§ Order read for resuming adjourned debate on Question [21st October], That the Bill be now considered.
§ Question again proposed.
§ 10.32 p.m.
§ Mr. John Wells (Maidstone)rose—
§ Mr. George Younger (Ayr)
On a point of order, Mr. Deputy Speaker. I seek your guidance on a minor technical point. The motion on the Order Paper says:As soon as a member of the Government shall have signified his intention to move, That this House do now adjourn, for the purpose of bringing the sitting to a conclusion:I was not aware of that motion having been moved.
§ Mr. Deputy Speaker (Sir Myer Galpern)
I think that that requirement was carried out by the Whip, the hon. Member for Bebington and Ellesmere Port (Mr. Bates).
§ Mr. Wells
When I was on my feet last week the pound stood at a very different figure from the one at which it stands tonight. That is almost entirely due to the ineptitude of the Labour Party, Her Majesty's present Government. We are tonight, as we were last Thursday, discussing the expenditure of £38 million of Government money on the building of an oil refinery which is totally unneeded, totally unwanted and completely undesirable—
§ Mr. Wells
My hon. Friend the local Member says, "Rubbish." I trust that I may have the opportunity of dealing with his arguments which we heard last week.
The argument for this Bill was bad last week. It is even worse this week. I hope that it will be rejected, for a number of reasons. First, it is almost incredible that a British subject should 172 be compulsorily expropriated by the Government in order to give his land to a £100 company formed in London, which is no more resident in Cromarty—
§ Mr. Wells
I wish that my hon. Friend on the Opposition Front Bench would contain himself. Many unkind and untrue things were said about my constituent last Thursday. I rightly contained myself in his defence until I heard the arguments. But it is important that the House should be acquainted with the facts about the good works which Mr. Michael Nightingale has perpetrated in and around his estate at Cromarty.
The Highland Fabricators Unit is compelled to run a ferry from Cromarty across the neck of water because of the lease that my constituent gave. My constituent is primarily interested in the well-being of the neighbourhood. He may not live there the whole time, but no more did the people who built Cromarty House. No more did the people who laid out the town of Cromarty. They, too, were people who attended the court of the King in their day, be it in Edinburgh or in London.
Therefore, there is a great deal of humbug on the part of the substantially absentee Scottish National Party and on the part of the totally absent Liberal Party. We should be clear about what is going on there.
During the recess, I visited that part of the United Kingdom and I was greatly impressed by the local councillors I met—people of all parties and no party. But I believe above all that these local people want solid local employment found, and I do not believe that this refinery will be a provision of solid local employment, by which I mean something that will provide jobs now, this year, next year and in 10 or 20 years' time. This refinery will be a great mushroom. There will be an upsurge in employment and then it will decline. What is needed is not 1,400 jobs for building the refinery, to be followed by 300 or 400 jobs for running it, but a lot of small firms, well based and well founded, providing continuing employment.
173 I speak with great diffidence in the presence of the local Member, but I know from my own researches that there are men and women there who are travelling some 70 miles to work each day. Who in their senses wants to travel 70 miles to work each morning and 70 miles back home at night? It is madness. A reasonable man might want to go 10, or 20, or at the most 30 miles to work, but one is worn out if one commutes more than that.
§ Mr. Gray
I feel that my hon. Friend is exaggerating this point. The number of people who travel 70 miles to work is very small indeed there. It is perhaps not an exaggeration to say that some people may do a round trip of 70 miles, but those who actually travel 70 miles each way are very small in number.
§ Mr. Wells
Of course the number travelling 70 miles each way is very small, but I assure my hon. Friend that some people are coming from further north than Golspie, which is about that distance. But the point I am putting is that it is madness to base the argument for the refinery on the great criterion of jobs. Last Thursday, we heard of this, that and the other great national or Scottish or Highland body wanting more jobs. Of course they all do, but they want them in proper proportion. If we are to have another refinery, it should be where jobs are scarce—the Clyde, for example, a centre of high unemployment—and not where there is full and over-full employment. Compared with Clyde-side, there is over-full employment in the Cromarty area.
If we put in the further 1,400 jobs required for the refinery construction, the people who will come in will be the oily men from all over the world—I mean "oily" in the best sense—and they will not be the unemployed and unemployable people from my hon. Friend's constituency. They will be incomers; they will find it a delightful place to live, and they will live there expecting houses and schools and university places and infrastructure of ail sorts. Then, when the refinery is built, and 1,000 of them are out of work, they will expect this House to find more money to find new jobs for them. Clearly that is absolute nonsense. I believe that the whole argument on jobs falls by the wayside.
174 I turn to the situation of my constituent, Mr. Michael Nightingale, about whom many unkind and hurtful things were said last Thursday in the House.
§ Mr. John Biffen (Oswestry)
Before my hon. Friend reaches the issue of his constituent, will he clear my mind on one point? Was it the view of Mr. Nightingale that there should be no refinery at Nigg, or that he was in favour of a refinery provided that it could proceed in circumstances that were acceptable to him? My hon. Friend has been arguing as though there were a case for no refinery.
§ Mr. Wells
I am grateful to my hon. Friend, and I shall seek to deal with that matter in a few moments.
My constituent, Mr. Michael Nightingale, who has been the proprietor of the Cromarty estate for 12 years and who since the recent sad death of Colonel Ross is now the outright proprietor of the entire estate, has taken the view all along that there should be a suitable increase in local employment. In the Highland Fabricators development he was careful to see that local jobs and amenities were protected. He has taken the view all along that, if there is to be a refinery, it should be properly protected and that local people should be properly protected.
When I first came into this debate as a Kent Member of Parliament, some 600 miles away from Nigg Bay, at first sight totally ignorant of it, I came into the matter to protect the interests of my constituent. But since then I have taken a much broader interest in the matter, and indeed I visited the place during the Summer Recess. The view I now take is that there should be no refinery. My constituent takes the view that if a refinery is to come against his judgment, at least local people should be protected from its worst effects. I think that answers the point made by my hon. Friend the Member for Oswestry (Mr. Biffen).
§ Mr. Biffen
I think it does, but is not my hon. Friend saying that Mr. Nightingale was quite prepared for a refinery to be established at Nigg Bay, provided that certain conditions were observed?
§ Mr. Wells
Yes, of course he was, provided that certain conditions were 175 observed. But that is where I part company from my constituent, Mr. Nightingale. He, being an even more reasonable man than I am, is prepared for there to be a refinery provided that certain conditions are observed. I take the view, which I shall elaborate shortly, that there should be no refinery at all, but Mr. Nightingale, being a more reasonable man than I, says "If the damned thing has to come, let us have it on our terms."
§ Mr. Robin Corbett (Hemel Hempstead)
Does the hon. Gentleman appreciate that in a BBC1 interview with Mr. Vincent Hannah on 19th October, his constituent was reported as sayingI would consider selling them the land in return for a small share in the company."?That sounds slightly different, does it not?
§ Mr. Wells
No, I think not. Surely the point is that Mr. Nightingale is prepared for there to be a refinery, provided that he is in a position to dictate the terms on behalf of himself and the local people.
I do not know whether the hon. Member has visited the site and seen the great natural beauty of the Sutors Peninsula, the southerly peninsula, or Easter Ross. There is no doubt that Colonel Ross, who was the previous owner, and Mr. Nightingale have taken a great interest in preserving local amenities. Mr. Nightingale was awarded the OBE not long ago for his work in maintaining areas of natural beauty. He is a man who has this very much at heart. He has said that he would be willing for the refinery to go ahead if he had some degree of control, either by having a share in the company, which would give him a seat on the board, or by him granting a lease.
My hon. Friend the Member for Fife, East (Sir J. Gilmour) who was one of the Parliamentary Commissioners who heard the case in Edinburgh, pointed out that if Mr. Nightingale's land was to be dredged away there would not be much of it left so that a lease would be somewhat inappropriate. I accept that. The fact remains that Mr. Nightingale will get quite a lot of money out of this whatever happens. Therefore, the monetary consideration has no bearing. What does have a hearing is Mr. Nightingale's 176 true and genuine concern for his friends and neighbours in the vicinity.
This is why I, as Mr. Nightingale's Member of Parliament, hope that I have progressed from a rather narrow, protectionist outlook concerning my constituent's interests to a broad interest in the subject. Mr. Nightingale does not care how this is controlled provided that it is controlled. That is the point. We do not much care how it is controlled as long as it is not handed over on a plate to a £100 company controlled by a Swiss-American whom nobody knows. Some say that he is richer than Paul Getty or Howard Hughes. Who cares? They are both dead. This gentleman is still with us. We want to know, first, that the local residents and their amenities will be protected and, secondly, my hon. Friend the Member for Ross and Cromarty wants to know that there will be a plentiful supply of jobs for many years ahead for his constituents. I do not believe that this madcap scheme will provide jobs for my hon. Friend's constituents over a period of 20 or 30 years.
I have the privilege of representing Maidstone and before that I had the privilege of being the unsuccessful Conservative candidate in the great town of Smethwick. These two places have one bond in common. Their strength and prosperity is built up on a lot of small, local industries. I will not bore the House with what we have in Maidstone and, indeed, were I to do so I would be out of order.
