HC Deb 13 February 1978 vol 944 cc15-8
11. Mr. Macfarlane

asked the Secretary of State for Energy if he will report on his progress to date in implementing the EEC policy to reduce refinery capacity; and if he will indicate what discussions he has had with the unions and the oil companies.

23. Mr. Biffen

asked the Secretary of State for Energy what representations he has received from the European Commission concerning the establishment of guidelines and proposed penalties restricting the expansion of oil refinery capacity; and if he will make a statement.

Mr. Benn

As I have already told the House, there is no question of Her Majesty's Government encouraging refineries to close in the United Kingdom. I have been asked in the European Energy Council to consider a proposal by the EEC Commission that there should be consultations within the Community on any new refinery projects that come forward. I have said that I will give my response in the light of the tripartite consultations with management and unions in the refining industry. The first of these meetings was held on 24th January.

The Commission is considering further proposals relating to the refinery industry, but these have not been put to the Council of Ministers. These are guidelines for throughput at individual refineries, possible use of Community funds to encourage refinery closures, and a ban on Community and State aids for the construction of new basic refineries. There are also ideas for monitoring imports of refined oil products into the Community.

Mr. Macfarlane

I am grateful to the Secretary of State for his reply. Is he aware of the proposals to expand both refinery and installation capacity in the United Kingdom? Is it not true that these proposals conflict with the EEC proposals to reduce refinery capacity and that this must create a great deal of confusion and doubt in the minds of workers in existing jobs and for potential jobs? What initiative can the Secretary of State take, and what kind of dialogue will he initiate on this problem area?

Mr. Benn

The existing projects to which the hon. Gentleman refers are longstanding projects which do not require authorisation from me under present legislation. Some of them are to develop the capacity of cracking, a secondary capacity which we need anyway. I am engaged in discussions with the Community but I am not prepared to see decisions about our own refineries taken elsewhere. I am having discussions with the oil companies and unions here. I have asked Commissioner Brunner to come and see me in London so that we can make it clear that we regard this as an essential interest of the United Kingdom.

Mr. Biffen

Is the right hon. Gentleman aware that in the autumn of 1976 the debates upon the Cromarty Petroleum Bill indicated that the House was most anxious that any United Kingdom refining policy should be subject to debate and decision here? Therefore, will he say whether it is his Department's view that under Articles 92 and 93 of the Treaty of Rome the Commission has autonomous power and authority to ban scientific refinery aids and more general regional aids? If that be so, will he leave the Commission under no illusion that the House believes that those are responsibilities that properly belong here?

Mr. Benn

I am not qualified to give a legal opinion on the interpretation of the Treaty. However, I telephoned Commissioner Brunner on the morning when the Energy Committee of officials met to indicate the gravity with which the United Kingdom regarded proposals that might involve directives or even voluntary guidelines backed up by sanctions, which had appeared in Le Monde as a story as to what they had in mind. I have asked Commissioner Brunner to come and see me, and I have asked for the matter to be referred to the next meeting of the Council of Ministers.

I am well aware that were decisions of this magnitude to pass from the House elsewhere it would have a serious impact on this country, which is the only serious oil producer in the EEC.

Sir Bernard Braine

Is the Secretary of State aware that at least in one part of the United Kingdom, in my constituency, there will be universal delight if he does not proceed with encouraging oil refineries to be built in a place where there is already too great a concentration of oil, gas and chemical storage? Will he confirm that the Commission has been concerned about the preposterous proposal to build two oil refineries on Canvey Island, where there is already an endangered community?

Mr. Benn

Whatever the merits of refineries in general or on particular sites, I hope that the hon. Gentleman will agree that the decisions should be taken in the United Kingdom by Ministers answerable to the House of Commons. It would not be sensible to defend a transfer of crucial responsibilities elsewhere because of local interests in this matter, nor would it follow that that would be the result. This is too big a subject to allow it to be influenced by considerations which are best dealt with within our own procedures at home.

Mr. Skinner

If it is correct that this is the new policy being flown around the Common Market, it is another lurch into the madness of the EEC. Will my right hon. Friend now answer the question put to him by the hon. Member for Oswestry (Mr. Biffen), who said—I am paraphrasing him—"Stand up for Britain against the rest of the Common Market on this matter"?

Mr. Benn

I hope that I do not need to be reminded of my duties in this respect. If my hon. Friend reads my main reply and my answers to supplementary questions, he will see that there is no doubt that I have made the position clear in letters and telephone calls to those concerned.

Mr. Gray

As refining policy is closely linked with the amount of oil exported, and as the BNOC has an advisory role vis-à-vis the Government, will the Secretary of State tell us what advice he has received from BNOC on the amount of oil which we export?

Mr. Benn

BNOC attended the tripartite meeting, and will attend the next one, as one of the oil companies concerned with our policy on domestic refining and the export of oil. BNOC is not in the refinery business, as the hon. Gentleman knows. It is involved in discussions with the oil companies about it. But this concerns the export policy on oil, and the House knows that the Government's view is that up to two-thirds should be refined in the United Kingdom.