HC Deb 23 May 1979 vol 967 cc1049-53
Mr. David Steel

(by private notice) asked the Secretary of State for Energy, in view of the severe cuts in oil supplies, what urgent steps will be taken to prevent the threatened disruption of essential services within the next few days, and to ensure that reductions in consumption are evenly and fairly spread over the country as a whole.

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

I am very concerned about the local difficulties that are arising in certain areas, and my Department is in close touch with these problems and with the suppliers. The oil industry is taking steps to iron out local difficulties as quickly as possible by making fair allocations to its consumers. I must, however, warn the right hon. Gentleman and the House that we are facing a tight world situation that will not go away. Cheap energy is a thing of the past, and we will have to plan our lives and work accordingly. The adjustment cannot be painless, nor can we in the United Kingdom be insulated from it. The Government will play their full part in helping the nation adapt to the new constraints, both in the short term and the long term.

Mr. Steel

Will the Secretary of State confirm that the overall shortfall in supplies to the country as a whole is of the order of 2 per cent.? If that is so, or if there is some other figure, does he accept that it is his Department's responsibility to try to ensure that that shortfall is borne equitably as far as possible throughout the country? Is he aware that in the South of Scotland the shortfall in diesel oil supplies is as high as 20 per cent. or 25 per cent., and that the latest news this morning is that petrol is no longer being supplied to garages, except those owned by the oil companies? This is having a severe effect on agriculture, school transport, heating in old people's homes, and so on.

In the last few days I have been in touch with both the suppliers and the oil companies, and my impression is that they are waiting for the right hon. Gentleman's Department to give clear guidelines and take action to try to ensure that the supplies are more equitably shared.

Mr. Howell

My Department is talking with the suppliers, and they have seen my hon. Friend the Minister of State. I also recognise the particular problem of agriculture as a result of the late spring sowing after the heavy winter. I recognise those problems, and we are discussing them with the suppliers. The overall shortfall figure is not as big as the right hon. Gentleman said. It is not 2 per cent. The figure that I have is 1 per cent., or less. In fact, it is expected to be only fractionally less than the amount that we consumed in the corresponding period last year. That, of course, is no comfort to certain people in particular situations, but that is the overall figure against a world output shortfall in supplies of about 4 per cent. Against that background, our position is not so unfavourable. That is the broad position.

Mr. Foot

In view of the seriousness of the situation, will the right hon. Gentleman take into account that we would like to have regular reports to the House on the subject? I ask that specially in view of the fact that this subject was not mentioned in the Queen's Speech.

Mr. Howell

I shall do my best in that regard. I am sure that my right hon. Friend the Leader of the House has noted the right hon. Gentleman's request.

Mr. Patrick McNair-Wilson

In view of the facts given to the House by my right hon. Friend, can he make a statement on Government policy regarding the export of North Sea oil?

Mr. Howell

North Sea crude is exported. As under the previous Government, the encouragement to suppliers is to export it to our EEC partners and to our partners in the International Energy Agency. Since we have to import certain oils of a kind that are not produced in the North Sea, it obviously makes sense to export North Sea oil to pay for them. It is traded internationally, and it would be silly not to maintain it in international trade. At the same time, I am sure that my hon. Friend is the first to recognise that we have international obligations. It is no gain to this country if other countries are in grave economic difficulties through oil shortage. We all sink or swim together. That is the reality, and we must work to that reality.

As I have said, North Sea oil is exported, but it makes economic sense as well as international collaborative sense. We must deal with this problem in an international context. That is what I have been seeking to do these last two days at the International Energy Agency conference that I chaired.

Mr. McCusker

Will the right hon. Gentleman say what discussions he has had with the Secretary of State for Northern Ireland, especially as the situation in the Province is likely to be complicated by the serious energy crisis in the Irish Republic, where there are grave shortages, rationing and exorbitant prices?

Mr. Howell

My officials are in touch with officials concerned with the Northern Ireland situation. If the hon. Gentleman has specific problems, I shall be grateful if he will bring them to me urgently. I shall certainly look at them.