A local economy built up on a number of small firms employing 10, 20, 50 or 100 people is far better than a Government-based load of rubbish with 1,400 people, to be cut back to 500 in a year's time. Basically, local people want steady jobs on which they can rely. Dad wants to be able to tell Little Willy that he can follow him in 30 years' time.
This is where we are going wrong in so many of our development districts. What has gone wrong with the Scottish economy is that successive Governments have put in big concerns instead of building up from small beginnings.
§ Mr. Gray
My hon. Friend's assessment of the situation is wrong. It is because of the obvious lack of knowledge of the area that is being expounded by 177 him that the Scottish Conservative Party is so poorly represented in Scotland. It is only now that Scottish Conservative candidates are realising that they must be identifiable with the people in their areas that we are beginning at last to improve our situation.
I draw my hon. Friend's attention, further, to a very interesting document which was produced by a Leverhulme research fellow of the University of Stirling, Mr. T. M. Lewis, a Master of Science, and a member of the Institute of Civil Engineers, entitledSome Comments on a Potential Refinery Development in the Cromarty Area.I commend it to my hon. Friend because it takes a totally different view and projects a very much greater number of jobs than has been claimed by anyone so far and a very much healthier future for the area as a result.
§ Mr. Wells
One must bow to the local knowledge of the local Member. However, the fact remains that a healthy economy is built up on many firms and not on one. My hon. Friend has the smelter, Highland Fabricators and the town of Inverness. A more healthy economy would be built up on lots of little businesses, as we all know and, despite the learned academic—I take learned academics with a very big grain of salt—if I were a potential workman in my hon. Friend's constituency, I would be very much happier to know that there were 100 companies each employing 10 people than to know that there were 10 companies each employing 100 people. But let us leave that alone.
I have sought to make a number of points. I now want to come to the national requirement for refineries. We are already oversubscribed. There is already too much refining capacity. The hon. Member for West Lothian (Mr. Dalyell) spoke about his interest in British Petroleum, at a very distant stage. He had the courtesy to declare that, which I thought was quite unnecessary. In Kent, where I come from, a number of my constituents work at the local BP refinery. In the same way that the hon. Member declared an interest, I suppose that I should do so on behalf of my constituents.
Let us, however, be frank about this matter. Britain has too much refining 178 capacity. To put up another refinery must be absolutely mad at the present economic stage. As I said in my opening remarks, the situation has altered radically since I was on my feet in this Chamber late on Thursday night. The Government would be mad in any way to give their support to spending on this project £38 million of your money, Mr. Deputy Speaker, and the Clerk's money and even the Under-Secretary's money—assuming that he pays his tax. We are mad as a nation to go spending £38 million of your money, Mr. Deputy Speaker—
§ Mr. Wells
Even the people in the Gallery pay their taxes. It is mad to spend their money on such a project at this juncture. It is not needed. It will not provide jobs, which are needed. There are no "jobs" needed of this magnitude.
The Under-Secretary told us last week of all the worthy bodies concerned. I forget all thenames, but they are all set out in Hansard. They are a load of codswallop civil servants who produced these requirements. We should forget what these people told us. I believe that the Secretary of State for Energy and the Secretary of State for Scotland have been taken for a ride on this, and that we should look at the real situation.
I am sure that this gentleman, Mr. Ludwig, is a kind father and all the rest of it. Perhaps he is not a father but I am sure he is an excellent chap. I invite the House for one moment to consider this. Mr. Ludwig has a £100 company in London, with a very doubtful ancestry. We have been told nothing about it by the parliamentary agents, who have been extremely idle over the whole thing. They have not consulted hon. Members in any way. They have given us minimal advice and help, and are not even represented in the Official Box tonight. That is deplorable.
The fact remains that Mr. Ludwig owns a fleet of Liberian tankers, and I invite hon. Members to consider in their minds the map of the North Atlantic, from the Gulf of Mexico round to Holland, right round the United Kingdom, to the north of us, up the Atlantic and down the North Sea. I suggest to the 179 House that Mr. Ludwig, who is interested in lifting raw oil with his fleet of tankers from some place or other and keeping his tankers continually on the move, is a bit worried about the North American pollution lobby. He is frightened of the attitudes of the North American antipollutionists, and I believe that he does not give a tuppeny damn whether he sets his refinery down at Nigg or in Shetland. I am sorry that the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) is missing. He was here on Thursday but perhaps it is difficult for him to come twice in a fortnight.
§ Mr. Wells
It is not a bad record. I do not know what is the attendance record of the hon. Member for Glasgow, Garscadden (Mr. Small). I am here most days, one way or another, so do not let us get too excited about that. I cannot remember when the hon. Member was here last.
But the serious point I am making is that this Mr. Ludwig owns a fleet of tankers on which he pays Liberian taxes. He flits from nation to nation, shifting oil from place to place. If it is not oil it is anything else that is shiftable. I believe that he or his advisers are fundamentally worried about the North American anti-pollution lobby. If he could get his foot into the United Kingdom he would find that the Gulf of Mexico is very little further from Nigg than it is from the north-east American seaboard. It is a little further but not that much further. The potential for him would be that much greater.
This gentleman, with his advisers, is totally footloose in the world and prepared to put his nasty, smoky pollutants down anywhere, and the Under-Secretary of State for Scotland is perfectly happy, it seems, to have one of the finest parts of the Scottish eastern seaboard ruined by pollution. He already has full employment but he is prepared to upset the existing fisheries, farming and small shop-keeping community by putting in a short-term extra booster of jobs.
It seems to me that Her Majesty's Government have been taken for a complete 180 ride on this. I therefore invite my colleagues on the Opposition Benches and hon. Members on the Government side to oppose the Bill at this stage. If by any unlikely chance my hon. Friends and I, who oppose the Bill, are defeated, I trust that we shall be supported in our amendments at a later stage tonight.
§ 11.0 p.m.
§ Dr. Oonagh McDonald (Thurrock)
Like other hon. Members have in this debate, I begin by declaring an interest. My interest is in the welfare and employment prospects for workers in Thurrock at the two refineries of Cory-ton and Shellhaven. I am concerned about the prospects of employment for them if we allow this development at Nigg to take place with the assistance of Government funds amounting to at least £40 million, although a formal application has not yet been received from the company. It is only natural that those of us with workers in our constituencies in oil refineries should be concerned at the prospect of another refinery being developed, because we know that our present refining capacity is not yet being used; it is only up to 64 per cent. at the moment.
The proposal to build a new oil re-finery has serious implications for the future of the oil refining industry and for job prospects. This Bill gives us an opportunity to take serious account of the views—
§ Mr. Biffen
The hon. Lady is advancing an interesting proposition. Would she care to extend it one stage further? At the moment, we have a capacity to produce electricity which is well ahead of current levels of consumption. By analogy, would she also argue, therefore, that it would be unwise to build further power stations?
§ Dr. McDonald
The hon. Member for Oswestry (Mr. Biffen) has not given me time to develop my argument. This I shall now continue to do.
The figures about our oil refining capacity speak for themselves. In 1975, our output was 86 million tons. Our total capacity is 147 million tons. The accepted estimates expect this to rise to 181 about 156 million tons a year, even without the building of the Cromarty Petroleum refinery. Much more speculatively, we can look ahead to the 1980s and expect that we shall need to refine about 110 million or 120 million tons a year. In other words, excess capacity will continue not just through the 1970s but into the 1980s.
Cromarty Petroleum claims that the real capacity of United Kingdom refineries is only 120 million tons a year and that, by 1980, when its own refinery is completed, there will be no spare capacity at all. These are unusual estimates, to say the least, and Cromarty Petroleum gives no evidence to back up these estimates. They seem to be merely figures plucked from the air to give substance to the argument whenever this is necessary.
§ Mr. Gray
If what the hon. Lady says is correct, perhaps she will comment on this item from the business section of the Aberdeen Press and Journal of 20th March 1976 which carries the headline:Now Forties oil goes to Canadian refinery.She will see these words:The first shipment of Forties Field oil for Canada has been delivered to a Montreal refinery.
§ Dr. McDonald
This is a commercial decision. It is true that the Department of Energy would like all North Sea oil to be refined here, but it cannot enforce this obligation on the oil companies at present.
The existing refineries have the capacity to refine the light North Sea oil and, where they have not, the Government are at present giving up to £20 million to enable existing oil refineries to adapt or to expand their plant to deal with it. Within the last few months it has been announced that Mobil Oil will receive £10 million for the Coryton Refinery. The Total Petrofina refinery will receive between £5 million and £9.5 million to upgrade and extend its refinery plant.
Those grants have been made by the Government to ensure that we have all the capacity that we can possibly need to refine North Sea oil. I ask the Secretary of State for Energy, given such grants, what part does the Cromarty Petroleum refinery play in the scheme? It seems that with £20 million already committed, we have all that we need and that a 182 further £40 million to build a new refinery altogether is unnecessary. We already have everything that we can conceivably need.
It may be true that we can risk investing in refinery capacity and justify Cromarty on those grounds, but if we offer that as a justification there are various things that we must take into account. For example, many other countries, such as those in the Middle East, have projected oil refineries which will come into the market to sell refined products. Other countries have excess capacity and prefer to import crude oil rather than refined products. They would prefer to import North Sea oil as a crude oil and not as a refined product.
