HC Deb 19 July 1976 vol 915 cc1257-8
2. Mr. Gray

asked the Secretary of State for Energy if he has considered offering further incentives to those companies likely to be in the market for oil production platforms to bring forward their orders.

The Minister of State, Department of Energy (Dr. J. Dickson Mabon)

Extensive discussions which are continuing with the operators on the United Kingdom Continental Shelf have not revealed any potential order the advancement of which would be ensured by any reasonable incentive that the Government might be able to offer.

Mr. Gray

Will the Minister give particular attention to the study published on 10th July by the Fraser of Allander Institute in which Mr. Alexander Kemp of Aberdeen University, having considered 12 North Sea oilfields, concluded that petrol revenue tax as at present constituted is not working towards one of its prime objectives—namely, the encouragement of the development of marginal fields?

Dr. Mahon

I have a high regard for that institute, and some of its previous papers have been useful, but I have not had time to study that one. Almost all operators inform us that they are appraising fields. No company has gone so far as to say that economic considerations are holding it back. There is in existence the Oil Taxation Act, and we have a provision for marginal fields, which we shall examine if asked. We also have the Offshore Supplies Interest Relief Grants Scheme and the Accelerated Project Scheme. Furthermore, we might be able to help, if asked by any of the companies, with the possibility of a refund of royalties. In other words, if it appeared in a specific case that incentives might lead to the advancement of a platform order, we would consider a refund of royalty.

Mr. Dalyell

Will my right hon. Friend say anything more about the talks he had with Mr. Robert Sneddon, other officials of the AUEW and shop stewards at Redpath Dorman Long, Methil?

Dr. Mahon

I have nothing further to report. It may be that we shall have another meeting shortly. We are hoping that there may be some other work coming in for the yard. I shall not go any further than that at present.

Mr. Gordon Wilson

Since the Government threw away £26 million of public money in providing facilities at Hunterston and Portavadie which have not been used, and are not likely to be used in current circumstances, may I ask the Minister to give an undertaking that sums of that order will be made available for helping all existing yards in Scotland, particularly in relation to the development of new technologies such as that of sub-sea completion units?

Dr. Mabon

The money is committed and cannot be spent twice over. The Scottish National Party, with other parties, pressed for an increased capacity to handle platform building orders.

Mr. Gordon Wilson indicated dissent.

Dr. Mahon

I withdraw that. It was certainly the case that most other parties did so. He would be a brave man who said that there will be no need for these sites within the foreseeable future. I agree that they will not be needed in 1977, but I would not rule out later years.

Mr. William Hamilton

Does my hon. Friend realise that a serious situation is developing at Methil, where there has been a complete cessation of platform orders? Can he say whether it is possible for this yard to diversify into other aspects of the North Sea oil operation?

Dr. Mabon

I am concerned about Methil, as I am about Graythorpe for that matter. We have given strenuous advice to the company and the work force to the effect that if they can diversify in the short term it is possible that they may be able to take advantage of orders for steel platforms that may come in 1977.