British National Oil Corporation

HC Deb 14 December 1982 vol 34 cc218-38 10.15 pm

The Minister of State, Department of Energy (Mr. Hamish Gray)

I beg to move, That the draft British National Oil Corporation (Borrowing Powers) Order 1982, which was laid before this House on 9th December, be approved. The purpose of statutory borrowing limits is to secure the proper parliamentary control of the corporation's borrowing. It may be helpful if I first outline and explain the legislation under which this draft order has been laid. Limits to BNOC's borrowing are set by section 6 of the Petroleum and Submarine Pipe-lines Act 1975. In this Act, BNOC's borrowing was restricted to £600 million. There was provision, however, for the limit to be increased to £900 million by order, subject to affirmative resolution by this House.

As hon. Members will recall, section 7 of the Oil and Gas (Enterprise) Act amends section 6 of the 1975 Act. It extends the definition of items counting against the borrowing limit, it reduces the upper borrowing limit to £800 million, and, more important, it provides that the borrowing limits may be reduced following the disposal of a wholly-owned subsidiary of the corporation. This provision is in new subsection 6(10) of the Petroleum and Submarine Pipe-lines Act.

To reduce the corporation's borrowing limits, the Secretary of State has to make an order. Section 46(2) of the 1975 Act, which was also amended by the 1982 Act and under which this order is laid, requires that the order be approved in draft by the House. The amendments to sections 6 and 46 came into force on 1 November.

The corporation's present statutory borrowing limit of £600 million was suitable for a corporation involved in oil exploration and production as well as oil trading. BNOC's exploration and production business was transferred to Britoil on 1 August this year. Britoil ceased to be a wholly-owned subsidiary of the corporation on 1 November, when the Secretary of State took over the shares. The result of this is that Britoil's debts are no longer counted in BNOC's borrowings.

A lower statutory borrowing limit, reflecting the change in BNOC's business and requirements for capital, is therefore needed if we are to secure the proper parliamentary control over BNOC's borrowing. A sum of £600 million is clearly too high for an organisation concerned only with oil trading and related activities.

This order therefore lowers the maximum amount that the corporation may borrow from the present £600 million to £100 million. It also lowers the figure to which that maximum amount may be increased by a further order, from £800 million to £150 million. Such an order would also require approval in draft by this House. Any increase beyond £150 million would require new legislation.

The initial limit needs to be sufficient to cover any mismatches that might occur betweeen the corporation's receipts and payments for cargoes of oil. It also needs to cover the situation where the corporation might have to hold and store oil temporarily.

In general, BNOC aims to trade on a back-to-back basis. The corporation would expect to receive payment from a customer for delivery of a cargo of oil at the same time as it paid the supplier of the cargo. In such circumstances, no borrowing would be necessary, but inevitably the corporation will need overdrafts, or other short-term borrowing, to cover occasional late payments, or other mismatches between payments and receipts, such as bank error. None of this is within the corporation's control. A single large cargo could be worth about £20 million. Exceptionally, with tankers capable of carrying 300,000 tonnes of crude, this could be up to £46 million. BNOC's experience is that late payments are uncommon, but they are an inevitable feature of the business. The borrowing limit must be sufficient to cover them.

While the corporation would not, in general, expect to have to store oil, circumstances may sometimes arise where that cannot be avoided. BNOC's availabilities under participation depend on the day-to-day performance of the North Sea fields, which cannot be exactly predicted, but it disposes of the oil under contracts which are generally of annual duration and where day-to-day flexibility is limited. BNOC might need to store oil temporarily to create the necessary day-to-day match or while it was organising another outlet. One hundred million pounds would cover several large cargoes and provide an adequate margin of safety. The corporation agrees that the limit is sensible. It is not excessive for a trading organisation with a turnover of over £7,000 million per annum.

The gap between upper and lower statutory borrowing limits is to allow time, should the lower limit be exceeded, to prepare legislation necessary to increase the upper limit. We consider that a gap of £50 million is sufficient for that purpose.

