SCOTTISH ECONOMY (OIL RESOURCES)

HC Deb 22 June 1978 vol 952 cc727-806

4.8 p.m.

Mr. Gordon Wilson (Dundee, East)

I beg to move, That this House condemns Her Majesty's Government for its mismanagement of Scotland's oil resources and its refusal to establish an Oil Development Fund for Scotland to be used for restructuring the Scottish economy, encouraging industrial growth and reducing unemployment. There can be no more important subject for debate for the people of Scotland than that which we have chosen today. The future of our country and its economy can rest on this major source of national wealth. I refer to the resources of oil and gas which lie off our coasts.

Today's news about the cut-back at Singer on Clydebank from 4,500 jobs to 2,000 indicates the real worry about the fabric of the Scottish economy. It is sad that there is no sign that Scotland can have those additional resources steered towards her and that the Government, although making claims about the value of having a Secretary of State for Scotland in the Cabinet, are apparently unable to do anything to save jobs in Scotland. It must ring in many ears today in that part of the country that a vote for Labour means a vote for unemployment.

I should like to review the three areas that will be affected by oil—unemployment, the curtailment of emigration and the social distress which many indicators have shown to exist in Scotland. These are the main subjects of political and social concern in Scotland. Every political party has been offering solutions for those problems. In this debate we are discussing, in particular, the mismanagement of our oil resources and the lack of an oil fund to help our industrial structure.

Labour Members will have grave difficulty in making excuses. They can blame some of the faults on the Conservative Party which failed in its duty by leaving behind a policy vacuum when it left office in February 1974. It can be compared with the early English king Ethelred the Unready.

In almost every sector of the oil industry which the Government have tackled, they have bungled the approach or climbed down on their main intentions. The consequences for Scotland have been damaging, are damaging and will continue to be damaging for years to come. For example, the platform industry was one of the main areas of interest when the Government came to power in 1974. They set out to exploit the oil well quickly. One of the earliest Bills that we had in this Parliament was the Offshore Petroleum Development (Scotland) Bill 1974. The then Minister of State, now Secretary of State for Scotland, said during the Second Reading of that Bill: to ensure that these vast resources can be used to the best effect they must be exploited quickly. Later he said: It is very much bound up with the question of getting oil out as quickly as possible because the work involved will be an important source of jobs and prosperity for the people of Scotland."—[Official Report, 19th November 1974; Vol. 881, c. 1108–9.] Right from the outset, the Minister indicated that it was the Government's intention to get the oil out quickly—that was their main criterion—and to produce employment. The oil is now coming out and the balance of payments has been strengthened, although a recent Barclays Bank report pointed out that the advantages of that strengthening will be eroded through import suction, so the alleged long-term benefits may not exist for too long.

It is in connection with jobs that the Government's strategy was entirely wrong. The intention was that oil companies should be given a choice of platform yards producing steel and concrete platforms, and there was a wholesale rush to provide those yards. Warnings were given during debates on the 1974 Bill that there would be too many yards and too much dislocation. Today we find that of the yards that were provided, Nigg and Ardersier have been continuously open, Methil closed and reopened, though only with an order which had to be partly shared with another EEC country, Ardyne is empty, Kishorn has recently been empty and Portavedie and Hunterston were never used. As a result, we have wasted more than £25 million of public money which could have been used for alternative industrial development.

We had hoped—I think that I speak for everyone—that the oil industry would provide one of the greatest injections of life into our engineering industry, but since the Government came to power, we have lost 10,000 engineering jobs in Scotland while there has been an increase of 3,000 such jobs in the United Kingdom as a whole. The engineering sector in Scotland is critical. It is the greatest repository of our skills and has been the backbone of our industry for many years. As other countries have shown, it should have been expanded, even in these difficult days of recession.

We had hoped that the arrival of the oil industry, giving, as it did, a large and protected home market, would have provided a stimulus for production and development which would have given the engineering industry the opportunity not only to secure a strong base in the oil industry but to become much more sophisticated in other industrial applications.

The Labour Party's statement "Oil for Everyone" which was issued before the General Election in October 1974, said: The Labour Government's plans for North Sea Oil will benefit everyone by creating many more jobs in Scotland. By creating new industry. By creating, through Labour's new economic strategy, a booming Scottish economy. I am waiting for the "Hear, hear" from the Government Front Bench. Do they think that there is a booming Scottish economy when we have 170,000 people unemployed, compared with the figure of 91,000 when they came to office? If that is their example of a booming Scottish economy, heaven forbid that we should have any more of it.

It is time that we had a major change. We had a promise from the Labour Party in the election campaign about what it would do, but on the two main sectors, which would have helped many of the people in West Central Scotland who voted Labour, we find that the engineering industry has not got access to the contracts that have come from oil and that it has not been able to maintain its position. The pre-election message of the Labour Party must sound sick to many folk in Scotland and today's news from Singer will reinforce that.

A number of jobs have been created. Some could hardly avoid being created, but it is a peak of 60,000 jobs, and once the underwater or land pipelines from the offshore platform have been laid to the market, no more will be laid unless more fields are found. There is a limit, and many of the jobs are only short term. They will disappear. Many have already disappeared and some have been caught up in other developments. The creation of 60,000 jobs is a disappointing achievement in view of the hopes that were held out.

We must lay emphasis on the fact that we had a strong home market which existed because oil resources were being developed off the coast of Scotland. Bearing this point in mind, I suggested during our debates on the oil taxation Bill that fiscal incentives should be built in to encourage oil companies to buy Scottish. I believe that if the Government had, from the outset, introduced into the licences a "Buy Scottish" provision and it had been known in advance to the licensees that a certain proportion—we suggest 50 per cent.—of the products should be purchased on our home market, many more jobs would have been created in Scotland.

Throughout the world where oil has been developed, these protections are provided. For example, there is a prohibition in the United States, under the Jones Act, on the use of supply boats which do not fly the American flag. If the mighty American Government which controls the mighty American economy found it necessary to take those steps, surely the British Government could have done at least that for the people of Scotland.

We have not had the employment and economic multiplier taking effect. We were told that the benefits of the oil industry would penetrate other industries remote from oil and provide more work throughout the country, but if we look at the distribution of employment, although we are happy that many areas, such as the Grampians and the Highlands, have done very well, we find that many areas in Scotland with industrial resources and strengths have benefited hardly at all from the oil industry. In July 1977, the numbers of inshore jobs fully related to oil were nearly 13,000 in the Grampian area, nearly 7,000 in the Highlands, 1,750 on Tayside, 1,600 in Fife, Central and the Lothians together, 845 in the islands and a mere 1,460 in mighty Strathclyde. For most of Scotland, the impact of the oil industry has been a damp squib.

It may be that Scotland's industrialists are to be blamed for slowness. It may be that there is an element of fairness in that criticism. The speed of the Government's intention to exploit the oil did not give our industry much time to catch up. It is interesting that the report of the International Management and Engineering Group on industrial opportunities for the United Kingdom stated: British industry has to break into an area of activity in which foreign investment, mainly American, has established an entrenched position in offshore work, and is daily strengthening that position by the accumulation of experience in solving the still more difficulty problems of the North Sea. There should have been some form of Government back-up to ensure that more work went to Scottish firms. No doubt the Government will say that they established the Offshore Supplies Office. However, the Office had to accept, first the political mandate that it was there to help the early production of oil, to get the oil out as quickly as possible, and, secondly, to provide contracts and jobs. One of the problems is that the OSO is just as likely to provide jobs and contracts for those south of the border as for those in Scotland. It was located in Glasgow, but from the outset many of the important officials—the audit engineers, for example—were located in London. It is only lately that they have been transferred to Glasgow.

The OSO will not publish the percentage of the work that goes to Scottish firms although it publishes that information for United Kingdom firms. There are regular outputs of information for United Kingdom firms, but it cannot or will not produce similar information for Scotland. It will not produce figures to tell us what business and employment was generated from oil in Scotland and how it assisted in that activity. I accept that the OSO tries to do its best, but I suspect that Scotland has had only a small proportion of the work, bearing in mind that the oil is located off our coast.

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

Rubbish.

Mr. Wilson

If there is any doubt, let the Government produce the figures. If they can produce the figures, we shall listen to them. The right hon. Gentleman, who is so sensitive on the subject and who shouts from the Government Front Bench, knows full well that he cannot produce the figures. If he did, they would be so shameful and shocking that the Department would be embarrassed.

Mr. Douglas Henderson (Aberdeenshire, East)

Get up and give us some figures.

Mr. Wilson

If the Government cannot produce the figures, I draw an answer from that. There has been little work going to Scotland during one of the blackest depressions that we have had for years. However, we live in a world in which offshore development is regarded as an extension of national shipping and shipbuilding.

There are various forms of protection. I suggest that the Jones Act is one example. Many of our merchant seamen would have found it desirable to benefit from a similar measure. It would have meant more jobs for them at home.

In future licensing rounds it should be made clear to the oil companies in advance that they will be asked to indicate, in the event of their being successful in the allocations of licences and the finding of oil what industrial application or investment they propose to steer towards Scotland. The licences are discretionary and should be used to bring in as much work as possible. I cannot understand why the Government have been so relaxed and liberal in their attitude. They have allowed employment and economic development to disappear.

I shall make a few comments about taxation and participation. It is difficult to cover the whole range of the development of the oil industry and the use of the oil funds even in an opening speech. Comment should be made about taxation. It is unsatisfactory—this can be seen from the falling estimates of income that the Government will be receiving from the revenues—that the oil companies are seen to be using the loopholes that exist in present legislation. The Government should do something about that. Time is short.

Labour Members who did not study these matters when we were considering oil taxation will be surprised to learn that the Government halted in their tracks in the middle of the Bill. They set out with great statements about what they intended to do. They said that they would take on the mighty oil companies, but midway through the proceedings in Committee they changed the taxation structure. They took the Bill backside foremost. They had not developed a tax system that would work.

There is a significant article in the Petroleum Times of 7th March 1975. The article appeared some time ago but it remains relevant as we are still labouring under an unsatisfactory taxation regime. The heading is: The UK Government's give-away tax. It reads: The battle of the UK rate of petroleum revenue tax is now over, and the oil companies operating in the North Sea can chalk up another victory over a European Government. Later in the article there is reference to dilution. It said: Although the computers have yet to digest the new programmes, it is already clear that the manifesto policies have been diluted almost to the point where no flavour is left. That was the analysis in one of the petroleum journals. It is an objective analysis of the weaknesses of the Government's tax structure.

Participation has been summed up by the Government's words "No gain, no loss". There has been no gain to the country and no loss to the oil companies. That does not rank very well with the claims made in the October 1974 General Election that a Labour Government would negotiate for participation and take participation. The whole process was a waste of time, and the Government well know it. They had to fulfil the letter of their manifesto promise even if they have been unable to implement it in reality.

Participation and taxation were two of the main areas of concern to the Government when they took office. They have bungled them. They have bungled the taxation set-up. They could have gone for a higher petroleum revenue tax. They had the opportunity and they decided not to take it. They procrastinated on participation. We have not had anything on that score.

Depletion policy is extremely important. I can give some credit to the Secretary of State for Energy, who in a speech to the Southwark College of Further Education—he is a hard-working man to cover it—on 1st February 1977 said—

Mr. Henderson

Where is he?

Mr. Wilson

— The other important question is how fast the Government should authorise the lifting of the oil. If we take it up too rapidly, we may be in danger of having a national surplus of oil in the 1980s only to move into shortage during a period of world scarcity, with all the financial implications of that misjudgment. Very prudent and careful assessment will be needed to weigh our immediate interests against our long-term needs. It is indicative that the Secretary of State for Energy realises, along with other specialists, that oil prices are likely to rise dramatically in the early 1990s, if not before. At that stage oil imports will cost a tremendous amount. However, instead of eking out the oil over a longer period the British Government are making the strategic blunder of trying now to produce as much oil as they can, when there is a glut and the price has stabilised. Yet in the 1990s, as the Government well know, the United Kingdom will be importing up to 50 per cent. of its oil requirement at extremely expensive prices.

It is only a pity that the Secretary of State for Energy does not have the same fighting ability that the Minister of Agriculture, Fisheries and Food has displayed in the Common Market when dealing with fisheries. If the Secretary of State were prepared to do more about oil and to fight inside the Mafia of the Cabinet, something more might be done.

Mr. Harry Gourlay (Kirkcaldy)

Will the hon. Gentleman make up his mind, or make up the SNP's mind, what is to be his or its policy on depletion? Earlier he was arguing that very few jobs have come to Scotland from the oil industry, but he is now arguing that we should slow down the rate of depletion, which would add to unemployment in Scotland.

Mr. Wilson

My party's policy has always been clear. I have had some say in its evolution. Its policy, basically, is that we take out of the sea as much oil as we require for home and export consumption. That is the principal strategy.

Perhaps I may put it another way for those who are unaware of the Scottish situation in terms of oil production. We consume about 10 million tonnes of oil per year. If we produce 90 million tonnes of oil, as the Government intend, to quote one of their lower targets, that will be the equivalent for the United Kingdom of about 900 million tonnes of oil per year pro rata. If Britain consumes 100 million tonnes and a population multiplier of nine is applied, obviously that is the scale of the uplifting that the Government are taking per head of population.

The second point that I want to make in response to the hon. Member for Kirkcaldy (Mr. Gourlay) is that, if we increase the Scottish content of the orders which come in, we shall get many more jobs. On the one hand, we save the oil for future generations. We have agreed to accept higher production figures than we would have wished. We have developed our approach in considerable detail on the subject. If anyone is interested, I can provide some detailed comments that I have made. The important thing is that, by increasing the Scottish content by the methods which I have suggested, we should have much more employment and activity to help Dundee, for instance, West Central Scotland and other parts of the country. That would be more sensible than to stampede into unnecessary oil production and lost job opportunities.

Dr. Mabon

if 10 million tonnes is the Scottish net self-sufficiency figure and we have produced 38 million tonnes in one year, is the SNP's depletion policy that we should not open up any more new fields?

Mr. Wilson

No, it is not. It should be taken gradually over a period. We should allow the anticipated rate of production to fall slowly within the parameters which exist for that. There are technical matters concerned with that aspect. I am very glad that the right hon. Gentleman came in on that matter. If he had been able to help me with the figures from the Offshore Supplies Office with regard to the Scottish content, it would have helped considerably. If he has that information, we should be pleased to hear it.

Dr. Jeremy Bray (Motherwell and Wishaw)

Will the hon. Gentleman give way?

Mr. Wilson

I will allow one more intervention. Time is short.

Dr. Bray

If the hon. Gentleman is suggesting that it is a matter of continuing with existing contracts, presumably employment in opening up new fields would dry up overnight.

Mr. Wilson

No, it does not mean that.

Mr. Henderson

That is the British Steel Corporation's policy.

Mr. Wilson

My hon. Friend makes the point about British Steel. If we adopt a gradual process of running down production so that we have a lower depletion take-up rate, we shall have more oil available for future generations. That is very important. There are those of us in this House who have some thought for our children and grandchildren. We are not prepared to blue it all in one great extravagant blow-up of the kind that the British Government have in mind.

I turn now to petrochemicals. There must be a lot of worry that too little has been done in this connection. We have not had much of the great petrochemical boom which was supposed to build up employment in Scotland. Apart from Grangemouth, most of Scotland's oil is due to be exported. There has been silence about Cromarty Petroleum. We are waiting to hear a little more about that. Scanitro has gone by the wayside. Many of the petroleum gases are due to be exported without being developed, refined and processed here. We are still awaiting final news from the Government about Mossmorran and the associated cracker.

We need the jobs in chemicals. Only 1.6 per cent. of jobs in Scotland come from chemicals compared with 2.2 per cent. in England and 2.3 per cent. in Wales. Therefore, there is room for improvement there.

I find that each company seems to find excuses for exporting to England or further afield and not building up its opportunities and investment in Scotland. The Government have gone out of their way to help, because their refining policy has been relaxed to help the companies to export crude oil instead of refining more, even inside the United Kingdom.

The plastics industry will grow, according to surveys which I have seen. It is significant—again, we come back to the Common Market—that some of the major European chemical companies have not established branches in Scotland or even in the United Kingdom. We have not had much benefit from that industry. Yet, it is reckoned that about 10 million tonnes of additional plastics capacity will be produced in Western Europe in the next decade. There are opportunities there.

We are still waiting to hear what is to happen to the gas gathering pipeline. That caused a lot of publicity two or three years ago, but it has disappeared.

