OIL SUPPLIES

HC Deb 11 June 1979 vol 968 cc37-55

The Secretary of State for Energy (Mr. David Howell)

With permission, Mr. Speaker, I wish to make a statement about the oil supply situation.

Following disruption of oil supplies from Iran from the early part of the year, a tight world oil situation has developed, with total supplies on present estimates likely to be well short of expected demand world-wide. The position in Iran could easily worsen again and the prospect from the other suppliers is at best fragile.

Against this background the United Kingdom position is as follows. Supplies are currently coming into the United Kingdom market at about the same rate as this time last year, but demand is well up, we have had a cold winter, and it is obviously vital now to rebuild stocks for the autumn. This means that actual supplies to United Kingdom consumers are on average about 5 per cent. below the increased levels on which people were counting. However, this does not give the full picture, since the supply position stemming from Iran has affected different oil companies supplying the British market in very different ways. This has led to serious shortages for some particular customers and some particular regions, especially as the first effects work through.

The oil companies have been rationing their allocations to their customers and the Government have specifically requested the United Kingdom Petroleum Industry Association to achieve a more even and effective distribution overall and to meet particular difficulties as a matter of urgency where customers are threatened with real hardship.

At the same time, the Government have taken steps to achieve an overall cut in demand of 5 per cent. in line with our EEC and international obligations. It is both in our interest and in the world's interest to ease oil pressures by working with our trading partners to prevent a panic scramble for oil.

I have made it clear that in the public sector measures must be taken to cut down by the 5 per cent. overall, consistent with the maintenance of essential services. In industry, on the roads and, we hope, in the home, we must strive to achieve a cutback of at least 5 per cent. by all, so that the limited allocations will bite more evenly than if some consumers simply carry on as normal and leave others seriously short. In all this the oil companies—both major and independent—plainly bear a heavy responsibility.

Looking immediately ahead, I am not satisfied with the arrangements that I have found for supplies of oil into the United Kingdom market, particularly when we are a major oil producer. We certainly have to trade North Sea oil internationally and with commercial skill to live and to invest. But we must get the balance right. I am also considering taking royalties in kind which may help United Kingdom refineries and suppliers meet their customers' demands. But, even with these measures on the supply side, energy conservation must now be given a permanent and central place in our policy, and I shall be proposing more measures on this front.

As for rationing, or Government-organised priorities for whole categories—with, of course, tighter cuts for those not in the preferred categories—I believe that at present levels of shortfall this would lead at once to far more rigidity and unfairness, quite apart from the cost to the taxpayer and the economy of the necessary paraphernalia. Nor would it produce a drop more oil. If the world situation deteriorates sharply again, we may be forced to pay that price, but in the present conditions the sensible way forward is through steps to improve supplies in the United Kingdom market, combined with economical use of oil by everyone and strong conservation measures. I shall, of course, seek to keep the House fully informed of the situation in the coming weeks.

Dr. J. Dickson Mabon

May I thank the Prime Minister for responding, at least on the second occasion, to the request we made to have this positive statement, of a kind, made by the Secretary of State this afternoon? Regrettably, we find the statement extremely disquieting. We feel that the Government's standing back from the situation will embarrass many essential services quite considerably.

The most important part of the statement, perhaps, is the part where the Secretary of State rejects any Government-organised priorities. Is he aware that hospitals and ambulance services, and other essential services, are today either short in supply or being held to ransom? These matters have been recorded in the press.

Is the Secretary of State aware that we reject the idea, enunciated by the Minister of State this afternoon, that the railways should be subject to a cut in oil? That is a complete nonsense. To withdraw railway services would make the congestion on the roads greater and increase the demand for petrol.

Is the Secretary of State also aware that many farmers are desperately anxious now for diesel oil, because the seasons cannot stand still and it is important to get on with essential services?

I appeal to the Secretary of State to withdraw the part of his statement to which I have referred, and to look seriously at trying to help indentifiable parts of our economy.

Mr. Howell

The right hon. Gentleman, from this statement and others that he has made, seems to be asking that the Government should move from their policy of helping individual customers' needs evenhandedly, working with the oil industry to that end, as we are doing, and working with suppliers to look at regional difficulties, and to go instead for full-scale official priorities for certain categories nationwide.