If we put further capacity into Cromarty Petroleum we put money into an extremely risky investment which will remain that into the 1980s. I accept the need for public investment in jobs, in viable projects to provide secure jobs in a market where we can reasonably expect to produce a good export trade. But this seems to be a risky project which is bound to waste public money.
It is not surprising, as a result of discussions with the Transport and General Workers Union, that the Secretary of State for Energy asked for certain assurances from the Cromarty Petroleum Company. They concerned four main areas—that North Sea crude oil would be used, that the refinery would be export oriented, that it would produce petrochemical feed stock and that it would give additional, not new, employment with no adverse affect of employment elsewhere. Assurances were received from Cromarty Petroleum in a letter published last week.
Let us examine some of the assurances. We are told that Cromarty anticipates entering into long-term contracts with North Sea oil suppliers, although it cannot be sure that a decision to use North Sea oil only will not be revoked in the future. That assurance was given in October. Last March in a Press statement about the future of Cromarty we were told that it would involve 50 per cent. North Sea oil and 50 per cent. Gulf or African oil. This represents a change of heart over a few months. Have agreements with African and Gulf companies broken down or have wonderful offers been made by other crude oil companies? 183 If so, by whom have these offers been made and can Cromarty name them? The Scottish Office has been unable to find any company with which Cromarty has an agreement to refine oil.
The refinery is supposed to be export-oriented, but where is the market to be? Cromarty has not replied. We are told that the managing director and other senior staff at Cromarty are not experts in the European market. Where, then, do they hope to sell their oil?
The next assurance is that the refinery will be producing petrochemical feed-stocks suitable for sale in the United Kingdom. But ICI, Shell and BP already have their own arrangements to produce petrochemical feed-stocks. One wonders what the sources that Cromarty will use are, and where it expects the market to be.
We are not offered additional employment, but only new employment. There is an important difference. New employment could mean that people in Cromarty get jobs at the expense of workers in Thurrock—hence my interest.
§ Mr. Iain MacCormick (Argyll)
Does the hon. Lady agree that the whole basis of her speech is that she does not want people in the Highlands of Scotland to have the jobs because this might affect her constituents in England?
§ Dr. McDonald
No. The basis of my speech is that public money is being spent on an insecure project which is not likely to produce jobs in the long term, or possibly even in the short term. Public money is being wasted. It will not create additional employment in the United Kingdom, which is what is required. Our concern is that money should be spent on viable jobs.
I talked about money being spent on a viable project which we could be sure would produce jobs. Let us look again at the history of the company. It is ultimately owned by Mr. Ludwig. If we delve into his past we shall no doubt find many interesting things. Among them we shall find that in 1957 he purchased land near Milford Haven. He first offered an iron ore refinery. That did not materialise, and ultimately the land was transferred to Gulf Oil. With that kind of history, how can we be sure—
§ Mr. Hugh McCartney (Dunbartonshire, Central)
Does my hon. Friend know that the reason for the project's not being proceeded with was a planning condition which still applies to Gulf Oil?
§ Dr. McDonald
The point is that the jobs did not materialise. The land was purchased in a speculative manner.
§ Mr. McCartney
Is my hon. Friend implying that the jobs did not materialise through the fault of Cromarty Petroleum or of some other party?
§ Dr. McDonald
I was not referring to the Cromarty Petroleum Company. As far as I know it did not exist in 1957. It was referring to the past activities of Mr. Ludwig and pointing out that promised jobs did not materialise. Jobs which are currently being promised by the company may not materialise. That is the point with which I am concerned.
We have here a company which is entirely foreign-owned. No British interests are represented in it. It wishes compulsorily to purchase a piece of land, and proposes an oil refinery for which we can see no need or use at present or in the early and mid-1980s. We have no guarantee that jobs will be provided if Cromarty Petroleum obtains the land or that they are needed there in that sort of industry. There is no guarantee of what will happen if Government money is handed out in the way proposed.
§ 11.10 p.m.
§ Mr. Roger Moate (Faversham)
The hon. Lady the Member for Thurrock (Dr. McDonald) has emphasised again how doubtful are many of the aspects of this whole affair and how uncertain are the propositions upon which the Bill is presented. If anyone had doubts before about the validity of the propositions put before us, those doubts will now be entrenched following what has been said in this and previous debates.
Before dealing with the wider questions of refineries and refining capacity, I shall refer to some of the harsh and unfair things that have been said about Mr. Nightingale. I am sorry that the right hon. Member for Kilmarnock (Mr. Ross) is not here. I am sure that he has valid reasons for his absence, but he has admitted candidly that he was the cause of the whole problem. I do not criticise a person for taking a courageous decision and 185 overriding the views of a reporter or a planning inspector, but some of the remarks in his recent speech on this Bill were not of the calibre one would expect from the man who has occupied such a senior position in the Government.
I took particular exception to this reference to Michael Nightingale by the right hon. Gentleman:All the rest of the land has been bought, but one absentee landowner, for reasons best known to himself, said "No" … But he is prepared to lease the land for 99 years or take a share in the action. In other words, he wants out of it as much as he can get."—[Official Report, 21st October 1976; Vol. 917, c. 1783.]That put together most of the abuse directed against Mr. Nightingale and I thought that they were despicable remarks and totally at variance with the truth. I wish that the right hon. Gentleman were here so that he could withdraw what he said.
In any long-drawn-out argument there will be many contradictions and, after a few years, it is hard to untangle the facts about who is right and who is wrong. However, I have seen a vast amount of material and I am convinced that Mr. Nightingale has acted properly in every respect, that he has at heart the welfare and well-being of the people of Cromarty, that he wishes to ensure a higher quality of life for that area and that he is not, as the right hon. Member for Kilmarnock suggested, trying to get as much as he can out of it. That was a pretty poor thing for the right hon. Gentleman to say. If Mr. Nightingale had wanted to extract the maximum amount of money from the land, he could have sold it at a much higher price. But that has never been his intention.
Some hon. Members have referred to Mr. Nightingale saying that he was prepared to take a share of the action or some such words. I wish that someone could refine the vast amount of paper which I have received on this matter. Mr. Nightingale's remarks have been misquoted time and again and it is only fair to put the record straight.
I have here a copy of the letter which has been quoted on television and by the Cromarty Petroleum Company in an advertisement. The letter reads:You have said nothing further about my possible wish to participate in any project that goes forward.186 The letter was dated 11th January 1974 and earlier in it Mr. Nightingale writes:I have been waiting to receive a copy of the project proposal which you promised when we met on 7th December … I note that it is now in the hands of several other bodies, but I cannot give sympathetic consideration to the proposal without the facts.At that time, Mr. Nightingale had no information about the proposal. His only information was that it related to a marine terminal project.
I have a copy of the letter from Cromarty Petroleum's solicitors dated 12th November 1973, which states:The company … wishes to purchase your property on Nigg Point … Cromarty Petroleum Company Ltd. would like to purchase your Nigg Point land for use for marine terminal and associated facilities along with tanks and other storage uses and intends to submit an application for planning permission in principle to Ross and Cromarty County Council in the next few weeks.I have a copy of that planning application, which confirms what is contained in the letter.
At that time the talk was about not a refinery, but a marine terminal project.
Mr. Nightingale, in a letter to me, said:I have made it quite clear since my letter to The Times on 13th September 1971 that I am opposed to the idea of a refinery at Nigg Point but have also made it clear that if the Government wishes it to be"—presumably that will be the final decision of this legislation—then I would co-operate but in such a way that the development could be of benefit to Cromarty Estate and thereby to the town of Cromarty itself. As I think I have explained to you the estate owns a number of important public buildings in Cromarty, such as the beautiful eighteenth century town hall and the Gaelic Chapel. All these buildings require large annual injections of money if they are to be maintained properly, but the estate income is minute.It should be emphasised that Mr. Nightingale has not received one penny piece out of the Cromarty Estate and that it has expended considerable sums of money on planning inquiries which have taken place. Therefore, any question of Mr. Nightingale seeking to get what he can out of it, as was suggested by the right hon. Member for Kilmarnock, is totally disproved by some of these points.
We are primarily concerned today with the purchase of 47½ acres of land. That is the proposition in the Bill. But it is 187 not as simple as that. The House has been given a rare opportunity to discuss many other matters directly concerned with this proposition. The purchase of the 47½ acres is the tip of the iceberg, so to speak, which gives us an opportunity to consider all the different matters relating to it.
It is unusual, but welcome to be able to debate a major planning decision. It is also unusual, but welcome, to have the chance to discuss at such length where the refinery should be sited.
I have found this debate illuminating and helpful. I am sure that other hon. Members welcome the opportunity to discuss the conservation implications of a major decision of this kind. It is certainly a welcome, but rare, opportunity to discuss the way in which Government money is spent on investment projects of this kind. The very nature and automaticity of the investment grant system means that we seldom get a chance to consider whether it is the right or the wrong way to spend public money. We might say that is a defect in the system. Perhaps we should have greater opportunities of scrutiny.
Some hon. Members have said that we are talking about 47½ acres of land, not the investment grant system. I should have thought that the House would welcome the opportunity to consider: is this the right time to invest such money; is this the best place to put the refinery; is this the best way to spend £38 million of the taxpayers' money? We should be grateful that the procedures of the House allow these debates to take place. I hope that the House will be grateful to my hon. Friend the Member for Maidstone (Mr. Wells) and others who have helped to ensure that we can debate these matters.