I ask the Government to consider encouraging oil companies to become involved in joint projects to ensure that singly they do not find excuses for failing to build up their investment in Scotland.

I come now to the last aspect of my speech. I refer to the oil revenues and the oil development fund. The way in which the oil revenues are being dealt with must count as one of the greatest swindles and frauds on the Scottish people for a long time.

At the last election, all the parties had their own delicate ways of expressing that the Scottish people would get the maximum benefit. That was the inference that they put before the people of Scotland.

The Conservative Party proposed that there should be a development fund, interestingly enough, to be controlled by the Secretary of State for Scotland—that was reported in an article in the Scotsman in 1975—but guided by the Scottish Assembly. I am not sure whether, as the Tories reneged on their promise of an Assembly, they have now reneged on the development fund about which they made great play in the election.

The Liberal Party said that Scotland would get half the revenues. That was very generous. I am sure that most English Liberal Members did not appreciate what their Scottish colleagues were doing on their behalf. However, it did not figure in the Lib-Lab pact. The right hon. Member for Orkney and Shetland (Mr. Grimond) did not use his influence with his right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) to persuade him that one of the crunch issues of the Lib-Lab pact should be that the Scottish Assembly had access to the oil revenue—not even the half that the Liberals generously had in mind.

The Labour Party has procrastinated on the issue and implied that Scotland would get its share. There is a lot of hypocrisy coming from the Labour Party. It used to say that the SNP's attitude to oil was immoral—that the Scots were greedy. But on 2nd June 1978, that worthy publication Labour Weekly carried the headline: EEC has eyes on our oil. Obviously, "our oil" is very much a form of British nationalism.

On 16th June 1978, Tribune, that champion of international workers' solidarity and the flail of "narrow nation-ism", carried the headline: How the EEC seeks 'legal' ways to grab our oil. For those who are interested in following it through, no doubt free copies will be made available by the Government as they must have difficulty in selling them.

The oil revenues must be the source of the deepest disappointment. We have had "The Challenge of North Sea Oil". I do not know how the Government managed to come up with that title. I should think that the new PR expert to advise the Prime Minister would have difficulty in fighting any challenge at all in that document which stated that the oil revenues would go into the Chancellor of the Exchequer's—

Mr. Henderson

Piggy bank.

Mr. Wilson

Piggy bank. That document states that the oil revenues would be steered towards industrial development in Scotland and in other under-developed regions.

On 30th January 1975, again during the course of proceedings on the Oil Taxalion Bill, I had a letter from the then Minister of State, Treasury. After turning down proposals which I had made to increase the amount of work coming to Scotland from oil development, it stated: As an Assisted Area Scotland benefits from measures financed by the Exchequer from general taxation. As you will appreciate our capacity to continue with these and other measures such as the Regional Employment Premium (which we retained) will be enhanced by the revenue which will in due course accrue to the Exchequer from North Sea oil. Scotland should thus benefit from our general regional development policy: we hope it will also draw advantage from the more specific measures we have introduced or promoted. Three years have passed, and with them the regional policy and the regional employment premium, the abolition of which, it was indicated by the Scottish Council, would cause the loss of some 20,000 jobs in Scotland. The Government are responsible for taking away REP after saying through the Treasury that this would be one of the benefits that Scotland would get from the oil resources. If anyone believes that, he will believe anything. It shows that the Government say one thing and change their minds after a year or two as soon as they think they can get away with it. I remember the exchange that my hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) had in connection with the Chrysler car project which had been proposed for 1979. I notice that the Secretary of State for Industry is just about to scurry to Chrysler to explain the position.

We were accused by hon. Members of being greedy. I remember the abuse that I took. They have to realise, however, that the oil revenues constitute one of the main possibilities for Scotland to develop its economic structure. There is an interesting aspect to the argument about need and morality. The Church of Scotland in its Church and Nation Committee Report in May this year said that Scotland has a "moral claim" to special treatment. When a Church says that Scotland has a moral claim to the oil revenues, that explodes once and for all the insinuations and nasty allegations that have been made over the years.

We are asserting tonight Scotland's moral and legal claim to the oil revenues, or a fair share of them. We have to repair our social and economic base. In October 1974 an STUC leaflet declared that Scotland would get the major part of the revenues devoted to industry. It said that these could be used to help restructure the economy of Scotland and the development areas.

We need development resources to put into our engineering chemicals, plastics, service, food processing and timber production and processing industries, and for investment in energy, in better transport infrastructure, in housing, and, above all, in the development of our human resources. These are the things that we can do with the assistance and help of the oil resources. We have to have them and we have to get our economy moving. We must bring down unemployment. No answer from the Government can provide any solution.

This House can take positive action tonight to make amends for its ruthless and unscrupulous rape of Scottish resources. It can rightly condemn the mismanagement of Scottish oil, and it can agree the need for a Scottish oil development fund to give the resources necessary to rebuild our nation.

4.43 p.m.

The Minister of State, Scottish Office (Mr. Gregor MacKenzie)

The nicest thing I can say about the speech of the hon. Member for Dundee, East (Mr. Wilson) is that it was not the most constructive I have ever heard. We all waited for the Book of Revelations. Instead we got something like the performance of an Old Testament prophet, and the speech was almost as long as that we would expect from an Old Testament prophet. It did not help me necessarily to understand the various arguments.

The hon. Member has demonstrated once again just how narrow and unrealistic is the view of the SNP of oil development and of the opportunities that oil affords to the people of Scotland and of the United Kingdom. In the light of the election results of the last few weeks it is perfectly clear that the people of Scotland do not share the greedy and selfish approach exhibited by the SNP.

The development of North Sea oil and gas has been one of the most successful operations undertaken in the United Kingdom since the war. Bearing in mind that the oil is being recovered from one of the most difficult areas in the world, the SNP's niggardly attitude seems to me to be designed to make a success look like a failure. All the people concerned can take credit enough for the remarkable success which has been achieved in moving to a position in which about half the United Kingdom's oil requirements are being met from the North Sea. The figure last year was 38 million tonnes. That fact will be seen increasingly as one of the most important milestones in Britain's economic history.

Achieving this state of affairs has not been without difficulty for the Government. Perhaps I might remind the House of the situation we inherited. It was most unsatisfactory in a number of important respects. When we came to office the previous Government, in four years of power, had operated one gigantic licensing round of nearly 300 blocks. The consequences of their action has illustrated how defective their policies were in almost every respect.

No effective provision had been made to secure an adequate share of the revenues for the people. There was no petroleum revenue tax, and not even any means of making corporation tax effective. There had been inadequate controls over development and no effective controls over the rate of depletion or the flaring of gas. There had been no effective control over exploration after the initial years of the licence. We have taken action to put those matters right.

The hon. Member for Dundee, East revealed in his speech to day that, we gather, he is now in favour of a depletion rate of 10 million tonnes a year, as against 38 million or 50 million tonnes a year. There would not be the jobs there have been in the offshore and onshore industries or the developments both in the North Sea and throughout Scotland if that policy had applied.

Mr. Gordon Wilson

Where in my speech did I say that production from the North Sea should be 10 million tonnes? Nowhere did I say that.

Mr. MacKenzie

The hon. Member could not have been reading his speech very carefully. He was questioned on this matter by my hon. Friend the Member for Kirkcaldy (Mr. Gourlay). What I have said was the distinct impression that the hon. Member left with my right and hon. Friends and, I am sure, with the Opposition.

The taxation measures that we have introduced have made sure that the people of Scotland are getting a fair share of the revenues while allowing the oil companies sufficient profit on their investment, encouraging them to develop the resources. The Petroleum and Submarine Pipe-lines Act 1975 puts control where it should properly be, which is in the hands of the Government. Under the Act the companies are subject to tighter control over submarine pipeline routes, levels of exploration activity, and rates of depletion from individual fields.

In addition, the creation of the British National Oil Corporation ensures that the State participates in all the major discoveries, and guarantees that these important offshore resources will be exploited and developed in the way which best accords with the interests of the people of Scotland and of those throughout the United Kingdom. I believe that all of these measures are now widely accepted both by the public and by the oil industry as just and necessary.

In Scotland one of the most serious failings was the quite inadequate forethought given initially to the needs of the infrastructure in supporting North Sea oil. That is a condemnation of the previous Conservative Administration and of the SNP Members. Apart from a few slogans which we occasionally heard from the SNP, they made no constructive contribution. Only since we have come to office has a major effort been made to catch up in this area. The local authorities and the other public agencies are, I believe, to be congratulated on their achievements.

Mrs. Margaret Bain (Dunbartonshire, East)

Is not the Minister, in fact, outlining with great hindsight the policies that should have been adopted in the late 1960s, when it was a question not of a Conservative Government but of a Labour Government? In the late 1960s the Labour Government practised the kind of policies that were followed by the Conservative Government.

Mr. MacKenzie

I am sure that the hon. Lady has one thing in common with me at present—and that is that neither of us knows what she is talking about. One thing that I recall is that the discoveries were made at a very much later stage than that which she has just mentioned.

It is worth while mentioning that we have done a great deal on the whole question of infrastructure, and much to the benefit of some SNP Members.

Mrs. Winifred Ewing (Moray and Nairn)

Where?

Mr. MacKenzie

Perhaps I may continue for a little while without interruption.

There have been major developments of harbours at Aberdeen, Peterhead, Montrose and in Shetland. We have the reconstruction of airports at Aberdeen, Inverness and Sumburgh. There is an immense house-building programme in the Grampion Region, the Moray Firth and Shetland. The improvement in main line railways and communications has been very marked. We have also ensured that ratepayers in the areas affected by these developments were protected from the full impact of the additional financial burden in providing these facilities.

From the start, we have given the highest priority to ensuring that Scotland's economy gets the maximum possible benefit from activity related to oil. One of the first decisions was to move the Offshore Supplies Office from London to Glasgow. The OSO has had a major role in helping industry in Scotland—and, indeed, in the United Kingdom as a whole —to meet the new requirements of the offshore business.

We also decided to put the headquarters of the British National Oil Corporation in Glasgow. This has not only provided—many of us are interested in this matter—jobs of high quality, and much needed jobs, but helped to bring an important part of the decision-making on oil matters to Scottish people.

At this point, I should like to pay a tribute to the very important part that the BNOC played last summer in helping to secure two very valuable contracts for the Marathon oil rig building yard on the Clyde. Further contracts, as some of my colleagues may know, are under negotiation, and, based on the yard's performance, we are certainly confident of its long-term future.

We all appreciate that it takes time for industry to adjust to the requirements and specification of a new industry such as North Sea oil. As has been mentioned often, the latest available full figures that we have show that at present some 55,000 to 65,000 people in Scotland enjoy jobs which are either directly or indirectly related to exploration for and exploitation of oil under the North Sea.

The hon. Member for Dundee, East chided us, in the course of his rather long speech, about the estimates of the OSO. It is worth noting that certainly 60 per cent. of the orders from the United Kingdom sector of the North Sea are now placed in Britain. That is a very good record indeed. We have to improve it further—not by protection or by compulsion, hut by trying to better our own industrial performance and the competitive position of our industries.

Mr. Gordon Wilson

rose—

Mr. MacKenzie

The hon. Gentleman took a fair amount of Back Benchers' time in the debate—a very long time.

Not many weeks ago I opened a factory in East Kilbride, a factory producing oil well-head equipment. I have visited many other factories. People who go about Scotland with their eyes open—I hope that the hon. Gentleman will occasionally do this—will see that a very considerable proportion of that 60 per cent. of orders is providing jobs for people throughout Scotland.

Mr. Gordon Wilson

rose—

Mr. MacKenzie

Once again, I am obliged to give way.

Mr. Gordon Wilson

If the right hon. Gentleman has made all these trips and has been in touch with the OSO, will he say what the Scottish figure is in relation to jobs, as he was able to give it for the United Kingdom?

Mr. MacKenzie

What we are concerned about is to look at the percentage here. If the hon. Member had been listening as carefully as he has been talking, he would have heard me say about two sentences ago that some 65,000 jobs were provided for the people of Scotland as a result of this industry.

It is already clear that the United Kingdom industry has built up the skills and the knowledge to compete at home, where there are growing markets for inspection, management and repair of installations, and certainly has a very considerable expertise in the export markets.

Scotland has, therefore, benefited already to a very substantial degree from the economic activity related to North Sea oil. This has happened at a time when not only Scottish but British, European and international rates of unemployment have been higher than at any other time since the war. It would certainly be a great mistake to imagine that the development of North Sea oil could alone counteract the unemployment caused by the international recession. This has been a boost to our economy. It has come at a time when it was very badly needed, and without it unemployment would certainly be very much higher than it is at present.

Let me turn to the wider economic benefits which affect the country as a whole. We have heard a great deal from SNP Members about what they would do with taxation revenues from North Sea oil. I can well remember, as can, no doubt, many of my colleagues, on both sides of the House, what was said by various SNP Members during the course of the last General Election. Whenever they were challenged about how they would increase pensions—I cannot remember the figure now; it varied from area to area and from candidate to candidate—all that we could discover was that the money would be coming out of the North Sea. One would have thought that instead of oil coming ashore, someone—an Almightly providence, perhaps—would be delivering pound notes. But I know that the people in the area that I represent were certainly not conned by the SNP candidate. They did not believe that the people of Scotland had collectively won the football pools or anything of the kind.

I do not think that people find the SNP's approach to the difficult economic problems facing us to be constructive. Certainly the SNP has failed to make out a convincing case, even on its own terms. SNP Members never explain to us how they would tackle the deep-seated problems of the Scottish economy—problems of steel, of shipbuilding and of motor vehicles. As most of us know these problems stem from a lack of demand in overseas markets and from intense international competition. But whenever the SNP is challenged about these matters, the only answer that we ever get is "Do not worry about these matters. If there were a separate Scottish steel corporation, a separate Scottish shipbuilding corporation, a separate Scottish this, that or the other, all these problems of demand and productivity would be solved."

The electorate can very well see that the SNP's policies in this regard are quite farcical and are designed to separate Scotland—I know that SNP Members do not like the word, but designed to separate they are—from the management of the United Kingdom economy as a whole. They will only make a difficult situation quite disastrous.

Faced as we are with depressed markets, serious dislocation in world trade and intense competition from countries in the Far East, the only hope lies in closer co-operation within the United Kingdom and Western Europe as a whole. A fragmented approach, a separatist approach, will produce only divisive policies, from which I think all of us would suffer.

Therefore, the Government totally reject any attempt by SNP Members to hypothecate the North Sea oil revenues exclusively to Scotland. We have made our position perfectly clear. Oil, like the gas in the Southern Basin before it, is a United Kingdom resource, to be used for the benefit of the United Kingdom as a whole.

Mrs. Winifred Ewing

rose—

Mr. MacKenzie

Perhaps the hon. Lady will forgive me if I do not give way until I have finished this part of my comments. As it happens, I live in Cambuslang, not terribly far away from the hon. Lady's home. She will know that we use gas in our homes which comes from the Southern Basin of the North Sea. We use it all over Glasgow. We do not talk about the English gas which is coming in to supply various homes in Scotland.

To take advantage, as Scotland has done over many years, of being part of the United Kingdom, sharing in the United Kingdom's economic assets and resources, and then to try to keep the benefits of North Sea oil for Scotland alone is not only immoral—irrespective of the work of the Church and Nation Committee or anyone else—but unworthy of Scotland as a whole. It fits ill with the spirit which enabled Scotland to contribute so much to the United Kingdom and the whole economic and social development of this country in the past. It would be seriously damaging to Scotland's wider economic interests.

Mrs. Winifred Ewing

Does the Minister not see in the slogan "It's Britain's oil" something terribly unacceptable to the EEC member States, who regard it as a European resource and have their greedy eyes on it? Does he see ally thunder cloud affecting his British nationalist stand on oil from the EEC's desire to interfere with the promises which the Government gave me in this House when I asked whether the EEC would affect the rate of extraction of the oil and the right to select our price and our markets? Does he see a threat to British nationalist oil claims?

Mr. MacKenzie

The trouble is that the hon. Lady is confusing her roles. She is today at Westminister representing a Scottish seat and she should for a few moments forget the obvious interest that she has been showing in the European Parliament for all sorts of reasons for some time.