At present levels of shortfall, that would be wasteful, unfair and highly inefficient. It would mean deciding between who is essential and who is not. It would mean downgrading in priority categories such as people going to work, essential members of the motoring public, and it would mean downgrading the tourist industry. It would mean giving priority to whole categories, even where there was not a shortage of oil.

I take the view that the people I have mentioned—motorists, and people going to work by car—are just as vital to the British economy as are other areas. The right way forward, I am convinced, is to stick to the working arrangements between the oil industry and the Government, and to protect the country from being saddled with an enormous and expensive apparatus at this present level of shortage. [Interruption.] Rationing may be the instinct of the Opposition on these matters, but rationing would not produce a drop more oil and is not our instinct. I do not believe that it is the right way forward.

Several hon. Members

rose—

Mr. Speaker

Order. Those hon. Members who were here at Question Time will know that on Question No. 4 I undertook that four hon. Members who waited, rather than asking a supplementary question at that time, would be called later. I will fulfil that promise in the course of these supplementary questions.

Mr. David Steel

Is the Secretary of State aware that he must not be surprised that the House expects the Government to take decisions in this matter? I rather thought that that was what Governments were for. Most hon. Members would agree with me in this. When those running ambulance services are paying £1.80 a gallon for petrol, does he not accept that that is not a free market but a black market?

The Government say in their statement that they are aware of the shortages in particular regions and for particular consumers, and the Secretary of State said that he has made requests to the petroleum industry to achieve a more equitable distribution. What has been the result of that request? That is what we are waiting to hear.

Mr. Howell

The right hon. Member knows that the particular problems in his own constituency are ones to which I have given special attention. While the Government are perfectly prepared to take decisions, we do not believe that the answer to every problem is to spend more taxpayers' money and to increase planning. Our aim, as I said very clearly in the statement, is to meet particular customer problems wherever they are raised. We are doing that and we are meeting them swiftly. That is why I mentioned the right hon. Gentleman's constituency. There are other constituencies and other areas where particular problems have arisen. We have moved to help them.

There was mention earlier of British Rail. The Government intervened there, and as a result essential services have not been cut. The only cuts made were ones that would probably have had to be made anyway in the light of sensible economy. [Hon. Members: "Oh."] The reality must be faced that the shortfall of oil will affect all users of oil and oil products throughout the economy. That has to be faced. If there are attempts by the Opposition or by the country to push us into working out particular priorities, others who are not lucky enough to be in the priority areas will suffer, and suffer severely. With the present level of shortfall, that would not make sense.

Mr. Hal Miller

I thank my right hon. Friend for the action that he has taken so far. Does he accept that there is disquiet, particularly among smaller garages, about allocations by their suppliers which, it is feared, may be based on a distorted pattern of trade which obtained at this time last year and is aggravated in particular parts of the country? Will he ask his oil industry advisers to look carefully at the pattern of allocations? Will he further ask them about allegations of distortion of trade to take advantage of higher prices obtaining elsewhere?

Mr. Howell

I have raised both these issues with the oil industry. I shall certainly continue to press the industry on the question of meeting particular regional problems and needs. As for the distortion of trade aspect—unfair competition is a matter for my right hon. Friend the Secretary of State for Trade—I have had no clear evidence of profiteering. Clearly, in some areas price has been used as a mechanism rather than handing out available supplies to first comers and having none for later purchasers. That is common sense. That is a reasonable way of operating.

Mr. Benn

Is the right hon. Gentleman aware that the Oil Industry Emergency Committee was set up by the industry to deal with distribution problems, that the previous Government put my right hon. Friend the then Minister of State in charge, and that he himself has a clear duty to see that a Minister supervises the activities of the committee?

Secondly, Parliament has entrusted the right hon. Gentleman with powers under the Energy Act which are sufficient for the control of a situation such as this, which may not call for rationing, and it would be a sheer abdication of his responsibilities to say that overcharging is for competition.