Mr. Charles Morrison

Whenever there is a petrol crisis, there tends to be a mad rush of motorists to the petrol pumps, with the consequence that far from a reduction in the amount of petrol in circulation there is an increase. Will my right hon. Friend therefore consider either insisting upon or at least encouraging petrol stations to insist on a minimum purchase, so that the amount of petrol in circulation is kept reasonably under control in order that those people who want petrol have a chance of getting it?

Mr. Howell

As I have explained, at this point there is no major shortage generally throughout the nation, although I recognise that there are local shortages. I am sure that the right way to approach this is through calm and careful policies of greater energy efficiency, demand restraint and conservation. I think that that is the right way. My Department will certainly ensure that in the public sector, and in both central and local government, there is a real drive for the most economical use of energy. I think that in the nation at large people will recognise that we are in an era of expensive energy. I am afraid that that is the reality that all of us must face every time we fill up our cars at the petrol pumps. It is that common sense which will be the best guide towards ensuring that we have a sensible allocation of supplies.

Several Hon. Membersrose

Mr. Speaker

Order. I propose to call two more hon. Members from each side, because this is an extension of Question Time.

Mr. Tinn

As one of the cases of special urgency, will the right hon. Gentleman consider the problem of fishermen in constituencies such as my own, about which I have already written to him? Will he do his utmost to ensure that a livelihood that has been made increasingly precarious over the years is not further jeopardised by this new difficulty? Supplies of fuel for boats in my constituency are now almost totally exhausted.

Mr. Howell

I shall do my utmost to ensure that.

Mr. Skeet

Will my right hon. Friend indicate when he expects the trigger under the IEA to operate? What will the impact of that be on the United Kingdom? Will my right hon. Friend also indicate whether there has been any abuse on the international spot market at Rotterdam? Is not this causing the rise in prices, and should it not fall under some international control?

Mr. Howell

As to the spot market in Rotterdam, that is a matter that the International Energy Agency countries looked at very carefully. I do not think that they found any evidence of abuse. Inevitably, when a small margin is traded at a time of world tightness in oil one is bound to see oscillation in prices. But it is important to see that it is a regulated market and that there is no question of abuse. The IEA countries and the EEC Commission are looking at that matter very carefully in that light.

On the question of the so-called trigger—the point at which international allocation liabilities come in for all countries—the position is that Sweden has applied to the governing board of the IEA saying that it has difficulties such that it thinks that the international allocation system could now come into play. That application is being examined by the governing board to see whether it needs to bring in the whole apparatus of international allocation or whether it can solve the problem by ensuring that Sweden is helped with her particular difficulties by the suppliers.

Mr. Gordon Wilson

Will the Minister take on board the fact that the House is astounded by the complacency that he is showing about the oil situation, which is rapidly deteriorating, and by the fact that he seems to be expressing more sympathy with the Common Market and the people involved in the IEA than with consumers in Scotland and the United Kingdom? Will he, further, try to justify the export of 40 per cent. of North Sea crude from the United Kingdom at a time when consumers in Scotland are being rationed at the filling stations?

Mr. Howell

I reject the argument of complacency. I think that it is better than panic and chicken-headed action, which would lead to far greater difficulties in the future. We must work with the common sense of the people of the British nation—and I include Scotland in that. I am sure that that is reality.

As to the exports of crude, I have explained the basic reasons—which were recognised by my predecessors, as they are by anyone who has looked closely at this issue—why exports of North Sea oil are desirable. It is just as much in Scotland's interests as in those of everyone else that the economies of trading partners who trade in oil should be protected against major disruptions caused by oil shortage. That is reality, and I am sure that the people of Scotland recognise that reality, even if the hon. Gentleman does not.

Mr. David Price

In his consideration, will my right hon. Friend bear in mind particularly the problems of disabled drivers, for whom it is particularly difficult to take part in the rough competition of getting in at filling stations that are about to close? Many disabled drivers depend solely on their motor cars and cannot use public transport.

Mr. Howell

Yes. In my Department's talks with suppliers I shall ensure that that point is borne carefully in mind.