The Scottish economy is closely integrated with the rest of the United Kingdom. The Fraser of Allander Institute of Strathclyde University, headed by Professor David Simpson, shows this beyond doubt in its recent input-output study. Just under half of Scotland's manufacturing output is sold across the border to the rest of the United Kingdom, and nearly half Scotland's consumption of manufactured goods comes from the rest of the United Kingdom. There can therefore be no question of a prosperous Scotland except in a prosperous Britain, despite what SNP candidates and Members may say.

Scotland's problems are essentially the same as those of the rest of Britain. They have common origins in our past industrial structure, our attitudes and our common economic history. They will be overcome only if we recognise them for what they are and work on them until they are overcome. North Sea oil gives us a real opportunity to strengthen our economy. Even with North Sea oil, that will not be easy. it is not a panacea for all our problems, but it will give us a breathing space and a better chance than we have had at any time since the war.

It is therefore essential that we make the right choices and set out priorities so that North Sea oil gives the maximum benefit to the country. Those priorities have now been decided upon by the Government and were set out in the recent White Paper. We have made it plain that our aim is to promote the expansion of demand and activity to get the economy moving forward.

We certainly intend to redouble our efforts through the industrial strategy to improve the competitive position of our industries by raising investment. We shall maintain and strengthen the impetus of regional policy which has already, despite what the hon. Member for Dundee, East said, made a considerable improvement in the Scottish position. We shall also invest in the future in new replacement forms of energy supply.

Since we came to power in 1974, we have already substantially strengthened the measures available to help the people of Scotland. The Scottish Development Agency, which we established in 1975, in advance of any revenue from the North Sea, is now making a significant impact on the Scottish economic scene. SNP Members constantly ask us to add to its contribution, so I hope they approve of it.

In my own Department, the Scottish Economic Planning Department, we have made offers of selective financial assistance of £97 million in the last few years and have paid out about £373 million of regional development grants, thereby safeguarding and creating thousands of jobs for the people of Scotland.

The difficulties of the current economic situation, both in the international economy and in the United Kingdom, tend to make us overlook what has already been made possible, and the Government's policies have already been influenced by the availability of North Sea oil. It would have been difficult, indeed, perhaps impossible, without it to provide the stimulus of the income tax cuts of the Budget of 1977 or the further stimulus provided last November, which was particularly helpful to the construction industry. Without it the scope for measures to assist industry through the Industry Act, the SDA and the industrial strategy would have been curtailed and the special measures for job creation which now benefit about 53,000 people in Scotland would have been much reduced.

I recall that this was acknowledged by no less a person than the right hon. Member for Western Isles (Mr. Stewart), who said that the special measures had reduced unemployment in his constituency to the lowest level in his lifetime—and with no disrespect to the right hon. Gentleman, he is no chicken. Therefore, we are already benefiting from North Sea oil to an important extent.

The effects of the measures that we have taken have been more important in Scotland than in the rest of the United Kingdom. We have heard today, as we have heard before, the proposal for an oil development fund for Scotland, but nothing specific or convincing has been said about how it would work, so I conclude that those who propose it have not thought through its implications in great detail.

I have explained why we reject the implications of the words "for Scotland" in the motion as being narrow, selfish and unworthy, but, leaving that aside, the idea of a special fund was considered carefully and at length in our review before the White Paper was published. Quite simply, we consider that what matters is to decide the right priorities for our use of North Sea oil benefits, and for that purpose we consider a fund to be unnecessary.

The policy decisions we need can be taken within the present framework and they must in the end be implemented through our main policy programmes. For a fund to have any effect, it would have to be devoted to the finance of additional items—to things which do not receive sufficient priority in main programmes. If so, it might end up being used in ways which many of us feel would have given poor value for money.

Mr. James Sillars (South Ayrshire)

When the Minister says that an oil development fund was considered, is he saying that the Government considered something which they thought selfish and greedy and is that the reason why it was rejected, or were there other reasons?

Mr. MacKenzie

I have just made the point that we considered the establishment of an oil fund. I am not sure what kind of oil fund my hon. Friend wanted. I think that it was rather different from that envisaged by Members of the SNP, but sometimes I doubt it.

For a fund to have had any effect, it would have had to be devoted to the financing of additional items, which might not have been good value for money. If such items can be justified, it is simpler and more effective to adjust our programmes to take account of them. A fund which merely replaced additional programmes of expenditure would in the end satisfy no one. On balance, therefore, we have concluded that the creation of additional machinery would be artificial and the wrong approach to the country's problems. The right way to use the benefits from the North Sea is to set our priorities as we have done.

The hon. Member for Dundee, East was very loud and long in his criticisms, if not always acute in his understanding of the real issues at stake. Those who pretend without any justification that opportunities have been wasted, that production should have been held back or that revenues should in some way be concentrated solely on Scotland have a duty to say whether they will also oppose the expenditure measures taken by the Government which have been made possible by oil. So far they have not done so, though they have the opportunity in this debate.

For my part, I am satisfied that the policies which the Government have set for the development of North Sea oil are working well. Scotland has benefited substantially already from the employment created from North Sea oil, and will continue to benefit, within the priorities which the Government have set for the use of the revenue and balance of payments benefits.

At the risk of repeating myself, I must say that I still think that this is a selfish and inward-looking motion. I believe that it does not reflect the true attitude of the people of Scotland, who are concerned about the problems of their native land but every bit as concerned about the problems of Merseyside, Wales, the North-East of England and elsewhere. I must also tell the hon. Member for Dundee, East that, just as I think his motion greedy and selfish, I am convinced that it does not reflect the attitude of the people of Scotland any more than his and his colleagues' conduct in this place in recent days has done.

Not many weeks ago, the Scottish National Party went into the Lobby to ensure that there were even further tax reductions for the well-to-do in this country. Last week, they went into the Lobby with the Tories to try to stop the whole development of devolution. Where, we often ask ourselves, was the old Celtic fervour? Where was the old Celtic radical? Where was old Uncle Donald that night? He was marching hand in hand with the hon. Member for Glasgow, Cathcart (Mr. Taylor).

We have rumbled all of this for a long time. The people of Garscadden rumbled it. The people of Hamilton rumbled it. The people rumbled it in the regional elections. We are rumbling it once again today, and I am sure that I can confidently ask my right hon. and hon. Friends to defeat the motion this evening.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

I feel that I must draw the attention of the House to the fact that this is intended to be a short debate. I still have three Front-Bench speeches and 12 Back-Bench speeches to accommodate within it.

5.11 p.m.

Mr. J. Grimond (Orkney and Shetland)

I am always glad to take part in a debate about Shetland and Orkney oil. We are prepared to allow the neighbouring islands to have a certain share of our oil funds, but I wish to make clear whose oil it is before we start.

I must take issue with the Minister when he says that the Government are protecting the ratepayers of Orkney and Shetland against the extra expenses to which oil had put them. If he were a ratepayer in Orkney, he would soon find out the truth about that. The rates have risen enormously, and such protection as is offered to the ratepayers has come out of the oil funds, which are supposed to be kept for reinvestment in industry and which have been negotiated by the Islands Council itself with the oil companies.

As for Shetland, it does not seem to be generally realised that so far not a drop of oil has been landed in Shetland. Nothing has come through the pipelines. The Shetland Islands Council has been put to great difficulty over this because it is not getting the revenue which it expects. I put seriously to the Government that they might look at the question of the derating of the terminals, and they might also support the efforts of the Shetland Islands Council—which, I hope, will be successful—in negotiating with the oil companies some payments before the oil actually comes.

I must tell the House that oil is by no means all benefit. It brings heavy expenses to local communities. It disrupts the life of these communities and of individuals. This is one of the reasons why Orkney is determined not to have the mining of uranium. We feel that we have made our contribution to the minerals of Great Britain, and for an island community to have another part of its land dug up for uranium would, we believe, be totally unjustified.

The motion refers to a Scottish oil development fund. At one time, I think, there was something to be said for that but, in company with the Minister, I did not find many details given today about how this fund would operate. It would be possible for the English, I suppose, to demand a gas development fund, and so one might go on with development funds throughout the country.

Now that we have a Scottish Development Agency, I imagine that it will channel capital investment into Scotland. I am not quite sure whether the proposal is to have another corporation dealing with oil revenues, or what it is. I hope that a lot of the oil revenues will be invested in capital projects, but they must be viable capital projects, and I believe that the best way to ensure that is to see that most of it is done through ordinary commercial channels, which know what they are about.

Secondly, I hope that at any rate funds from somewhere will be made available on a generous scale for research into new sources of energy, such as the waves, the wind and the sun. I know that this is being done. Even in the cooler latitudes of Orkney, there is a man who assures me that he heats his bath water with the sun, though how often he takes a bath is not so far revealed.

These new sources of energy will not add much beauty to the landscape, and I suggest that the ecologists might think of looking at a landscape dotted with windmills and imagine how our coastal waters would look with "ducks" waving in the sea. Nevertheless, investigation of these new sources is important. I do not want to see research done in America duplicated, but I hope that the Government can assure us that they are conscious of the need to carry out research in these directions.

Thirdly, I consider that a considerable proportion of the revenues ought to be made available for local communities and local banks. If they are to make a contribution, at least in the north of Scotland, to the curing of unemployment, this effort must be directed through the smaller firms. Such firms will be in need of capital, and in my view they are much more likely to bring new jobs than the large monopolies would be. Nor are such small firms nearly so vulnerable to industrial blackmail. I hope, therefore, that they will gain from the oil revenues.

I should like to know whether the Government have seen the scheme discribed in Lloyds Bank Review for April this year, under the title "A People's Stake in North Sea Oil", by Brittan and Riley. I do not necessarily agree with it, but for those who are interested in spreading ownership it is of interest. The basic idea is to issue a North Sea oil stock. This would be a marketable stock issued to all adults in the kingdom. I shall not go into the details now, but if the Minister can tell me whether any study has been made, or is to he made, to see whether such a scheme is feasible, I shall be grateful.

I turn now to one or two problems which have arisen in my constituency as a result of oil developments. There is widespread discontent in Shetland over the allowances paid to local people. In-corners get housed in camps, they are fed, they are transported, they get holidays, but few such benefits or equivalent allowances are available to the local people.

I have had complaints also from the Stockton-on-Tees Trades Council about the treatment of workers on the rigs. The council alleges that many people from that part of England have gone up to work in the Chevron field and that 1,100 workers have been dismissed, many of them within 26 weeks of their engagement. I do not know how far this is the Government's responsibility, but I wish to put on record that there are dissatisfactions with working conditions in this industry. Perhaps the appropriate Ministry will look into it.

In Shetland, the advent of oil has led to a dual economy. There are very high wages for those on oil-related work, while many of the crofters not employed on oil work still have very low wages but have to pay high prices. Oil-related work is taking away workers from crofting, from fishing, from road work, from knitwear and from shopkeeping, and it could have a serious long-term effect in both Orkney and Shetland. This is particularly serious when it is added to the slump in fishing and the uncertainty about that industry's future.

That brings me to a matter of great importance which I must put to the Government, namely, training. Most of the oil-related work—perhaps all of it—is unskilled. Young boys leaving school go out to work, earning £100 a week and getting all sorts of perquisites, but they get no training. When this period is over, they will have high expectations for a standard of life but no skills with which to earn the necessary money. I do not say that at this moment training is vital, but what is vital is that there should be plans for training as the oil construction period runs down. I hope that the Government are giving attention to that.

Again, we must do much more for boys who go into industrial training and take up apprenticeships. I know of one lad who, instead of going into unskilled work —highly paid but an absolute dead end —is training as an apprentice in Lerwick. He comes from another island. He tells me that his take-home pay is £27 per week, out of which he has to pay £17 for digs. He is lucky to get digs as cheap as that. Further, he has to buy his own tools. This is quite absurd, from the point of view of the country and from the point of view of everyone else.

Such treatment compares badly with that afforded to those who go into academic further education. It seems to be entirely wrong for a country which will have to depend on its skilled industrial workers to tolerate this enormous contrast between what unskilled or academically clever people are paid and what apprentices are paid.

It is important to keep the whole question of oil in perspective. The right hon. and learned Member for Surrey, East (Sir G. Howe) gave some figures the other day pointing out that the net addition to the gross national product arising from oil when at its peak of production would be no more than the Japanese add every six months to their GNP simply by working harder and being more efficient. It is no good investing money unless it is properly used. The trouble with this country is not that there is a total failure to invest. It is that too much money is put into non-productive investment and too much of it is under-used, even when it is in industry.

I would like to see some estimate of the effect of the benefit of natural gas upon the economy. The Minister said that he estimates that oil has done us a lot of good. We have had natural gas for many years now. I believe that about one-third of our energy needs outside of transport are now met by gas and that gas from the North Sea will be equal to about one-third of the energy provided by North Sea oil. If that is so, we ought by now to be able to see, without speculation, what has been the effect on the economy of this gas. It cannot be said that over the past three or four years we have been through a particularly good period. It would be unwise to assume that oil does not bring great problems as well as advantages.

I agree that there are advantages for the terms of trade and so on but oil produces great problems for the local communities and for the country. If there is to be a benefit from oil we have to make sure that the revenue is used for efficient, productive employment. If it makes Britain or Scotland more complacent, and many advertisements for parts of Scotland seem to imply that all problems will be solved by it, oil will do more harm than good.

5.22 p.m.

Mr. George Robertson (Hamilton)

This subject is of considerable importance, and not only to the people of Scotland around whom this debate has been framed. It is important for the people of all of these islands. In discussing the management of oil and the possibilities that it opens up, we have to assess, as the electorate will have to assess at some stage, the credibility of the various parties and the policies they put forward.

Oil is a major national resource which opens up major opportunities for all of us. Each of the programmes put forward by the political parties will have to be judged not just in the context of the view taken of one natural resource but in the context of the development of all natural resources and the revenues accruing from them. Although it is easy for the nationalist party to put forward this motion and to make criticisms of a wide-ranging and penetrating type, the fact is that its alternatives have also to be assessed by the electorate. The programmes that it proposes have to be judged too, not just the criticisms that they throw so negatively against Government policy.

I have been interested in trying to establish, along with many of my hon. Friends, precisely where the Scottish National Party stands in relation to oil. I was not enlightened by the opening speech of the hon. Member for Dundee, East (Mr. Wilson). I am sure that the same is true of many of my hon. Friends. A lot of promises have been made by the Scottish National Party to the people of Scotland. These promises have been specific and have concerned the future that the Scots could expect if or when the bonanza that oil was likely to produce could be directed into the pockets of the Scottish people and not into the Exchequer of the United Kingdom. Ultimately, the acid test of the Scottish National Party's policy will be whether it can deliver the goods. Can it deliver what has been promised? There have been inconsistent and ever-increasing bribes offered to the Scottish people.

I have been trying to establish what the specific promises made by the nationalists concerning oil amount to in view of the election which is not too distant. Promises were made to the electorate of my constituency, as well as to electorates elsewhere to the effect, that the wealth flowing from the oil would produce a doubling of the standard of living of the people. That was said by the second-from-last nationalist candidate in my constituency. It was said in an SNP publication that oil and oil alone would make Scotland the richest nation per head of population. That came from the election address of 1974.

Mr. Ramesh Watt (Banff)

Does the hon. Member agree that if we allow the Labour Party to continue in its present profligate ways, Scotland could well be the only nation in the world that has found oil yet finished up the poorer for it?

Mr. Robertson

I do not agree. In that respect, I quote from a document called "A Scottish Government and the Oil Revenues" published by the SNP. This was a document that was given some degree of publicity. It speaks of Holland and on page 8 makes a number of assessments about the impact of national resources on the Dutch economy. It says: The 'Dutch Disease' is a warning to us. We must avoid frittering away the oil revenue on what appear to be attractive programmes in social capital investment". What we have had consistently over the years throughout Scotland has been a variation of the promises and the bribes by the party which claims that, with all of the oil revenues directed to the Scottish population, there would be, among other things, a doubling in the standard of living, with Scotland becoming the richest nation per head of population in the world. These are absurd claims which increasingly in recent months the electorate has found to be as fraudulent in practice as they seemed to be on paper.

Let me turn to some of the more specific elements of policy put forward by the SNP. The SNP document "A Scottish Government and the Oil Revenues" is a refreshingly frank, and in some cases honest, publication for an SNP document. It deals with a number of issues and problems which would confront a hypothetical independent Scottish Government. The document breaches for the first time that code of conduct within the SNP which does not allow the concept of separatism ever to arise. Page 3 of the document speaks of assuming: a level of anger at the break-up of the British state amongst the English electorate. Clearly and identifiably the SNP is stating what it stands for—the break-up of the British State as we know it. There is an assessment of the consequences on the British constitution and the cost that would arise as a result of the perceived damage within Britain.

