§ Order for consideration read.
§ Motion made, and Question proposed, That the Bill be now considered.
§ Mr. Deputy Speaker (Mr. Oscar Murton)
I must inform the House that Mr. Speaker has announced his provisional selection of amendments as follows: Amendments Nos. 2, 3 and 5 will be taken together, and with Amendment No. 8 we shall take also Amendment No. 9.
§ 7.1 p.m.
§ The Minister of State, Scottish Office (Mr. Gregor MacKenzie)
Perhaps it will help the House in considering this measure if I set out the Government's position. There has been a great deal of public discussion and correspondence on this matter, and I hope that a short explanation will help the House.
In the first place, I must make clear the role of the Secretary of State for Scotland under the Private Legislation Procedure (Scotland) Act 1936, under which this measure is promoted. Under that Act there is provision for the examination by Parliamentary Commissioners of any opposed provisional order. This is to give objectors the opportunity to argue their case and for the matter to be examined in Scotland. This procedure was followed in this case. A Commission of two Members of each House heard Mr. Nightingale representing the owners of the land concerned and the promotors in Edinburgh in May. The hon. Members for Dumbartonshire, Central (Mr. McCartney) and Fife, East (Sir J. Gilmour) were members of the Commission. After hearing both sides, the Commissioners made their decision to recommend that the order be confirmed.
At that stage in the procedure it is the duty of the Secretary of State for Scotland to lay the necessary confirmation Bill before Parliament. While he can, in theory, refuse to do this, successive Secretaries of State have always honoured the undertaking given during the passage of the Procedure Act that they would not set aside the recommendations of Parliamentary Commissioners except in exceptional circumstances—for example, where 1734 there had been some significant procedural irregularity. There is no question of anything of that kind here. It was therefore my right hon. Friend's clear duty to give the order the normal facilities and lay the Bill before the House.
The purpose of the provisional order which the Bill would confirm is to authorise the promoters, the Cromarty Petroleum Company Ltd., to acquire compulsorily some 47 acres of land and foreshore at Nigg. This is part of a total area of about 800 acres required for the construction of the proposed refinery and its associated marine terminal. I understand that the promoters have already purchased the remainder of the land they require.
The Bill is not concerned with any other aspects of the proposal for which planning permission has been given, but the House may wish to consider the matter in the light of wider considerations to which I shall now turn.
Let me deal first with the subject of planning. The planning history of the area over the last 10 to 15 years has identified the Cromarty Firth as one of the key areas for development in the Highlands where industrial growth can be of great benefit not only to the immediate area but to the Highlands as a whole. This view was taken by the old Ross and Cromarty County Council and by the Highlands and Islands Development Board and, since local government reorganisation, by the Highland Regional Council. It is backed up by a number of planning studies. These include the report of the Jack Holmes Planning Group, commissioned by the Highland Board in 1967. The view has been given expression in a series of amendments to the development plan promoted by Ross and Cromarty County Council and approved by successive Secretaries of State.
The practical effect of this policy has been the establishment of the aluminium smelter at Invergordon, the oil production platform yard at Nigg and the pipe-coating yard at Invergordon, and the identification of a number of other sites appropriate for industrial development. The policy also led to the setting up in 1973 of the Cromarty Firth Port Authority to control harbour developments in 1735 the area. It is therefore a clearly established objective of both the local authorities and successive Governments that the Cromarty Firth should be developed industrially. It is against this background that the application for the building of the refinery with which this Bill is concerned fell to be considered.
The reasons for the Secretary of State's decision on the matter are set out at length in the letter sent to the Highland Regional Council on 1st March this year, following his receipt of the report of the public local inquiry. Copies of this letter were placed in the Library. I need not go over that ground in detail, but would draw attention to the Secretary of State's main conclusions. He accepted that no overriding national need for further refining capacity had emerged at the inquiry. On the other hand, he considered the new jobs important for the economy of the area. It is estimated that the project would produce about 1,500 jobs during construction and about 450 when in operation. The Secretary of State considered, in addition, that the project would increase the possibility of attracting other developments to the Cromarty Firth. In these circumstances he considered that it would be a very serious step to turn away a development of this kind in an area already identified for industrial growth. Taking account of all the factors, he decided that the advantages of the proposed refinery outweighed the disadvantages.
§ Mr. Tam Dalyell (West Lothian)
On a purely factual point, do the Government accept the view that to create one permanent local job will cost between £100,000 and £400,000 of Government money? Does that coincide with the Government's estimates?
§ Mr. MacKenzie
My hon. Friend anticipates what I shall say later on the financial aspect. No doubt he will have an opportunity to make his comments during the debate. I wish to emphasise that in terms of jobs the decision that has been taken is warmly welcomed by many people in the Highlands. It was certainly welcomed by the Scottish Council for Development and Industry and the Highlands and Islands Development Board, as well as by local authorities and local trade unions. Members 1736 of the Scottish Trades Union Congress have discussed this matter with me because they are concerned about it.
A further point that has been exercising the minds of hon. Members is the question of refining capacity. I have been made aware of the anxieties of many of my colleagues on that score. Therefore, it is my good fortune to have with me this evening on the Government Front Bench my hon. Friend the Under-Secretary of State for Energy, who will have an opportunity a little later to add his voice to our deliberations. No doubt he will then deal with some of the points that evercise the mind of my hon. Friend the Member for West Lothian (Mr. Dalyell).
Other questions that have been posed relate to the financial assistance given to the project under the Industry Act 1972. I wish to make it clear that so far no application has been received either by my right hon. Friend the Secretary of State for Industry or by my right hon. Friend the Secretary of State for Scotland from the Cromarty Petroleum Company for any grant under the Act. Therefore, anything I say on that subject is in that sense hypothetical.
§ Mr. Russell Johnston (Inverness)
The Minister will probably know that the handout issued by the public relations office of the company said that the company intended to make the normal application.
§ Mr. MacKenzie
I accept that. I was about to deal with it. I am making it clear that at this moment we have not received these applications. I am dealing with something that I anticipate.
The regional development grants that are paid under Part I of the Act are very much a matter for the Secretary of State for Industry. Hon. Members will know that they are paid at the rate of 20 per cent. on most capital expenditure on buildings and equipment incurred on qualifying premises in development areas. These include the Cromarty Firth. Premises qualify in terms of the Act if they are wholly or mainly used for the qualifying activities. Oil refining is among these activities, as are other processes to be found in oil installations, although oil storage is not. On the facts at present 1737 available I understand that it is impossible to say whether the entire capital costs would attract the 20 per cent. grant. That will depend on precisely what is done on the site and how it is done.
As to whether regional development grants in such a case represents value for money, I can only say that these grants form part of a complex mix of automatic and selective incentives designed to promote the growth of modern, internationally competitive industry in our assisted areas. It would be dangerous to base a case for altering individual features of this package on the alleged merits or demerits of a particular project that received assistance. Successive Governments have felt it right to devote considerable resources to incentives. In any case the financing of the package has to compete with the claims of other programmes, such as housing and schools, in the normal processes of interdepartmental reviews of public expenditure.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
Does my hon. Friend accept that one of the major criticisms of Government regional policy as a whole has been the fact that it is not sufficiently selective? One of the points in the Chancellor's statement of 22nd July announcing public expenditure cuts was that there would be more selection in future—the implication being that certain companies in certain areas would not get the automatic grants that they have been receiving.
§ Mr. MacKenzie
What my hon. Friend is asking me to do is to work under an Act of Parliament that we do not have. We are operating under the 1972 Act. I have been describing the purposes of that Act.
Selective financial assistance under Section 7 of the Industry Act 1972 may be given to viable projects in manufacturing industries in the assisted areas where it is likely to provide, maintain or safeguard employment. An oil refinery would be eligible to apply for such assistance. In Scotland. Section 7 is the responsibility of the Secretary of State for Scotland and in exercising the powers under the section he is advised by the Scottish Industrial Development Advisory Board.
I have tried to cover in a short space of time some of the matters that I know 1738 have been concerning hon. Members. I know of the concern that has been expressed, but I hope that all hon. Members will appreciate the importance of this development in Scotland and the thought that has been given to it in Scotland by a whole range of interests, including the Highland Regional Council, the Highlands and Islands Development Board, and the trade unions. All of these are anxious, as I am, to see progress made in this matter. I hope that the House will now feel able to allow the Bill to make progress.
§ 7.15 p.m.
§ Mr. Nicholas Ridley (Cirencester and Tewkesbury)
I naturally hesitate to intervene in what is principally a Scottish matter. Although the House may disagree with what I have to say, I defend my right to say it with equal vigour. I notice that three Members of the Scottish National Party are present and, encouraged by their lack of reticence to intervene in English affairs, I am sure that they will not hesitate to allow me to intervene in what is a Scottish affair.
I know the area of Nigg, although not, I am sure, anything like as well as other hon. Members present. It is a beautiful area as well as one which is extremely important from an industrial development point of view. We must bear in mind that there are strong amenity and natural beauty aspects to this matter which have to be weighed in the balance. It is not my intention to comment on them. Those who represent the area will do so more ably than I. All I wish to say is that it is one of those parts of our countryside which we should relinquish to industrial development only with the greatest reluctance.
What has to be asked is whether the expenditure of this public money is justified. One starts by looking at the company to which we are giving £36 million-odd. I know the history of this company and how its parentage traces back to a substantial character. It is curious that the only representation of this company in Britain is a small office in Soho Street. The thought of £36 million-worth of taxpayers' money going in that direction leads me to ask my first question, namely, are we certain that the grant of this money is watertight and that it will not simply go out of the 1739 country rather than into the ground at Nigg?
Are we certain that the company will pay British taxes? We have heard a lot about transfer prices in the past. We have heard a lot about the means by which money is shuffled in and out of refineries by oil companies. The House would not wish to grant permission which would involve the expenditure of this large sum of public money without being satisfied on that point. I am not saying that we cannot be satisfied, but it is up to the Government to satisfy us.
The curious thing is that although this company is reputed to be, at the back of it all, a company of substantial means which will be able to find the other £144 million which it is estimated is necesssary to build this refinery, it appears to have a special fund-raiser in London. The Daily Telegraph of 1st October said:A fund-raiser sent from New York is working 'semi-permanently' in London to raise the other £144 million required. He is Mr. Steve Stavrides, described to me last night as `a financial expert'.If he is busy seeking the other £144 million, why is it that the company says in its statement laid before Parliament:There can be no doubt as to the financial capacity of the company to mount the present project in view of its base in this organisation"?It seems curious that, if a company has such funds at its disposal, the presence of this financial expert is necessary to raise the other £144 million in London. If he succeeded, that would not be inward investment, which, we have been told, is one of the advantages. It is borrowing our money to make the investment. That point should be cleared up.
I want next to look at the economics of this in terms of jobs. The usual cog of light industry jobs in terms of the 20 per cent. grant normally payable is between £1,000 and £2,000 a job. That represents the taxpayer's contribution. For more capital-intensive jobs, however, that figure has been known to rise to up to £25,000 or even £50,000 per job. Indeed, the hon. Member for Motherwell and Wishaw (Dr. Bray) made a considerable impact some years ago in criticising the cost per job to the taxpayer of certain industrial subsidies at that time. Many of us had some sympathy with him. Even at the figure of 450 permanent jobs to 1740 be provided by the refinery, the cost per job works out at £78,000. That is a phenomenal sum per job.
Moreover, a new mystery is injected today into the question of the number of jobs. We were led to believe that there would be 450 permanent jobs when the refinery was working, but we read in the Financial Times today that the company has stated:When completed, there would be 450 permanent jobs for staff operating the refinery and the same number of jobs at the marine terminal and in support services.Are there to be 450 jobs or 900 jobs? As far as I know, that is the first time that anybody has ever mentioned the extra 450 at the marine terminal.