Mr. Dick Douglas (Dunfermline)

Does the Minister concede that at this time he should take a view of what is happening in the international oil market? Will he say what is likely to happen at the December meeting of OPEC? What does he think is likely to happen in the spot market? Where will BNOC store this oil? What provision is he making in that regard?

Mr. Gray

I shall deal with those matters as I proceed. The hon. Gentleman will have an opportunity to comment in due course.

The new borrowing limits should come into operation on 31 December. That is the date on which the corporation's new financial structure is to be established. It may help hon. Members in considering the draft order if I now put it in the broader context of the corporation's new financial structure.

BNOC's trading business has functioned successfully and, to a large extent, separately from the upstream business which was transferred to Britoil. We see no reason why it should not continue to function successully.

The corporation will continue to operate in accordance with guidelines agreed with Government from lime to time, setting out the functions which—in addition to handling participation oil, its main activity—we consider appropriate for its trading role. Those will include, for example, trading in royalty oil and managing the Government's pipeline and storage system. Although participation agreements provide for oil companies to be paid market prices, there will remain scope for profit-making through, for example, shipping deals and third-party trading.

If the corporation makes significant profits, we have the power under section 5 of the Oil and Gas (Enterprise) Act to require the corporation to pay to the Secretary of State sums surplus to its requirements. This would be analogous to the payment of a dividend. On the other hand, if the corporation were to run into temporary difficulties, it would no longer be able to rely on upsream activities for support. Section 6 of the Act therefore provides for the payment of grants. Those are, however, very much reserve powers.

Section 4 of the Act cuts BNOC off from the national oil account. It will, therefore, need a new financial structure. As we explained during the Committee stage of the consideration of this section, we believe that the corporation will need some reserves. That is because BNOC cannot rely alone on overdraft facilities to accommodate swings in its trading position. Oil trading is subject to fluctuation. If the corporation had no reserves, it might need to seek grants at frequent intervals, with corresponding frequent payments back to Government under section 5. This would not be compatible with the corporation acting as a commercial trader in oil. We consider that the appropriate reserves that the corporation should have is £30 million. This money will come from the national oil account.

Those reserves, together with the ability to borrow, will ensure that the corporation has a sound financial sructure to continue its role as a trader in oil, handling participation oil in the national interest. Limiting borrowing to £100 million will ensure the proper parliamentary control. I therefore commend this draft order to the House.

10.24 pm

Mr. Edward Rowlands (Merthyr Tydfil)

The order is part and parcel of a policy which has destroyed an extremely successful BNOC and we shall vote against it on that ground tonight. We shall also use our vote tonight to object to the shabby way in which the House has been treated by the Minister's rambling statement tonight on the financial restructuring of the State corporation.

Before I come to some aspects of the Minister's statement, let me remind the House of the order's background. The Minister said nothing about the fact that BNOC has been a remarkable success story. Within five years of its inception it was built up into a vibrant and profitable corporation. In 1982 its profits will be about £500 million gross. That is the measure of BNOC's success, owned, as it is, 100 per cent. by the Government.

More important than the profit aspect is the fact that BNOC was the only oil corporation in the North Sea which owed its undivided allegiance to this nation. In a North Sea dominated by the multinational oil corporations it had a vital role to play in the development of the smaller, more marginal and difficult fields in the late 1980s and early 1990s. We have no guarantee at all that the multinationals or the new creature, Britoil, will fulfil future national needs. BNOC was designed to provide the nation with such a guarantee and that has been destroyed by the Government.

It was only yesterday that the Minister of State acclaimed and trumpeted the development of the Clyde field. I hope that he will be the first to acknowledge that the planning and preparation of the Clyde development was BNOC's. Britoil can claim nil or minimum credit for the development proposals put forward to the Minister and subsequently approved. Those were BNOC's proposals and plans which Britoil merely inherited. BNOC has been broken up out of sheer ideological spite.