What we are now beginning to see from the depths of SNP policy is an assessment of the negligible effects on the Scottish economy which oil would bring. Instead of speaking of about £7,000 million, which the Scottish electorate has been promised in recent elections, this document, produced in February 1978, says that the oil revenue capacity of the Scottish economy is likely to be only £1,000 million per annum. We are told now that the Scottish economy cannot absorb this and that the maximum that a Scottish Government could expect in year one of so-called independence would be £1.25 billion, in year two £1.4 billion rising to a maximum, in year five, of £1.75 billion.

The whole thesis of this document seems to establish that those are the realistic figures, and not the grandiose promises of £4,000 million, £5,000 million, £6,000 million, ranging up to £10,000 million, made to the Scottish people in previous election manifestos by the SNP. This is the true scale of the benefit that would accrue under the separatist policies of the SNP from oil development.

When one measures the existing needs of the Scottish economy, and establishes the statistical fact—accepted, it would appear, by all parties—that the actual public sector deficit between what is collected in Scotland and what is spent in Scotland in the public sector is about £700 million, the £1,000 million that the SNP now claims would be the maximum in the revenue take from oil can be put into perspective. Out of the remaining element of that has to be financed the creation of a completely separate Government as well as completely separate shipbuilding corporations, aircraft corporations and all the other paraphernalia of a nation State. The whole thing is absurd.

Mr. Sillars

Could my hon. Friend tell us the source of his information for the assessment of a borrowing requirement of £700 million? The last official statistic appeared post the last Hamilton by-election and was about £400 million, and no recent budget has been done by the Treasury taking account of the contribution from North Sea oil resources—at least, not to my knowledge.

Mr. Robertson

It is not within the context of oil resources that the recent figures seem to suggest that the public sector deficit exists at the moment between £600 million and £700 million. I stand to be corrected if that figure is not accurate. But certainly the figure is at least in excess of the £400 million last published, and undoubtedly, on the basis of studies recently done, it must be nearing the £600 million to £700 million mark. This does not, however, disturb the central thesis of what I am saying—that the scale of the resources available even to a separate Scottish Government would be of negligible proportions in terms of the grandiose plans for social expenditure continually being advanced by the SNP.

Dr. M. S. Miller (East Kilbride)

I have not had the benefit of reading the document referred to by my hon. Friend. On what basis was that assessment made in relation to the oilfields involved? Is it assumed by the writers of the document that there will be no problem at all in apportioning the number of fields in the North Sea to Scotland?

Mr. Robertson

My hon. Friend makes a very important point. The document, which is crucial to the assessment of this debate, again for almost the first time, makes a detailed study by the SNP of the difficulties and problems that would be associated with negotiating a settlement of the division of the continental shelf. Indeed, the document says: The 1968 Order —that is, the Continental Shelf order— had no other intention than to allocate which law applied where, and it is evident from consideration that—and this would certainly be the stance taken by the English government—allocation of 'sovereign rights' was not included. Moreover, one cannot even work from precedent as none exists. The document again establishes that there will be major problems and difficulties associated with the break-up of the British state —its words, not mine—involved in coming to any political settlement in the short term. So we are talking about solutions which are at best and not at worst.

When we are discussing the problems and difficulties associated with the present Government's conduct of oil policy, we have to relate it integrally to the alternatives being put forward by the SNP, which criticises Government policy so much. As I have said, the problems associated with oil development are clearly established in this document and elsewhere. The Dutch disease is a problem that can be avoided. We in this country must desperately seek to avoid the difficulties and the considerable social problems now being encountered by the Dutch Government following their bonanza period.

Until recently, I was a member of the Board of the Scottish Development Agency, and I believe that at this stage we have no need in this country for a separate oil fund. I concede that the Scottish TUC has promoted the idea of a separate fund, and that the Church of Scotland has from time to time promoted variations of the fund, but the fact is that the majority of the Scottish people would now agree that we have probably reached saturation point with the creation of new institutions taking away the instruments of government from the people and their democratically-elected representatives.

I think that, having created a number of organisations, we must use these existing instruments to further Government policy and to further the restructuring of industry. We have these institutions, and with the funding and with the correct and proper strategy over a period—a longer period than simply four years—we shall be able to build on them.

But empty rhetoric from the SNP will not solve any of the problems we face, in Scotland, and the difficulties being encountered by the Government in their negotiations with the oil companies, and their determination to get a proper and sensible policy for the oil industry, will not be helped simply by carping criticism by those who have no positive or constructive solutions to put forward.

I believe that the Scottish electorate, when eventually given the chance to make an assessment of all the parties' views on this issue, will follow the trend shown of Garscadden, in the regional elections and at Hamilton, and will judge the nationalist policy of separatism and apportionment of oil revenues. I believe that only a practical programme for the disbursement of oil revenues will be satisfactory to the Scottish people.

5.37 p.m.

Mr. Iain Sproat (Aberdeen, South)

I am glad to follow the hon. Member for Hamilton (Mr. Robertson), because he has done a very good demolition job on the vast and ludicrous gap between the cost of all the institutions of a separate Scotland which the Scottish National Party wants and the revenue that would be received from the 10 million tonnes of oil a year, or whatever it is, that the SNP is now proposing as the sort of level that we should extract.

The Minister of State spoke of the selfishness and greed of which the hon. Member for Dundee, East (Mr. Wilson) gave evidence in his speech. But we did not even have to listen to the speech of the hon. Member for Dundee, East, because the title of the debate The mismanagement of Scotland's oil was sufficient. It cannot be said often enough that there is no such thing as Scotland's oil. The oil lying off my constituency is no more Aberdeen's oil or Scotland's oil than the coal that lies beneath the fields of Yorkshire or the gas that lies off the coast of Norfolk is Yorkshire coal or Norfolk gas or English coal or English gas. They are all British resources. That is the legal position, and, whatever the Church of Scotland may say, it is certainly not the moral position that Scotland has any right to this oil above any other part of the United Kingdom.

The SNP has been singing an old song again today, but no one is listening any more. The hon. Member for Hamilton—and I am happy that he did—showed that in his own by-election, and it was shown in the Garscadden by-election earlier, too. I do not think that we have to worry very much about the Members sitting on the SNP Bench for much longer.

I want to speak about a subject which concerns me in this whole question of the management of oil—the slow-down in the development of North Sea oil. I give as evidence of that slow-down the following facts. First, in May 1974—that is, shortly after the Labour Government came into power—the Department of Energy forecast in its "Brown Book" that production in 1977 would be 50 million tonnes. We know that the actual 1977 production was about 38 million tonnes. In other words, there was then about a 25 per cent. shortfall in the Government's forecast. The forecast for 1978 production was given as 80 million tonnes, while the latest Department of Energy projection for this year is between 55 million and 65 million tonnes—a shortfall of between 19 per cent. and 31 per cent.

Secondly, significant discoveries are not being developed. The latest "Brown Book" lists about 49 significant oil discoveries, some going back to 1973, of which only one—Fulmar—is now under development, although no platform has yet been ordered. Thirdly, as another area of evidence in the slowdown, only two permanent platforms for new fields have been ordered in the last four years, for Murchison and Tartan. Recently, the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) predicted that six or seven orders would come to United Kingdom yards in the next 18 months. I very much hope that he is right, but I also hope that, when speaking from the Front Bench later, he will tell us from what fields he expects those six or seven orders to come. The right hon. Gentleman will remember that this time last: year he said that we would have five or six orders in 1977–78, and of those only two have so far materialised.

Given that there is some slowdown in the development of North Sea oil, what are the reasons for it? There is no question but that one of the reasons is that the companies underestimated the complexity and difficulty of the development. There is no shame to them in saying so. But, equally, they have over-extended themselves. I do not think they would deny that.

However, in addition, there are four main reasons which I should like to mention. The first main reason for this slowdown is that the fields are getting smaller and need better fiscal terms. Unfortunately, the terms are getting worse and tighter rather than better. For example, under rounds 5 and 6, companies now must relinquish two-thirds of exploration acreage instead of the 50 per cent. under rounds 1 to 4. I understand that under rounds 5 and 6 the royalty will increase —not in the sense that the percentage will be increased—in that it will be levied on United Kingdom landed value rather than on the-well head value, as it was under rounds 1 to 4.

Secondly, we all know that in the early days it was necessary to give various assurances to the oil companies to encourage them to get on with the speed of oil development, and quite rightly so. The then Secretary of State for Energy gave a series of assurances on 6th December 1974 which became known as the "Varley guidelines". These guidelines did a great deal to encourage the companies to go ahead with a speed of development which was the optimum speed for this country as a whole.

But, of course, those guidelines no longer apply, and no such assurances are now available for companies considering new developments. Not only are no assurances available, but the present Secretary of State for Energy said on the 5th April this year: when the oil companies were first coming into the North Sea and their investment was very heavy before the returns came—frontloaded investment, as it is called—it was necessary to give some assurances that those who invested would be able to develop their fields. Therefore, in the early days those assurances were given, relating to fields that were already under development. This was in 1974. As we move into a new phase of oil policy—particularly through private sector development, but this applies more generally —we are freed from assurances given in the past—[Official Report, 5th April 1978; Vol. 947, c. 443.] In other words, the right hon. Gentleman is completely removing such sense of certainty as had been given by the original Varley guidelines and substituting nothing in their place but uncertainty.

The third reason why I believe that North Sea oil development is slowing down is that the British National Oil Corporation is heavily involved in monitoring other company operations in addition to its own activities. In spite of that, nothing can be done without the approval of BNOC. As an indication of this, it took about 18 months for BNOC and the companies to come to agreement over round 5 operating agreements. Not only is BNOC involved in operating agreements but, first, it holds equity in five oil fields which are under development—which is more than any other com- pany. Secondly, it is the sole operator in a dozen or more blocks, plus four more in round 6. Thirdly, it has a 51 per cent. interest in 80 or more blocks under rounds 5 and 6 and, fourthly, it has over 50 participation deals to monitor and work out, including involvement in downstream activities.

It is no wonder that, with a staff of about 877, which is the latest figure, and in addition to all its own work which it must do in those four areas, the BNOC does not have the staff or the experience to work out with the companies exactly what is needed in development plans. I am sure that this bureaucratic interference by BNOC, whatever its other virtues or purposes may be, is a major factor in slowing down our North Sea activity. It is interesting that Lord Kearton has said that it takes about 2,500 employees to run a North Sea oil field, yet he is trying to run not only BNOC's own oil fields but everyone else's as well with only 870 employees.

The last reason why development in the North Sea is slowing down is quite simply that the size of the exploration rounds is now far too small. Under round 4 in 1971–72, 282 blocks were awarded. In 1976, under round 5, that had shrunk to 44 blocks awarded. Under round 6 this year, only 40 blocks have been offered and historically only about one-third are awarded in the end. Small rounds mean few attractive prospects, and few attractive prospects mean less exploration.

Having said that there is evidence of a slowdown in North Sea oil development, and having shown some of the reasons why that has taken place, I should like to say why I consider this to be a very serious problem for our country, regardless of who the Government of the day may be. The problem for the United Kingdom in the future is that there will be less oil by the mid-1980s than expected. Indeed, we are already getting less oil than expected. Since the bigger oilfields will start to decline in the mid-1980s, it should have been our policy to get the many smaller oilfields developing in their place in order to replace that decline. As I said, out of the 49 significant fields which should be brought into operation in the 1982–1988 period to offset the decline in the big fields, such as Brent, Forties and Ninian, it looks as if only three or four will be commercial.

I am not saying that the tax regime for the larger fields should be altered or diminished. But I urge the right hon. Gentleman to look again at the possibility of at least making the tax regime easier for the smaller and marginal fields, so that we can at least encourage development in those smaller fields when the bigger fields decline.

5.50 p.m.

Mr. James Siliars (South Ayrshire)

The debate and the exchanges so far in the debate have demonstrated that Scottish National Party Members are now paying a fairly heavy political price for having over-stated the case on oil shortly after the discovery of the oilfields in the North Sea and early assessments of the magnitude of flow both of oil and of money.

In the 1970 period, it is fair to say, the SNP must have fielded a number of fairly inexperienced candidates who gave more than a fair share of hostages to fortune in relation to the assessment of what oil would bring. I remember reading in one of the Cumbernauld papers a constituent writing to the hon. Lady who now represents that area saying that after independence perhaps she would be good enough to post to him his Littlewoods coupon every week on a Friday because he liked to pick up his pay on that day. Certainly SNP candidates gave the impression that after independence every Scottish kitchen sink instead of having two taps, would have four—hot and cold, and petrol and whisky as well.

But SNP Members have advanced from that position, and people would be very foolish to write off a party which got roughly 33 per cent. of the vote in two parliamentary by-elections on the straight case of independence or non-independence. I have heard the party written off in this House and elsewhere far too often to believe that it is likely to go away.

As the speech of the hon. Member for Dundee, East (Mr. Wilson) demonstrated, however, the case today is not being overstated to the same extent. Under what I regard as the grindstone of the critique applied by both the Labour Party and the Conservative Party, the Scottish National Party is coming nearer to reality in respect of what Scottish oil can or cannot do in the Scottish economy, although, if the assessment quoted by my hon. Friend the Member for Hamilton (Mr. Robertson) is correct about the ability of the Scottish economy to absorb £1,000 million per annum, it is still probably about £500 million per annum over-stating the case when it refers to the capacity of the Scottish economy to absorb that magnitude of additional resources. Economists to whom I have talked have said that we could absorb about an additional £500 million without having a massive effect upon the rate of inflation. But, of course, that figure is open to argument.

Mrs. Winifred Ewing

Does not the hon. Member agree that, when we are talking figures, one of the more striking features about the oil development in the North Sea is the gross under-estimate which was made by both the Labour and Conservative Parties when they ridiculed the homework of the SNP about the amount of oil in the sea which turned out. as we always said, to be on a conservative basis? Those two parties went on record as saying that we were exaggerating the amount of oil.

Mr. Sillars

I can speak only from my experience from inside the Labour Party. I took part in a party political broadcast in February 1974 in the course of which the question of North Sea oil was raised, and we were given a briefing background paper. As far as I can recall, the Labour Party's research staff was pretty accurate about its assessment of the magnitude of the wealth flowing from the oil.

However, my purpose is not to defend the SNP. I do not agree with it about the oil revenues being diverted into the Scottish economy. As a Socialist, I have no desire to see Scottish prosperity built upon English penury, but I shall support the SNP in the Division Lobby, and I shall explain why.

My contribution to this debate is directed towards three objectives which I believe it is necessary to establish if the SNP motion is to be supported. The first is to justify the Scottish claim to a significant proportion of the oil revenues. The second is to state what could and should be done with an oil-financed development fund. The third is to restate some basic principles about full employment, because the argument about how we engage in management of the economy is in my view for one major purpose, which is to produce full employment with all the implications inherent in it for the Scottish working class.

My support of the Scottish claim to a significant proportion of oil revenues is based on the proposition that oil won from under Scottish waters is as much an indigenous Scottish resource as the fish hauled out of those waters and the coal cut from under those waters off the coast of Fife.

I forecast that one day it will be recognised generally as a Scottish industry. That will be when the oil activity abates and the Scottish economy is left with the problem of rehabilitating the individuals, the work forces and the communities presently built up around the oil industry. I know that the retort is often "So what?" In a sense, we got that from the hon. Member for Aberdeen, South (Mr. Sproat). He gave us the cry about the Selby coalfield. I believe that the answer to that was given far more eloquently by my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray), who made what I regarded as a most significant and, for some of my hon. Friends, a most disturbing speech on 30th October 1974. It was his first speech in this Parliament as the newly-elected Member for his constituency. His answer to that kind of charge was as follows, and I have given notice to my hon. Friend of my intention to quote his remarks: Nor is it any answer to point to other resources and industries in other parts of Britain which are equally needed in an industrial economy and to argue that Yorkshire coal, Welsh water or Cornish clay afford equal opportunities for regional control of resources. They do not. Oil is unique as a major commodity in having a market price far above its production cost, thus giving it command over other resources and playing a special role in power politics."—[Official Report, 30th October 1974; Vol. 880, c. 275–6.] My hon. Friend described oil as having a special role in politics. That special role arises in the Scottish context because of its potential use in allowing us to break free from the perpetual cycle of decline and despair which has been the lot of the Scottish people in the context of the Scottish economy. That was mentioned most forcefully by Professor Donald MacKay, who used to be the professor at Aberdeen University and now takes the chair at Heriot-Watt. In a paper which he produced entitled "North Sea Oil and the Scottish Economy in 1974", he summed it up by saying about oil: It is a possible escape from the depressing economic record of Scotland over the last half century. Quite frankly, it is seen as a means of redressing the balance of economic, industrial and commercial power within the UK in favour of Scotland. Later in that same paper, describing Scotland as a slow-growing region in a slow-growing national economy, he said: Between 1950 and 1970, the following countries in Western Europe, all of whom had lower per capita income in 1950, had caught us up and surpassed us; Norway, Iceland, Denmark, Belgium, Holland, Austria, France, West Germany and Luxembourg. If we are to redress that balance and to allocate part of the oil resources, and if there is to be any call on those resources, it must be on the basis of need. I regard it as self-evident that if a nation's industrial-based economy is undergoing a rapid process of de-industrialisation, if its social and economic infrastructure are widely acknowledged to be seriously deficient, and if its people are enduring levels of unemployment unheard of in post-war years, that economy should have the first call on resources discovered and exploited within its land or its sea area.