Incidentally, I suppose that they would be dock jobs and, as such, subject to the Dock Work Regulation Bill, being taken over by Transport and General Workers' Union men surplus from London. I do not see what benefit that would be to the Scottish economy. But let that pass. [Interruption.] The hon. Member for Dundee, East (Mr. Wilson) may wish to comment. I dangled it before him in order to bring him to his feet.
§ Mr. Nigel Spearing (Newham. South)
The hon. Gentleman will recall, with reference to London, that hydrocarbons are entirely excluded from that Bill by Schedule 3.
§ Mr. Ridley
I cannot believe that 450 people will be employed at the terminal piping oil ashore. Presumably there is some other port complex envisaged which will handle cargo. I know of no terminal which employs 450. Even Rotterdam, I believe, does not employ that many. There is, therefore, something to be cleared up here. I am not saying that it is wrong. I just want an answer.
Then there is the problem of refining capacity. We have been told that our refineries are working at 64 per cent. To add to that capacity is unnecessary. I am sure that the Under-Secretary of State for Energy will tell us about that. In addition, will he say whether it is necessary to have this extra refinery in this part of the country, if it be necessary to have an extra refinery at all? It will deal only with crude from the North Sea and perhaps elsewhere, exporting the products to other parts of the world and some to this country.
1741 As I understand it, there is no reason why the refinery should be sited in an area of great beauty as opposed to Grangemouth, the West Coast or any other already industrialised area. It can even be said that the jobs could more usefully be provided in the Clyde area. If there be a proven need for this extra capacity, that might be a better place for the extra jobs.
§ Mr. John Wells (Maidstone)
It is my understanding that there is over-full employment in the Nigg area at present, and people are travelling 70 miles to work each day, a total journey of 140 miles. Is it not ridiculous to put this extra number of jobs there instead of, for example, as my hon. Friend suggests, in the Clyde area where people are desperate for work?
§ Mr. Ridley
I merely offer that suggestion to the Under-Secretary of State for comment, because I cannot claim to know a great deal about working conditions at Nigg, but I know that there is a serious shortage of jobs in the Clyde area.
§ Mr. Robert Hughes (Aberdeen, North)
Which the hon. Gentleman and his Tory friends helped to create.
§ Mr. Ridley
We have an economic crisis. The last occasion on which I spoke in the Chamber was on the first Monday after the recess when we debated the economic situation. In that debate, with Members of Parliament wearing their other hats and talking about our economic problems, there emerged a tentative trembling consensus that perhaps what was wrong was that the Government were spending too much money. That thought came from hon. Members on the Government side and from the Conservative Opposition as well as from hon. Members who represent Welsh, Scottish or Irish parties.
It is not good enough, when we come to another subject, to say "We dealt with public expenditure last week. Now let us spend some money". Be it remembered that £36 million is a lot of money, though not, of course, as much as when the Government came to office. Measured in dollar terms, it is rapidly declining in value. But we cannot have it both ways. We are short of public 1742 money, and we cannot, therefore, spread it widely on every project, irrespective of merit.
If we are to spend money on aiding industrial development, we have all the greater responsibility to ensure that that industrial development is the sort of development which is needed in the British economy, which is located in the right place and which will not lead to difficult problems. If it were not for the Industry Act and its 20 per cent. automatic entitlement, I doubt that there would be many who would feel that this was a project to which money should go.
We have to economise, and my plea to right hon. and hon. Members, faced not with a general debate on economics but with a specific debate about the employment of £36 million of public money, is that they should not forget the economic crisis, that they should use that selection, that perspicacity and that desire to plan which is so much a party of the Labour Party's philosophy, and that they be prepared for once to tell the Government "No".
§ Mr. Dalyell
I begin, as I have on previous occasions, by declaring an interest—the interest of those of my constituents in Bo'ness and roundabout who work in the refinery at Grangemouth.
There have been references to the trade unions, and in that connection I shall now quote what was said by the secretary of the BP (UK) shop stewards' committee, Mr. Neil Boner. He said:Tam Dalyell has the full backing of our committee, which is made up of refinery workers at Grangemouth, Kent, Landarcy and Belfast. Our views are also shared by other members of the T & GWU in other refineries throughout the United Kingdom who recognise that the whole of Europe is faced with surplus refining capacity and that the building of a new refinery anywhere in the United Kingdom is not an economically viable proposition.Since this is but a three-hour debate, I put this simply in the form of a question to my hon. Friend the Under-Secretary of State for Energy. What was said by Mr. John Miller and Mr. Jack Jones when they went to see the Secretary of State for Energy? May we have an account of that meeting? I do not ask that as a rhetorical question. I genuinely do not know the answer, and I think it extremely pertinent to the debate.
1743 Although, technically, my hon. Friend the Minister of State at the Scottish Office is correct when he says that the Bill is concerned with no matters other than planning, it is the very crux of the argument put by many of us that no sensible planning decision can be made on an issue such as this without some overall knowledge of refinery strategy in this country, and it is meaningless to talk about this kind of planning decision unless one can look at the wider context.
§ Mr. MacKenzie
Perhaps I did not make myself crystal clear to my hon. Friend and others when I opened the debate. What we are concerned about is the confirmation order. It is about 47 acres of land, not about general planning considerations, which have already been settled and laid out in the Secretary of State's letter of 1st March 1976 to the Highland Regional Council.
§ Mr. Dalyell
That is a very technical view of the situation, and my response to my hon. Friend is the one I have given him previously in a letter. Back-Bench Members of Parliament can count themselves fortunate from time to time that they can express their views on such an issue as this. By chance—it is only by chance—this issue has come up for us to do something about it. We have some responsibility in the matter, even if we are not strictly in order, technically, and when we have an opportunity to raise our voices on a matter of national strategy we are grateful for the chance to do so. This is where Private Bills can be very interesting in terms of the relation between the Executive and the House of Commons.
I shall stick to precisely one issue—the question whether this country needs the green-fields refinery site at this time. It is said by Conservatives that perhaps in some way I have been brainwashed by BP. It is true that on my initiative, since I became interested in this matter, I went to BP, and I have a continuing relationship with that company. But I also went to Esso and Shell.
The figures that are given are that at the moment we are using only 60 per cent. to 65 per cent. capacity, and projections to the 1980s do not show anything different. If this were just the 1744 evidence of the oil companies, it could be argued that somehow or other I had become the creature of the oil companies' objections. But that would be very unfair and probably wrong, because I do not see how they could lie about this even if they wanted to. Most of their refinery workers know the truth that we are using between 60 per cent. and 65 per cent.
There is evidence, not only from every petroleum journalist, but also from the Chairman of the British National Oil Corporation, Lord Kearton himself. I quote from a speech of his which was reported on 10th April in the Glasgow Herald. He said:I will be perfectly candid and say that it would be extremely difficult to justify. This country is possibly over-refineried at present and the existing refineries are working 60 to 70 per cent. of capacity because of the rundown in national consumption. At the moment, people are saying that it might be 1980 or more before we can get back to the 1973 level of consumption. This is why cases for new refineries are very difficult to justify on any commercial grounds.I ask one direct question to the Under-Secretary. Is the Department of Energy saying that in its opinion—and in giving the impression, at any rate, of encouraging this project—it knows better than the man it appointed as Chairman of the BNOC? This is a very crucial question. It is a matter of judgment, and we must have an answer to it before we can go any further in this debate.
Finally, I ask a question of the Treasury. I am very grateful to my hon. Friend the Minister of State for being on the Front Bench. In paragraph 5.10 the CARPU report says:Recent Treasury estimates indicate that industrial subsidies for smaller scale manufacturing industry tend to range between £1,000 and £2,000 per job created, compared with £25,000 to £50,000 per job created in the larger scale industries. In the development of the Nigg refinery inevitably this figure is likely to exceed £100,000 per job created. Initial per capita costs will be high in the beginning as roads, social facilities and housing are provided in advance of a fully operative industry rate base, which in total are forecast as £40,000 in current values. The cost to the state of each one of the likely 100 local jobs created is £400,000. Benefits from the type of industrial development currently proposed for Cromarty are unlikely to accrue to any degree to outlying areas and communities.When this matter comes to the Treasury—I understand that the applicaion has not yet reached them officially—there is a 1745 major question whether this kind of money should be devoted to remote Ross and Cromarty or should go to areas such as Clydeside, Lanarkshire, and Merseyside, where there is an existing infrastructure.
§ Mr. Hector Monro (Dumfries)
The ball is very much at the Government's feet, and when we hear their reply to this debate, we shall be able to make a final judgment. I hope that whoever replies will explain the situation more carefully than it has been explained in the past, because we want to know exactly where we stand if this Bill becomes an Act.
I have no interest to declare except a fairly detailed knowledge of the area of Easter Ross and a great love of the Cromarty Firth. The flying boat that I flew during the war was called the "Cromarty Firth". This area of Scotland is also the heart of the Clan Munro country. That is why I have an interest in what will happen to this particular part of Scotland.
We must look at this from the point of view of the planning side. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and the hon. Member for West Lothian (Mr. Dalyell) spoke of the economic situation that will result if the Bill gets the go-ahead. From the planning side we all accept that this is an area of great natural scenic beauty. At the same time, we also accept the necessity of developments in that area to provide work, and, in this case, a resource for Britain. However, we must balance these two points. My hon. Friend the Member for Ross and Cromarty (Mr. Gray) has been very careful in striking a balance between what is required in retaining the beauty, and the necessity for employment. We must all bear this in mind tonight.
In relation to the environment, we are all aware of the problems that affect such things as bird life, tourism and transport, and in the end we must come to an impartial decision based on what is best for this area.
The Bill will have a fairly dramatic impact on the area if it becomes law. Twenty years ago this was a very beautiful area, and by and large it still is. Twenty years ago there was very little development, but since then we have seen 1746 and accepted the advent of the distillery and the smelters at Invergordon, and the platform yard at Nigg. Now we have this proposal for the refinery.
A more difficult question for the Government is if and when they see an end to development in this area. Will there be a limit to the industrial development that will be allowed? Will the area have a green belt or landscaping around these developments, or will there be piecemeal developments indefinitely? Does the Highland Region plan say that once we have the refinery that is the end of all major developments in the area?
Naturally, if this refinery goes ahead we want to see a spin-off of small industries and other minor developments of a highly skilled nature, which will give valuable employment to the area. Are we subsequently to have another vast imposition on the countryside, which might produce another Grangemouth in the Easter Ross region? All of us believe that this is something that must be prevented at all costs.
Of course we have to accept what has been done because it is there. On balance, and subject to my next major point, I do not believe that the siting of the refinery alongside the platform yard will diminish to any major extent the already tarnished image of Nigg or, indeed, Cromarty itself. I hope that the design of the refinery will be such that it will not show above the Sutors or out into the Moray Firth. I should be interested to know whether there is some opportunity for the people of the area to ensure, if the refinery is a failure or when North Sea oil resources run out, that the site is reinstated so that it does not become an eyesore, as has happened in the central belt of Scotland.
We have all read and seen an enormous amount on this subject in the Press, in memoranda sent directly to hon. Members, and on television. The Government must answer a simple question. What control is there over the developer to ensure that, if he obtains the 47½ acres by compulsory purchase he does not sell the site off to another bidder at a higher price? The Private Bill procedure is a very powerful weapon and we want to be sure that it will not be just a stepping stone to enable someone to make a remarkably quick profit.
