of other nationalised industries? The salaries paid to the chairmen of the electricity boards, for example, are published and well known.

Mr. Smith

I suggest that my hon. Friend should distinguish between the chairmen and their salaries and the salaries paid to members of the board and to executives. I was being questioned in particular about the executives. The Government are considering the question of publication.

Mr. Hordern

Would it not be a good idea, since there is a shortage of members of the board of the BNOC, to invite Lord Ryder to join the board to exert his mollifying influence with Lord Kearton, as he has already done elsewhere? He has, after all, considerable experience in the exploitation of natural resources.

Mr. Smith

Before the hon. Gentleman casts any more aspersions of that kind, he might look around among some of his right hon. and hon. Friends.

Mr. Biffen

But does not the Minister recognise that this is a matter of significant and central importance to the activities of the British National Oil Corporation? Will he confirm that the legislation which established the BNOC gives the Secretary of State a power of specific directive in these instances?

Mr. Smith

The powers of specific direction under the legislation are not related to any particular instance but are available to the Secretary of State in respect of any matter to which they apply.

Mr. Skeet

Answer the question.

Mr. Smith

I am answering the question.

The hon. Member for Oswestry (Mr. Biffen) may not be as familiar with the legislation as are some of us who took part in its passage.

Mr. Biffen

I am.

Mr. Smith

The powers of specific directive are available to the Secretary of State, but the question of salaries for these people is for the board at this stage.