That was done, first, to produce a financially fragile State trading company, and then Britoil. I note the references in the order to Britoil, so we are in order to mention it. I do not wish to go over the general ground, save to say to the Secretary of State that although he has expressed great satisfaction about the sale of Britoil shares, I have searched in vain through all the debates on the Oil and Gas (Enterprise) Act—in Committee, on Report and on Second Reading—to find out whether he has defined "great satisfaction" as being a 72 per cent. non-take-up of the Britoil shares. However, I did find innumerable references to the right hon. Gentleman's belief that there was a large, eager share-buying public, gasping to buy those shares. Yet 72 per cent. of them remain in the hands of the underwriters. The new theme is that it was a marvellous exercise to rehabilitate underwriting in the City. Again, I can find no evidence to suggest that was the point and purpose of the Oil and Gas (Enterprise) Act. I hope, too, that the small shareholder who did buy those shares and who is now nursing a 25p to 30p share loss on each share, is greatly satisfied with the Secretary of State.

Mr. Douglas

The Government know about business.

Mr. Rowlands

Yes, this is the Government of business, with their financial whizz kids. I wonder if the members of the Post Office staff pension fund, who bought 10 million to 12 million shares—according to The Times the day before yesterday—are greatly satisfied that they now face a potential loss of some £2 million. I wonder whether Mr. Quartano or the chief executive of that fund, appointed by the Secretary of State to the Britoil board, is greatly satisfied with the results and outcome of the Post Office pension fund's investment and the Secretary of State's appointment.

The Secretary of State has presided over one of the most spectacular Stock Exchange flops in living memory. A decent and honourable man would have resigned.

The Secretary of State for Energy (Mr. Nigel Lawson)

Labour Members know nothing about such matters.

Mr. Rowlands

The right hon. Gentleman presided over a share flotation which left 72 per cent. of the shares in the hands of the underwriters.

We shall vote against the order to show our general opposition to both the Bill and this tawdry exercise. We also want to object to the shabby way in which the House has been treated on the important issues raised in the Minister's speech about the financial restructuring of BNOC.

It was said repeatedly by Opposition Members and others in Committee that there would be major problems about the financial nature of the State trading arm that would remain. We are setting up virtually a new State trading corporation with a new financial structure. It is worth reminding the House that it is a 100 per cent. Government-owned trading company. Will all the loans and funds be part and parcel of the public sector borrowing requirement?

Mr. Lawson

Yes.

Mr. Rowlands

Of course they will be. Therefore, there is a potential addition to the PSBR.

Mr. Lawson

It was always there.

Mr. Rowlands

Yes, but it was usually positive. Most of the cash flows of BNOC that went from the national oil account to the public sector borrowing account were positive. The Minister admitted that there was a high possibility that they would be negative in the next year or SO.

The company is not only 100 per cent. Government owned with a potential capacity to lose a lot of money, but it will have to live on its wits, its nerve and 10 cents. It is a 10 cent company. It will sell and buy its products for the same price.

Unlike any other trading commodity company, BNOC cannot—and rightly so—withdraw from its market, irrespective of the nature of that market, and however difficult it may be. Therefore, it will trade in massive amounts of oil, as the months ahead could show, in an extremely difficult soft oil market. Therefore, the financial structure of this stripped-down trading company must be of great and ultimate concern to the House.

Before the active vandalism that broke up the integrated oil corporation, the corporation had an enormous cash flow and a substantial asset base, as admitted implicitly in the Minister of State's remarks when he said that the company cannot rely on the upstream assets and profit potential of what was the integrated BNOC. Its trading role, though accounted separately, was effectively guaranteed by it being part and parcel of an integrated national oil corporation. Although it is an intangible factor, the trading and negotiating powers of the trading arm of that corporation were strengthened by it being part of an integrated national oil corporation. All those factors, as we said repeatedly in Committee, would lead to difficulties for a State trading company dealing in the most marginal percentages—10 cents and so on—rather than being part and parcel of a tautly integrated national oil corporation.