1747 Payments are to be made by the Government under the Industry Act in the form of huge grants. Are the Government satisfied that the project is viable? Will there be adequate oil to refine? Will it be a viable proposition, and will the taxpayer see his money wisely invested? The Minister must give us a clear answer on that. He must have studied the matter in detail before overturning the reporter's decision.
§ Mr. Gregor MacKenzie
I am slightly puzzled by the hon. Member's attitude. He has been a Scottish Member for a long time. He knows the procedure on private legislation. It is the promoter's responsibility to ensure that the case is heard in the House of Commons. My task is simply the formal one of laying the confirmation order before the House of Commons. That is what I have done.
§ Mr. Monro
It is not as simple as that. This is a very important matter. The Minister must not try to escape through the procedures of a Private Bill. We are entitled to know the answers to the questions that I have posed. Both the taxpayers and those who are interested in the development of Easter Ross have a right to the answers. If the refinery is a success, can we be sure that the taxation paid upon its operations will benefit Britain and will not go to a foreign country?
If the Minister can give satisfactory answers on these questions I shall support my hon. Friend the Member for Ross and Cromarty in saying that the project should go ahead. However, we must be sure on all the points that I have raised. We do not want the 47½ acres or the whole site being used by some other company for purposes different from those set out in the Bill. It is up to the Government to provide satisfactory answers.
§ 7.45 p.m.
§ Mr. Robert Hughes (Aberdeen, North)
I was very moved by the concern shown by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) for the workers of the Clyde. He is regarded on the Clyde with little less than affection and is known as the butcher of UCS because of his plans for shutting down UCS and putting out of work thousands of Clydeside workers and many 1748 other people who were dependent on those jobs.
I must say to the hon. Member for Dumfries (Mr. Monro) that perhaps the trembling of a consensus is beginning to come into the House. I do not know whether I could have commented better on the morality of private enterprise than the hon. Member who warned the Government to be careful because if the project were given the go-ahead the Government might be milked and the land sold off to someone else at a better price. That is part of the conception mentioned by the right hon. Member for Sidcup (Mr. Heath) when he spoke of the unacceptable face of capitalism.
The choice which faces me presents me with a great dilemma. I am being asked to choose between supporting an absentee landlord and a transatlantic entrepreneur. That is not the sort of choice I like to make.
There is the problem of planning, which was mentioned by the hon. Member for Dumfries and which was raised in a different but equally valid context by my hon. Friend the Member for West Lothian (Mr. Dalyell). On both counts the general planning permission system in this country is quite unsatisfactory. We ought to have a much more direct control over the planning of major capital investment projects like refineries. We should not be dependent upon saying that we would like to open a refinery or a major industrial complex and then having to decide whether one particular project should go ahead. There should be much more positive control.
General planning arrangements present the same difficulty. Local authorities tend to deal wtih particular applications as they come along, and that poses problems. Attempts were made in the past to try to resolve this problem, and that was the genesis of the reform of local government in Scotland and England and Wales. The idea was that by having bigger regions with major planning powers one could forecast beyond immediate applications. By having general structural planning procedures the local authorities were supposed to decide throughout Scotland which areas were available for industrial development and how much development there would be in the area. Companies would know in 1749 advance where they stood before they applied for planning permission. However, my impression is that the hopes for planning in the regions have not come to fruition. As far as I know, none of the regions has prepared even the sort of structural plans that we were discussing before local government reform.
I do not dissent from the argument that the Industry Act 1972 is not selective enough, though I believe that the Government's control over applications is more positive than it is given credit for. It is not automatic. There has to be close examination before applications are granted, but I should like to see the system become more selective.
I poked a little fun at the hon. Member for Dumfries, but he made a valid point. Before any money is put in we should have certain guarantees. I do not object to my hon. Friend the Member for West Lothian trying to protect the jobs of people in his area, but one of the major questions, apart from refining capacity, is the cost of jobs, especially in capital-intensive industries, under the Industry Act. I do not know whether it is possible to put a figure on this, but we may have to be prepared to pay a very high price to get jobs.
When I used to argued, as I do now, that Governments were far too keen on pouring money into the pockets of private enterprise to keep industries going as well as to start new ones, the late George Middleton, former General Secretary of the STUC, who had a strong Marxist background as a former member of the Communist Party, as my Scottish colleagues will well know, used to say that the road to Socialism is never paved with derelict industries. Perhaps I might adapt that and say that the road to prosperity in the Highlands is not paved with areas which are bankrupt of jobs. The Highlands face problems of few job opportunities and not only the export of capital but the export of human beings who have nothing to keep them there. I accept that we should be prepared to pay a high price, if necessary, to get jobs to the Highlands and Islands.
What is the Scottish National Party policy here? My local paper, the Evening Express, is reporting a campaign by the SNP to sow alarm and despondency among people working in the oil 1750 industry by saying that the prosperity of the oil boom is short lived, that these people will soon lose their jobs, and implying that it is the fault of the Westminster Parliament. The SNP should answer here as well as in Aberdeen.
Its policy of halving the Government targets on oil would mean no more development, a massive loss of jobs and disaster for Scotland. I hope it will not shilly-shally. Let the hon. Member for Dundee, East (Mr. Wilson) explain why his party is sowing alarm and despondency while at the same time saying that Scotland's whole future depends on oil.
§ Mr. Gordon Wilson (Dundee, East)
I am surprised that the hon. Gentleman is ignorant of SNP policy. We take great care to publicise it on many occasions. Does he not accept that there is a crisis in the platform industry and that the policy of successive Governments to issue licences in large bursts has contributed to it? Will he also agree that the main benefit which Scotland can gain from oil, apart from the petro-chemical and refining matters which we shall be discussing later, will come from the revenue raised from taxes which can be ploughed back into the economy?
§ Mr. Hughes
Of course the revenue will be very important, but if we halve production, we halve the revenue.
The SNP cannot continue to say that oil will pay for everything in Scotland and then say the revenue is to be cut. Unless fields are to be opened for production, one cannot build rigs, and the fields cannot be opened till they have been explored. Jobs in Aberdeen do not depend on oil rig construction but on exploration and the servicing of existing rigs. SNP policy in Aberdeen is wrong. The SNP is trying there, as it does everywhere else, to deceive the people.
I hope that when jobs are provided in the Cromarty area the infrastructure will be taken into account. It may be that part of the policy of the Government and local authorities should be that corn-panics ought to take some of the responsibility for providing housing, education and health services. It should not be on open-ended contract. There will be a lot of money coming in and companies should be prepared to make a contribution.
1751 However, the final responsibility for providing services will rest with the Government and local authorities and we cannot embark on major industrial expansion without providing the infrastructure. When the smelter went to Invergordon the then Labour Government provided the infrastructure to make the life of workers more tolerable. The present Government have taken account of this need in their policy of giving extra cash to oil-related areas.
Not everyone finds Highland scenery beautiful; some find it bland. I agree that the Cromarty area is beautiful, but are we to penalise for ever people living in beautiful areas by saying that there must be no industrial expansion there, that they must live in poverty, and that there must be no job opportunities for their families because some of us visit the areas occasionally and find them attractive?
Are we equally to say that because there is an industrial complex at Grange-mouth the people there must always have industrial complexes imposed on them. Many of the people in Bo'ness, while enjoying their work and the rewards which it brings, are concerned that their environment is not all that it might be.
§ Mr. Dalyell
I would withdraw my opposition, not within hours, but within minutes if two things were to happen—first, a statement from the Secretary of State for Energy that we need this refinery on the projected basis; and secondly, a statement from the Treasury saying that it thinks this the best way of using £40 million or much more of public money and better than investment in energy, railways or a hundred and one other projects we could all think of.
§ 8.0 p.m.
§ Mr. Hughes
If it were a question of how best to raise resources or whether the money should be spent in Nigg as opposed to Clydeside, it would have to be answered, but that is not the question. We are not being asked to decide upon alternative places but whether we shall make possible an industrial development in the Cromarty area by passing the Bill. If we do not do so, the prospects of jobs are totally and completely gone. The passing of the Bill does not guarantee that the jobs will come, it does not guarantee that the project will go ahead 1752 and that everything will be lovely, but at least it does not close the doors.
The people of the Highlands have had to live for too long without real prospects because it has been an area to which people have come from outside for the shooting or fishing, for its beauty or for tourism. It has always been kept in that way. I believe that we have a responsibility to pass the Bill if for no other reason—I believe it is a compelling one—than that failure to do so would stop the project, good, bad or indifferent, stone dead. I believe that the opportunities are such that we should not take that risk.
§ Mr. Russell Johnston
I find myself in complete agreement with the hon. Member for Aberdeen, North (Mr. Hughes). The normal reaction from Highland Members when faced with a proposition of this sort—indeed, I suspect that it is the reaction of Members throughout the country—is "Jobs are a good thing". That is certainly the reaction when we are faced with terrible unemployment, especially when there is the prospect of a range of skilled jobs being available. At the same time one is anxious that they be secure jobs in so far as any sort of employment can be secure in that sense.
It is worth emphasising what the hon. Member for Aberdeen, North said—namely, that Highland Members are most conscious of the necessity to conserve and protect the environment and the fine surroundings in which they live. They are also equally conscious of the need to ensure that developments take place in a balanced and sensitive manner. I rather resent being told that such developments should come only very seldom, that I had better watch my amenity and that I do not care properly for my amenity. I resent being told that I do not appreciate the surroundings in which I live. I particularly resent those comments because I have seldom heard those who make them supporting the argument for work and job opportunities over the years that that argument has been made. It is necessary to provide a range of opportunities in the Highlands as well as in other areas.
I must say, like the hon. Member for Dumfries (Mr. Monro), that I have seldom participated in a debate in which 1753 I felt so utterly dependent upon the Government doing their sums correctly or knowing what they are doing. The feeling that I am dependent upon the Government in that way is not a happy one, because their par for the course is not awfully good. The Government must genuinely know that Mr. Ludwig is right and has made proper calculations. They must be confident, as many people have said, that he is dependable and will not sell the land once he has obtained it. We must also be certain that if the petro-chemical complex happens it has some certainty and solidity. For myself—I do not speak in a party sense—I should have no objection to the Government taking an equity shareholding in foreign companies in turn for the grant that they generously give. Indeed, that might have helped in some other places that we all have in mind.
It is difficult for an ordinary Back Bencher to make a proper and balanced view. All those who have taken part in the debate have said that the correspondence they have received has been voluminous. I have not read the vast report to which the hon. Member for West Lothian (Mr. Dalyell) referred. It was commissioned only in July of this year, but those responsible have managed to reach definitive conclusions in a very short time. They must be very clever people.
Likewise, we have been dealing with the views provided by the company's public relations people, who in offshore oil make a counter-argument to the various stories that have been presented in the Press and to which reference has been made by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). For example, they argue that the cost-per-job argument is dispensed with by what is called the output-per-job argument. I should like the Minister to express a view on that. It is claimed in the public relations document thatThe country will recover its grant after three years on stream from operating costs alone.I am not in a position to judge whether that is right or wrong. It may be right or it may be wrong. Likewise, it is argued that refining capacity is needed. The contrary view has already been put by the hon. Member for West Lothian. I do 1754 not in any way criticise the fact that he is in contact with BP. We must also bear in mind that BP has an interest and will tend not to be completely objective in these matters.
This is a highly complex matter and it is hard to get to grips with it in a three-hour debate. If Parliament is to have a say in these matters, as it should when so much public money is involved initially, I do not think that this is the best method. Only a prolonged interrogative procedure, such as that offered by a Select Committee, has any chance of bringing out something of a definitive nature.
§ Mr. Roger Moate (Faversham)
Did the hon. Gentleman support the motion before the House to refer this matter to a Joint Committee of both Houses? Would not that have met the point that he has made?