We can now examine these proposals in detail. If the Government's answers are not satisfactory—they have not been so far—I suggest that hon. Members might feel justified in saying that the Bill should not be considered.
The question that the House must ask itself is: has it been established that there is an overriding national interest for this project at this time? That is the sole justification for saying that this refinery should go ahead. If there is not an 188 overriding national interest, no one can argue strongly in favour of a refinery on a beautiful piece of British coastline. The overriding criterion in the jobs versus conservation argument is an established and clear requirement for development in that place. But the Government have not said that they need a refinery there. A private company says that it wants to build a refinery there. Far be it from me to suggest that private companies should not invest their own money for the benefit of the United Kingdom—
§ Mr. Tam Dalyell (West Lothian)
What bothers me is that the private company is not investing its own money. Very little, if any, money from the Ludwig organisation is going into this project. I understand from merchant bankers I consulted over the weekend that the only equity that is going in is £36 million, £38 million or many millions more of the taxpayers' money. Attempts are being made to raise the rest in the City. Whatever else it is, it is not the private company's own money. Some of us would be far happier about the project if a percentage of the company's money were going into it. We should get away from the idea that vast foreign funds are being injected into this country, because that is far from the reality.
§ Mr. Gordon Wilson (Dundee, East)
Is the hon. Gentleman trying to establish the proposition that industrial development should be kept in areas of England where development has occurred in the past and not in areas of Scotland badly in need of industrial development?
§ Mr. Moate
That is too big a question to answer in that way. It has to be established that a refinery is needed there. There is a logical case for saying that refineries should be established as close as possible to the markets that use them in the normal course of events. Therefore, there is not the strongest possible case for developing a refinery in Nigg Bay. On the other hand, I concede that it is argued that this will be an export refinery, 189 although that has yet to be established. That qualifies my answer to some extent.
In terms of conservation, it has to be proved that we need a refinery there before we carry out the development. We also have to establish that it is in the overwhelming national interest to spend £36 million of our money on a refinery in that part of the world. That has not been done. Unless that is proven it would be wrong for the House to go to exceptional lengths to give to this private company—which has not yet proved itself to be of any substance—such extraordinary powers. The company seeks a Private Act of Parliament. To give to a private company power compulsorily to purchase the land of another citizen would be to grant a rare privilege. It is a rare privilege for the country to give £36 million or £38 million to a private company.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
The position is worse than the hon. Gentleman suggests. The company has written into the order the tax exemption clause—Section 8—a matter which normally the Treasury and the Inland Revenue would take care of. This private company has taken upon itself the right to exempt from tax all the costs relating to the order.
§ Mr. Moate
Nothing about this company amazes me. It is a remarkable example of enterprise to establish a £100 company and ask for £38 million of the taxpayers' money. The proposition at this moment in time is that the company is asking for powers of this Parliament compulsorily to acquire land. Flowing from that will be all the other matters that we are discussing. We should not grant that power lightly. We should not grant it unless we are satisfied that this project is needed in the national interest.
I wanted to say another word about conservation because some of us are so accustomed to the argument of jobs versus conservation that we think it hardly worth arguing the case. It has become a cliche. It is a situation with which we are all familiar in our own areas. We take the view that there is a conservation argument but we do not think about it much more.
190 I was glad that my hon. Friend the Member for Pudsey (Mr. Shaw) made this point in his speech the other day when he quoted the case of the Royal Society for the Protection of Birds. It is worth recalling the point that the Society made in its letter dated the 7th October. It said:The RSPB's opposition to the development arises from the fact that the Cromarty Firth is recognised by the Government's own conservation agency, the Nature Conservancy Council, to be of international biological importance due to its large bird population.It added:Following the advent to North Sea oil, the RSPB has accepted the overriding need in the national economic interest to construct bulk oil handling terminals in Orkney, Shetland, the Firth of Forth and at Teesside. We believe that no such overriding need has been demonstrated to justify this major threat to the Cromarty Firth.It is important to establish that there are strong conservation arguments against a refinery. Other hon. Members will argue that the case for jobs is real. My hon. Friend the Member for Ross and Cromarty (Mr. Gray) has clearly concluded that this is the case.
§ Mr. Giles Shaw (Pudsey)
In dealing with conservation will my hon. Friend also take note of the fact that the preservation of wildlife is an international obligation? Will he also note that, so far as I understand, this is the first time that such a project has been going ahead, or is likely to go ahead, when an application has been made for two reserves of international significance within the Firth itself?
§ Mrs. Margaret Bain (Dunbartonshire, East)
Would the hon. Gentleman accept that many of us in Scotland feel that on many occasions animals and wildlife have been put before people? If we look back through history it happened during the Highland conservation when sheep became more important than the people in the area. Is it not time that people, and employment for the people, were put 191 first? That is what we in the SNP are fighting for in respect of this legislation.
§ Mr. Moate
The hon. Member for Dundee, East (Mr. Wilson) says that that has always been clear. A number of us have listened to the speeches from the SNP Bench and they were anything but clear. Their earlier speeches indicated that they did not know what to say or think. Apparently they are now in favour of it. That is fair enough but it is a bit late. No doubt they also voted against the Joint Committee of Inquiry which was suggested by a number of hon. Members. That would have been in the interests of Parliament and of Scotland.
I was talking about conservation versus jobs. What we have to establish is whether it is worth sacrificing the bird life, or whatever, in such an area for the sake of jobs. Of course, if there is an over-riding national need for the jobs the case is conceded. What I was going to say about my hon. Friend the Member for Ross and Cromarty (Mr. Gray) is different from what I have just said about the SNP. While I disagree with my hon. Friend's conclusions, I do admire the courage he has shown in coming down firmly and clearly on one side of the argument.
§ Mr. Robert Hughes (Aberdeen, North)
Would not the hon. Member concede that it is a great pity that we are put into this dilemma of having to choose between conservation and jobs on the application of one company? Would it not be better to accept nationalisation of the land in Scotland and the Socialist policy of forward planning?
§ Mr. Moate
I need not pursue that line of argument. However, much as I am against the nationalisation of land and the State's involvement in these matters, I prefer compulsory purchase powers to be used only in the interests of the State. They are powers that should be exercised 192 very sparingly, but there are occasions when they need to be used, times when the Government have to purchase properties compulsorily. I am much more hesitant about the argument that these powers should be used to transfer property to another private company. Perhaps the hon. Member for Aberdeen, North (Mr. Hughes) and I can go a little way along that road together.
We can all envisage a situation such as this in our own constituencies. If someone wished to establish an oil refinery on the Isle of Sheppey, in my constituency—and it may surprise hon. Members to know that, although it is in the South-East of England, it has an unemployment rate of more than 10 per cent.—no doubt there would be conflicting arguments between those who wanted jobs and those who wanted to preserve the coastline. My hon. Friend the Member for Ross and Cromarty has had the courage to say that he would go for jobs, and who would blame him? But there will be those who will blame him and who support the conservation interests. They will be upset by what he has done, but I hope that he and they will agree to differ on this issue and that they will respect my hon. Friend for having the courage to fight this project all the way through, for having welcomed these opportunities for parliamentary debate, recognising that this is a matter of immense national importance.
I wish now to say a few words about the company itself. If the company were putting in its own money, we should welcome this massive investment of foreign money, and that would be a strong argument in the company's favour. One of the arguments for the proposition is that the Ludwig empire has such vast resources that one need have no doubts about its ability to invest this amount of capital. But if it is so vast and has such resources, why is it seeking these funds in the London market? It is not Mr. Ludwig's money. He has a fund raiser who is raising money. Why is not Mr. Ludwig's money only going into this project?
It seems clear that we are talking about a project of up to £200 million and, according to the Daily Telegraph of 30th September 1976, the British Government will be supplying £36 million and of the balance of £144 million it looks as though 193 some $62½ million, or some £40 million—changing rapidly as the day progresses—
§ Mr. Moate
—is to be found by Mr. Ludwig. The rest is being raised in the London money market, so that it is simply resources already available for investment in the United Kingdom.
The Daily Telegraph of 30th September had a leading article saying:If a visitor from Mars were seeking to understand why a great industrial and trading nation such as Britain is obliged to call in the receivers from the IMF, he could do worse than mull over the saga of the Nigg petroleum refinery".I expect that both opponents and supporters of the project would agree with that. It goes on:This is a project of such commercial improbability that it may very well, like its previous manifestations, turn out to be stillborn. Nevertheless it tells us much about the management of the nation's affairs over the past 10 years.For it is not a new idea. On the contrary, this is the third time over the ground. On each occasion there has been a scheme to build a refinery on the Cromarty Firth involving a prospective outlay in tens of millions of pounds from the taxpayer in grants, to create a handful of jobs at the rate of £70£80,000 per job. Each scheme has been marked by a total absence of identifiable markets.That is the key point. The company has switched its emphasis from the import of 50 per cent. North Sea and 50 per cent. Middle East oil: now it is talking about 100 per cent. North Sea oil. But in the 1980s, the problem will not be finding sources of oil in the North Sea. The company will probably get the oil it seeks. The problem then will be where it will market its oil. We have been told that it has contracts lined up. If so, we should be told, because the viability of the project depends on those contracts being real.