We repeatedly warned the Government during debates on the Bill that what would be left is a financially weakened trading corporation. The exceptional financial arrangements in the Minister's rambling statement reflect that. It is an incredible insult to the House that the major financial restructuring of the corporation should not have been presented to Parliament properly. Not a single financial memorandum has been presented to the House. Not a single paper has been brought to the House except for the borrowing powers order, in which there is no reference to the £30 million cash injection that was announced tonight or to the character of that cash injection. Is it in the form of equity to the company? Apparently it is coming from the national oil account. We have no idea of the character of the national oil account, its balance sheet and what is left in there. Will the Minister of State ensure that a memorandum is published so that we can debate it properly in the House? This is a major financial restructuring of a 100 per cent. Government-owned trading corporation.

Mr. Lawson

It was discussed in Committee.

Mr. Rowlands

It was not discussed in Committee. We repeatedly mentioned financial restructuring. We never got a single scrap of information, as members of the Committee will testify.

We discussed the possibilities endlessly in Committee. We were never given the information that we have been given tonight. It should have been presented to Parliament properly through a financial memorandum, not by this scrappy order with a meagre explanatory note that makes no reference to the cash injection that the Minister has announced. We do not have a balance sheet for the national oil account and we do not know the character of the £30 million cash injection.

What the Secretary of State has said is no substitute for the proper presentation to the House of the issues and their full financial implications. Trying to unravel the confusion about the proceeds, the debentures and the financial fiddling that has gone on in the past few weeks is all the more reason why we should have had a proper statement and memorandum.

The Minister of State said that the £30 million is coming out of the national oil account. Will the Secretary of State explain two statements that he has made about the debentures and the total proceeds that will accrue to the Government from the sale? On 10 November he said: The minimum price, on the minimum tender price, will be £548 million gross for the equity, plus £88 million for a debenture, of which £55 million will be paid into the national oil account, which gives total proceeds of over £600 million."— [Official Report, 10 November 1982; Vol. 31, c. 549.] In fact, it gives total proceeds of £603 million. Where has the difference between £55 million and £88 million gone? Is it here?

Mr. Lawson

Yes.

Mr. Rowlands

Good. In that case, the right hon. Gentleman will have to withdraw his statement of 22 November when he said: The total share issue will raise a gross sum of £548 million. In addition, Britoil will shortly repay, with interest, a debenture of £88 million. Total gross proceeds will be approximately £640 million. Having allowed for the £11 ½ million for the bits and pieces associated with the sale, the Secretary of State said: the total net proceeds from the disposal of Britoil are estimated to be in excess of £625 million"—[Official Report, 22 November 1982; Vol. 32, c. 596.] In fact it was £628 million if one deducts the £11½ million from the £649 million. I assume that the Secretary of State was making the £30 million provision from the £88 million debenture as part of the cash injection into the new company.

On 22 November, the right hon. Gentleman did not refer to that, and claimed that the total proceeds of the £88 million debenture would be the sum that the Government collected as a profit for the sale. I beg him to intervene to tell me whether he was right on 22 November.

Mr. Lawson

There are two ways of calculating the issue. The hon. Gentleman is making heavy weather of the subject. Either one can net off the £30 million, which has been the capital injection into BNOC, as my right hon. Friend the Minister of State made clear, or one can not take that into account. They are both methods of calculation. It was completely open to the House to proceed one way or the other. All the figures were there—the size of the debentures, the equity proceeds and the cost of the share sale.

Mr. Rowlands

The right hon. Gentleman will have to do better than that. He did not give an either/or provision in either of those statements. On 22 November he said categorically that the net proceeds from the disposal of Britoil would be in excess of £625 million, in which he claimed the total £88 million debenture. Tonight, he has withdrawn at least £30 million, as that will be the cost of trying to refloat the financially fragile State trading company.