§ Mr. Johnston
At that stage the pressure of time was such that the point had been reached when it was rather late for taking that course. That should have been done at an earlier stage. Equally, the House should look rather closely at this private legislation. The Minister bad said that the Government, by the terms of order and procedure, are rather inhibited from answering some of the questions that many Members feel are fundamental to the whole matter. I am in a dissatisfied frame of mind, but it is my intention to support this proposal, albeit with doubts and reservations. We are dependent on the Government having done their sums properly, because they have made their support clear. I hope they are right, for this could be a fine development, fitting well into the balance of industry which has grown up in the Cromarty Firth area.
§ Mr. Rooker
I can well understand the diffidence with which the hon. Member for Inverness (Mr. Johnston) finished his speech. However, in the early hours of the morning of 2nd August, after a debate lasting two and a half hours, he voted against sending the Bill to a Joint Committee of both Houses. I accept that it was put to the House on that occasion that it was too late to take that course and that it would be impracticable. But here we are on 21st October, and the Bill has not progressed.
1755 I take a certain degree of credit, along with my hon. Friend the Member for West Lothian (Mr. Dalyell)—
§ Mr. Rooker
My hon. Friend says "Blame". I accept blame, from whichever side of the House it may come.
After the debate on 2nd August, through which I sat but in which I did not contribute, I thought that I was doing the hon. Member for Dunbartonshire, East (Mrs. Bain) a favour when, with my hon. Friend the Member for Keighley (Mr. Cryer), I tabled a blocking motion. At the beginning of the debate the hon. Lady asked 12, 13 or 14 pertinent questions. There was some confusion about whether the Second Reading had been moved. However, the hon. Lady was the first speaker and she asked a good many important questions, to which she received only two or three answers. That appeared to be the position after reading the report of the debate.
For those reasons alone, and because of the matters raised in the debate, my hon. Friend the Member for Keighley and I thought it worth while orally to object the following day to the further procedure of the Bill taking place. We subsequently put down a blocking motion.
I have said previously, I think on 5th August, that my only interest in this matter is that I have a right, as a Member deciding United Kingdom policy and disbursing taxpayers' money, to take an interest in any matter before the House. I have never been to Nigg, although I have talked to people from Nigg over the last couple of weeks in the House.
I deeply resent some of the remarks and attitudes from various parts of the House to the effect that this is of no interest whatever to me in Birmingham, and "Why are you poking your nose in?" In fact, I am almost coming round to supporting the devolution proposals, but if such remarks continue I shall have second thoughts before that Bill is presented for Second Reading.
It is worth pointing out that I have had no contact whatsoever with the promoters of the Bill. Public relations firms have not corresponded with me or sought to engage my interest, although I 1756 understand that they have written to other hon. Members, including answers refuting certain statements that I have made in the House. I do not blame them for that. They have a busy time with all those who are doing programmes and writing articles—many of which have been very anti the whole enterprise and have raised many questions.
My hon. Friend the Minister keeps nodding or shaking his head every time anyone says that it is the Government's responsibility to help Back Benchers to decide what to do on this issue. The issue cannot be fudged by saying that it is private legislation. If it were private legislation, the Bill would not look as it does but would be printed in a different form altogether.
Yesterday, after tabling amendments, I went to the Private Bill Office and asked whether any certificates regarding the Bill had been deposited there. There is a requirement for certain certificates to be deposited in relation to the Bill. The reply that I received was "This is not a Private Bill, sir." If it is not a Private Bill, clearly it must be a Public Bill. Certainly it is not a Private Member's Bill. Nevertheless, the Private Bill Office does not accept it as being a Private Bill.
This is a Public Bill going through the House under the Private Bill procedure. Therefore, it is incumbent upon the Government, whatever Department is involved, to make a statement, simply because the schedule on page 2 involves a rather long preamble before the order is printed. That preamble gives a certain background of the company, stating that it is a subsidiary of a company which is registered in Liberia. In line 21 it also states:And whereas the development so proposed"—which has already been referred to as the oil refinery and terminal facilities—by the Company for the provision of the said facilities is in the national interest".I am not prepared to be told by what I consider to be a bucket-shop company what is or what is not in tile national interest. That must come from the Government. That is why one of the amendments was tabled to the effect that we wanted Ministers to bring forward a certificate giving their opinion as to whether such facilities were in the national 1757 interest. If they were, they would have my support. I agree with my hon. Friend the Member for West Lothian about that. The Government cannot fudge the issue. I hope that the next Minister to speak will meet four-square the arguments and doubts that have been expressed on both sides of the House. This is not a party matter.
My other point refers to the decision letter of 1st March. My hon. Friend the Minister made clear that the letter was available to hon. Members, and my right hon. Friend the Secretary of State constantly referred, on 2nd August, to the fact that the letter was a public document and that everything was spelt out in its six pages of decision and several pages of conditions. It may be a public document, but it was not placed in the Library until four days after the debate, and only in response to a Question from me. The Library has no record of the letter before then. It had not been deposited and lost. As Scottish Members will know better than I, the Scottish Office is full of shortcomings in making sure that anyone who wants to walk along the Corridor to the Library—I see my hon. Friend the Minister shaking his head again. The Library would have had to say that it had not been deposited by the Scottish Office. It was put in the Library four days afterwards.
The letter is full of contradictions, particularly concerning the number of jobs. My hon. Friend also said that many interests in Scotland support this project. I accept that. I have been lobbied during the Summer Recess and since the House returned. But there are many interests in Scotland which do not support it. I shall not read out great reams of comment, although I shall read some in the debates on the amendments if time permits. However, I was interested to receive yesterday a Press release from the Scottish Council (Development and Industry) telling me how much it supported the refinery being located at Nigg and saying that I should do something about voting for it and withdrawing my resistance. I noticed, however, that the envelope come from a public relations company in London—whose telephone was engaged for all of yesterday, so I could not return the document. How-ever, the Press release says that the 1758 Council is independent. There is no mention in its annual reports of the £150,000 that it gets from the Government. It also says that it is non-political. I looked down the list of executive members. I confess that I received a letter this morning from someone in Scotland drawing my attention to the fact that it is not quite as non-political as it may appear at first sight. On the executive there are Members of the House, of different shades of opinion, but no Labour Member. There is a Conservative Member on the executive and a Scottish National Party Member, and two members representing the Scottish TUC. The rest seem to be people with a massive amount of commercial interests, as one would suppose in an organisation concerned with development and industry.
One of the members—I chose him at random and looked him up in "Who's Who"—is Sir William Lithgow, who, I presume, will support the statement issued yesterday in the name of the Council. He has a direct interest in this matter, at a place called Evanton further down the Cromarty Firth. Sir William Lithgow is involved in commercial enterprises that will benefit directly as a result of this refinery being placed in Nigg Bay.
§ Mr. Max Madden (Sowerby)
This information is of great interest. Will my hon. Friend name the Conservative Member and the Scottish National Member who are on the executive of this organisation?
§ Mr. Rooker
I wondered whether I would be asked that question. It was only when I was sitting in my place that I realised that I did not know their constituencies. However, one is the hon. Member for Moray and Nairn (Mrs. Ewing) and the other is the hon. Member for Aberdeenshire, West (Mr. Fairgrieve). I make no bones about that, but it is said that the organisation is non-political and of all shades of opinion, yet there is no one on its executive from these Labour Benches. Admittedly there are two representtives of the Scottish TUC. Although the executive is said to be nonpolitical, there are representatives from this House. Any other organisation claiming to be non-political and wishing to involve hon. Members would make it its business to ensure that all shades of 1759 opinion were registered on the executive. I am merely making the point that no one from the Labour side of the House is on that executive.
§ Mr. Gordon Wilson
Perhaps the hon. Gentleman should know that certain members of the executive of the Scottish Council are elected from among the membership of the Scottish Council, to which individuals, as well as organisations, pay subscriptions, so there is an electoral process as well as an ex officio process.
§ Mr. Rooker
I would not want to mislead the House. The people on the executive come from various bodies, and some may be there in personal capacities. It so happens that some are Members of Parliament, nevertheless, and the letters "MP" appear.
Another matter that I wish to raise concerns the report by the Community and Resource Planning Unit, referred to by my hon. Friend the Member for West Lothian. It is a massive document which I only received yesterday. I have spent six hours on a train today and have had plenty of time to read through it. I do not wish to quote at length from the numerous pages, but it is worth pointing out that this report was commissioned by residents in the area. Its one defect is that it tends to be a little anonymous.
§ Mr. Robert Hughes
Before my hon. Friend goes too far into this, may I say that I accept entirely what he said about the Scottish Council, but who are the people who prepared the report? What is their commercial interest in the area? Does he think that this might have influenced their views?
§ Mr. Rooker
It is a commercial organisation. I rang them up because the report did not state whether it was prepared by a resource planning unit or a university or an institution. It seemed a little anonymous. I was told "We are a commercial consultancy organisation". I believe that it is headed by a man called Mr. Moss; at least, his name seems to be on the document.
§ Mr. Rooker
That was what I asked. I was quite clear about it. The report, however, is a little anonymous. It says:In July 1976 a group of residents in Easter Ross appointed the Community and Resource Planning Unit to undertake a brief planning study, draw conclusions and make recommendations concerned industrial development in the area.I understand that the organisation has obviously looked through a lot of documents and has quite clearly been to the area.
I would only mention two points from the report because it is verbose in its length. It states:By comparison with other oil refinery developers Cromarty Petroleum had not undertaken an adequate programme of research and analysis in the development of their scheme. In our opinion"—they having looked at all the documents, talked to a lot of people and gone through the council minutes when the original planning decision was first of all refused—we feel that the fear of some of the landowners likely to be beneficially affected by the planning decision, and an unstructured industrial policy for the Cromarty Firth all added to create panic among members of the former Ross and Cromarty Council when first faced with the planning application for the refinery.Reference was made to the problems of a local authority, of whatever size, being faced with a major planning application in this matter. It is quite substantial. Certainly it is substantial enough to concern people. It refers tothe power of some of the landowners likely to be beneficially affected".During the course of the recess a gentleman from Scotland sent me a copy of the former Ross and Cromarty Council development directory. Section 1/5 of that directory deals with this area and this very site. There is a map which clearly marks who owns the various sites. It clearly marks the highland fabricators' site, land owned by Cromarty Petroleum as well as land owned by a Mr. J. C. Robertson. On the opposite page is a statement of development of policy, and two paragraphs refer to the number of workers possibly employed on the Cromarty Petroleum Company refinery.
The document then says that there are 160 acres of land shown for oil storage. It adds that we should contact Mr. J. C. Robertson. Clearly, whoever this Mr. Robertson is, he is one of the beneficial 1761 landowners because his land already had planning permission for the oil storage a long time before today's situation arose. In fact, Mr. J. C. Robertson was a member of the former Ross and Cromarty Council and I think he is now a member of the Highland Regional Council. When one looks at the record of the Ross and Cromarty Council minutes when the original planning decision was turned down—it was only later reversed at the instigation of Mr. Robertson and other people—one begins to see that the beneficial interest of landowners is substantiated.
It is quite remarkable that the Scottish Office had the matter reported to it in February 1975 by a Scottish ratepayer. It is significant that in the development directory published by the county council the only private individual who gets a free advertisement happens to be one of the members of the council who was a member of the planning committee. This was taken up by the Scottish Office with a man who lived in a place called Rosemakie. The Scottish Office replied "Sorry, we cannot do anything about this gentleman on the council. It is entirely up to them."
The fact that the councillor can get his free advertisement in this way is beside the point, but clearly this gentleman is one of the beneficial landowners.