§ Mr. Moate
That is a fair point. But we also have a fair point. If the company is asking for £38 million of our money, we are entitled to know that the project 194 is viable. But accepting that point, I should be prepared to go along with confirmation by the Secretary of State that he is satisfied. If he would say that he has seen these contracts and that the markets exist, that would help the House.
The Secretary of State has been asked to confirm that there is an over-riding national need for a project of this kind in the Cromarty Firth. Reasonable questions were put to him by representatives of the Transport and General Workers' Union. When asked to satisfy the House and the people on these matters, the right hon. Gentleman wrote to the company asking for assurances that the project would not take jobs from anywhere else, that there would be a net gain of jobs, that the company would be handling North Sea oil and exporting its products.
Surprise, surprise—the company quickly gave the assurances that the right hon. Gentleman sought. It did not take long to consider these matters, even though there was a change of emphasis from its original plans. Within a couple of days, we are told, the assurances had been received and satisfactory replies given—by telex. The company did not waste time on long explanations and research documents.
It is not good enough for the Government to lend their weight to a Bill asking for this kind of compulsory purchase power for a project of such dubious viability. The hon. Member for West Lothian (Mr. Dalyell) was absolutely on the nail in saying that, if the Government would say that this project is urgently needed in the over-riding national interest, that would alter the situation. Until that has been established, the case for this compulsory purchase has not been proven.
§ Mr. Dalyell
I would support the hon. Member's argument on markets by saying that when, in formal session of the Energy Committee of the European Parliament, I asked the Director-General whether there was any realistic possibility of markets such as were suggested from a green-field refinery paying interest on the capital which would be required—markets into Rotterdam, into Germany, with their Wilhelmshaven problems, and into France with their problems—he said that it was inconceivable. That is an official opinion of the European Commission. It may not be definitive but it should be mentioned.
§ Mr. Robert Hughes
This is a curious proposition. First we are told that the project is not viable and that there are no markets, and then that the company is having to raise finance capital in the City. It the hon. Gentleman is right, the capital will not be forthcoming and the project will not take off. All we are doing is discussing a Bill for the purchase of the land to make it possible that the project might proceed further. If we refuse the Bill tonight, however, we stop the possibility of the City, the company or anyone else providing jobs in the area.
§ Mr. Moate
I dispute that. There are other ways of settling the matter. I ask the hon. Gentleman to reconsider his first point. Does the hon. Gentleman think that, if the project is so unsound that the company will not raise the capital, it can be right for Parliament to pass a Bill transferring land compulsorily to an organisation whose credentials are so thin?
§ Mr. Robert Hughes
I am sorry to interrupt the hon. Gentleman again and so carry on the debate even longer than is necessary. Surely the point is that if the company, in the prospectus that it must issue to the people from whom it wishes to raise money, cannot show that it owns the land, how can it raise the capital?
§ Mr. Moate
If the House decides that the Bill should be considered now, we shall come to the question of leasing. I am satisfied that a lease can be arranged, that it would be a satisfactory arrangement, and that it would meet the requirements of any investor. But that is a different point.
I do not think that the Bill should be considered because I do not think that a case has been made out at this stage. This is not just a matter of a few objectors tonight who believe that a case has not been made out. It is the decision of the former Secretary of State for Scotland in overturning the findings of his reporter that has brought this situation about. A 196 whole body of opinion at that time said that there was no case for a refinery there. There was a massive inquiry and the reporter said that there should be no refinery. The report of the Community and Resources Planning Unit—CARPU—said:The Cromarty Inquiry involved five Queen's Councillors, ten barristers, two professors and seven doctors of medicine and science. Ninety-one individuals gave expert and articulate evidence and over five hundred individuals produced written representation to the applications.The cost of the Inquiry is difficult to assess with any accuracy, but our conservative calculations produced a total of £650,000. This figure does not include for all the background and organisational work necessary by all representatives, neither does it take into account the cost of preparation of Mr. Maycock's report ….
§ Mr. Gray
It is only right to point out that that report has been discredited. The Chief Executive of the Highlands Regional Council has written to the professional bodies concerned complaning about the way in which the survey was carried out. Many peculiar methods were used to gather evidence. In addition, I should point out that the principal group of objectors was known under the name of "CROW", and that the chairman and secretary of "CROW" have dissociated themselves from the CARPU document.
§ Mr. Moate
I cannot understand why my hon. Friend intervened. All I was doing was quoting an extract from that report, which I felt to be unobjectionable. It was a factual statement. If my hon. Friend is saying that the figures are wrong, I should be interested to hear him say why he feels they are wrong. The report tried to assess the costs of the inquiry.
It is a very good report. One might disagree with its conclusions, but it is a massive production and looks highly professional. According to Press reports—and I have no other source of information—it was clear from the beginning that it could not be guaranteed that the outcome would be satisfactory to the objectors. I was merely seeking to emphasise that this was an enormous inquiry involving a great deal of expense and that the report came to the conclusion that the final cost could exceed £650,000.
197 It is interesting to note that the Secretary of State, following the inquiry, overturned the objections of the reporter on the grounds of job content. What is the point in going through a vast inquiry of that kind, at massive expense, when the factor that determines the final outcome was known before the inquiry began. What is the point of all that effort when the Secretary of State has already decided that the overriding consideration was the need for employment in the locality?
§ Mr. Giles Shaw
My hon. Friend is now dealing with a most important point. Does he not agree that the conservation policy of the United Kingdom is thrown into the melting pot by such decisions, and that it is vital that conservation policy should be worked out in accordance with what the Government believe to be their priorities? He is right to suggest that where jobs are held to be of the maximum priority overriding any other consideration, the sooner that is made clear the better. If that happens, we may bring some orderly planning into conservation matters. Until we do so, no conservation policy will be worth anything.
§ Mr. Moate
The Government owe us an explanation on this matter. The reporter made clear that there was no overriding national interest proved for a refinery in that situation. He said:There is no evidence of a need for development in this location in either national or local interest sufficiently great to warrant overriding the preceding objections.Therefore, the proposition that is held before us tonight runs contrary to the weight of informed opinion collected and considered at the inquiry.
I have heard nothing to suggest that this company is so sound and well-financed that the project could go ahead with its own money. I have heard nothing to say that these people have such guaranteed markets that the project could command finance from the City. Furthermore, I have heard nothing to prove beyond doubt that we need a refinery in such a way as to override the strong conservation arguments. Perhaps if this were my constituency and the argument involved the existence of 400 jobs, I could understand the pressures, but I think that this is a dubious project. 198 Although it is right to put forward constituency interests I shall be surprised if this project ever goes forward.
If that is the situation we have raised false hopes. Admittedly, we shall have saved ourselves £36 million or £38 million which would be a welcome saving. On the other hand, this land will have been transferred to the company and we do not have control over what it does with the land. It can transfer the land to another company or it can sell the land. It has industrial planning permission. It may be that the refinery will not proceed. The case for the Bill then falls. Presumably it is justified only in terms of the refinery.
We have no control over what the company does with the land. The hon. Member for Birmingham, Perry Barr pointed to limited articles of association of the grandparent company, which has as one of its major objectives, the dealing in land.
§ Mr. Dalyell
Is it not a fact that the financial strength, so-called, of this group rests on the "Ludwig legend" and not on the publication of any financial balance sheet or declaration of public asssets?
§ Mr. Moate
I agree that that is the case. I have already raised the question of the 1974 accounts. It is a serious matter when accounts of this kind are incorrect. We have Price Waterhouse & Co., one of our most eminent and respected firms of accountants, saying categorically that in the opinion of the directors the ultimate holding company was the Ludwig Institute for Cancer Research which was incorporated in Liberia. It turns out that it is incorporated not in Liberia but in Switzerland. I would have thought that Price Waterhouse & Co. would make a statement, writing to me explaining the situation, saying that it had been misled. If the company cannot check on a simple, elementary fact like that, I wonder that it has the gall to come to Parliament and ask for £36 million to £38 million.
§ Mr. Dalyell
Is there not one person who can put us right on this, namely the hon. Member for Ross and Cromarty (Mr. Gray) who has said:I have made exhaustive investigations about the activities of the company."—[Official Report, 21st October 1976; Vol. 917. c. 1788.]If he has made exhaustive investigations, 199 he is the only man in Western Europe who has and we look forward to hearing from him.
§ Mr. Moate
I do not doubt that my hon. Friend has satisfied himself, as far as he feels it is possible or necessary, that the company can obtain the funds it needs. To a certain extent this is a matter of commercial judgment because I suspect that even the company cannot be totally certain that it can raise the money. Otherwise it would have already told us.
§ Mr. Rooker
I have great respect for the fight which the hon. Member for Ross and Cromarty (Mr. Gray) is putting up, but the Home Secretary, as Deputy Leader of the House, said today that the hon. Member was in charge of the Bill.
§ Mr. Gray
I corrected this matter this afternoon. I think it must have been a slip on the part of the Home Secretary. He had elevated me to a position I had no right to assume. I am certainly not in charge of the Bill. I am acting as a constituency Member of Parliament in my Back-Bench capacity and I support the Bill.