All the elements of decline are there. The need is very clearly established. Let me again quote from the speech of my hon. Friend the Member for Motherwell and Wishaw on 30th October: The allocation must start not from the resource end but, as we are Socialists, from the need end. Let there be an inventory of the assets and current expenditure, and of social needs enjoyed or suffered by the several nations, regions and classes within Britain as a whole, and, indeed, of personal wealth and incomes too. Let the objective be set of bringing these up to a common level within a number of years, with the allocation of resources then made on the basis of social need. My hon. Friend went on: On this basis I believe that Scotland, Wales and parts of England would justly enjoy a substantial premium for many years over their present share of the national income."—[Official Report, 30th October 1974; Vol. 880, c. 277–78.] I have not quoted him out of context, and I am not suggesting that he will necessarily agree with the conclusions that I draw from this debate.

I want to take a few seconds to provide detailed proof of why Scotland—and Wales and parts of England as well—should enjoy what my hon. Friend called "a substantial premium". We have in Scotland 187,000 registered unemployed. The true figure is around 200,000. In the past 20 years, 200,000 jobs have been lost in the key industries of coal, steel, shipbuilding, vehicle manufacturing, textiles and agriculture.

In the decade between 1965 and 1975 employment fell by 40,000 in total. The number of male jobs fell by 133.000. By mid-1976 the manufacturing share of total employment had fallen below 30 per cent. for the first time in living memory. Since the mid-1960s more than 110,000 manufacturing jobs have been lost. Recently the Strathclyde Regional Council forecast that we are in danger of losing another 65,000 manufacturing jobs in West Central Scotland by 1983. Since Labour won the last election Scottish unemployment has doubled.

The effect of all this is that we have massive redundancies, high overall unemployment and high concentrations of jobless in certain areas. Although the unemployment figure for Scotland is 8.4 per cent., there are areas of male unemployment of 25 per cent. to 40 per cent. This has had a corrosive and debilitating effect on Scottish society. According to the Strathclyde Regional Council, one in 10 children in that area are born into deprivation. There are 21 areas of multiple deprivation in the United Kingdom, 18 of which are in Scotland.

Given that situation, I have no feelings of guilt, shame or greed—in fact I am as selfish or unselfish as the Scottish Trades Union Congress—in demanding a share of this new basic resource for the Scottish economy. Since the taxation settlement between the Government and the multinational oil companies there has been precious little, if any, protest in this House or outside about the vast amount of wealth and the vast quantity of oil allocated to the multinational oil companies.

There is no director or executive from BP or any other oil company who lives in an area of multiple deprivation. These people do not have children who are in composite classes because of cuts in education, and none of the international super-class has been ravaged by high unemployment. Yet all these experiences have been the fate of thousands of families in Scotland.

Therefore, the claim is justified that if the multinational oil companies are entitled to their cut of the wealth from North Sea oil, so are the Scottish people. If we do not get our substantial share of that resource the Scottish economy and the state of the people will continue to decline.

With the injection of a massive amount of capital and the adoption of a Socialist policy—that is, production for need, as well as production for profit when manifestly production for profit only has failed people—we can transform the situation within the Scottish economy in a remarkably short period. I think that we should pump £400 million to £500 million a year, year on year, into the Scottish economy to transform it and create full employment.

It is fashionable for so-called Socialists to pray in aid the international recession and use that as a total excuse for Scottish unemployment and the decline in our economy. There was more than a tinge of that in the speech of the Minister of State this afternoon. These people conveniently overlook the fact that the Scottish economy has been in decline under both Labour and Tory Governments during periods when the rest of the world has enjoyed boom conditions.

Faced with their own inability to provide Socialist solutions to the problems created by international capitalism, these people feel that they must try to persuade the people to accept what would be normally unacceptable. What would be the situation tonight if the Tories were in power, Labour was in opposition and there were 187,000 Scots unemployed? If Scottish unemployment had doubled in four years under a Conservative Government the Benches would be packed tonight and there would be no acceptance of an international recession or any excuse like that.

It may be that in some areas we would be forced to accept the unacceptable. If we lived in Southern Italy, Northern France, Malta, Greece, Portugal and, dare I say it, Peru, and if we were citizens of those countries we would have to accept the unacceptable. I am not in possession of sufficient knowledge of their economies to judge, but I am in possession of sufficient knowledge of the Scottish economy to judge that this is not the case in Scotland. We do not need to accept the unacceptable. We have oil-based resources and an abundance of manpower and engineering skills. We have vast areas of need in Scottish society. What we lack is the political will to put them all together and overcome the problem.

I am not saying that there is a short-term solution to half a century of problems. Nor am I saying that some of the long-term problems of Scotland, together with those of other parts of the white West can be easily solved especially as the world's balance of power changes from north to south. But I am saying that there is a short-term solution to the immediate, appalling problem of high unemployment and social decay in certain areas, as well as the poor social and economic infrastructure.

We can create the basis to overcome some of the long-term challenges before us. It is possible to create full employment in the short term in Scotland by a major public works programme. That is what I mean by producing for need and not for profit. We should have a programme embracing housing improvements and new housing construction. We should have a vast expansion of the roads programme and a fundamental tackling of the railway system—improvements in railway track, signalling and rolling stock. We should have hospital renovation, especially for geriatrics and the mentally ill. We should have an advancement of the district general hospital programme, most of which has been lying in abeyance since 1962.

If we got a share of the oil revenue and we had the political will to engage in a public works programme of that size we would create work and stimulate the private sector. That should cheer the Tories. It would leave us at the end of the day with a superb social and economic infrastructure.

There would be the multiplier effect of a single public works project. If we built a district general hospital of 700 beds costing between £8 million and £9 million it would require 20,700 square metres of blockwork, 850 tonnes of steel, and 26,300 square metres of floors and slabs. It would require 11 miles of electrical wiring, and 9,300 square metres of gravel and paving. In the Scottish economy, with its large public sector, when one engages in a major public works programme one stimulates the building and steel industries and one also employs architects, electricians, joiners, plumbers and those who operate earth-moving machinery. One gets the whole Scottish economy on the move—perhaps for the first time in several years. That is all capable of being undertaken if we have an oil-financed development fund.

All my arguments are directed towards four aims. The first is that we should raise industrial activity to new levels; the second is that we should give new strength to our industrial base; the third is that we should establish a superior infrastructure as one of the prerequisites for a more thorough-going solution to our long-term economic objectives; and the fourth aim, the most important of all, is that we should seek to re-establish the right to work and full employment for the Scottish working people.

In my view, full employment is the key factor in human life. The basic conditions and circumstances of working people have not changed a great deal. All we have to sell is our labour. Whether we can sell our labour and under what conditions governs the character of our life style. That requirement determines what constraints will be removed or imposed on ordinary individuals because it affects personal, intellectual and cultural development.

The right to work and a decent job at a decent wage are fundamental to all the other rights and civil liberties which working-class people believe they should enjoy. Without the right to work and to obtain a good return for our labour, all the other rights of which we speak and all our liberties are seriously diminished.

I question whether we have an equal society when in one part of the same town a man in full employment is on a middle-class income but in another part of the same town a man may have exhausted his unemployment benefit and may be existing on supplementary benefit. In theory, those two men have equality of opportunity and rights. But that is only a theory; it does not happen in practice.

Prolonged unemployment makes a person less of a personality, especially in his own eyes. I was recently visited in my constituency surgery by a man who had worked extremely hard in the building industry almost all his life. That man has now been unemployed for a year, with no prospect of employment. He came to see me about his circumstances. The important thing I noted was the deterioration in the personality of that man, a man whom I have known for some time. Strangely enough, above all he blamed himself and he told me that he was losing self-pride and self-confidence.

I have never read a more eloquent telling, or moving commentary than that which appeared in Labour Weekly in July 1974, as the Labour Party geared itself for the General Election in October. It was a Labour Weekly "Extra" which carried the headline: Heath's one million unemployed. Don't let it happen again. The great irony is that it never has, because the figure has been 1.3 million to 1.4 million unemployed.

Let me quote from that edition of Labour Weekly: Labour's message is quite clear: Don't let it happen again. The Labour Government has made an immediate start in tackling the grave problems we are facing. It has put forward the solutions it sees to these problems. It wants to get on with them. The theme of this broadsheet is jobs—because the greatest problem in this country and the top priority for this Government is still the danger of unemployment. Labour is scared of unemployment. Like the millions of ordinary people who lived through the Thirties, the memories of Labour MPs and Ministers are haunted by the dole queues that scarred society then. Then comes the eloquent moving part of the article: It isn't just the hardship and the cut in living standards. It's the indignity that is inflicted and the self-respect that is taken away. It is also the stupidity of keeping people idle and wasting human resources when the country faces grave economic problems. Labours proposals are geared to the problem of jobs, of the regions which still have high unemployment, of the need for training and re-training, of investment. And Labour believes that it is not with new and radical policies, and not with the discredited policies of the past, that the solutions will be found. The article concludes: New methods, new policies and a new understanding are needed if we are to get a grip on these new problems of our economy. An oil-financed development fund and a public works programme would provide new methods, new policies and a new understanding. However, because the Government have turned away from that opportunity, I intend to vote for this motion.

6.15 p.m.

Mr. Hamish Gray (Ross and Cromarty)

The hon. Member for South Ayrshire (Mr. Sillars) will forgive me if I do not take up the whole of his argument, but I hope in my speech to discuss one or two of his comments.

Perhaps I may remind the hon. Gentleman, since he was critical of the multinational oil companies, that until January 1976 94 per cent. of the total investment in the North Sea came from private sources—in other words, from oil companies and private investment. That investment has provided many of the jobs to which the hon. Gentleman referred. That is too easily forgotten in the dogma of Socialist politics.

This motion is based on a false premise. For that reason the Conservative Party will not support it. My hon. Friend the Member for Aberdeen, South (Mr. Sproat) gave the reason when he said that the motion refers to "Scotland's oil". We do not accept that it is Scotland's oil. Therefore, we believe that the whole motion is false. The people of Scotland do not wish to be separate, as has been well and truly proved recently. The motion is also weak in that sense.

On the other hand, we have every sympathy with the Scottish National Party in its round condemnation of the Government for their failure to control unemployment. I shall not go into that matter in great detail because the hon. Member for South Ayrshire dealt with it adequately and effectively. The Labour Government should also be condemned for their failure to achieve sufficient industrial growth.

Let me refer to the recently issued unemployment figure totalling 187,150. In January of this year unemployment rose to 203,629. As the hon. Gentleman rightly said, if Labour had been in opposition and those figures of unemployment had been reached under a Conservative Government there would have been marches to the House of Commons every week. It is a ridiculous figure.

The Minister of State spoke complacently, as though everything in the garden was lovely, and yet he is a member of a Government who, when in Opposition, condemned the Conservative Government when unemployment in Scotland was 89,700. The Labour Government had the audacity to allow that figure to reach 203,000 in January, and to date it is still 187,000. This is a very serious situation.

This figure is the result of the Government's policies. It is perhaps misleading for the SNP to attack and condemn the Government so severely on this subject when all too frequently the SNP is in sympathy with many of the Government's ideas. Indeed, the SNP's own policies would create even more unemployment. I remind SNP Members that 60 per cent. of Scotland's manufacturing industry is in firms owned outside Scotland. Great difficulties would arise if SNP policies were followed to their logical conclusion.

I wish to take up a point made by the hon. Member for Dundee, East (Mr. Wilson) on depletion policy. If SNP Members insist on a reduction in the rate of the depletion of oil, inevitably they will create more unemployment. If we cut back to the extent suggested by the hon. Member for Dundee, East there will inevitably be a loss of jobs.

Petrochemicals in Scotland, especially in the Highlands, have been referred to. I hope that there will be developments in this industry. There are proposals relating to Nigg Bay, in my constituency. I recently met the company involved and was told that there are considerable developments in the offing, but for reasons of commercial confidentiality the company is naturally unable to make public what is happening. There is great interest in the area, and I look forward to positive developments before too long.

We have become used to hearing the SNP refer to Norway as a model in handling oil policy, but Norway is having a complete re-think and it seems almost certain that it will try to make changes before long. Exploration drilling has been low throughout the 1970s. Only one oil field, Ekofisk, and one gas field, Frigg, are in production. In the United Kingdom sector there are eight oil fields and seven gas fields in production, and a further eight fields are being developed.

Norway appears to have fallen into a trap, and I suspect that the hon. Members for Dundee, East and South Ayrshire could easily fall into the same trap. It all hinges on the attitude of ensuring that high extraction rate is initially attained and then cutting back to suit the situation that has been created. That is precisely what has happened in Norway. It is committed to a high extraction rate and cannot escape from it because the spending policies of the Norwegian Government make it necessary to maintain that rate of depletion.

There was an article in The Scotsman on 13th June by Mr. Tony MacKay, of the Institute for the Study of Sparsely Populated Areas. He operates from Aberdeen University, and was an associate of Professor Donald MacKay, who was referred to earlier. Mr. MacKay examined the failure of Norwegian oil policies and said, in his article: The main problem is that through their expenditure policies the Norwegian Government have committed themselves to a fairly high and steady rate of oil and gas production, certainly considerably higher than the present level. He described how, between 1974 and 1977, Norway achieved an annual rate of growth of 4 per cent. and how its unemployment fell to 1 per cent. That was achieved on the assumption that Government income from oil and gas in the late 1970s would be very high. But that did not happen, and that is why trouble has occurred for Norway, which is facing large balance of payments problems. There was another article in The Scotsman on 15th April which highlighted the problems faced by the Norwegians and reported that Norwegians face a four-year freeze in living standards under a Government plan announced today to rescue the ailing economy. These are facts. There is no doubt that this situation has been brought about largely because of the policies adopted by Norway in the early stages.

The SNP policies would signal even greater dangers. In its pamphlet "Building Scotland's Future", the SNP proposes to finance a Scottish Ministry of Industrial Development, at a cost of over £700 million per annum, and to provide a basic pension of £25 a week for a single person and £35 a week for a married couple. That is uncosted, but I have done some rough costing and I estimate that the cost of that proposal would be another £285 million.

The SNP suggests that it will put an extra £150 million into modern schools, hospitals, and so on, over the next five years. Let us say that this will cost another £30 million a year. There is a proposal to cut income tax by 12 per cent., which will cost about £150 million a year. The SNP says that it will create 130,000 new jobs over five years. The only way of assessing the cost of that proposal is to consider the regional aid that Scotland has received recently. In 1974–75 it totalled £146 million and in 1976–77 the aid amounted to £215 million. A rough estimate of the cost of the proposal to create new jobs would be £200 million.

The increase in expenditure involved in those proposals is £1,365 million per annum. I can assure the House that that figure relates to only one SNP pamphlet. It does not take into account all the other things that the SNP proposes. The party has reached the stage in Scotland where if anyone suggests something he wants, the Scottish National Party will claim that it can be provided from oil funds. It has become a total farce, and slowly but surely the people of Scotland are seeing through all these bogus arguments.

The Minister referred to the licensing policies of former Governments and particularly to the licences issued by the previous Conservative Government. I suggest that if the terms of the licences issued by that Conservative Government had not been as attractive as they were we would not be enjoying the benefits of North Sea oil today. There is no doubt about that. It was suggested that we issued licences without any thought of petroleum revenue tax. The biggest oilfield in the North Sea is the Forties field, and the licences there were issued by the Labour Government—without any question of petroleum revenue tax. Those who claim credit for the sun must accept responsibility when it rains.