Mr. Howell

The Oil Industry Emergency Committee and the taking of powers under the Energy Act are matters which would be justified in a major oil emergency. We are now in a period of shortfall of the level that I have described, as the right hon. Gentleman knows. He also knows that it should be possible, through the oil industry and existing machinery, to manage sensible and fair treatment for customers throughout the country wherever there is hardship. But if there are difficulties in this matter and in the way in which our oil industry is organised which apparently have given us these problems—in contrast, we are told, to lesser problems in neighbouring countries—they arise in part from the nature, structure and organisation of the oil industry which we have inherited. [HON. MEMBERS: "Oh"] Oh, yes. That is why we are looking carefully and rapidly at the structure of the oil industry and reviewing the functions and finances of the British National Oil Corporation to find more satisfactory and flexible methods than those that I found when I took office on 4 May this year.

Mr. David Price

In his statement my right hon. Friend referred to international co-operation. Does he agree that American action in subsidising imports of oil into the United States of America is thoroughly counter-productive to international co-operation? Will he join the French and German Governments in making stern representation to Washington?

Mr. Howell

As I told the House at Question Time, I have been in contact with other EEC Energy Ministers. The French Minister of Energy, on behalf of the EEC Ministers, in the role of the presidency, flew to Washington to make the strongest possible protest to the United States about their unilateral action. I agree with my hon. Friend that that kind of action, particularly without prior consultation in the International Energy Agency, is likely not to prevent the scramble for oil, which we must prevent, but to cause greater instabilities.

Mr. J. Enoch Powell

Were the requests to the oil companies made in statutory form? If statutory powers exist for such directions, why were they not used? If, as I understand, the Government believe in the price mechanism, why do they not use it?

Mr. Howell

The price mechanism is not the whole answer, because obviously there are problems of transition and easing the impact of the higher prices which are bound to come, but the price mechanism is part of the situation. I am surprised that the right hon. Gentleman felt it necessary to raise that question.

On the question of representations to the United Kingdom Petroleum Industry Association, once powers under the Energy Act are taken and directives given, the Government are then in the position of allocating and organising priorities. In that situation, it will be necessary for the Government and, indeed, hon. Members to justify choices in essential priorities between one user and another which may in practice not be justified and may create more injustice. With the present levels of shortfall, I am convinced that that kind of full panoply of apparatus of allocation by Government officials would create more difficulties and rigidities and undermine the work that is being done by the Government, the Department and the oil industry to meet customer needs and combat hardship during this first impact from Iran which has been working through this economy for many months. Let no one be under any illusion that it has suddenly sprung up during the last few weeks.

Mr. Viggers

Does my right hon. Friend agree that our present difficulties, highly inconvenient though they may be, are but a pale shadow of the problems which will face us or our children when the oil and gas supplies actually run out? Will he confirm that the Government are giving proper priority to really long-term strategic planning?

Mr. Howell

The formulation of a long-term energy policy is the responsibility not of one Government but of successive Administrations and Parliaments. We are dealing with a 10, 20 and 30-year span in which we have to take major investment decisions on colossal sums and find a balance which will ensure that for our children and their children there will be a variety and flexibility of supply, without which our civilised standards of living and pattern of life as we know it will be undermined. I fully recognise that responsibility and we are working on it.

Mr. Rowlands

Does the Secretary of State realise that his remark about even-handedness will be treated with total derision in South Wales valley communities which this weekend have suffered cuts not only in their rail transport but in their bus services in areas which are totally or heavily dependent on public transport? In addition to essential services, such as ambulances and farmers' needs, will he try to give some priority to public transport services in valley and other communities which are heavily dependent on them?

Mr. Howell

As I said earlier, where a particular bus or public transport service is in difficulty, much the swiftest way is for it to be dealt with specifically with the oil supplier and, if necessary, with the Department. Where the hon. Gentleman is at fault, or perhaps has not received the right information, is in implying that all bus and public transport services are in grave difficulties and that they should all become an essential priority. That is not so. A general categorisation and preference for those would merely divert petrol, oil and diesel from farm tractors, from people trying to drive to work over the mountains in Wales and from others who are doing work just as valuable in our economy as those driving buses. The hon. Gentleman must understand that a fair share of the cutback of 5 per cent. has to be borne by all those using oil and oil products, but, of course, we must give priority to the emergency services. That is the commonsense way.