§ Mr. Gray
The hon. Member for West Lothian (Mr. Dalyell) is being offensive, as usual. I have been given a copy of a letter from the Chase Manhattan Bank dated June 1974. It was sent to the Ross and Cromarty County Council of that time. I quote only from the last paragraph of the letter:We understand that the subject is considering constructing an oil refinery in the Cromarty area which may involve total capital expenditures of approximately $250 million. Based on our experience and favourable impressions of the company and its management, we feel that Universe Tankships Inc. has the capacity to undertake the financing of this 200 project. We believe that the company may be considered entirely responsible for its commitments.
§ Mr. Moate
I am grateful to my hon. Friend for his intervention. He is anxious to be helpful, but that letter was dated 1974. That is two years ago. A lot of water has flowed under bridges since then. That is not the sort of evidence that the House should need in order to come to a clear decision.
As I have said, I understand my hon. Friend's position and his desire to fight for jobs for his constituency. However, the House is being asked to give unusual powers to a private company. That company has not proved its credentials or given us the necessary evidence. We, have not had the evidence to support the case for an oil refinery based in that particular part of the British countryside. The case has not been made out.
That is not just my view or that of a few of us. It is borne out, almost word for word, by what Mr. Maycock said only in December 1975—not so long ago. He said of the Cromarty Petroleum Company:Their reticence extends to any marketing arrangements that they have in mind for the refined products.Of Dr. Fells, Mr. Maycock said:He has failed to explain what these plans are, or to demonstrate their credence.Mr. Maycock went on to say,I therefore conclude that the need for additional refining capacity based on the operation of such vessels at Nigg is to be questioned.Speaking about the direct relevance of the Bill and relating it to compulsory acquisition of the title, he said:Their motive for taking that action is to be questioned, bearing in mind they have been offered a 99 year lease of that land should planning permission be granted for the development the life span of which is almost certain to be less than that term.He goes on to say—this strengthens me in my attitude of opposition to the measure—I am not satisfied that there is evidence of a need for the development in this location in either the national or the local interest sufficiently great to warrant over-riding the preceding objections.201 I hope that the House will concur in that view and not give further consideration to the Bill.
§ 12.4 a.m.
§ Mr. Robin Corbett (Hemel Hempstead)
I should make clear that British Petroleum has a national computing and accounts division within my constituency, and that within about 100 yards of my constituency boundary four major oil companies have a terminal, though not a refinery. However, it is not for that reason that I intervene in the debate.
We are talking about the subsequent spending of at least £36 million of public money. When money is hard to come by for other purposes, it is right that the House should be very careful and weigh the advantages and disadvantages of what is proposed.
Incidentally, less than one-tenth of this money, on the right terms, would keep in business the Observer newspaper and would preserve those jobs, let alone others that one could mention.
There are three principal questions about this matter. First, do we need this extra refining capacity, looking at matters in the context of the total energy situation? Secondly, if we do, is Nigg the most suitable place for it? Thirdly, is this the wisest way in which to spend taxpayers' money at this time?
For the answer to the first question we should go, so to speak, straight to the horse's mouth. The answer on that point, given voluntarily, and not under intervention, to this House last Thursday, is that no case has been made out for extra refining capacity. That is not just the view of the oil industry itself but a view made plain by the Minister of State, Scottish Office, who told the House that the Secretary of State for Scotlandaccepted that no overriding national need for further refining capacity had emerged at the inquiry.That view was echoed by my hon. Friend the Under-Secretary of State for Energy, who said later in the debate thatOur present refining capacity is more than sufficient for our present national demands.In case that message did not get home, my hon. Friend went on to say:That means that there is no overriding case for the refinery in terms of present United Kingdom needs."—[Official Report, 21st October 1976; Vol. 917, c. 1735, 1780.]202 I hope that those listening to the debate will accept that that certainly disposes of the argument in terms of the refining capacity assertions put forward by the promoters of the Bill.
§ Mr. Richard Buchanan (Glasgow, Springburn)
What my hon. Friend has told the House is typical of the story of British industry. Is he not aware that we have never attempted during a depression to train people for the skills that will be necessary when we come out of the depression? The tale he has given to the House of capacity, capacity, capacity, takes no cognisance of the upsurge in industry which will come about if our policies are pursued.
§ Mr. Corbett
I have no quarrel at all with my hon. Friend in what he says in terms of investing for the future at a time of low economic activity, and I particularly agree with him concerning training. I know that Cromarty Petroleum disputes this, but I am advised that the present state of use of refinery capacity is 64 per cent. When we acid to that figure the closing down of existing refineries for maintenance and repair, and matters of that sort, we still have a situation now-and it will last well into the 1980s—that there is more than enough refining capacity for our crude oil.
I quite take my hon. Friend's point. We have been caught with our pants down too often on these things, but I do not happen to believe that it applies in this case. The best estimate which can be made—and, Heaven knows, it is difficult enough to plan into the future—is that we do not need this extra refining capacity for as far as can be seen ahead into the 1980s.
The principal case argued by the promoters of the Bill is not for refining capacity in terms of the need of the United Kingdom market. We have some divergence of views whether it will be 50-50 use of North Sea oil or whether, as my right hon. Friend the Secretary of State for Energy said the other day, it will be the bulk of it. But it is certainly not the company's case on this and that needs to be taken into account.
It would be quite ironic—my hon. Friend the Member for Thurrock (Dr. McDonald) made this point—if this House were to pass a measure which meant that we were to spend £78,000 per job to 203 create 450 new jobs, and then, in the areas of the existing refineries, working at only two-thirds capacity, we were to see redundancies. That would be the economics of Bedlam.
I well understand the concern of the hon. Member for Ross and Cromarty (Mr. Gray) about getting new jobs in his area. I mean that quite genuinely. But, regrettably in that sense, these decisions cannot be taken on a narrow constituency basis. We have to look at where we are putting our resources.
To be fair to my hon. Friend the Under-Secretary of State for Industry, he went on to say that all the evidence suggested that the proposed project was not mainly directed at the United Kingdom market and that it was intended to produce substantial quantities of petro-chemical feedstock, of which we are net importers. That is a very attractive argument. But it is my information that, regrettably it does not stand up to examination.
I am advised, for example, that North Sea oil, which the Under-Secretary said would provide the bulk of the refinery's throughput, is not the most suitable for the production of ethylene and other petrochemical feedstocks. My information is that the more paraffin-based crude oil from the Middle East is far more suitable, is less difficult to work with and is less expensive for this enterprise.
We have to look at this in the context of where these petrochemical-based feedstocks are to come from, in the context of where they are getting the crude oil for the refineries at which they are to be produced. To put it no higher, I think that there is at least a question-mark over this assertion by the company because of the nature of what we know so far about North Sea oil itself.
Even for a moment accepting the export intention which I believe is a thin one, I wonder what is the need to have this refinery at Nigg Bay. At most, on the information that we have had, it is only 50 per cent of North Sea oil which will be used for the throughput of the refinery and for a market the bulk of which, we are told, is not within the United Kingdom.
I am advised that the economics of the oil industry dictate that it makes far better sense to have a refinery as near as 204 possible to the centre of distribution, rather than where the oil is produced. In other words, it is cheaper to pump the crude oil to where it can be processed near to where it will be used, assuming, as the company does, that it will have any sizeable market for that processed oil within the United Kingdom—and there is a very big question-mark over that, on the company's own admission.
If this is to be mainly an export refinery, which again is what the company is claiming, aimed at winning exports, what other alternative sites either in Europe or outside Europe have been looked at? As I have said, it makes sense to have these refineries near to the markets in which one wants to sell.
I accept that these matters are not directly for the Government because they have responsibility to put this before us, but these are some of the questions which have remained unanswered in the long and troubled history of this proposition.
I come, then, to my third question: is this the best use of the taxpayers' money? The proposition is that, inevitably, as a consequence of passing this measure, we shall be asked to pay about £78,000 per job for 450 new jobs in this area—and not permanent jobs, at that, because no one predicts that North Sea oil will be with us for ever.
§ Mr. Dalyell
My hon. Friend mentions £78,000. Perhaps I might quote the CARPU report, to have it either confirmed or denied: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.If that is true, it makes my hon. Friend's case even stronger.
I might also draw my hon. Friend's attention to the fact that representatives of the Inverness Labour Party whom I met on Friday night were of the view that for very much less money they could create far more jobs, for instance, in their school cleaners' dispute in, for instance, road repairs which are desperately needed, and in all sorts of other activities in the Highlands.
§ Mr. Corbett
I am grateful to my hon. Friend. I was using a basic figure and, clearly, the more factors one adds to it, the bigger it becomes.
I am sure it is agreed that the cost of providing these 450 short-term jobs is substantial. It is even greater if one adds to its costs of infrastructure.
About 2,500 British Petroleum refinery workers—members of the Transport and General Workers' Union—at refineries at Grangemouth, Kent, Llandarcy and Belfast have come out against the Cromarty proposal. They say:With surplus refining capacity the building of a new refinery anywhere in the United Kingdom is not economically viable. It would be a gross waste of human and industrial resources.One might say that that is an exercise in self-interest. If any hon. Members feel that that is so, I must add that they went on to say that if we are talking of spending £40 million of public money for the provision of jobs, there are many other ways in which it could be spent in many other parts of the country and that it could be spent in a way which would provide many more jobs on a more stable basis.