Mrs. Winifred Ewing

rose—

Dr. Mahon

Here comes the snow.

Mrs. Ewing

Does the hon. Member for Ross and Cromarty (Mr. Gray) accept the report of the Public Accounts Committee which criticised the Conservative Government's issuing of licences? Does he accept that when the SNP was making conservative estimates of the amount of oil, the Conservatives ridiculed us as overestimating the amount? As things have turned out, there is, as we thought, far more oil than we estimated.

Mr. Gray

I do not disagree with the hon. Lady. That is a fair comment, but any estimates of oil reserves must, to a great extent, be guesswork. For example, many estimates have been condemned by Professor Peter O'Dell, who has always said that the estimates of the SNP, the oil companies and the Government were much lower than the figures that he considered to be realistic. The BP field has been much more productive than was ever considered likely, but this works both ways, and there are other fields where the yield will not be as great as was hoped.

I must put the record straight on petroleum revenue tax, because the Minister was a little unfair in what he said about the previous Conservative Government. In the Budget Statement on 6th March 1973, the then Chancellor of the Exchequer, Mr. Tony Barber, made clear that it was the Government's intention to bring in legislation to ensure that Continental Shelf operations would be brought within the United Kingdom tax system where the operating company was non-resident, that artificial losses made by oil companies abroad would not be offset against United Kingdom tax liability, and that the take from oil operations would be increased. He made clear that there was no likelihood of oil coming ashore before 1975 and that therefore there was ample time to deal with these matters.

As the hon. Member for Dundee, East said, to a large extent the present Government followed the policy outlined by Mr. Barber. It was they who introduced PRT. Between 1964 and 1970 the Labour Government introduced licences on exactly the same tax basis as those introduced by the Conservative Government. It is as a result of the policies followed and licences introduced by the former Conservative Government that investment was attracted, that exploration was ensured and development was encouraged. The United Kingdom is now reaping the rewards of constantly increasing oil production.

The amount of investment that has taken place in the North Sea is enormous. We want to encourage more, but if we are to ensure that there is continuing investment in the North Sea we must give careful consideration to the incentives that we can provide. One suggestion is that the Government must devise some means of encouraging more development in marginal fields. At present we have massive investment in the good fields, but when that oil is only partially depleted we should be giving priority to the marginal fields, in which there are considerable reserves.

The Minister of State was extremely unfair in some of his remarks about infrastructure. Many of the improvements that have taken place were planned by the former Conservative Government. I am not surprised—I am sure that the SNP is not surprised—that the Government sit back and try to take the credit for everything. They want to divert attention from unemployment, which is the lethal part of the motion. The Government have wasted money. As the hon. Member for Dundee, East said, they wasted £25 million on Hunterston and Portavadie, which were never used and which never will be used. We have yards in this country, both for steel and concrete, that are capable of meeting any demands that are likely to be made of them.

I condemn the Government along with the proposer of the motion the hon. Member for Dundee, East, for their failure to deal with unemployment and to attract adequate industrial development. Equally, I condemn the Scottish National Party for what could almost be called its racist policies on oil.

6.33 p.m.

Mr. William Hamilton (Fife, Central)

It seems that we are all condemning one another. I shall be no exception to that rule, but I shall be different to the extent that I, a Labour Member, shall be critical, to a degree, of the Government's present policies.

It is idle to presume that there is any easy solution to the unemployment problem that has been repeatedly referred to by all those who have spoken in the debate, or to the challenges arising from the facilities provided by North Sea oil and gas.

I felt that the hon. Member for Dundee, East (Mr. Wilson) missed a great opportunity by keeping the debate rather narrower than it need have been. It could have been debate on overall energy provision, either in the United Kingdom or in Scotland. If that course had been taken we would have had a much better debate. Having restricted it to North Sea oil—the hon. Gentleman called it Scottish oil—he proceeded to give us his solution to the problem of Scottish unemployment. He suggested that we should slow down the production of North Sea oil.

That suggestion was complementary to the remarks made by his hon. Friend the Member for Perth and East Perthshire (Mr. Crawford), when members of the Finance Bill Committee discussed further tax concessions for those receiving £7,000 and more per year. The hon. Member for Perth and East Perthshire said that to provide the jobs that are needed in Scotland we shall have to give substantial tax concessions to those earning over £10,000 a year. That would go down very well with working people in Scotland, employed or unemployed! If that is the contribution that the SNP wishes to make to the problem of unemployment in Scotland, it had better think again about its policies.

The Tory Party is making all the capital that it can out of the unemployment problem. The hon. Member for South Ayrshire (Mr. Sillars) makes the predictable charge that it is Socialist policies that are wanted, as if that shibboleth, that slogan, will solve our problems. I am as good a Socialist as the hon. Gentleman. I have been a Socialist for longer than he, because I am older. I make no virtue of that. However, I understand that merely to sloganise is not to solve the problem.

It is no good anybody pretending that capitalism, Socialism or any other "ism" can get us out of the unemployment problem. It is not facile escapism to say that it is an international problem. Nor is it enough to say that it is the international crisis of capitalism. The problem exists in States that claim to be Socialist as well as in capitalist States.

It is a world-wide problem and it is impossible to seek to solve it on a purely nationalist basis. That is why my right hon. Friend the Prime Minister is moving around the world. He will be visiting Europe this month and next month to get together with other international statesmen to ascertain whether we can find solutions to our problems.

The hon. Member for Aberdeen, South (Mr. Sproat) talked about problems within the oil industry and about energy problems generally. At least I can argue with and differ from the hon. Gentleman. He talked about evidence of a slow-down in the development of North Sea oil and attributed that, in part, to the Government's fiscal policies. I recommend the hon. Gentleman to read the debate that took place in another place on 8th February, when the contrary view was expressed by great experts on energy matters. It was said that the development had reached its maximum and would probably flatten out not because it could not proceed at a faster speed but because of increased costs and the relative lack of expertise.

Lord Balogh said that there is no oil-producing country in the world as liberal in its fiscal policies towards the oil companies as is the United Kingdom. He added that in public the oil companies are bound to bellyache and complain about the penal tax system but that privately they recognise that they are on a winner. Not all the armies in the world will drive the oil companies from the North Sea. The Government should tighten up their tax policies and the tax that they are taking on behalf of the British people. The British National Oil Corporation, the royalties and the taxation are not enough to get control of a valuable resource for the use of the British people.

It is not so many years ago that the hon. Member for Ayrshire, South had a great belief in the Labour Party. He did not believe one word that the SNP was saying. I venture to suggest that after the next General Election he will be in that party. His speech today was almost an invitation to himself to join it.

Mr. Sillars

To ease the hon. Gentleman's anxiety I put it on the record that in no way would I be a member of a non-Socialist party. That is one of the reasons that caused me to leave the Labour Party.

Mr. Hamilton

I should very much welcome the hon. Gentleman's leaving the Labour Party now. In fact, I think that he will get the boot very soon. I hope that he does. The proper course, having made that speech, is for him to get into the SNP, despite the document that he produced two or three years ago "Do not butcher Scotland's future". The arguments that he adduced in that pamphlet are as relevant today as when he wrote it.

The hon. Member for Dundee, East should have learned the lessons of the last two or three months. Politically, in Scotland public opinion polls, by-election and regional election results indicate that the SNP has lost all credibility. The reasons are not far to seek. The SNP constantly appeals to the baser motives of the Scottish people—greed, envy, and the rest. I wonder whether the hon. Member believes even a fraction of what he said about the exploitation of the Scottish people. The word used in London is "colonials". That is the kind of emotive language that the Scottish nationalists use.

I suggest that the hon. Gentleman should pay a visit to Glenrothes. He will there see an enormous diversity of industry. Since the war Fife has built up the greatest concentration of electronics industries in the world outside California. That may surprise the hon. Gentleman. That has been done under successive Governments who believed in regional policies. I give no particular credit to the Labour Government, but they played a large part in putting the new towns legislation on the statute book. It is one of the greatest social concepts that the world has seen since the war.

Mr. George Robertson

Will my hon. Friend give way?

Mr. Hamilton

No. The Scottish new towns have been visited by statesmen and politicians from every country in the world because of the diversification of industry in those places due to the policies of successive Governments. Glenrothes has ridden out the economic recession more successfully than have most other parts of the United Kingdom. For the hon. Member for Dundee, East to denigrate what has happened in Scotland since the war under successive Governments is to do a disservice to both major parties in this country, particularly the Labour Party.

My right hon. Friend the Minister of State put this problem in its proper perspective when he talked about its being international. It is no use seeking to pretend that this resource is exclusively for the use of 5 million people who live north of an arbitrary line on a map. The right hon. Member for Orkney and Shetland (Mr. Grimond) made the valid point that if that game were to be played the Orkneys have a greater claim to the oil than anyone in Glasgow or Edinburgh.

We do not regard these resources as any more Scottish than the coal in Yorkshire or whatever resource happens to be around our shores. This approach to the problem makes good economic and Socialist sense, and it makes for good morality. If we have a resource within the sovereignty of the United Kingdom, it makes good sense to say that the wealth accruing from that resource shall be allocated not according to accent, or to where people live, or to what they believe, but according to what they need. That is the basic philosophy of the Labour Party. Indeed, that is what the Government are trying to achieve.

The hon. Member for Dundee, East talked about North Sea oil being a damp squib for Scotland. I do not know where he has been all these years. Even in the last two or three years, the evidence has been all round for us to see. Thousands of jobs have been created.

The Economist, on 18th February, referring to the number of new jobs that had been provided in Scotland as a result of oil, gave a figure of 60,000. The article stated: For comparison, mining employs about 35,000 people". Therefore, the number of new jobs created by the discovery of oil is about double the number of jobs in coal mining in Scotland. In farming there are about 50,000 jobs. Therefore, the number of new oil-related jobs in Scotland is greater than the total number employed in agriculture throughout Scotland.

The article went on: Output per employee in direct oil jobs seems to have been about twice the Scottish average. The total market for offshore supplies is reckoned at around £1 billion a year. Locational advantages, judicious arm-twisting by the Government, and the work of the Offshore Sup- plies Office and others in helping to get orders, have meant that well over half of this sum has been spent within Scotland. These are the advantages which have accrued to Scotland.

The article went on to point out that after this initial development the next phase would be the downstream development, of which we have a good example coming to Fife with the petrochemical complex at Moss Morran, to which the hon. Member for Dundee, East referred. I remind the hon. Gentleman that when that announcement was made the SNP candidate in Fife came out firmly against it. There was to be a prospective investment of £400 million in that part of Fife, and the SNP opposed it. Therefore, it does not lie in the hon. Gentleman's mouth to condemn the Government. The three Labour councils—Dunfermline District Council, Kirkaldy District Council and Fife Regional Council— were putting pressure on the Secretary of State to get on with that development. My right hon. Friend is under considerable difficulties, but he knows how we feel about it. The SNP should not say that we are against the development. If anyone is opposed to it, it is the SNP.

Mr. David Lambie (Central Ayrshire)

Surely my hon. Friend recognises that this is traditional SNP policy. It has opposed petrochemical development at Hunterston. Indeed, at the public inquiry at Hunterston Scottish nationalists gave evidence against petrochemical development. In the last regional election their candidate—luckily, she was heavily defeated—came out openly against petrochemical development at Hunterston. Cunninghame District Council, which is SNP controlled, is still saying that it does not want petrochemical development. We should not be surprised at the policy of the SNP. The Scottish nationalists have a different policy for every constituency to suit local needs.

Mr. Hamilton

My hon. Friend has underlined what I said. Following that condemnation of the petrochemical complex in Fife, the SNP kicked out its candidate. Now it has another. For all I know, its policy has changed as well. Indeed, the SNP issued a statement saying that it has been in favour of Moss Morran all the time. That is the kind of topsy-turvy change, switching and turning upside down, that the people of Scotland have now rumbled. That is the reason for recent election results.

The facility at Moss Morran is important to Scotland. The Provost of Dunfermline went on record on that subject in the Dunfermline Press last weekend. The report states that Although the final decision has still to be made on the proposed petrochemical complex at Moss Morran and Braefoot Bay, there are already indications that the project, if it goes ahead, could bring an industrial boom in its wake. Provost Les Wood said this week that, since the start of the year, over 50 inquiries had been received about the possibility of sites for industry in Dunfermline District. 'Some of these inquiries are from firms in oil related industries, but it is obvious that all of them are aware of the Shell-Esso proposals at the moment before the Secretary of State,' he said. He went on: We are convinced from what we have experienced already in the way of inquiries about sites, that there is virtually certain to be downstream industry, if the gas separation and cracker plant projects go ahead. It seems that the go-ahead for the projects could be the start of a new boom for West Fife. I believe that to be profoundly true. That is the kind of thing that the SNP came out against.

I wish to quote from an article that appeared in The Times of 15th November last year dealing with the then latest literature of the Scottish National Party. It said: The Scottish National Party is claiming in its latest literature —I do not know whether this is up to date, or whether the SNP has produced a revised version since— that Scotland has 'enough coal for 1,000 years' and 'enough oil to provide £1,800 million to a Scottish Treasury for 60 years' so why should we tolerate continuing social deprivation within Scotland? If the SNP believes that Scotland has enough coal for a thousand years it should write to the Coal Board about it. There are proved coal reserves in the United Kingdom to last for 300 years, but nothing like that in Scotland. The oil may last 25 years. If we are serious about discussing energy policy in the United Kingdom, in the long term oil is infinitely less important than coal. If we had had a debate on United Kingdom energy policy rather than on the narrow bellyaching motion before us today, we would have been able to put oil in its proper context. That would have been a much more profitable use of the time by the SNP.

The Times article continued: What of the oil revenues? First, to talk of revenues from the North Sea fields over 60 years' is a foolish and misleading political trick. It went on to talk not about Scottish oil, but about the United Kingdom sector. There is no agreement in existence or remotely in prospect that says how the North Sea could be divided into Scottish and English sectors. No attention has been paid to that. It is a myth to pretend that one can somehow easily decide in a cosy round table discussion with some English authorities how these apportionments can be made. That is unrealistic. The article continued: All the trends are towards a breakdown of national barriers in the search for answers to these vital problems, —the article there is referring to energy in general— rather than a retreat into nationalism. For nationalism in this increasingly energy-hungry part of the twentieth century does not spell freedom, but the opposite. For Scotland to choose 'independence' on the strength of a present surplus of oil without safeguarding the future would be folly. That is why I shall be voting against the motion tonight.

I believe that the Government must put greater pressure on the oil companies to ensure that we get a much greater take of the revenue and wealth that will accrue from the oil resources. But I do not believe that any other Government are capable of doing that. I have sufficient faith in my Government to believe that they will handle these problems correctly, fairly, and justly in the interests not only of the Scottish people but of the people of the United Kingdom.

Mr. Deputy Speaker (Sir Myer Galpern)

Order. As far as I can judge there are still two hon. Members anxious to take part in the debate. The winding-up speeches are due to begin at 7.15 p.m. That leaves roughly 10 minutes apiece for each hon. Member, and I hope that I shall not have to pour oil on troubled waters later.

6.55 p.m.

Mrs. Margaret Bain (Dunbartonshire, East)

I shall bear your remarks in mind, Mr. Deputy Speaker.

It is extremely difficult for us of the SNP to reconcile the type of speech that we have heard from the hon. Member for Fife, Central (Mr. Hamilton) with the euphoric and premature post-mortems written about my party in the past few weeks. The rather predictable vitriol which came from the hon. Member indicated that the Scottish National Party is still a major political force in Scottish politics and will continue to be so and I shall not waste time by trying to pick up his rather spurious arguments.

I would rather turn to the theme which was put forward by my hon. Friend the Member for Dundee, East (Mr. Wilson) and the hon. Member for South Ayrshire (Mr. Siliars), who spoke of the need to break the spiral of decline and despair which exists in Scottish life. In endorsing some of the views of the hon. Member for South Ayrshire, I point out that of course there are ideological differences between his party and mine. There is a difference of emphasis on the means of reaching our particular end. But at least the hon. Member made an intellectually honest speech. He can see his way to supporting a measure which would help the young people of Scotland in particular and the whole economy in general.

