British National Oil Corporation

HC Deb 10 March 1980 vol 980 cc899-901

1. Mr. John H. Osborn

asked the Secretary of State for Energy when he will be in a position to tell the House about his plans for the future structure of British National Oil Corporation.

11. Mr. William Hamilton

asked the Secretary of State for Energy if he will make a further statement on the future of the British National Oil Corporation.

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

I hope to make an announcement shortly.

Mr. Osborn

Will my right hon. Friend assure us that the corporation will limit its regulation powers as well as participation in drilling and production activities? Is he aware that a number of operators who have downstream interests are concerned about the power to buy back and not being able to use their own investment for their own downstream operations?

Mr. Howell

Yes, I am aware of these concerns. They were expressed to the Government as soon as they came to office, which is why we took steps to limit some of the corporation's privileges, especially the right to be on operating committees. I made clear last summer, and again in. the autumn, that it is the Government's policy to keep the necessary access to oil provided by the trading operations of the corporation. That involves keeping participation agreements and the arrangements that go with them. I am aware of my hon. Friend's concern and I shall examine these matters carefully.

Mr. Hamilton

Will the right hon. Gentleman give a categorical assurance that in no circumstances will the Government, for doctrinaire reasons, sell off to private enterprise such a valuable national asset?

Mr. Howell

The hon. Gentleman talks of doctrine and dogma. The dogma that I should find hard to defend is that the State should be the 100 per cent. owner of an enterprise and an asset in all instances. That is a dogma that is hard to defend, especially when people are beginning to have some doubts about the efficiency of collectivist State centralised agencies.

Mr. Renton

Will my right hon. Friend take on board, contrary to the opinions expressed by he hon. Member for Fife, Central (Mr. Hamilton), the strong enthusiasm among BNOC employees and the British public generally to invest and to have the opportunity of investing in the corporation either directly or through their pension funds? Will my right hon. Friend ensure that this is done in such a manner that the company cannot subsequently be renationalised by a Labour Government?

Mr. Howell

I recognise that ownership of assets throughout the State sector is a sentiment expressed by a number of employees. It is a healthy and timely development. It is important that it is made clear that the Labour Party dissociates itself totally from the sinister threat that it might confiscate any shares from the State sector that pass into the hands of ordinary members of the public.

Dr. Owen

As it is now clear that selling off the corporation would not even help the public sector borrowing requirement, since it would mean forgoing substantial revenues in future years and gravely damaging the United Kingdom's control over the United Kingdom continental shelf, is the right hon. Gentleman able to give the House any reason why he should even be considering the privatisation of the corporation?

Mr. Howell

The right hon. Gentleman is not correct. The security of supply and access to oil is obtained by the trading operations of the corporation. The important thing for the 1980s is that we should have healthy enterprise in the North Sea and good security of supply. I am not convinced either that we inherited the best system for that or that narrow State control is the best answer to encouraging enterprise in the North Sea or anywhere else.

Several Hon. Members

rose—

Mr. Speaker

Order. I shall call one more hon. Member from each side of the Chamber to ask a supplementary question. Then we must move on.

Mr. Skeet

Is my right hon. Friend able to indicate whether the trading company will operate like a crude oil broker? Is it expected that the exploration and production company will be an integrated enterprise in which people may take shares?

Mr. Howell

My hon. Friend will have to await the details of my statement.

Dr. J. Dickson Mahon

Will the Secretary of State confirm that he will take the fullest account of the views of the chairman, whom his Government appointed, and of the board—to the effect that they do not want to have BNOC split into an upstream-downstream operation, and that they see no value in public equity?

Mr. Howell

From the outset, I have been in close contact with the previous chairman, the present chairman and the board on their various views. I shall take full account of them.