§ Mr. Corbett
In all honesty, I cannot do that off the top of my head.
In conclusion, I was about to say that, on the serious ground whether for the foreseeable future we now need this extra refining capacity, the case for the measure is patently not made out. The Government and hon. Members from all parts of the House have said that.
We are then left with the question whether this is the wisest way of spending the money. At the very least there is a big question mark over that. I can see the argument for the short term, but is it not cruel to pretend that the project will be of long-term benefit? The case for the measure is clearly not made out.
§ 12.19 a.m.
§ Mr. John Biffen (Oswestry)
In a real sense this is a House of Commons occasion in that it is Private Business. In his intervention on Thursday, the Under- 206 Secretary prefaced his comments by saying that he had a watching brief—and no more. I emphasise that my intervention merely underlines my own personal interest in the debate because it raises issues which will have whetted the appetite of the powers that the Government possess under the Petroleum and Submarine Pipe-lines Bill and which cover the whole range of matters which concern the House tonight.
I shall make my few points briefly as I sense that the House wants to come to a speedy decision. I shall resist the temptation to indulge in character assassination. The reputations of Mr. Nightingale and Dr. Ludwig have been tossed around in a light-hearted fashion. I sometimes wonder whether the House is going through a period when its reputation is so spotless that it should engage in such debate.
§ Mr. Wells
Much as one deplores character assassination, at least two people have been present to attest to the good qualities of Mr. Nightingale—his own Member of Parliament and his near-neighbour, my hon. Friend the Member for Faversham (Mr. Moate). Nobody has been here to say anything good about Mr. Ludwig. The parliamentary agents, who have been able to send us fairly uninformative bumf, have not put forward one good thing to say about this chap or his company. Therefore, I do not believe that Mr. Nightingale, who is an honourable British citizen, who has been well defended and whose attitudes have been well defended, can begin to be in the same category as this foreign gentleman with his £100 company.
§ Mr. Biffen
The very terms in which my hon. Friend put that intervention will stand examination in tomorrow's Hansard. I prefer to remain close to my original remarks, that character assassination, from whatever quarter, was wholly out of keeping with what should be the standard of this debate.
I turn to the more weighty issue—the whole question of the balance that must be struck between conservation and the development of the resources of the North Sea. I do not think that the people of Scotland need a stream of itinerant Englishmen to instruct them on the problems of conservation and all that attends exploitation of the Noth Sea resources. 207 The same problem arose over the question of the establishment of the production platform construction sites. The same problems will arise over oil terminals or the establishment of petrochemical plants. If the gas-gathering scheme proceeds, as I have no doubt it will, many of these issues will again come before the Government and the House. I am certain that the issues of conservation are regarded in as lively a manner in Scotland as in any other part of the United Kingdom.
I welcome the interest that has been shown by my hon. Friend the Member for Pudsey (Mr. Shaw), but I felt that the hon. Member for Dunbartonshire, East (Mrs. Bain) had a point when she recalled that there were some periods in Scottish history when the balance seemed to have been somewhat overdrawn in another direction.
One aspect of the Cromarty Petroleum Company which has not been much referred to is that without any doubt it is something of a buccaneering outfit. I do not thing that that is in any sense a pejorative description. But is there not a role for a buccaneer in an industry which is very much dominated by the trans-national companies? [An hon. Member: "With taxpayers' money?"] I have no doubt that if a trans-national company were seeking to establish a refinery in Nigg it would receive just as much taxpayers' money. Let us not draw a distinction. The intruder, the outsider, is not particularly welcome to many of the trans-national companies. Although I would not describe Mr. Ludwig as a Cinderella, he is certainly not one of the seven sisters.
I come next to the question whether the proposed enterprise would be viable. For a great deal of this evening some hon. Members have been acting somewhat like merchant bankers, as though they were being asked to judge whether this was a viable scheme and whether they would advance money which the company would have to raise before there could be any advance of public funds. There has been no shortage of assertions about the future pattern of oil supply and demand on a global scale. I do not know the answer. I have no desire, and no qualification, to enter my judgment on what will be the balance of 208 world supply and demand three or four years hence, and certainly not during the period for which the company hopes to operate. All I do know is that there have been recent beneficial developments in the exploitation of North Sea oil which underline rather more optimistic assessments of the resources available there. I am glad to have the nodding acquiescence of the Under-Secretary.
The present under-fulfilment of the American objective of a high degree of self-sufficiency in energy supplies makes it appear that the American market will be particularly attractive for energy from the North Sea. I am pleased to have the Under-Secretary's nodding acquiescence again.
We can all make forecasts of likely levels and whether we have the appropriate refining capacity but when our remarks are read in Scotland, there will be the feeling that there has been a certain amount of closely-argued special pleading from the South-East, not least from the hon. Lady the Member for Thurrock (Dr. McDonald) who made a perfectly appropriate and fair constituency speech. Some English Members have been remarkably insensitive to feelings in Scotland.
§ Mr. Biffen
I am grateful to the hon. Member for Hemel Hempstead (Mr. Corbett) for that lesson in geography. The hon. Gentleman's speech, matched that of the hon. Lady the Member for Thurrock in its insensitivity to Scottish opinion.
§ Mr. Dalyell
I am surprised that the hon. Member for Oswestry (Mr. Biffen) sets himself up as the arbiter of Scottish opinion. I listen to him on many matters, but not on this.
§ Mr. Biffen
The hon. Member for West Lothian has the grave disadvantage of the privilege of a Scottish birth which was flawed by a distinctive English education.
If there are substantial oil resources being exploited off Shetland and North-East Scotland, there will be a natural 209 expectation that when this House makes a judgment it takes account of the natural desire on the part of the Scots to see that a great deal of refining capacity will proceed in Scotland—yes, even at Grangemouth.
Perhaps because this has been a matter of Private Business the House has brought a most welcome sceptical detachment to the question of the best use of public funds to promote employment. One theme running through the debate has been the anxiety that sums of this magnitude would have employment consequences which would mean, as the hon. Member for Hemel Hempstead said, a cost of £78,000 per job. That is fair criticism and it takes us on to the much wider question of how appropriate it is to have a subsidy on capital investment when it will often not be particularly rewarding in terms of the number of jobs created. However, we shall mislead ourselves if we suppose that this is distinctive, unique or confined to the application by the Cromarty Petroleum Company Ltd. It goes very much wider than that.
I have no wish to prolong the debate. The House has had an opportunity to consider a tangled and tortuous subject on which arguments have been sincerely and zealously advanced. In previous debates on the Bill I have been happy to vote with my hon. Friend the Member for Ross and Cromarty and I shall do so again tonight.
§ 12.30 a.m.
§ Mr. Hugh McCartney (Dunbartonshire, Central) rose—
§ Mr. Deputy Speaker
Is the hon. Member for Dunbartonshire, Central (Mr. McCartney) sure that he wishes to speak?
§ Mr. McCartney
I am quite certain, Mr. Deputy Speaker.
The hon. Member for Maidstone (Mr. Wells) invited someone to stand up in support of a certain gentleman whose name has been bandied around by those who oppose the project. I am not here to give support to that gentleman or to any other, but I can state a few reasons why he or any group of gentlemen, or gentlewomen for that matter, who wish to engage in the kind of investment in which the Cromarty Petroleum Company Ltd. 210 is prepared to engage should be commended and supported.
We are all aware that for many years commitments have been made—certainly within the Labour Party—to people in the Highlands regarding the regeneration of the Highlands.
The hon. Member for Dunbartonshire, East (Mrs. Bain) referred to some of the earlier history which has been the cause of much continued suffering because of the rundown of job opportunities and the depopulation of the Highlands.
If this House does not pass the Bill and Cromarty Petroleum is unable to proceed with this project, it will not only wreck the project but undermine the opportunities for diversification by companies, such as Highland Fabrication Ltd. and others, which are established in that area, so reducing the opportunities for holding and extending job opportunities in future.
It will also be a serious deterrent to investors—both United Kingdom and foreign—to move into the Highlands in future. Who will take the risk? Who will hazard money without any hope of return because of the filibustering processes which have been adopted in this House? Who will want to take the risk of being kicked around and eventually having their objectives negated and frustrated? If that happened, it would be to the grave disadvantage of people in the Highlands.
What does the project mean in real terms? The current estimate is that it will cost £180 million to build the refinery and the marine, storage and associated facilities. Of that, £120 million will go on plant, equipment and materials. The balance of £60 million will be spent directly on wages, salaries, and so on, for the building work force.
It is estimated that £80 million worth of the cost for plant, equipment and materials can be supplied by Scottish business and industry. The company has also stated that its policy is to purchase as much as possible within Scotland and the United Kingdom as a whole.
The plant, when completed, will provide jobs for 450 employees directly, indirectly for another 450 employees, and 1,800 employees will be engaged in construction.
211 It is estimated that in the first three years of operation £33 million in operational costs will be injected into the United Kingdom's economy.
These figures are evidently known to those who are in opposition to the project, but they choose to ignore them. The vested interests which have conducted the campaign against this project—not only Mr. Nightingale, but others—have chosen to ignore statements made publicly throughout the whole operation by the company.
§ Mr. McCartney
I think that the hon. Gentleman had more than sufficient time, both on Thursday and tonight, to state his case.