I point to the European Scottish report of 1975 and to the conclusions of the steering committee. I ask Labour Members to bear this in mind when they go through the Lobbies this evening. For those involved with the survey the most significant and depressing outcome was the realisation that too much of the burden of the last 150 years of Scotland's history rests on the shoulders of young Scots today. It is not strange that they find it difficult to tolerate that, but it is disturbing that they react with a sense of hopelessness and despair.

The young Scots of today are tomorrow's future, and they need investment to change that future from one of despondency to one of hope. Against that background, I was horrified at the Minister of State's complacent and platitudinous attitude to my hon. Friend's remarks. There is a television programme called "Mastermind'. Today, every time a pertinent question was put to the Minister of State he gave a voluble "pass" and refused to answer the very important points about unemployment in Scotland, which is a major problem for my country. It ill becomes the right hon. Gentleman, as a Member representing a constituency in the West of Scotland, where unemployment stands at 10.2 per cent., to show that kind of complacent attitude.

In addition, under this Government, in the past year emigration has risen from 4,500 to 9,500. It is the young people who are leaving our country. It is not enough for the Labour Government to say that this is due to some kind of world plot which is causing the recession.

Like the hon. Member for South Ayrshire, I see no question of selfishness or greed in trying to establish an oil-financed development fund for Scotland. Just as the Labour Government set their face against giving the proposed Scottish Assembly tax-raising powers, so they have no political will to establish the oil fund in Scotland, even though the Scottish TUC, with which the Government claim to have a special relationship, was one of the main organisations in Scottish society to ask for such a fund.

The Minister said that the Government rejected the concept of the fund because it would satisfy no one. In Dunbartonshire today we have heard of the proposed redundancies of 2,000 people in Clydebank. The oil development fund might well have met the needs of those 2,000 people, many of whom are my constituents, and for whom there is no alternative employment.

It is no compensation to those people for the Government to talk about regional assistance. Let me refer the House to the October 1974 Labour manifesto. We have doubled the regional employment premium thus bringing another £40 million to Scotland every year. What do we have now? We have the abolition of REP at an estimated cost of 20,000 jobs in Scotland. There is no long-term policy being operated by the present Government to guarantee a manufacturing base being continued in Scotland.

In areas such as Clydebank and throughout the whole of the West of Scotland, where we have industries such as Singers and shipbuilding, there is no long-term strategy to guarantee a future for them, thereby maintaining our manufacturing base, which is essential if the Scottish economy is to pick up and guarantee the kind of security for which our people are looking.

Again, reference was made to the 65,000 oil jobs which have come to Scotland. No indication was given of how many of these are just temporary, building up an infrastructure, and how many of them will go in the next few months. Indeed, this is an element of hidden unemployment in Scotland. But the Minister thought that it was great that the Offshore Supplies Office was doing so much for Scotland.

I should like to point out an example from my constituency, where a company involved in the oil industry in Scotland was having extreme difficulty with a nationalised industry under British government. This American company, in Cumbernauld New Town, is the producer of pipeline valve actuators for the world's pipelines and offshore platforms. It is a considerable provider of employment in my constituency. It is probably the second largest manufacturer already, in its product line, in Europe.

The company was informed in April of this year through the contractors in London that it was not being considered for orders for the British Petroleum Sullom Voe project. A bid had been accepted from the company, and although it was commercially acceptable and technically acceptable to the contractors, BP did not have the manpower to visit our factory in Cumbernauld and inspect it. Orders were then to be placed with an American company in Houston, which has supplied BP in the past.

The company in my constituency could meet delivery requirements, and the bid had been with the contractors for over one year. Eventually, that problem was sorted out, but one full year was wasted, with all the implications of insecurity for at least 80 employees in my constituency. A nationalised industry such as BP, along with the OSO, could do nothing really to help in that kind of situation.

The hon. Member for Hamilton (Mr. Robertson) and, indeed, the hon. Member for Ross and Cromarty (Mr. Gray) who has now departed from the Chamber—spoke of promises made by the SNP to the electorate of Scotland. We have been an intellectually honest party, putting to the Scottish people the kind of alternatives that are open to them. Because of our intellectual honesty, we have moved, in 10 years, to gaining one-third of the support of the Scottish people. I put it to hon. Members, such as the hon. Member for Hamilton, that that support will continue to grow. I ask him and his colleagues on the Labour Benches to look at their own promises to the Scottish electorate. I ask them to reconcile their vote tonight with the position in which many people in Scotland find themselves.

The October 1974 Labour manifesto for Scotland stated that The first and overriding priority facing Scotland will be to create more and better jobs. Unemployment rose to nearly 200,000 and, indeed, there is hidden unemployment.

It also said: 7,000 Civil Service jobs are being moved from London to Scotland. We are still waiting. Then: The whole of Scotland has development area status. Of course, this has been withdrawn from certain areas of Scotland. We all know that only too well.

Then: We have ended the delay and dithering Hunterston and laid down a policy involving a start for BSC and sites for oil platform construction. The action has been that the plans for the expansion of the site have been shelved and no orders ever came for platform construction.

Then: Labour's housing philosophy is simple and direct. Everybody is entitled to a decent home at a price they can afford, whether that home is rented or bought. One hundred and sixty thousand houses in Scotland are below minimum tolerable standards, with no inside toilet. A quarter of a million houses in Scotland lack exclusive use of the three basic amenities.

So this whole sorry record goes on. Yet Labour Members can see their way to going through the Lobby tonight to oppose the concept of setting up an oil-financed development fund which could help to eradicate many of these problems in Scotland.

The complacency shown on the Labour Benches today is equalled only by the hypocrisy that has come from the Conservative Benches. I was interested to read in the Evening Times the other evening that the hon. Member for Glasgow, Cathcart (Mr. Taylor) would today ask a Question of the Secretary of State for Industry about the future of the Scottish shipbuilding industry. I was particularly intrigued by this, knowing that the Conservative Party, including the hon. Member, had voted against the Intervention Fund and against the Polish contract coming to the Upper Clyde—a contract which has guaranteed jobs for many people in the West of Scotland.

Perhaps, of course, it is not so much that they are complacent today but that their friends and colleagues are all at Ascot and are not interested in the future of the people of Scotland.

Anyone who goes through the Lobbies tonight against this motion, especially any Scottish Member of Parliament, is rejecting the cries for help that are coming from the people of Scotland, who are asking for a change of attitude and for a genuine commitment that will set them free from the kind of problems that they have suffered over the last century. We shall build a new kind of future in Scotland using the resources of Scotland in futuristic and forward-looking industries, giving jobs to people and eradicating social problems.

7.5 p.m.

Mr. Alick Buchanan-Smith (North Angus and Mearns)

About the only thing that the Scottish National Party has been able to achieve in this debate, in both the motion and the speeches that have been made, is to show that SNP Members are expert in one thing only—bleating about the ills of Scotland. If only they would realise that in that respect they themselves, perhaps, do one of the greatest disservices to Scotland. Every time they speak, and in motions such as that before us, all that they are doing is selling Scotland short. That is something that we do not want to see.

We want to see Scotland prosper and progress in the world, and not be con- tinually cried down by the kind of speeches that we have heard from the SNP Bench this afternoon.

The one thing that is fortunate is that at least recent elections in Scotland have shown that fewer and fewer people are being deceived by what the SNP says. In itself, that is no wonder, because the greatest disservice that could be done to Scotland is that for which the SNP stands—to separate the Scottish economy from the economy of the rest of the United Kingdom. If there is one thing that would be certain to lead to unemployment in Scotland, that is the most certain thing of all. In regard to jobs, that is the one thing that none of us wants to see.

One of the unfortunate things that come out of a debate such as this is that we have got into the situation of trying to apportion blame in terms of the way in which policy has gone wrong on the exploitation of oil.

I share the view of my hon. Friend the Member for Aberdeen, South (Mr. Sproat). I say that coming from an area in which oil development is taking place. There is no doubt that over the past year or so much of the momentum has gone out of the oil industry. I do not agree wholly with what my hon. Friend said, that it is necessarily related to fiscal policy, because I believe that it is necessary that the country gets financial benefit out of the oil industry and takes its share in the profits that are in that industry. But where I believe the Government have gone wrong—this is where I disagree with the hon. Members for Fife, Central (Mr. Hamilton) and South Ayrshire (Mr. Sillars)—is in the form of Socialist policy that has been followed by the Government. There is no doubt that in relation to the kind of interference in the oil industry, particularly in the structure of the industry, and the establishment of the BNOC, the Government, by their policies, have put instability and uncertainty into the industry. It is that instability and uncertainty which have caused a slowing down in the industry.

I remind the Minister that there is nothing that needed to be done to safeguard the national interest that required the establishment of an organisation such as the BNOC. There is nothing that needed to be done in the national interest that could not be done either by fiscal means or by licensing controls, physical controls, in relation to exploitation. By using up all this additional manpower, by instilling this degree of uncertainty and instability into the industry, the Government, must bear their share of blame for the uncertainty in the industry in recent years.

On an evening such as this, when debating oil. I cannot but reflect on the interference by the Government also in the oil platform building yards. At the time, we debated the subject in the House. But one thing that is significant is the amount of public money which had to be invested in that subject and which has shown no return whatsoever. If that had been left to private industry to do, it would have been private shareholders rather than the taxpayers who would have had to bear the loss arising from the very big mistake that the Government have made.

The Government must acknowledge that in modern times the oil industry is the best example of private enterprise and risk-taking. If this had been much more a partnership between the Government and private enterprise and there had been no unnecessary interference by the Government, the national interest would have gained much more. The correct partnership is for the companies to bear the risks and for the Government to take a supporting role in providing the infrastructure. By means of fiscal policy and licensing controls, they could then ensure a return for the nation. The Government have got the emphasis wrong.

I was interested in the speech of the right hon. Member for Orkney and Shetland (Mr. Grimond). The Government should take a supporting role—they have to some extent—in oil development. The industry has brought great benefits, but also great costs to the areas where development has taken place. Many of those affected, particularly where the environment has been destroyed, have gained no direct benefit. Existing industries have suffered the burdens of competition. The roads have been congested. One has only to travel the A92 or the A94 from Perth to Aberdeen to realise the burden that the industry has imposed on the normal road user.

When there has been so much benefit to the economy and to Scotland as a whole, has sufficient been done to invest in the areas concerned? I have three specific examples.

First, there has been controversy over which road—the A92 or the A94—should be trunked to join central Scotland to the Aberdeen area. I do not want to open this question again, but the Government have not given sufficient priority to proper communications between the oil areas and the rest of Scotland. They are detrunking one road in a year's time against the advice of the reporter of the public inquiry who suggested that it should be delayed for another three years, when £10 million of identifiable necessary improvements is outstanding on that road. In this detrunking, the Government are giving a vague assurance in relation to the Montrose relief road, which I welcome. They say that when the work is carried out, they may—I emphasise "may"—be able to support it from oil-related funds. The Government are not putting back enough into the economy of the affected areas and therefore are not supporting the industry properly.

My second point relates to the proper provision of facilities in the North-East and in Shetland. There has been a tremendous increase in population and housing in those areas but there has been no equal increase in community facilities like schools and community centres. There has been a huge housing development in the village of Porthlethen, on the outskirts of Aberdeen, in my constituency, but at this stage it has only one primary school with temporary classrooms and it is grossly overcrowded, with no facilities for community activities.

Thirdly, I am concerned about what is being done for industries other than oil. The Minster of State visited my constituency a year ago and promised—a promise for which I am grateful—an advance factory and an industrial estate for the town of Brechin. A year later, nothing has happened and the farmer has sown another crop in the field that was to be the site of the estate. People are concerned about the Government's intentions to help these areas. The demotion of the Aberdeen travel-to-work area from full development area status is a further example of insufficient attention being given to the need to support the industries on which the economy of these areas will depend after oil ceases to flow.

The Government must do more. More money should be ploughed back into the areas which are making this great contribution to the strength of Scotland and to the British economy.

7.16 p.m.

Mr. Douglas Henderson (Aberdeenshire, East)

One thing which always emerges from a debate initiated by the Scottish National Party is the unanimity that crosses the frontier between the Conservative and Labour Parties. As I listened to the hon. Member for Aberdeen, South (Mr. Sproat) congratulating the hon. Member for Hamilton (Mr. Robertson), who seems again mysteriously to have disappeared, I wondered whether he would have welcomed with such enthusiasm a similar result in his own constituency.

Again and again, we hear from both main parties a unanimity of opinion, of approach and of complacency, which emerges only when the SNP initiates a debate. This debate shows the division between those of us who believe that Scotland's resources are the property and the right of the people of Scotland and those in the other parties who believe that they should be controlled from London.

That is what this debate is about: whether Scotland's resources and problems should be handled in Scotland or London. In the speeches of hon. Members from other parties—perhaps with the honourable exception of the hon. Member for South Ayrshire (Mr. Sillars)—one heard an incredible complacency. The theme seemed to be: "Everything is working perfectly with control in London. Why do these nasty SNP people want to change it?"

I am reminded of that satirical poem of Hugh MacDiarmid, in which he says: Tell me the auld, auld story O' hoo the Union brocht Puir Scotland into being As a country worth a thocht. England, frae whom a' blessings flow, Whit would we dae withoot ye? Then dinnae threap it doon oor thnoats As gin we e'e could doot yeo! I am sure that that will be appreciated. I hope that all our colleagues from other Scottish constituencies understood it. The test would be to ask them to give us the second verse. Perhaps the Minister of State would oblige.

There is a polarisation in Scottish society between those who believe fundamentally that the resources and the problems of Scotland can be tackled only by Scottish people responsible to the Scottish electorate and with a wider sense of the world than we get in the United Kingdom, and those on the other side—I accept that it is a legitimate and fair view—who believe that Scotland's resources are better managed from London, that Scotland's problems are better solved in London, and that Scotland's future can be decided only in London.

After the constructive and incisive speech of my hon. Friend the Member for Dundee, East (Mr. Wilson), we had the Government's script read by the Minister of State, the right hon. Member for Rutherglen (Mr. MacKenzie). He should get a new script writer. I could not believe that any Member of Parliament—and especially a Scottish Member—could sound so boring, so complacent and so platitudinous as the right hon. Gentleman contrived to be. I acquit him, of course, of such characteristics. The guilty men are in the Official Box, and I hope that when the Minister next has to make a speech we shall have a change of faces. No doubt it is too much to expect a change of attitudes.

The Minister spoke of the people of Scotland getting a fair share of the revenues, and he talked about infrastructure. The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), among others, drew attention to the problems of infrastructure. Over the past few years the Government have given special assistance in this direction, but it is significant that in the past two years the grant for special oil-related expenditure has been cut for the Grampian Region, for the Banff and Buchan district, for the Gordon district and also, I believe, for the Kincardine and Deeside district. So the ratepayers in these areas, which are bearing the brunt of the developments, are receiving less and less grant from the central Government to help them.

At bottom, as was rightly stressed by several hon. Members, speaking from different points of view, this is a problem of Scotland's industrial structure and its unemployment. Those of us who have seen unemployment in our own constituencies or, perhaps, in our own families at times—that can happen to hon. Members in any part of the House—realise how destructive it is of the morale of individuals and, what is worse, of the morale of entire areas.

I can always remember the time when I brought visitors from a business college in London—this was before I came to the House—and took them round parts of Glasgow to look at the possibilities for development. What struck them more than anything else was the expressions on the faces of people standing at the street corners. I am sorry if the hon. Member for Aberdeen. South thinks that this is a laughing matter.

Mr. Sproat

I am laughing at you, Douglas. That is all.

Mr. Henderson

It is extremely serious, and does not call for frivolity of that kind.

The morale of many people in Scotland has been destroyed over a long time. Sometimes entire families have had the experience of seeing people without employment for two and even three generations. I am sorry to say that the situation has got worse.

Mr. Alexander Fletcher (Edinburgh, North)

Absolute rubbish.

Mr. Henderson

The cry of "Rubbish" goes out from the Tory Party Front Bench. After all, there is probably not much unemployment in their areas. But anyone who knows central Scotland knows that that state of affairs is all too prevalent. It is a blot and a shame on all of us who represent Scottish constituencies and on all of us who purport to speak for Scotland.

How is it that the resources of Scotland can be so mismanaged? How can we be so disorganised as a nation that we have not been able to tackle these problems fundamentally and in a lasting way over such a long time? The glib cry goes out—we heard it from the hon. Member for Fife, Central (Mr. Hamilton)—about international crises and the rest. Incidentally, I remember the assurance that the hon. Member for Fife, Central gave the House some time ago, that he intends, when Scotland becomes independent, to leave the country at once. In my view, that is a great incentive to all of us on the SNP Bench to make sure that that independence comes quickly.