I shall refer to the number of jobs which will be created, because the way that many of us will vote will depend on this. If we knew how many jobs would be created, we would have some basis on which to discuss this matter. There are three official figures. The Ross and Cromarty Development Director mentions 350 jobs. The decision letter of 1st March issued by the Secretary of State for Scotland refer to a limited amount of permanent employment—about 400 jobs. The number of jobs started to creep up even then. My right hon. Friend dismisses the fact that they would last for only 40 to 50 years because, apparently, there is a limit on the life of this refinery. Nevertheless, the number of jobs has gone up from 350 to 400.
I now turn to the letter sent by the company to the Secretary of State for Energy yesterday. The number of jobs has now jumped, apart from the 1,500 1762 temporary construction jobs, from 350 to 450 on a permanent basis, and an additional 450 in essential support services and on the oil terminal. Are we talking about 350, 400, 450 or 900 jobs? The answer to that question affects the calculation of the amount of public money involved in the creation of each job. Oil refinery experts claim that these figures are above the number of jobs that can be expected to be provided by an oil refinery of the size proposed.
It is incumbent upon the Front Bench—whether the Scottish Office, the Department of Industry or the Treasury—to tell us the number of jobs. If all the detailed work has been done on this project, the Government should know that figure. We shall be pushing later on the amendments and in the Lobbies, if necessary, for the exact number of jobs involved.
We are told that a fund-raiser from America is trying to find the £144 million capital required in addition to the £36 million of public money that will be automatically calculated. As no amendment on this subject has been selected, it will not be possible for me to raise this matter later. Paragraph 2 of the Schedule—which sets out the order—refers to the Lands Clauses Acts, which are a set of statutes going back to 1845. The Lands Clauses Consolidation (Scotland) Act 1945 is incorporated into the order, with the exception of three sections. Sections 15 and 16 of that Act are included in the order, and they require that all the capital required for the undertaking—the undertaking being the refinery and terminal facilities, not just the company—must be raised in toto before the compulsory powers given under the order can be put into force.
A certificate to that effect has to be deposited with the sheriff. In England under similar legislation the certificate has to be deposited with two justices. Perhaps one sheriff in Scotland is worth two justices in England. It is necessary to prove to the sheriff that the £144 million and the £36 million are available before he can issue a certificate, and only then can the compulsory purchase powers for the 47 acres granted in the order come into force.
The powers granted must be used within two years, otherwise they are completely lost. What will be the procedure? 1763 Clearly, it will be necessary for the company to get on to the land in the immediate future. It cannot wait for several months while the fund-raiser from America raises the £144 million.
We are told in the Bill that the Cromarty Petroleum Company is a straightforward company registered under British company legislation. It is further stated in the Bill that the company is wholly owned by Universe Tankships Incorporated, which is a corporation registered in Liberia. The statement sent yesterday on behalf of the promoters of the Bill to every hon. Member explains that Universe Tankships Incorporated is a subsidiary controlled by the Ludwig Institute for Cancer Research, which is based in Zurich, Switzerland. Some of us wonder whether any profit made by the company will come by way of corporation tax to the British Treasury or whether it will be siphoned off to a charitable institution with offices in Switzerland.
People have gone to Zurich and done some research. A free-lance researcher journalist, Bill Williams from Alexandria, has had inquiries made in the cantonal register of companies in Zurich. The Ludwig Institute has a capital of 50,000 Swiss francs divided into 50 shares of 1,000 Swiss francs each. Where do the promoters say that the Ludwig Institute is a charitable corporation, as its name clearly implies, the articles of the Ludwig Institute state that it is formed exclusively for the purpose of medical research, with the exception that it is permitted to acquire and sell land. Clearly it must be in breach of Swiss company law because it is operating a tankship company. If it is not in breach of Swiss company law, it must be in breach of our company law. I received this information only recently. I was hoping that the debate would take place later so that I should have time to take up the matter with the Department of Trade. Clearly there is a contradiction here. The company cannot be operating legally under both Swiss and British law.
The Ludwig Institute for Cancer Research has a set-up in London about which nobody knows anything, not even the Imperial Cancer Research Fund. It is supposed to be based on the Chester 1764 Beatty Research Institute. It is strange that until June the Imperial Cancer Research Fund had no knowledge of it whatsoever.
§ Mr. Wells
I agree with everything disagreeable that the hon. Gentleman is saying about these people. Much as I should wholeheartedly like to support him, I believe that what he went on to say was erroneous. In the last debate on this matter, it was said that no reputable cancer institute in this country had heard of these people. I believe that the House was inadvertently misinformed and that the hon. Gentleman is perpetuating that error. I have no brief for these people—I am dead against them—but the hon. Gentleman was in error in his last few sentences.
§ Mr. Rooker
I checked the last debate. The hon. Member for Bristol, West (Mr. Cooke) asked who was running the British end of the Ludwig Institute for Cancer Research. The answer from the Opposition Front Bench was:It is chaired by Lady Compton, and includes Lord Halsbury and Professor G. A. Smart."—[Official Report, 2nd August 1976; Vol. 916, c. 1387.]The head of the British section is Professor T. Symington, who is in "Who's Who", but who has no mention of the Ludwig Institute for Cancer Research against his name. Neither has Lord Halsbury, a former adviser to the Distillers Company. One cannot be more eminent than that in medical circles. No mention is made in any of their "Who's Who" entries of being, tied up with this body.
I accept that there is a British end, but the main point is that the Swiss end is not allowed by Swiss law to engage in anything other than medical research or the acquisition and sale of land. That is the crux of the matter.
If we pass the Bill, there is no guarantee that an oil refinery will be built. The antecedents of the company show that, under Swiss law, it is allowed only to buy and sell land. Do we need to say any more?
§ Mr. Giles Shaw (Pudsey)
I intervene briefly on the question of the environment and conservation policy in particular.
1765 I declare my interest as a member of various conservation societies and a Fellow of the Royal Society for the Protection of Birds, which has made a submission in this matter.
I want to make two brief points. This matter has been the subject of a planning inquiry and of the planning inquiry decision being overruled. I think that that calls into question the Government's conservation policy regarding wild life in Scotland. This must be one of the obligations that we must seek to balance. Obviously, we cannot seek to balance conservation precisely vis-à-vis the number of jobs that may be provided by this project. All conservation societies accept that, where there is overriding economic advantage in a planning project, such as is believed to be the case here, it should overrule conservation interests.
The Minister will be aware that in this matter the conservation interests of the Cromarty Firth are considerable, not only on national but on international grounds.
Furthermore, the hon. Gentleman will be aware that the Government's conservation agency, the Nature Conservancy, is currently negotiating to establish two reserves within the firth. Therefore, it is relevant to ask: where are the extenuating circumstances in the Government's conservation policy?
The Minister will agree that in Scotland there has been and will continue to be substantial debate on the conservation issue. In the case of the Shetland, Orkney and Firth of Forth developments, conservation interests have been put on one side. In this case, according to hon. Members on both sides, there must be genuine doubt about the overriding economic circumstances involved whether it be in terms of the refinery capacity argument which was put by the hon. Member for West Lothian (Mr. Dalyell) or on the argument presented by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) about just how many permanent jobs will accrue from the development.
There is a large element of doubt. The conservation case is relevant and it is right that it should be aired in the House.
Nowhere is this more vital than when there is already a clash with Government conservation policy. If the overriding economic considerations are established the Minister must indicate how the Gov- 1766 ernment view the development of conservation policy in an area like Scotland because priority can move from one to another. I hope that the Minister will comment on the conservation issue. The Minister of State, Scottish Office may shake his head, but in other capacities when he was not presenting the Bill to the House he would recognise the environment and conservation problems in oil development, transient or otherwise. Any project may in the end run out of time, but once the environment has been destroyed its recovery is impossible.
There is nothing in the promoters' document that shows that they are aware of the possible conservation problems, but the Minister will be aware that in relation to oil refineries and tankers hazards are involved. It is desirable that promoters be provided with stringent planning conditions to guard against hazards that could lead to major pollution.
I seek clarification on the reason why the Government believe that overriding economic circumstances are such that their conservation intentions are put on one side. In this case an oil refinery is to be brought very close to an area of international biological importance. This appears to be another case where the conservation argument is set on one side. At some point the buck will have to stop.
§ Mr. Norman Buchan (Renfrewshire, West)
I shall make two or three points in the context of the previous discussion. I deplore the attacks made on my hon. Friends the Members for Birmingham, Perry Barr (Mr. Rooker) and West Lothian (Mr. Dalyell). The speech by my hon. Friend the Member for Perry Barr exonerates him because he said that the subject does require examination. Things have to be said, and part of the whole sorry business is that we did not have this debate earlier. Manifestly, the company and the proposal should be investigated, but I do not necessarily agree with the opposition to the Bill tonight.
First I shall deal with the question of costs. My hon. Friend the Member for Perry Barr is right to say that it would be simpler for all of us if we were discussing a precise proposition with a precise grant—which some estimates put at £36 million—and the precise number of jobs that will be created, but we are not 1767 doing that. The justification is that this is a planning Bill related to an order from the Secretary of State, and that it is not the final proposition that has to go through the sieve of examination. Nevertheless, it is clearly an important step towards that, and it should have been considered in this way.
Those who criticise the company have also used the money argument in relation to the taxpayers' money—the £36 million—for the provision of 400 or 450 jobs. We are working in the dark, and I want to look at this for a moment. It seems a large amount of money. However, we have to keep in mind two or three other matters. The first is that all major, modern, technological developments cost a great deal of money. One has only to compare this with, say, farming. I was the other day on a farm where the capital value was more than £1 million, and it employed only four people. In other words, the capital costs there can be compared with those of the refining industry, and this is a fact of modern life. There will be no large-scale technological developments without massive sums of money. Therefore, if we are to say that £36 million for a technological development of this kind is too great when one considers the number of workers who will be involved in it, we are in effect saying that there should be no Government grants to any modern technological industry. I am sure that my hon. Friend the Member for Perry Barr would not argue that.
However, there is another argument. It is not merely a question of the amount of money per job involved. We are dealing with a particular area which is unlikely to see in the foreseeable future another opportunity for a major industrial development. There may be developments ancillary to this, to the smelter and to the Nigg yard, but there is hardly likely to be another new venture of any kind. Therefore, we are not dealing with a precise area. We are dealing with the Highlands Region and, therefore, the cost must be looked at from the point of view of the additional value to the area or region.
There is another argument as well, and it is the one which some of us pre- 1768 sented when we fought for the creation of the Highlands and Islands Development Board. My right hon. Friend the Member for Kilmarnock (Mr. Ross) is in his place. That Board was one of his great achievements. We all knew then that one problem was that a certain rate of development would mean a sucking off throughout the Highlands into specific parts of the Highlands. In other words, an industrial job in one area could suck off the rest. Here, there has been a measure of industrial development which requires consolidation. It is not so much a major sucking off from the hinterland of the Highlands as the consolidation of a new industrial point which has been established. A labour-intensive industry on a large scale would have this precise sucking off effect from the hinterland, whereas a technological industry of this kind will not have the same effect as a large-scale, labour-intensive industry. There are industrial arguments involved in this, therefore.
The other point is that we tend to look at the cost of developments in relation to the provision of jobs as a raw output. If I fault the Government's economic strategy in general it is for the crude economics with which they equate public expenditure as being lost, whereas it reflects itself either in output or in income. The same applies here. It is not merely a matter of £36 million of investment working out at £100,000 per worker. There is an addition. There is also an output. In this case, the addition will involve a foreign income to the country in relation to that output. Therefore, we cannot follow with any respectability the crude argument on this. That is quite different from saying that my hon. Friends were wrong to raise this matter and to demand a discussion of the background.