Mr. Skeet

As about 60 per cent. of naphtha goes into petrol, what assurance is my right hon. Friend prepared to give to the petrochemical industry that it will be able to get its feedstock? Has he made use of section 4 of the 1975 Act to ensure that the BNOC receives a direction on oil pricing and on the export of its own products?

Mr. Howell

We are reviewing the functions and activities of the BNOC. I shall take into account the point made by my hon. Friend. It is obviously relevant to the review.

On the question of naphtha supplies, the basic shortage is of crude oil from which naphtha and other fractions of the barrel come. Therefore, there is a shortfall of 5 per cent. right across the board.

I have urged all industry, including those companies using oil products, to seek to make economies and to do so—as many of them tell me they can—without necessarily cutting back production. There are many ways in our society—and we need only to stop and ponder these—of operating existing services and levels of production while cutting back on the use of oil by the sort of amount I mentioned.

I freely concede that if we were to have a far greater cut, and if there were to be another major shortfall in the Middle East, it would be different. However, to handle the present shortfall, I am convinced that it is far better to use the approach that I have outlined to the House, which I believe is more even-handed and fairer than any kind of rationing and allocation being pressed on the public, as is suggested from the Opposition Benches.

Mr. Gordon Wilson

Is the Secretary of State aware that the oil companies will be the beneficiaries of 65 million tons of oil produced in the Scottish sector of the North Sea this year? In those circum- stances, why is it that the Government have allowed those companies to cut the supply of oil to the United Kingdom? Has the right hon. Gentleman considered instructing the British National Oil Corporation to take up its allocation of participation oil in order to satisfy the needs of the domestic market?

Mr. Howell

North Sea oil is traded internationally and commercially, and contracts are entered into. As I said, I take the view that the balance is not entirely right. I have looked at the structure of the oil industry, including the very over-extended State oil apparatus which our predecessors deemed to be right but which I personally question, to see in what way we can change the balance—as I said in my statement—in a way consistent with our commercial requirements and interests, our international interests and the need for security of supply. If we are concerned with the national interest and the interests of the British people, including the Scottish people, it is a change in this area that is required. That is something that I and the Government are rapidly setting about doing at present.

Mr. Emery

Does not the Minister consider that there is much greater concern than he is expressing regarding certain distribution problems? It must be unacceptable that certain farming interests are told that they cannot have diesel from their normal suppliers for one month. Will the Minister consider using the co-operative mechanism of the Oil Emergency Committee which previously—in 1974—was able to ensure, without Government directives, that there was an evening out of supply and that those oil companies which were short were matched by other oil companies which could import a larger amount of oil? That type of co-operation should be monitored by the Ministry.

Mr. Howell

I am certainly prepared to continue pressing the oil suppliers, as I have for several weeks, to try to even out the first impact of the Iranian crisis, particularly in the way that my hon. Friend rightly describes. We can work all the time to improve distribution and see that it is more even-handed. That is the aim of my talks with the oil industry, and I shall continue to press those points. The oil companies are very much aware of the need to meet particular regional problems and the needs of farms, although they, too, recognise that to stand up and say that a whole category is in difficulty and must be given priority would be quite wrong and would create the kind of injustices that Opposition Members, by their noise, seem determined we should wish on the British people.

Mr. Robert Hughes

As the Minister seems to be saying that the shortfall is approximately 5 per cent., and agreeing that the difficulties arise primarily from distribution in rural areas, certain sections of the Health Service and the public sector, may I ask him to stop being mealy-mouthed and admit that the free market economy in petrol has failed abysmally in its job? This must be due to either bungling incompetence at being unable to organise a rational system of distribution in a country as small as ours or to crude, naked greed which he and his friends support.

Mr. Howell

What I do freely admit is that the allocation and rationing system, with which Opposition Members seem determined to try to saddle the British people, would create greater difficulties and more unfairness in the public services and to the farming industry than the present situation. I believe that the right way forward is the one that we are now pursuing.