§ Mr. McCartney
The hon. Gentleman had more than sufficient time to express himself. Some comments were made on Thursday night which, in my view, should be answered. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) referred to the company as "a bucket-shop company", He failed to specify what he meant by that term, out it was clear from his remarks that the term was derogatory, and at the very least be doubted the viability of the company and the integrity of its executives.
There are various kinds of buckets. In the steel works there are huge ladles for carrying molten metal. It is necessary to put a considerable amount of material into those buckets before getting anything out of them. In Glasgow a whisky measure is a bucket. The contents of the buckets in the bars here would not dirty the glass in one's hand. Nevertheless, the bucket is a measure and it is possible to get out of it only what is put in.
212 It is important to consider what the company proposes to put into the project. I am sorry that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is not present. On Thursday evening he made several statements which his hon. Friend the Member for Faversham (Mr. Moate) supported tonight. I am surprised that the hon. Member for Cirencester and Tewkesbury had the gall to make those statements. As a business man and a former Tory Minister he must be aware of the way in which money is brought together in a package. He has probably been engaged in similar operations. The way in which the Cromarty Petroleum Company has stated that it will bring together the money for this investment is similar to the way in which money is brought together for any operation of this kind. The company stated publicly that it intended to invest in the project £40 million of its own money.
§ Mr. McCartney
The balance would be found in hard currency—perhaps German marks, United States dollars or some of each—through British banks in the way that is done in similar operations.
§ Mr. McCartney
I am not giving way. The hon. Gentleman has had sufficient time in which to express his views. It is notable that those who seek to protect one party involved from personal attack used most of their time on Thursday and tonight indulging in personal attacks on hon. Members—
§ Mr. Deputy Speaker (Mr. Bryant Godman Irvine)
Order. The hon. Gentleman has enough experience to know that is not a point of order.
§ Mr. McCartney
I did not intervene in the speech made by the hon. Member for Maidstone. I am not attacking the gentleman he was defending and I have no intention of doing so. What I said was that those who are opposed to the proposal sought to defend the gentleman concerned during the whole course of the debate on Thursday and today, and engaged continuously in innuendo and personal attack. It is on record.
The investment in North Sea oil is an example of how package deals of this sort have been organised. Who will suggest that the oil companies have been responsible for the total investment in North Sea oil, except in the sense of organising it? I understand that $14½ billion has been spent on the development of the North Sea, $4 billion of which has come from the oil companies themselves.
On Wednesday night my hon. Friend the Member for West Lothian (Mr. Dalyell) stated that the members of Transport and General Workers' Union were opposed to this project. He listed the names of the sites at which those members were employed. My hon. Friend also referred to a Mr. Neil Boner, who happens to be convener at the Grangemouth works. Mr. Boner and I happen to be members of the TGWU. I know that Mr. Boner is a highly respected trade union member. He is certainly highly respected not only within the industry in which he works but also within trade union circles at large. Perhaps my hon. Friend the Member for Birmingham, Perry Barr would remind my hon. Friend the Member for West Lothian of our experience of the Dock Work Regulation Bill in Committee. We experienced exactly the same kind of campaign from hon. Members opposite, from their friends outside this House and from the national newspapers. They tried to turn worker against worker, union against union, factory against factory and employer against employer in order that their purpose of destroying that Bill could be achieved.
That campaign was carried on inside and outside this House. I put it to my hon. Friend the Member for West Lothian—is there not a possibility that this is a similar campaign being conducted by vested interests who do not wish to see this project proceeded with?
214 I would tell my hon. Friend what the actual policy of the TGWU is in connection with the proposed development in Ross and Cromarty. I am in day to day, week to week, contact with Transport House on matters affecting our members in every industry. Not one single member of our group has received a complaint from the membership or a request from Transport House to intervene against this proposal. I went to Harry Urwin, the deputy general secretary of the TGWU and put it to him straight. I asked him: "Harry, is the TGWU officially opposed to the development at Ross and Cromarty?" He told me: "I am unaware of any decision made by our union and no suggestion has been made to me that the Transport and General Workers' Union is opposed to this policy."
I telephoned the regional office in Glasgow and spoke to the regional officer who among other things is responsible for this industry. I was informed by him that, so far as the region was concerned, he had no knowledge of any decision being made by the TGWU to oppose this project.
We are all aware that the Scottish Trades Union Congress unanimously supports this project. Sitting on the STUC General Council are officials of the Transport and General Workers' Union. We also know that the Highland Regional Authority, and others, are in support of the project as is the Scottish Council (Development and Industry).
On Thursday night I heard some astonishing remarks made about the Scottish Council (Development and Industry). There are very few members of that organisation who would agree with me politically. I do not know of many occasions, when they have entered the political battlefield, when I agreed with them. But no one can deny the role that Council has played in the efforts to regenerate Scottish industry. No one can take that from the Council.
It is unlikely that those who have been in opposition to the Scottish Council would want to be on that Council—except with a view to destroying it from within. The Council has done a magnificent job, not only on its own, but in co-operation with other bodies in Scotland endeavouring to introduce new and develop existing industries.
§ Mr. Buchanan
I apologise to my hon. Friend for interrupting his flow. Is he aware that the Chairman of the Highlands and Islands Development Board, Professor Alexander, moved in the Scottish Council (Development and Industry) that this project should be supported and that that proposal was unanimously adopted?
§ Mr. McCartney
My hon. Friend has anticipated what I was about to say.
Hon. Members have received a letter from the Ross and Cromarty constituency Labour Party, whom no one could accuse of supporting politically the hon. Member for Ross and Cromarty. That letter categorically supports the project. I remind not only my hon. Friends from Scotland but my hon. Friends from England and Wales that for many years at successive annual conferences of the Scottish Council of the Labour Party and the Labour Party we have given commitments to the people of the Highlands, to our colleagues and the people they represent, and we have endeavoured to honour those commitments. Our commitment to the Highlands and Islands Development Board has been an example. I am sure that my right hon. Friend the Member for Kilmarnock (Mr. Ross), who is not here tonight, is very proud of the rôle that he has played in the setting up of that board.
§ Mr. McCartney
The hon. Members who are opposed to this project are the very hon. Members who were opposed to
§ Question accordingly agreed to.216
§ that. I had hoped that they had learned their lesson.
§ More recently the setting up of the Scottish Development Agency, which acts in co-operation with the Highlands and Islands Development Board, has helped to improve the present situation and the potential of the Highlands, and that has been another example of our honouring our commitments.
§ Bearing all that in mind, I ask my hon. Friends to support the proposal that this project should go ahead. A service would be done to hon. Members and to the public at large if some of the Press comments on this issue were referred to the Press Council. Never before have I read such gutter rubbish from journalists in the newspapers that have written about these matters. Seldom in industrial issues, when people's livelihoods are discussed, have there been such racial overtones denigrating those thought to be a danger to those represented by the writers. Mr. Ludwig was described as a mid-European gentleman although he was born and brought up in America. We have heard talk about "an Anglo-Indian gentleman" and about the fund raiser being foreign, in a way calculated to influence people.
§ It is imperative that this project be allowed to go on and that the House should reject any attempt to delay the process further. This will affect not only present workers but future generations of workers who will be brought into the area because of the promises made.
§ Question put, That the Bill be now considered:—
§ The House divided: Ayes 43, Noes, 9.215
|Division No. 341.||AYES||[12.51 a.m.|
|Bain, Mrs Margaret||English, Michael||Ross, Rt Hon W. (Kilmarnock)|
|Biffen, John||Gilmour, Sir John (East Fife)||Small, William|
|Brown, Hugh D. (Provan)||Gray, Hamish||Stewart, Donald (Western Isles)|
|Buchan, Norman||Hamilton, James (Bothwell)||Summerskill, Hon Dr Shirley|
|Buchanan, Richard||Harrison, Walter (Wakefield)||Tinn, James|
|Canavan, Dennis||Hughes, Robert (Aberdeen N)||Wainwright, Edwin (Dearne V)|
|Carmichael, Neil||McCartney, Hugh||Watt, Hamish|
|Cocks, Rt Hon Michael (Bristol S)||MacCormick, Iain||Weatherill, Bernard|
|Cook, Robin F. (Edin C)||MacKenzie, Gregor||Welsh, Andrew|
|Corrie, John||Millan, Rt Hon Bruce||White, James (Pollok)|
|Craigen, J. M. (Maryhill)||Monro, Hector||Wilson, Gordon (Dundee E)|
|Crawford, Douglas||Oakes, Gordon|
|Cunningham, Dr J. (Whiteh)||Penhaligon, David||TELLERS FOR THE AYES:|
|Dempsey, James||Reid, George||Mr. Jim Lester and|
|Doig, Peter||Rodgers, George (Chorley)||Mr. Ian Campbell.|
|Douglas-Hamilton, Lord James||Ross, Stephen (Isle of Wight)|
|Corbett, Robin||Moate, Roger|
|Crowther, Stan (Rotherham)||Shaw, Giles (Pudsey)||TELLERS FOR THE NOES:|
|Dalyell, Tam||Skinner, Dennis||Mr. J. W. Rooker and|
|McDonald, Dr Oonagh||Spearing, Nigel||Mr. John Wells.|
|Marshall, Jim (Leicester S)|
§ Bill considered accordingly.