That brings me to my next point. If my hon. Friends were justified in saying that this had to be examined and if I am justified in saying that the expenditune is justified, a third equation is raised, which is, how best we should pursue planning operations and control industrial developments.
There is a third solution, which I argued in relation to oil industry development in the Highlands. A company would say "I have a good site. May I 1769 have permission to build?" Because everyone was terrified of losing the necessary employment, there was a tendency to say "Yes". Instead of planned development of oil sites, planning permission was given from point to point; but amenities matter in the Highlands. The Government should have said "Our estimate is of X number of sites for onshore developments, and we shall choose them. We shall apply for public purchase of the land and it will belong to us". It is an environmental matter, and could be dealt with by public control of that kind. Over-creation of onshore sites might not have happened.
§ Mr. Dalyell
Does my hon. Friend know that the Chairman of the British National Oil Corporation is against the proposition for another refinery?
§ Mr. Buchan
I wish that my hon. Friend had waited till I got to that topic. It is not in line with the general argument I am putting now, which is the question of public involvement. I am not an expert on oil requirements, as the Chairman of BNOC is, but I am not sure that he is necessarily any more authoritative on the question of usefulness here than a number of other people are, particularly one or two of the academic economists.
If we have the oil resources that we expect from the North Sea, why should we believe that we shall not require more refining capacity? We know that oil production in three years' time, when the refinery comes on stream, will be considerably bigger. Therefore, I cannot accept that there is a case for basing the argument on the present 64 per cent. capacity. We must consider what will happen in three years' time and for the rest of the century. As the purpose is the production of refined oil rather than crude oil, we must also bear in mind the value to us across the exchanges.
We need to talk sweet reason to two people—the Chancellor of the Exchequer, and now, apparently, the Chairman of BNOC. We are the people who should estimate whether we require a petrol refinery and where it should go, and control the production from it and own it. It should have been a public development. It is part of the craziness of our present economic strategy that we see 1770 this as only an output expenditure instead of an investment. This is where I disagree with my two hon. Friends, but I agree that their objections concerning the company could have been met by a solution along these lines. There has been support and criticism from various sectors. Attention must be paid to the people concerned.
Reference has been made to the Scottish Council for Development and Industry. It was said that that council was not independent because it was given Government money. It was said that the council had Tory members and a SNP member. Indeed, I understand that the President of the SNP is a member of that body. Nobody has asked me to join it and nobody has asked the Chairman and President of the Labour Party in Scotland to join it. Therefore, we must examine the situation carefully.
The trade union movement in Scotland is in favour of these proposals, and we also know that they have the approval of the Highlands and Islands Development Board. Above all, the workers in the area—a total of 6,000 people—welcome the proposals. They are under no illusions about the problems for the company. I am sure that it will be found that those workers would take the view that the refinery should be public.
We are in doubt where the Tory Party stands on this matter. I know that the hon. Member for Ross and Cromarty (Mr. Gray) supports the project, but I was disturbed to hear one or two of the comments made by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley).
The other people about whom we are in doubt are the members of the SNP. We do not know their policy on oil matters, and it would be useful if they would tell us. There are one or two moral problems involved. Have SNP Members come down in favour of the project? At one moment they appear to be nodding agreement and at another they appear to be registering disagreement. It would be nice to know where they stand.
We in the Labour Party are in favour of the Scheme. I understand the hon. Member for Dundee, East (Mr. Wilson) is the energy spokesman for his party. I believe that the SNP policy on oil will be damaging for Scotland, and, indeed, 1771 immoral. Its view is "We want the money that has been paid by the United Kingdom in investment in North Sea oil." Is it saying that it wants the £36 million that has already been paid by the British taxpayer?
§ Mr. Gordon Wilson
Does not the lion. Gentleman think that the £3,600 million a year that will arise from Scottish oil revenue is immoral in terms of where it will go? Why does he support that situation?
§ Mr. Buchan
The hon. Gentleman must bear in mind the Shetland situation. He is expecting the people of England and Wales to pay for the investment and for others to be in at the profitable end of the deal. That surely is immoral. The hon. Gentleman spoke of a figure of £3,600 million, but he must think of the depletion rate, which is another important consideration. On the other hand, the SNP calculates the resources on the whole 100 per cent. exploitation. It cannot go for half the rate of depletion and then use the figures based on the whole rate. That is another kind of immorality.
§ Mr. Gordon Wilson
I did not know that the hon. Gentleman's arithmetic was so poor. Does he not accept that, if the depletion rate were reviewed in the way that the SNP has proposed, the revenues would come down, that Scotland's needs of about £1,500 million would be met and that a surplus would be available for investment? If the depletion rate were cut the oil reserves would last longer and production would be of greater value in the future.
§ 9.0 p.m.
§ Mr. Buchan
I am talking about the equation we have been dealing with year after year and about the number of things that can be supported on one year's revenue. The SNP is saying that it will halve the amount and then double its length, halve the resources and double them. What nonsense. I wish that it would stop treating the people of Scotland as if they were 2-year-olds.
There are other problems if the resources are to be depleted in this way. If the SNP is saying that it will drop all this nonsense it will have to pay something back to those who have invested in it, like the constituents of my hon. Friend 1772 the Member for Perry Barr. Construction money and Government grants have already gone into this scheme. The taxpayers of England and Wales have already spent money. Government investment would have to be paid back. The ownership of the oil, in so far as there is any ownership of it in the United Kingdom, will have to be taken into account and payments made. Halving the depletion rate means halving the jobs in industry—posibly more than that, because they are onshore jobs. Tens of thousands of workers will be thrown out of work tomorrow if the depletion rate is halved. There is a huge hole in the policy of the SNP.
There is, finally, the question of Shetland, because it has shown no sign that it believes in the immoral policy of "Scotland's oil". If the SNP were honest it should be saying that this is Scotland's oil—Shetland and God willing. It is saying that it is prepared to give autonomy to Shetland but will take all of the oil for Scotland. This is imperialism with a vengeance. The SNP should drop this nonsense and tell us where it stands.
I have argued that the project should go on. I regret that it has been done in this way and I hope that we have learned a lesson from this. The land should be owned by the people, particularly those in the Highlands. In that way the planning problems would be solved. The ownership of all development should be vested in the nation. That is the way forward. That is one of the things we have learned from this sorry and unnecessary delay. I ask my hon. Friends, having accepted much of the criticism about the company, to allow this proposition to go forward.
§ Mr. Gordon Wilson
There are three elements involved in our consideration of this Bill tonight. The first is the acquisition of land, the second is the question of the refinery and the jobs likely to come from it, and the third is the investment of public money. I will deal with them in that order.
I can see no objection to the acquisition of 47 acres when 850 acres have already been acquired. What is happening is that the land is being acquired from one absentee proprietor by a multi-national which in a sense will also be an absentee proprietor but at least one that is 1773 prepared to provide jobs and to invest in the land. [Interruption.] I would be grateful if the hon. Member for Renfrew-shire, West (Mr. Buchan), having regaled us for a quarter of an hour or so with irrelevancies, would kindly be quiet.
On the land question, there is, as I say, an objection, in as much as the acquisition is by an external proprietor, but one hopes that the planning conditions laid down by the Scottish Office will help to redress any weakness which may arise therefrom. In any event, we are dealing with only a minor amount of land, 47 acres, compared to a large area which has already been acquired.
It would have been preferable if the land had been in public ownership and if the Government had leased it to the company on appropriate conditions.
§ Mr. Wells
The hon. Gentleman says tht it would have been preferable if the land had been in public ownership and the Government had leased it to the company. What is the difference between that and the present landowner leasing it to the company for 99 years, as he has expressed his willingness to do?
§ Mr. Wilson
I should not necessarily trust the existing landowner to lay down in the lease conditions which would be suitable and give sufficient protection to the public. That is the difference.
§ Mr. Wilson
No doubt, if other suggestions had been made they would have been considered, but no such suggestion has been made, and I gather from reading the material that has been provided that no lease had been brought to the attention of the Ludwig organisation.
§ Mr. Wilson
The hon. Gentleman says that, but I am dealing with the question of public protection, and where public development of this kind is in issue and, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) says, in many respects the antecedents of the company are in question, it is desirable to have as much protection as possible. I should 1774 not have expected hon. Members on either side to quarrel with that.
I see nothing in principle against acquisition from the private owner by an organisation which intends to start a refinery, especially since there will be compensation paid for the land so acquired.
If that be right, we come next to the question of the refinery itself. I agree with a lot of the comment made about the need for development in the Easter Ross area, an area which has been deliberately built up by Government policy to have an industrial background and industrial infrastructure. It would be of great value to the Highlands if we had a centre of industrial or economic power located there. If this project comes to fruition it will add considerably to job and economic stability in the area. Nevertheless, I do not think that the local residents would be altogether satisfied with the refinery by itself if that were an end of the matter, and it is hoped that the development will lead to something else.
However, I have some questions about the refinery, the type of enterprise which it is to be and the range of refining which will be conducted.
§ Mr. Ridley
May I take the hon. Gentleman through the calculation? It is suggested that we are to give £78,000 per job. Is he aware that, if that money were invested by each recipient, each of the job seekers could easily have an income of £10,000 a year without doing any work at all? Surely that would make them far better off than they would be by working in the refinery.
§ Mr. Wilson
I accept that that might be regarded as a form of social credit or dividend payable, but I did not know that the hon. Gentleman, who has espoused many an economic theory in his day, had taken that one up. I shall come to the question of public money later, so I reserve my observations till them.
It would be wrong to consider that this is a refinery or a processor of hydrocarbons which is isolated, because in Scotland at the present time there are developments taking place. The hon. Member for West Lothian (Mr. Dalyell) is interested in the future of Grange-mouth, and so is the Under-Secretary of State for Energy. There are proposals 1775 for the ammonia plant at Peterhead which, according to reports in the newspapers, seems to be making some progress, and the natural gas liquification plant of Esso and Shell, also in the Peterhead area. It is also reported, without any substantial foundation, that Esso is considering the possibility of an ethylene cracker plant in Scotland. That would be a great step forward, because many petrochemical developments could come from it.
I have my doubts whether this particular type of basic refinery is the most desirable, but, on the other hand, we are not faced with a choice between different types of refinery in Easter Ross. All we have is one specific proposal before us.
There has been a lot of talk about the over-capacity which exists. I was interested in an article in the Petroleum Economist in October this year which said in an article entitled "Search for European Energy Policy":Last year, the oil refining industry in the Community lost around $7 on every barrel of main products sold. Yet the industry is faced with the need for huge capital investments for the conversion of processing capacities to restore the balance between refining yields and products demand, which has swung in favour of more light products—gasolines and naphtha—at the expense of heavy fuel oils.It may be argued that this trend favours the establishment of the kind of refinery which is proposed for the Easter Ross area.
The article goes on:The climate for such investments is not made brighter by an expected continuing overcapacity in relation to foreseen demand into the early 1980s and the prospect of increasing competition from new export refineries in oil-producing countries.Therefore, it does seem that there is a worldwide trend towards establishing oil refining and petrochemical industries in the countries which are producers of oil. This trend has been followed by a number of the OPEC countries in the Middle East.
There are doubts about whether this refinery will be commercially viable, but the fact remains that this organisation is willing to put up a substantiial amount of its own money. I shall be extremely interested to hear the Under-Secretary's view on viability.
When we come to the question of finance there must be some reservations 1776 in the minds of many hon. Members about whether the public money required—£36 million to £40 million—should be provided, or if it is even necessary. Sometimes we take the view that all industrial activities have to be subsidised. This is a false view. There are many types of industrial activity that do not have to be subsidised and whose return validates the investment. This investment will still take place, even if no Government money is being supplied at all. We should keep uppermost in our minds the fact that companies in the oil business have enormous resources at their disposal, and if they think that there will be a return from having a refinery they will not hesitate to invest the money.