Mr. Patrick McNair-Wilson

Is my right hon. Friend aware that in the rural areas a great deal of fuel is wasted by motorists who are looking for fuel? Will he, therefore, have discussions with the appropriate authorities to ensure that proper opening times are published outside garages, so that people know when they can buy petrol?

Mr. Howell

I have had discussions with the oil industry and with the motor agents and those who operate the forecourts of the filling stations to see whether they can organise a better and more effective system of information both about fuel economy—to avoid people driving around wasting fuel whilst looking for fuel—and about driving in a way which would reduce the shortfall of 5 per cent. In other words, I have asked them to encourage people not to keep their foot flat on the floor when they race away from traffic lights and to organise supplies between local garages more effectively. I believe that this is being done and will be done more effectively. The last thing that is needed—although no doubt the Opposition would wish it to happen—is a law promulgated from Whitehall ordering how all our garages should behave.

Dr. John Cunningham

Is the Secretary of State aware that the public would prefer the Government—even this Government—to dictate the levels of public transport and the availability of petroleum products, rather than leave it to the multinational oil companies, as he has done? Has he not provided those companies with a licence to determine not only the supply of petroleum products but also the price of those products? Is he not hooked on an ideological kick here? How does he reconcile his determination not to intervene with his statement that a major conservation programme is necessary? Is that not a contradiction of his earlier remarks? Will he not have to intervene in order to produce it?

Mr. Howell

The hon. Gentleman says that he thinks that the public want the Government to dictate. It is my view that the public do not want that and, indeed, expressed their wish against dictation of that kind in recent opportunities at the polls.

The hon. Member asks "Is it not desirable to go for some system of rationing?" [HON. MEMBERS: "No."] Does he not realise that the cost of following such a path would involve at least 2,000 extra civil servants and an extra £1½ million per month in salaries? As regards the multinational oil companies, which he believes are at the centre of this, let me explain to him again that the system I found when I arrived in this job on 4 May included not only the traditional oil suppliers but a new major oil company—the BNOC. That company is also a major influence on supplies to the British market. If the hon. Gentleman is going to start complaining about oil companies and their behaviour, he should be even-handed and look at the behaviour of all oil companies in the present complex with which we have to deal.

Mr. Maxwell-Hyslop

Is my right hon. Friend aware that in my constituency quite a number of the rural garages have been told that they will receive no further supplies of petrol this month and that some have had their normal deliveries cut by more than 30 per cent.? Will he publish the guidelines to which he has referred several times in the House? If my right hon. Friend makes reference to a document, as he knows, he is bound to lay it on the Table of the House. Will he publish the guidelines so that individual garages can see whether they are receiving fuel in accordance with them?

Mr. Howell

The cuts imposed by certain oil companies have been unacceptably high in relation to the overall shortfall that I described earlier. That is why I said that, although there has been an average shortfall of 5 per cent.—that includes the amount taken off for stockpiling because stockpiling for the winter is obviously vital—in some areas, because some companies have been unevenly hit by the Iranian crisis, there has been a much greater shortfall. I have been pressing the oil industry—I do not think I mentioned any document, with respect to my hon. Friend—to take action to meet the substantial disparities between one oil supplier and another. It cannot be right that some customers have all their needs fulfilled and more besides when others, such as the garages mentioned by my hon. Friend, are in great difficulties. I believe those difficulties are being overcome and can be further overcome.

If my hon. Friend finds the difficulties and unevenness persisting, I urge him, or the specific garages, to get in touch with their suppliers, to try other suppliers if that is not satisfactory or to come to the Department of Energy and we shall sort it out. That seems to me a sensible way of handling the matter. I cannot see that that is a reason for issuing a mass of national Government priorities—I know that my hon. Friend is not suggesting that, but others are—and saddling the country with a gigantic apparatus. I do not know what the love of Opposition Members is for this type of bureaucracy. It costs a great deal of money.

Mr. Bagier

Does the right hon. Gentleman accept that it is much more important to keep public transport and public utilities going than to provide petrol for the Rolls-Royces attending the Derby, Royal Ascot, or whatever? As the present Minister of Transport has been excluded from the Cabinet, will the right hon. Gentleman explain what sort of communication he has with him, what representations have been made by him with regard to petrol supplies for the public utilities, and what reply has been given?

