HC Deb 04 December 1978 vol 959 cc1016-9
5. Mr. Gordon Wilson

asked the Secretary of State for Energy if he will make a statement on current oil policy.

Mr. Benn

The Government's current oil policy and energy strategy are described in the Green Paper published in February this year. These matters are kept under review by the Energy Commission, which considered last Friday a discussion paper by my Department on our offshore oil policy. I am sending the hon. Member a copy. Next year, and, I hope, annually thereafter, the Government will publish an updating of the Green Paper and present it to Parliament.

Mr. Wilson

I am grateful to the Secretary of State for that answer. Will he disregard some of the phoney propaganda which is coming from the oil companies in relation to the non-profit-ability of Scotland's offshore oil resources? Will he realise that the same tactic of gloom and doom was pursued during the passage of the Oil Taxation Bill and the Petroleum and Submarine Pipe-lines Bill? Will he make sure that there is no question of the petroleum revenue tax not being uprated as the Government suggested earlier?

Mr. Benn

I am grateful to the hon. Gentleman for his retrospective warning to me not to be put off by an obvious oil company campaign which I noticed in the newspapers. If the proof of the pudding is in the eating, the fact that we had a 100 per cent. application for the blocks that we put on offer and that 55 companies applied, compared with 53 last time, indicates that only the oil companies and the hon. Member for Bridgwater (Mr. King) appear to have any doubts about our policy.

Mr. Madden

Does my right hon. Friend agree that the response to the latest round of applications was extremely encouraging and gave the lie to the Tory Opposition's claims that this would be a deterrent to further exploration? Does he also agree that there is an excellent case for increasing the oil revenue tax, which would allow the Government to abolish all television licences and to do many other worthy things?

Mr. Benn

I shall not be tempted by my hon. Friend into answering the latter part of his question. Perhaps I might appeal, even to the Opposition, to recognise that the oil companies expect any British Government to defend our interests and extend and increase the control over our oil. When we do that, it does not help to find that any little oil company public relations campaign is amplified and echoed by the Opposition. In the event, we have had a highly successful sixth round of applications. We have done it on the basis of a very much stronger oil policy than we had even a few months ago, and, of course, indescribably stronger than the weak-as-water policy that we inherited from the previous Government.

Mr. Patrick McNair-Wilson

Is the Secretary of State satisfied that the smaller companies which are bidding in the sixth round have the financial strength to carry through satisfactorily the necessary exploration?

Mr. Benn

It is true that smaller companies have applied. One of the arguments, and I was not unsympathetic to it, was that there should be scope for smaller companies to go forward. They will be assessed on the basis on which anyone would expect the Government to assess applications. The fact that there is interest on the part of the smaller companies and of the bigger ones indicates that the strong and determined oil policy operated by the Government is not a deterrent to investment in the North Sea. It is most unwise of people to suggest that it will be.

Mr. Tom King

Is the Secretary of State aware that the test of an effective national oil policy is whether it will fully safeguard the nation's interests, while at the same time obtaining for the nation the maximum skills and expertise which are present within the whole international oil industry? Against that yardstick, will he notice that his sixth round, so far from being the success that he claims, has seen the substantial abstention of four of the most helpful and constructive oil companies which have already made a major contribution? Will he accept that the figures are characterised by a considerable fall in the size and scope of the companies present in the sixth round? Will he further agree that what will not help the oil policy is the evidence of the drop in the exploration rate, which is there for all to see, and that he cannot deny that? What is needed is a measure of confidence and trust that assurances given by the Government will be maintained.

Mr. Benn

As the sixth round was the most successful round of applications for licences that we have had, in terms of coverage, of applications for blocks, and the number of companies that applied, I was somewhat surprised that, after months of making speeches saying that the sixth round would be a failure, the hon. Gentleman found himself locked with Exxon, which does not really need his help, on the occasion of the announcement of the round, in saying that it had not been a success.

The truth is that the oil companies are looking ahead for five to 10 years or more. The North Sea is infinitely the most stable area politically in the world. I find it hard to believe that it can be in the interests of this country that every time an oil company, as part of a bargain and a negotiation—which I do not mind at all—puts out press statements designed to improve its short-term bargaining position, the full weight, such as it is, of the hon. Gentleman should always be available to it. The hon. Gentleman's forecast was wrong this time, just as it has been wrong on every other occasion since the beginning of the oil policy.