The Minister of State has said that under the Industry Act the Government's hands are tied. We all accept that this is a discretionary grant and the Government do not have to make it, but I understand that the Government have accepted guidelines which suggest that where there is an application made in given circumstances and where a grant was given on a discretionary basis in similar circumstances in the past, those guidelines must be adhered to. The Government therefore do not have a free hand when application is made. If my interpretation is not correct I would welcome a correction from the Minister or from the former Secretary of State for Scotland, the right hon. Member for Kilmarnock (Mr. Ross).
§ 9.15 p.m.
§ Mr. Dalyell
If the grant were discretionary some of us would not have been bleating, as I have been for a long time, about the need to have Treasury Ministers and a Treasury statement. Perhaps it would be helpful if I read out an extract from a letter sent to me on 18th October by the Minister of State. Department of Industry, who said:As to whether these grants represent value for money I can only say that they form part of a complex mix of automatic and selective incentives designed to promote the growth of modern, internationally competitive industry in the assisted areas. Successive Governments have felt it right to devote considerable resources to the incentives, but the financing of the package has, in any case, to compete with the claims of the other programmes you mention in the normal processes for the interdepartmental review of public expenditure.There is the possibility of the direction automatically of considerable sums well 1777 above £40 million of public money. That is what worries some of us.
§ Mr. Wilson
I am grateful to the hon. Member for West Lothian (Mr. Dalyell) for giving that material. I would still, perhaps, require an interpretation of it, because the reference to "automatic and selective" in one breath is not entirely clear.
With these huge projects of, say, £10 million or even £20 million—and here we are talking about £200 million—where, obviously, the grant will mean a considerable investment of public money, there should be a greater degree of flexibility. In other words, in the lower ranges industrialists and others should be able to know, when they put in their application in the usual way, whether they are likely to get a grant. With a massive project like this it would make sense if the application could be made to the Government and if the Government would have the discretion to turn it down or to offer, say, from £10 million to £40 million. If the Government were to give money on that scale they would, of course, have to make not just a crude analysis of how many thousand pounds per job was involved, but also the economic return in terms of output and, in the longer term, to what extent other industry might be attracted by the original investment.
Many of us would feel doubts about the project if it were to absorb a great deal of the industrial development budget for Scotland. The sum of £40 million is equivalent to the annual income of the Scottish Development Agency if one considers that it is £200 million spread over five years. I should like the Government to tell us whether the payment of £40 million would have any major impact on the amount of money available for curing Scotland's serious unemployment.
§ Mr. Robert Hughes
The hon. Member is arguing from a double standard. He is saying that if the money is paid to a company which is providing jobs and is helping the economy that is in some way detracting from solving the country's economic problem. How can that be logical?
§ Mr. Wilson
Hon. Members would be concerned if, say, the whole budget of 1778 the SDA were spent on providing 450 jobs when unemployment in Scotland is running at 170,000. I understand that the average amount per job spent on industrial assistance is about £5,000. Yet here we are talking about a sum eight or 10 times as great as that. We must have an assurance on that score.
One of the problems is that we are dealing with a commercial concern the antecedents of which are not too certain. The Government are involved in a major way, and it will be interesting to hear the summing up speeches from the Under-Secretaries of State for Energy and Scotland answering questions that have been put to them in a genuine way. They must answer in detail and not in general.
§ The Under-Secretary of State for Energy (Dr. John A. Cunningham)
The most surprising thing about this debate has been the complete misunderstanding by many hon. Members of the nature of the Bill and of my presence at the debate. It is astonshing how many hon. Members have referred to the Government's responsibilities and have asked for replies on issues that are either clearly outside the terms of the Bill or are not the responsibility of my Department.
This is a Private Bill, and it was introduced under the Private Legislation Procedure (Scotland) Act 1936. It is clearly not a Government Bill. The Secretary of State for Scotland is responsible for the confirmation Bill, but that is the only responsibility of the Scottish Office and the Government have no further responsibility for the drafting, the arrangement of the clauses or any other aspect of the Bill. It is astonishing that so many hon. Members of much longer experience than I have ignored this fact.
§ Dr. Cunningham
No. I have listened to a great deal of the debate. I am not making a winding-up speech; I am merely giving the view of the Department of Energy. Time is short, and other hon. Members wish to speak.
§ Dr. Cunningham
No. I am here because my hon. Friend the Member for West Lothian (Mr. Dalyell) asked my 1779 right hon. Friend the Secretary of State for Energy to see that the views of his Department were expressed in the debate. We agreed that this would be done. As far as I am aware, no other hon. Member approached the Department.
§ Mr. Rooker
On a point of order, Mr. Speaker. I made representations to the Lord President's office and to the Government Chief Whip demanding the presence of Ministers from the Department of Energy and the Treasury. When they all appeared, no one was more pleased than I.
§ Dr. Cunningham
I said that no other hon. Member had approached the Department of Energy. I do not deny that my hon. Friend approached the Lord President, but no one other than my hon. Friend the Member for West Lothian approached us.
My hon. Friend the Member for West Lothian and other hon. Members raised a number of points about the effect of this proposal on the Government's policy towards oil refineries. He mentioned, among other people, Lord Kearton, the Chairman of the BNOC, and also spoke about the commercial decisions of companies. Clearly this is not a matter for the Department of Energy. People make commercial decisions in their own way, in their own time and on the basis of their judgment of the potential in the market. It is surprising how many Opposition Members ignored that fact in their remarks and tried to ascribe to the Government powers which we do not have and in respect of which, if we sought to take them, we should be violently opposed by hon. Gentlemen.
My hon. Friend also mentioned matters raised by the General Secretary of the Transport and General Workers' Union. The questions were asked of my right hon. Friend the Secretary of State for Energy and were taken up in a letter to the company. The company's reply was received, and both letters were published yesterday. Copies are available in the Library as my hon. Friend the Member for Birmingham, Perry Barr (Mr Rooker) has rightly said——
§ Dr. Cunningham
We have been asked to comment on a number of other issues which are clearly not our responsibility. It has been astonishing to listen to a number of hon. Members speaking about environmental matters as though they are the responsibility of the Department when in fact the application was the subject of the longest-running public inquiry in Scottish history. That is a matter of fact. It is not a matter for the Department of Energy. We are here to make a decision on a Private Bill on a free vote. If Opposition Members cannot make up their minds on that basis—clearly many of them have not been able to do so—they should not be in the Chamber speaking for their constituents.
I turn to the responsibilities of my Department. The need for the project has been questioned, the argument being put that there is already a surplus of refinery capacity. That matter was raised by my hon. Friend the Member for West Lothian along with other hon. Members. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) asked about our power to control refinery development. In fact, we have that power. It has been taken under the Petroleum and Submarine Pipe-lines Act. However, the application referred to in the Bill was made before that Act became law. I should have thought that that was a well-known fact, but I am grateful to my hon. Friend for raising the matter so that it can be clarified.
Our present refinery capacity is more than sufficient for our present national demands. It will take some time for the growth in demand to overtake that excess, although that will eventually happen, especially bearing in mind that we expect to be landing all the oil that we need for domestic needs by 1980. That means that there is no overriding case for the refinery in terms of present United Kingdom needs. That was the point made by my right hon. Friend the Member for Kilmarnock (Mr. Ross) when he was Secretary of State for Scotland. He made that clear in his decision letter following the local planning inquiry.
All the evidence suggests that this is not a project directed mainly to the United Kingdom market. That is clear 1781 in the published correspondence. My right hon. Friend the Secretary of State for Energy took up this matter specifically in response to inquiries made in the letter written by the Transport and General Workers' Union to which I have already referred.
It is intended that North Sea oil will be used for the bulk of the refinery's throughput. The export of most of the output of high value products on long-term contracts is anticipated. It is also intended to produce substantial quantities of petrochemical feedstock, of which we are currently net importers. This is intended to be mainly an exhort refinery. That removes the worries about an additional product surplus in the United Kingdom market and the effect of that on existing refinery facilities and employment in them.
In his statement of 6th December 1974 on refinery policy, my right hon. Friend the Secretary of State for Industry, as he now is, drew attention to the advantages of refining North Sea oil in this country before export. He also said that, while we were likely to have enough refinery capacity to meet our own needs in the 1980s, companies might be able to make a case for additional projects to supply export markets—that was in 1974—or to link with pretrochemical developments.
The assurances that the company has given are entirely consistent with this policy. It is clearly unlikely that Cromarty Petroleum would be going ahead with its investment plans if it did not see good market opportunities. The company has undertaken to consult fully the Department and the British National Oil Corporation about its refining and marketing plans. I therefore have no reason for believing that this project will in any way conflict with our own long-term oil interests.
If it goes ahead, the capacity will be available, we understand, in 1980 or 1981. By then we expect to be self-sufficient in oil. The decision to go ahead by the company and its success will rest on the market prospects, and that is a matter on which the sponsors must make their own commercial judgments.
§ Sir John Gilmour (Fife, East)
I was one of the Commissioners who considered this matter. Paragraph 6 of the submission that the Cromarty Petroleum Company has sent to us today states that the merits of the proposals have been endorsed after detailed consideration by Parliamentary Commissioners. I should like to make it clear to hon. Members that all that we were concerned with was whether there should be a compulsory purchase order for this particular bit of land, and we in no way gave any consideration to whether there should be a refinery. That was all that we were asked to do.
It is, therefore, up to the Scottish Office, after overturning a planning inquiry and granting planning permission for this refinery, to show that this is really in the national interest for Scotland. If it can be so shown, undoubtedly it ought to be built.
It is a quirk of how these procedures work out that if the Commissioners had felt able to accede to the request of the proprietor to grant a lease, I think that the objections would have been withdrawn. The Bill would have gone through without any opposition and we could not have had any discussion on it. Hon. Members may feel that some of our procedures might be altered so as to make certain that we can discuss planning permissions which can be overturned after the reporter has made his report.
However, in the light of the fact that the land on which these jetties are to be built will very largely have to be dredged away in order to make the necessary jetties for the large tankers on the outside and for the small tankers on the inside, we felt that it was not a practical proposition that there should be a lease of this land. We therefore concurred with the compulsory purchase order. It was only for that reason that certainly I, as a Commissioner, came to that view, and this was the opinion formed by the majority of the Commission.
§ Mr. Dalyell
When the hon. Gentleman was doing this work in Edinburgh on behalf of Parliament, did he feel entirely comfortable that his limits were so narrowly defined? On reflection and with hindsight, does he think that this kind of very narrow inquiry is the right 1783 way of tackling this extremely complex problem?
§ Sir J. Gilmour
This is a matter that bears examination and argument. On the other hand, it would be very difficult for Parliament to agree to put the powers into the hands of the Secretary of State to take a planning decision, and, after he had taken it, to say "We are sorry but we shall not agree to it", and then to reverse it. One of the things that people say about how we can help industry most is "Let us not have industrial disorder. Let us get on with the job and let us say what people may or may not do."
It would be easy for Parliament to take the power to override a planning decision taken by a Secretary of State.
I hope, therefore, that, after due consideration, if we get a proper explanation of the necessity for the building of the refinery, the order will be confirmed.
§ Mr. William Ross (Kilmarnock)
I am the cause of all the trouble. If I had turned down the application made by Ross and Cromarty County Council to grant planning permission to the company, this debate would never have taken place. Had I done that, there would have been a much louder noise and many more people would have asked why I had refused to let a project go ahead that would produce about 400 jobs in a part of Scotland that we had singled out for future industrial development.