Mr. Howell

I am obviously in close contact with my right hon. Friend the Minister of Transport about these matters. However, I deplore the hon. Gentleman's suggestion that motorists on the road are in all cases in some way inessential or a down-graded category.[Interruption.] The hon. Gentleman was implying that there was an absolute priority and preference for public transport over private motorists. I deplore that suggestion. Many people who travel on the roads as motorists are doing vital work in the national interest and are helping our economy. I do not believe that on a 5 per cent. shortfall it would be realistic or fair to go around trying to draw the line between the private motorist—however vital his or her role may be—and public transport. There is a much more sensible approach, which is to ask those in public transport also to seek to make this small economy. Where they are in real difficulties, let them take the procedure that I have outlined, as some have done, and many have been helped.

Several Hon. Members

rose—

Mr. Speaker

Order. We have discussed this for half an hour, and I propose to call four more hon. Members from either side, which I think is a fair crack of the whip.

Mr. Hordern

One of my right hon. Friend's interesting proposals was that a proportion of the royalties should be taken in the form of product rather than cash. Bearing in mind that BNOC exports half its production, will my right hon. Friend say whether there is sufficient refining capacity if these interesting proposals are carried out? If so, is there any reason why he should not get on with this straight away?

Mr. Howell

There is refining capacity which would now be available for oil from the United Kingdom continental shelf to be refined and sold into the British market, where there is demand. That could be met. I think that that is something which could go forward if the crude oil was available. On the royalties issue, I should make it clear that royalty in kind has been taken, by decisions of the previous Government, for the second half of this year. What I mentioned would affect the first half of next year. I said that this may help United Kingdom refineries and suppliers, because there is no guarantee, when the royalty oil is taken, that it would not necessarily have come to the United Kingdom market anyway. Therefore, I do not regard this as anything more than a marginal help, and it may be marginal help in the first half of next year. But, as of now, I can tell my hon. Friend that refinery capacity is available to handle North Sea oil which could come into the United Kingdom market.

Mr. Faulds

Is the right hon. Gentleman aware that if, under Right-wing pressures, foolish decisions are reached about Southern Rhodesia, Nigeria may well decide to make life much more difficult for the West, including Britain, by restraints on her oil and commercial benefits?

Mr. Howell

That is a speculation by the hon. Gentleman, on which I am not prepared to comment.

Mr. Faulds

Wait and see.

Mr. Rippon

Will my right hon. Friend give the same consideration to my constituency as he has given to that of the Leader of the Liberal Party, because we face exactly the same sort of difficulties? Is he aware that in sparsely populated areas such as Northumberland it is not possible for people to go around topping up because it takes a gallon of petrol to get to the nearest garage and there are no opportunities for public transport or the kind that are available elsewhere? Does my right hon. Friend accept that there is a strong feeling in Northumberland that the present distribution is not even-handed, and that very great difficulties are being caused to both fanners and other individuals? Will he try to help?

Mr. Howell

I have already looked at the problems in my right hon. and learned Friend's constituency, as I have in regard to the constituencies of many other right hon. and hon. Members. Where there are particular supply and customer difficulties—this by no means extends over all consumers of oil—I have sought to take steps to help, and will take further steps. I recognise that during the period in which the impact of Iran has fed through, the even-handedness was not in the first stage at all satisfactory. Of course there were major shortages in certain areas, but I am convinced that as we work on this system, with all the difficulties that have faced us, we shall succeed in getting a fairer spread of the allocations and cutback. If there are further difficulties, my right hon. and learned Friend should raise them with me again, as he has already done, because that is absolutely right.

Mr. Stoddart

Is the right hon. Gentleman aware that he has shown amazing complacency in handling this problem? His abdication of responsibility to the oil companies is offensive to this House of Commons and will be offensive to people throughout the country, who will resent being told that public transport in particular, and other essential services, should not have priority. The right hon. Gentleman should remember that one bus will take 72 passengers and one train 600 passengers, but under his free marketing system they might well be pushed into 600 cars on the road.