Here we have an opportunity. I remember an American visitor saying to me in 1970 "If I were ever asked what it was that could make a difference to any modern industrial country, I would say that it was the discovery of oil." Yet hon. Members have been telling us that we should almost be better off without it, that they are doing the Scots a favour by taking the revenues away down to London. "Look at all the headaches we save you by doing that", they say.

Mr. Sproat

Silly man.

Mr. Henderson

I can understand the rage and fury of the Conservative Front Bench—

Mr. George Robertson

rose—

Mr. Henderson

No, I shall not give way. I have only a few minutes. I can understand the rage and fury of the Conservative Front Bench in the light of their record.

Mr. Fletcher

The SNP Leader should fire him.

Mr. Henderson

I think that the hon. Member for Edinburgh, North (Mr. Fletcher) has been using that phrase constantly during the past 10 minutes, and I am afraid that that is about all he has in his head. He has nothing else to contribute to the deabte on oil or on any other subject.

The attitude has been that Scotland can be saved from all its problems by London's taking control of Scotland's oil resources, so that the wise and benevolent men down here will spend it for Scotland, and spend it wisely, because, of course, the Scots would be thriftless and make a hash of it. That is the underlying argument running through the debate today.

Are the Scottish people as capable of coping with their problems as are any other people in the world?

Mr. Gray

It is quite plain that the hon. Gentleman is not.

Mr. Henderson

As I look at the Tory Front Bench, I can understand that there would be doubts about the answer to that question. We have no doubt what could be done for the Scottish people. This place has had years and years in which to tackle the fundamental problems in Scottish society, and it has totally failed. Not over the four years of this Government, not over the past 10 or 15 years but for generations, this place has failed the people of Scotland.

Because this place has failed the people of Scotland, they are looking to new remedies and new ways of deciding matters for themselves. Basically, that is what the argument is about—whether the Scottish people should control things for themselves and should make their own decisions, or whether it is better to leave London to do it for them. That is the great divide between us. [Interruption.] I have no doubt that the hon. Member for Edinburgh, North has been out for a good dinner or something and has enjoyed another three minutes to hear the Minister.

We have witnessed the attitude of the two Unionist parties. It should not be forgotten that the Labour Party is as much entitled to be called the Unionist party as are the Conservatives in this context. They join hands and decide that the Scottish people are not to have the right to determine their own affairs.

In Scotland, we have a record of social deprivation, of unemployment, of rotten housing, and many other things which need to put right in our society. When the oil was discovered, people in all parties in Scotland must have said that here was something which gave us the possibility of a fresh start. But the conclusions reached are different. The Labour Party has reached its conclusion. It regards the possibility of any such fresh start for the Scottish people as immoral, contrary to the findings of the Church of Scotland. I do not know what the Moderator will say to the Minister of State—the right hon. Member for Rutherglen. Labour regards it as immoral that the Scottish people should have this resource. The Conservatives want to hand everything to the international oil companies. That is their policy. They would he happy with that.

We, on the other hand, have said that the right approach is for the Scottish people to have control of these revenues through an oil fund which would be used to deal with unemployment, with social dereliction, and with the other problems in Scottish society—dealing with them within Scotland, in a Scottish context, through a Scottish Government elected by the Scottish people.

When the vote comes tonight, hon. Members will be voting for or against Scotland, for or against Scotland's rights, for or against Scotland's oil, and for or against Scotland's future.

7.30 p.m.

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

May I first respond to the hon. Member for Aberdeen, South (Mr. Sproat) and his hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) who raised the question of progress in the North Sea? I know that the hon. Member for Glasgow, Cathcart (Mr. Taylor) is anxious that I should tell him about platform orders and say how encouraging the present position is. The hon. Member must recall that we had the third platform at Ninian, Ninian North, in the period that he mentioned. Since then we have had this regrettable hiatus which has been a problem for the yards. We have now begun to recover and I was able to announce, after the Oil Liaison Committee met last week, that there was confidence that there would be further orders in the next 18 months.

I can be specific about the development plans of the companies and their intentions.

The fields we expect to see developed in the next two years or so are Fulmar, Cormorant North, Buchan Magnus, N.W. Hutton and Maureen. Hon. Members have spoken about the platforms and the fields that are still being developed. If we were to take the point of the hon. Member for Dundee, East (Mr. Wilson) and keep things as they are, what assurance is there that we would not end up producing more? If we go into the 1980s at the present rate we shall be producing a surplus of oil considerably in excess of what we need for self-sufficiency in the United Kingdom, namely 100 million tonnes.

We shall have to look at the question of depletion. We have to talk to the companies about this. It is certainly something that we take seriously. We cannot take the view—I do not want to caricature hon. Gentlemen—that we should let things rip and develop the fields as fast as we can, getting out perhaps 200 million tonnes of oil. We would then be in a sad state in the 1990s and next century. We must husband our resources.

It is difficult to run a depletion policy. I do not accept the criticisms that the programme has slowed down because of BNOC. Even the Conservatives would have had to invent BNOC or use BP to find out lots of things which the companies would not have found out for us. I am talking in terms of depletion. We would like BNOC to find areas of oil for us which we would then keep as reserves. I believe that to be a good policy. Why should we ask a commercial company to do that? It would want a licence to develop the fields. There are good arguments for BNOC, quite apart from the Socialist arguments, which are also good arguments—

Mr. Sproat

Good arguments and Socialist arguments. There is a difference!

Dr. Mabon

No.

I accept the point about the smaller fields. We do not want to neglect the marginal fields. They are part of our resources. No one has come forward and made a case for the various tax concessions and reservations that we have. These are in the fundamental Act of 1975. We are perfectly willing to look afresh at this issue. I take the point about the current fiscal regime and the point made by the hon. Member for Dundee, East about whether the taxation policy is the wisest that we could adopt.

I readily admit that all of this is worthy of review.

I do not chastise the hon. Member for Ross and Cromarty (Mr. Gray) too much for his remarks. I am sorry that he made them because in our estimation it is wrong to write off Portavadie and Hunterston.

Mr. Gray

Why?

Dr. Mabon

I am not prepared to argue now whether it was a mistake to create Portavadie and Hunterston. The fact is that there was little resistance to our creating them. I have some news which I believe hon. Members will find pleasantly surprising. There are at least four companies expressing interest in these developments. One of these com- panies—Howard Doris—has announced its interest in conjunction with a Dutch firm.

The companies are interested in the four existing concrete sites in Scotland and in going forward with various sophisticated developments which involve concrete. The Government would be foolish to say to these companies "We are not bothered. We are tired of carrying on along this road. We shall shut down the yards." It is conceivable that the orders we would get would come to these yards and not to others. I need not go into the technical reasons. Those in the oil business know what I mean.

Mr. Gray

Will the right hon. Gentleman confirm that it is not the Govern-merit's intention to direct anyone to those two yards to the detriment of other yards which are surviving very well by their own efforts?

Dr. Mahon

I can truthfully say that that is not the case. There is one firm that is most anxious about Portavadie. The hon. Gentleman knows about that. That firm is in negotiation with us now. The other two firms have their own designs and ambitions. They are not necessarily in conflict with one another except inasmuch as the oil company concerned may choose one system rather than another, which would mean that the order would go to one yard rather than another. We shall not interfere. We are not a Government who decide technical matters. It is for those who are experts to decide and choose. We have our technical advisers but we do not dictate where the orders should go.

I mention this to show that we are making progress despite the fact that the oil companies—working on the frontiers of a new technology—have had their setbacks. I do not accept that this has anything to do with the bureaucracy of a Socialist Government, just as I would not say that it was because of free enterprise. Such suggestions are nonsense. The oil companies, BP, Shell and the rest, and BNOC, have done exceptionally well.

We have to take seriously the SNP view on depletion. The SNP has not thought through its policy, just as it had not thought matters through when it voted with the Conservatives to bring down the Government. It was doing that in defiance of its own National Council which had resolved that it wanted to have the devolution Bill on the statute book. Perhaps it was not so much defiance as confusion. What a confused bunch they are.

Let me take the most confused of the lot, the hon. Member for Dundee, East. In 1974 the SNP—the hon. Gentleman was one of its advisers—told us that depletion control must begin at a production rate of between 40 million to 50 million tonnes a year. The hon. Gentleman changed his mind, and I do not blame him for that. Later he said that it was envisaged that the figure would be 50 million to 80 million tonnes a year. That was still in 1974.

In 1976 the hon. Gentleman declared, on behalf of the SNP, that the production rate at which depletion control would start was in the range between 30 million to 40 million tonnes a year. The hon. Gentleman's figures are going up and down. In January 1977 he said: Once the development expenditure has been incurred the economic costs involved in restraining production levels by more than 10 per cent. to 15 per cent. are high and should not normally be complated by the Government of Scotland. The hon. Gentleman's figure was 50 million tonnes. We are bouncing around.

There is one more statement which gives the latest news from the front. The latest news is that the level we are to accept, as enunciated by the egghead in charge of the Scottish National Party's policy—the "honourable egghead"—is 60 million to 90 million tonnes a year. I want to take that as the latest information and to ask what it means in terms of these platforms that I have mentioned. It would mean that we did not build any of them. It would mean that we had probably made a mistake in authorising Ninian North, Murchison and Tartan. Shades of Kirkcaldy and Methil!

The fact is that we are at 38 million tonnes. Despite the criticism of progress, we shall get to 50 million or 60 million tonnes—and here we get to the bottom of the hon. Gentleman's depletion range. Therefore, if the SNP is wise, if we accept its opinion and the people of Scotland accept it, it will be 15 years, on present calculations, before the next platform is ordered and built. We all know that that is applicable only to Scotland because Laing's, the only steel yard in England, has now shut down. There are no concrete yards in England. This is a specifically Scottish industry which, by decision of the SNP, would not have an order for 15 years. Lewis Offshore would not get another order of any kind for 15 years. Not another module builder in Scotland would get an order for 15 years.

Yet, as my hon. Friend the Member for Fife, Central (Mr. Hamilton) said, this is one of the largest, indeed, the largest, of our industries. It is bigger than agriculture and mining. The SNP may sneer at 55,000 or 60,000 jobs, but according to its plans this industry, one of our largest, most profitable, and finest, would have to shut down for 15 years.

Mr. Gordon Wilson

I am grateful to the Minister for having given up that exaggerated repetition. The right hon. Gentleman will admit, if he is an honest man, that he has quoted me out of context. The situation about development and depletion policy is as follows. Starting from scratch, 50 million tonnes would be a reasonable figure to have in mind. But, of course, as the right hon. Gentleman is aware, as one produces oil, one has to deal with the situation where one has the developments under way, and in the statement, only part of which he quoted, he will be able to find that we shall have taken that into account. Secondly, I repudiate as a complete exaggeration the figure of 15 years. It is quite untrue. As he knows, with the high Scottish content of orders that we propose, there would be more jobs rather than fewer.

Dr. Mabon

Even if the hon. Gentleman could prove my calculations wrong—and I have taken good advice—and the figure was not 15 years but five, our offshore industry would be wiped out. Furthermore, when we come to the arguments about protectionism, does he realise that Ardersier is building a platform for Brazil? Does he realise that the opposite of protectionism is retaliation?

I will explain what we are trying to do. After the oil is gone, whenever that is going to be—it might be in this century or the beginning of the next—we in Scotlant want to be among the best of the builders of offshore oil installations for the rest of the world. The irresponsibility of the SNP and its motion today is just the kind of thing that would do incredible damage to Scotland. I call on my right

Question accordingly negatived.

hon. and hon. Friends, and on all men of good will, to defeat the motion.

Question put:—

The House divided: Ayes 14, Noes 131.

Division No. 237]	AYES	[7.43 p.m.
Crawford, Douglas	Robertson, John (Paisley)	Wigley, Dafydd
Evans, Gwynlor (Carmarthen)	Sillars, James	Wilson, Gordon (Dundee E)
Ewing, Mrs Winifred (Moray)	Stewart, Rt Hon Donald
Henderson, Douglas	Thomas, Dafydd (Merioneth)	TELLERS FOR THE AYES:
MacCormick, Iain	Thompson, George	Mr. Andrew Welsh and
Reid, George	Watt, Hamish	Mrs. Margaret Bain.
NOES
Abse, Leo	Grocott, Bruce	Padley, Walter
Anderson, Donald	Hamilton, W. W. (Central Fife)	Palmer, Arthur
Archer, Rt Hon Peter	Harrison, Rt Hon Walter	Pardoe, John
Armstrong, Ernest	Hooley, Frank	Parker, John
Ashley, Jack	Horam, John	Pendry, Tom
Atkinson, Norman (H'gey, Tott'ham)	Huckfield, Les	Penhaligon, David
Bates, Alf	Hughes, Rt Hon C. (Anglesey)	Price, C. (Lewisham W)
Bonn, Rt Hon Anthony Wedgwood	Hughes, Roy (Newport)	Radice, Giles
Bidwell, Sydney	Hunter, Adam	Rees, Rt Hon Merlyn (Leeds S)
Bishop, Rt Hon Edward	Janner, Greville	Richardson, Miss Jo
Booth, Rt Hon Albert	Jay, Rt Hon Douglas	Robertson, George (Hamilton)
Bottomley, Rt Hon Arthur	Jeger, Mrs Lena	Robinson, Geoffrey
Bradley, Tom	Jones, Alec (Rhondda)	Roderick, Caerwyn
Bray, Dr Jeremy	Judd, Frank	Rowlands, Ted
Buchanan, Richard	Kaufman, Rt Hon Gerald	Sandelson, Neville
Campbell, Ian	Kinnock, Neil	Sever, John
Canavan, Dennis	Lambie, David	Shaw, Arnold (llford South)
Carmichael, Neil	Lamborn, Harry	Silkin, Rt Hon S. C. (Dulwich)
Carter-Jones, Lewis	Lamond, James	Smith, Rt. Hon. John (N Lanarkshire)
Cartwright, John	Latham, Arthur (Paddington)	Snape, Peter
Cocks, Rt Hon Michael (Bristol S)	Lee, John	Spearing Nigel
Coleman, Donald	Litterick, Tom	Spriggs, Leslie
Cox, Thomas (Tooting)	Loyden, Eddie	Stallard, A. W.
Cronin, John	Luard, Evan	Stewart, Rt Hon Donald
Crowther, Stan (Rotherham)	Mabon, Rt Hon Dr J. Dickson	Stoddart, David
Cryer, Bob	McDonald, Dr Oonagh	Strang, Gavin
Cunningham, Dr J. (Whiteh)	McElhone, Frank	Summerskill, Hon Dr Shirley
Davidson, Arthur	MacFarquhar, Roderick	Taylor, Mrs Ann (Bolton W)
Davies, Ifor (Gower)	MacKenzie, Rt Hon Gregor	Thomas, Jeffrey (Abertillery)
Davis, Clinton (Hackney C)	Maclennan, Robert	Thomas, Ron (Bristol NW)
Deakins, Eric	Madden, Max	Tomlinson, John
Dean, Joseph (Leeds West)	Mason, Rt Hon Roy	Walker, Harold (Doncaster)
Doig, Peter	Meacher, Michael	Walker, Terry (Kingswood)
Dormand, J. D.	Mellish, Rt Hon Robert	Ward, Michael
Dunnett, Jack	Milian, Rt Hon Bruce	Watkins, David
English, Michael	Miller, Dr M. S. (E Kilbride)	White, James (Pollok)
Evans, loan (Aberdare)	Molloy, William	Williams, Alan Lee (Hornch'ch)
Evans, John (Newton)	Morris, Rt Hon J. (Aberavon)	Williams, Sir Thomas (Warrington)
Fernyhough, Rt Hon E.	Moyle, Rt. Hon. Roland	Wilson, William (Coventry SE)
Foot, Rt Hon Michael	Newens, Stanley	Wise, Mrs Audrey
Fowler, Gerald (The Wrekin)	Ogden, Eric	Wrigglesworth, Alan
George, Bruce	O'Halloran, Michael
Gilbert, Rt Hon Dr John	Orme, Rt Hon Stanley	TELLERS FOR THE NOES:
Gould, Bryan	Ovenden, John	Mr. James Hamilton and
Graham, Ted	Owen, Rt Hon Dr David	Mr. James Tinn.