I am surprised to hear hon. Members pretending that we should be discussing something other than what we are discussing, which technically is 47½ acres of land. All the rest of the land has been bought, but one absentee landowner, for reasons best known to himself, said "No".
§ Mr. Ross
I am sorry, I have a limited amount of time. The hon. Member for Maidstone (Mr. Wells) has spoken. I heard his speech on a previous occasion and I did not interrupt him.
1784 Not long ago the Conservative Government introduced a Bill to get rid of the long leases which cause trouble in Scotland and to enable people with long leases to turn them into feu tenure. That is quite alien to Scottish tradition. I do not think that my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) was concerned about the proprietor, although he would probably be much more appreciative if the Highlands and Islands Development Board had taken over the land.
New powers have come to local authorities, and the same is true in relation to refining capacity. The application came to us before we had powers for the proper planning of refining capacity either in Scotland or elsewhere. I wonder how many hon. Members voted against that Bill. The hon. Member for Ross and Cromarty (Mr. Gray) might reflect on that.
An hon. Member representing an English constituency voiced concern about conservation. I do not know whether he knows this area of land. I was there about a month ago, when I saw members of the Highlands and Islands Development Board, and they supported the project. This is not a mountainous area; far from it. Highland Fabricators is already there, pipe-coating is done in the area and there is an aluminium smelter. The people who put the environment first today are the people who put forward the same views in discussions on those projects.
In discussion after discussion, inquiry after inquiry and project planning after project planning, it was decided that this was the area in which we should be able to begin to transform the Highlands. We are fortunate in that oil gives us another chance to do that.
My hon. Friend the Under-Secretary of State was wrong in saying that the inquiry on this project was the longest inquiry there had ever been. He has never heard of Drumbuie. It was not Drambuie, but Drumbuie. That name is written in the heart of the former Secretary of State for Scotland, who is now in another place. That inquiry went on and on and it eventually came to me to make the decision.
The hon. Member for Ross and Cromarty knows very well that I made the right decision on environmental grounds. I have never been one to ignore the environmental aspects of Scotland. At 1785 the same time, I had not the slightest doubt at all that Drumbuie was absolutely vital, and that was admitted by the reporter. I think that the language that was used was that the environmental difficulties were not insurmountable. It came down to the question of the national need for oil.
My hon. Friend the Under-Secretary of State for Energy has given the right answer. In December 1974 we had, for the first time, a policy outlined by the then Minister in respect of refining. One of the things he made clear was that we would appear to have an adequate capacity up to about 1980. He said that, consistent with the policy of the particular company, it might be commercially desirable and it might not conflict with a policy for further capacity which might be related to exports.
The question of the number of jobs was raised by my hon. Friend the Member for Perry Barr. He seemed to think there was some mistake in the letter that I carefully wrote and read. The one thing that there must not be in a decision letter is any conflict or mistake of that kind, because it could throw blight over any decision which is reached. In any planning letter, one should rest upon the facts which have been brought out in the inquiry and which have been agreed by both sides. The figure of 400 jobs was one which was agreed and accepted at that time. Let there be no doubt about that. Four hundred jobs in the area means an awful lot in addition to the 1,800 jobs in relation to construction.
The other point was the question of cost per job. What surprised me was that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) realised that at one time there was an industrial policy in this country for regional development. A direct relationship was laid down between the cost and the number of jobs. There was a relationship of cost per job. It was not inflexible and it was probably higher in the Highlands area than anywhere else. However, that was wiped out by the 1972 Act.
I did not know that the hon. Gentleman was in the Government at that time. By that time he had decided to depart—or the Prime Minister had decided that they would be better without him. I think 1786 that the hon. Gentleman had a bit of gall even to mention Clydeside tonight—him of all people mentioning Clydeside. That was the cause of his departure. He must remember the phrase "butchering UCS" He was the man who was ruthlessly prepared to create unemployment in the Clyde. The hon. Gentleman is entitled to believe what he said, but he has to live with it as far as Scotland is concerned. Some of his hon. Friends also have to live with it.
§ Mr. Ridley
I would remind the right hon. Gentleman that Upper Clyde Shipbuilders—now Govan Shipyards)—has actually lost nearly £50 million since that time. Has he thought whether more gainful and secure employment could have been provided on Clydeside by that sum of money?
§ Mr. Gordon Wilson
If the right hon. Gentleman studies Hansard tomorrow, he will find that I said it was equivalent to the annual budget of the SDA, which would have been £40 million.
§ 9.45 p.m.
§ Mr. Ross
The hon. Gentleman seemed to think that this was from a limited sum of money which was available for Scottish development and that by spending it there it could not be spent elsewhere. I suggest that he is quite wrong. It is an automatic grant.
The hon. Gentleman mentioned a Shell project and some other projects. Shell projects have been mentioned in connection with constituencies south of the border. They get an automatic 20 per cent. capital grant if they are in development areas. I can take the hon. Gentleman to chemical developments which 1787 cost millions but employ only a handful of people.
It is right that my hon. Friend the Member for Perry Bar should raise the question of whether these grants should be automatic or discretionary. But we must live in this world. My hon. Friend has every right to make a speech on this matter. I would defend his right. I used to make speeches on English matters, and the English did not worry about me. It may be that they could not understand what I was saying. But my hon. Friend made a very good speech on this matter.
I recall that the ex-Leader of the Opposition used to make points about these grants, and they have been referred to by the STUC. But this matter is now within an Act of Parliament. Grants have been made for different developments. Therefore, we would be wrong to use this argument as a justification for voting against the Bill.
§ Mr. Gray
On a point of order, Mr. Speaker. I wonder whether you could give us some guidance on this matter. This is probably one of the most important matters which has had to be decided since the war affecting my constituency. I should like to participate in the debate, and I know that a number of my hon. Friends also wish to take part. It is obvious that we shall not finish before 10 o'clock. Indeed, I apologise for interrupting the very interesting speech by the right hon. Member for Kilmarnock (Mr. Ross). Could you, however, tell us whether it is correct that the Government have indicated their willingness to give further time for this debate in the very near future?
§ Mr. Speaker
That will be a matter for the Chairman of Ways and Means, who will no doubt consult the usual channels about a further date if we do not reach a decision tonight. I am sure that that is the course that will be followed.
§ Mr. Ross
I shall finish in exactly one minute. I want to hear the hon. Member for Ross and Cromarty, who has to live with this situation. I know the feeling of the people in his constituency. They want this project to go ahead. The local authorities, the STUC, 1788 the local Labour Party and the constituency Labour Party want it. I, too, want to see this project go ahead. I hope that hon. Members will have second thoughts and allow it to go ahead.
§ Mr. Gray
This has been an interesting debate, and I do not think that anybody who supports the project would complain about the length of it.
Although there has been a great deal of sniping tonight, I believe that the company has nothing to hide. I have made exhaustive invesigations about the activities of the company. It has proved to me that many of the rumours and suggestions that have been made are without foundation.
It is interesting that since we debated this subject on Second Reading considerable public interest has been aroused. I am of the opinion, rightly or wrongly, that a considerable amount of this public interest has been stimulated by one of the major national oil companies—British Petroleum. I suppose that the company is absolutely entitled to have its say, but if I had anything to do with the Ludwig organisation and I had any doubt about the viability of the project it would certainly be removed by the activities of the British Petroleum Company.
§ Mr. Gray
My hon. Friend must not misrepresent what I have said. I can see that I have hit a sore spot. I clearly said that the British Petroleum Company was perfectly entitled to its views and to stick to them, but that I was sure that this would do more to convince the scheme's promoters of its viability than anything else.
The hon. Member for West Lothian (Mr. Dalyell) declared an interest in the subject. He told us that he has had discussions with BP and that he is worried about the future of his constituents, although I am sure that he has no need to worry. Those who oppose the Bill on the ground of jobs cannot have it both ways. We are told that the company is making exaggerated claims about jobs, and that the number of jobs involved is too small. 1789 I do not suggest that any of my hon. Friends would be influenced in their judgment of this matter by the activities of a national oil company. I have the greatest possible regard for the way in which BP has carried out its activities in the exploration of the Forties field. In Mr. Matt Linning, it probably has one of the finest of the oil generation in this country. Nevertheless, its activties in this regard are questionable and mistaken.
On 1st September 1976 an article in The Times was headed:BP renews attack on project to build refinery at Nigg Bay".The article said that Mr. Monty Pennell, BP's deputy chairman, stated in a letter to a Scottish hon. Member that he had considerable doubts about the project. The article stated thatHis letter to Mr. Tam Dalyell, Labour MP for West Lothian and an opponent of the plan for a £100 million refinery at Nigg, has been forwarded to Mr. Benn".Large and powerful as BP is, it does not have a monopoly of forward planning. Some of the criticisms were picked up by Professor Ian Fells, the Professor of Energy Conservation, Department of Chemical Engineering, at the University of Newcastle. Referring to BP directives he said that he could only conclude that BP had got its forward planning seriously wrong some years ago. He went on:This means the consumer is paying for the mistake of over-provision and the chemical engineering contracting industry can gloomily anticipate another ever deeper trough in orders. … Of course, BP may subscribe to the ' no growth' lobby in which case their objection makes sense. But if they do they should come clean and say so.I thought that that was a very fair article, and the sentiment was echoed by yet another acknowledged authority in oil planning in Scotland. On 12th October, the Aberdeen Press and Journal carried the headline,Economist raps bogus refinery argument.It referred not to the hon. Member for West Lothian or to any others who objected; it referred to the sort of arguments that were being deployed by people within the industry who really should have known better. I quote briefly from what Professor MacKay, late of the University of Aberdeen and now of Heriot-Watt University, said: 1790It is not without note that one of the major opponents of the Nigg Refinery is BP. It should not be part of our economic policy to say that because there is excess capacity in an industry we should not allow competition.That, quite simply, is getting at BP again. Later he said:I would back the company's commercial judgment against the Government's any day.However, in this case the Government's commercial judgment and that of the company seem to agree, so I think that it is a pretty strong case.
I turn now to the problem of refinery capacity. This is a matter that has been argued from a number of sources. Although existing refinery capacity is adequate at the moment, there is no guarantee that there will be, in effect, all that we require in the early 1980s. This company, which proposes to build its refinery at Nigg Bay, has announced that it will not be operational until the early 1980s. It is to be a new refinery. The number of jobs appears to be in question, but I do not think that the actual number of jobs involved at this stage is all that important.
I say with all sincerity to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) that he does not know the area. I know the area very well. I was born and brought up in the Highlands. I saw most of my friends having to go south. Some of them possibly went to the hon. Gentleman's part of the country. They had to go, for the simple reason that work was not available. For the first time this century, in the Highlands of Scotland we have the chance of creating a complex that will provide continuing employment enabling people to live and to stay there, with the result that their families will not have to move away.
I suggest to the hon. Member for Perry Barr that probably in innocence—I do not think that there is any malice aforethought on his part—by his action he has put at risk a development of £150 million or £160 million. That is what the hon. Gentleman is doing.
§ Mr. Rooker
Is the hon. Gentleman saying that he believes that this Bill should have passed through the House without a debate?
§ Mr. Gray
It may be that the hon. Member for Perry Barr was not here when I began my speech. I said that the debate had been very useful. Certainly I do not suggest that the Bill should pass through the House without debate. I am suggesting that questions have been asked and that I believe that answers have been given. It is wrong of people to try to block a project of this 1792 nature for reasons which perhaps are not obvious to us all.
Time is running out. I hope that I may be able to continue at a future date.
§ It being Ten o'clock, the debate stood adjourned.
§ Debate to be resumed upon Monday