Mr. Howell

The hon. Gentleman talked about complacency. He should perhaps reflect on the five years during which the affairs of this nation were in the charge of his right hon. Friends—including four months after the Iranian crisis was perfectly in prospectߞwhen very little was done to prepare the country for the difficulties we now face. If the hon. Gentleman talks about complacency, that is where it should lie. As to particular allocations for public services or public transport, I have explained that the public transport services use oil and are capable of saving oil without cutting essential services. Practically all parts of industry and the public services are capable of achieving these savings, and many have done so already. It is a perfectly sensible way forward, and is infinitely preferable to going for the full range of allocations and priorities—declaring all public transport operations to be good, whether or not they are needed or wasteful, and all private motorists and other down-graded priorities apparently put in the background. That seems to be a silly way of handling this present situation.

Sir Anthony Meyer

Is my right hon. Friend aware that there will be general support for his resistance to panic measures which demand a siege economy? However, will he explain to the oil industry that the needs of the tourist industry, which is a vital industry in terms of both exports and employment, are not adequately met by a system of allocation based on the previous month's consumption? In the case of that industry, it would be far better to use last year's consumption for an equivalent month.

Mr. Howell

I am grateful for my hon. Friend's opening remarks. Of course, he should realise that tourism would be precisely the category which would get it in the neck if Labour Members were allowed to go for their priorities.

The truth is that tourism is a vital industry in our country. While it too must make sacrifices, and to some extent cut down, it must be wrong to suggest that the whole of this industry should be downgraded in favour of some declared essential services which Labour Members have in their minds. That is what they have been arguing, and those are the consequences of the decisions that they are trying to press upon the British people. I am, therefore, grateful to my hon. Friend.

There are certain areas where tourism demands are creating problems. The oil companies have been asked to look at them and are doing so. They are certainly trying to maintain last year's allocations, which are deliberately geared up for the high season in the tourist resorts, and, if possible, to improve on them. In the particular areas where there are particular problems, we are attending to them. That is probably a better deal than they would hope to get from the kind of recipes that have been advanced by Labour Members this afternoon.

Mr. English

The right hon. Gentleman is to be congratulated on arriving at a position in which he is entitled to expound the views of the Cabinet on the effectiveness of the free market price mechanism. Did the Cabinet express those same views to its subordinate Ministers, such as the Minister of Transport, or did the right hon. Gentleman decide off his own bat not to follow Conservative Party policy?

Mr. Howell

I am not aware of the particular item to which the hon. Gentleman is referring, although I can guess. That matter is a question for my right hon. Friend the Minister of Transport, who has told the House that he is reviewing the whole matter which I think the hon. Gentleman has in mind. I see no reason why my right hon. Friend should not review an issue and a position that were wished on him and that he inherited when he came into government. There is no reason why he should not look at this again.

Mr. McQuarrie

Is my right hon. Friend aware that in the North-East of Scotland, particularly my own constituency, many villages have only one service station and that for periods of between 12 and 17 days those stations have been without supplies? What steps does he propose to take to alleviate the situation?

Mr. Howell

I am aware of particular villages and areas where there have been very serious supply problems. We are taking immediate steps with the oil companies—and have done already, several days back—to try to help these villages and supply areas where the previous supplier has found himself completely out of oil supplies. This is the action that we have taken. I believe that it will be effective—infinitely more effective than declaring general priorities from Whitehall and then hoping that something will happen.

Mr. Foulkes

Prior to the recess the Minister gave an assurance to one of his hon. Friends that he would give special consideration to the problems of disabled drivers, who cannot take part in the panic scramble for petrol. Will he now give an indication of the result of that consideration and what action he proposes to take to help disabled drivers?

Mr. Howell

Garages and filling stations and those who supply and distribute to them have been asked to look particularly at and take particular care of the problems of disabled customers who are in difficulties. Where they are in difficulties, garages, filling stations and forecourts have been asked to take particular care. I believe that that is the right way to help the disabled, who obviously have a special problem and a special difficulty in a situation of this kind, if they are in an area of shortage. They may not be in such an area, but, if they are, that is how they will be helped.