I had the honour and decency to make a personal statement to withdraw something that I said, at the request of the right hon. Gentleman and others. He should have the decency to do likewise with regard to his statement of 22 November. I invite him to do so.

Mr. Lawson

The hon. Gentleman had to withdraw a disgraceful allegation that the prospectus of Britoil was false. If that had been true, it would have been a criminal offence. He should have withdrawn his statement when he made it, rather than waiting 24 hours to do so. It was a disgraceful matter of which the hon. Gentleman should be ashamed.

With regard to the figures for the proceeds of the sale of Britoil, I originally felt that it might, in fairness to the Opposition, be correct to deduct the £30 million which was to have been paid to provide funds for BNOC. Subsequently, on examining the accounts more carefully, it was clear that the funds were already in the public sector. Therefore, there was no need to make that offer. My second and higher figure was correct. I have nothing to withdraw.

Mr. Rowlands

When the right hon. Gentleman misleads the House, we have the right to demand a proper withdrawal. He made no qualifications when he presented his statement on 22 November. He claimed that the net proceeds would amount to £625 million. He now says that £30 million will be deducted from that sum. That is what he is saying and that is what the Minister of State has said. That is why we have every right to demand a withdrawal from the right hon. Gentleman. I have the honour of being able to say that I withdrew when it was right to do so. The right hon. Gentleman will not have that honour and we note his behaviour. [AN HON. MEMBER: "Sue him in public."] We most certainly will. The Minister of State spoke of a cash injection of £30 million. In what form will it go into BNOC's account? Is it equity? If it is, will there be dividends? Will the Government receive dividends on the £30 million? Is it a straightforward £30 million subsidy? Is it grant in another form? We are entitled to know the character and nature of the £30 million cash injection.

The Minister of State said that provision had been made in section 6 for the payment of grants. Is that provision to be redundant, or will it remain in place in case the company runs into even greater problems and deeper waters? The section anticipated the potential lame-duck character of the trading company. In Committee we warned repeatedly of that possibility. We are entitled to a much better explanation than the one that we have received tonight.

The destruction of the national oil corporation, the farcical flotation of Britoil and the financial mumbo-jumbo that has been presented this evening are features of a policy that has oscillated between the scandalous and the incompetent. I ask the House to register its objection to it by voting against the order.

10.43 pm

Dr. J. Dickson Mabon (Greenock and Port Glasgow)

There is no doubt that the British National Oil Corporation is the Government's unwanted child. If they had been able to sell off the trading section of the old BNOC with Britoil, I am sure that they would have done so.

The Government realised that for two formidable reasons they could do nothing else but keep the corporation alive. First, they had more than 60 major legal contracts involving in excess of 100 companies that would have had to be renegotiated with the private company, Britoil, if the integrated scheme of BNOC had been transferred from the public sector to the private sector. That is why BNOC is left as the holder of the participation contracts in the national interest. They are under the signatures of the Secretary of State, BNOC and all the other third parties. I am certain that there would have been a great effort by the companies to weaken the participation agreements if renegotiation had been necessary. However, I am sure that the Government would have been careless about that if that had been the sole obstacle.

There was a greater obstacle. The right hon. Member for Sidcup (Mr. Heath) became aware of it as a result of the oil price increase of 1973. The strategic control of oil was and is essential. The right hon. Gentleman had a bitter awareness of this in his experience with British Petroleum. The previous Labour Government were not prepared to see the participation agreements being of such a nature that they would lose strategic control of the disposition of the oil.

The only reason why the BNOC exists today is that the Conservative Party, despite its doctrinaire prejudices, can find no way to get out of difficulty. As it is the "Orphan Annie" or unwanted child of the Government, they are not careful about their sums in relation to it.

I shall not develop the splendid arguments of the hon. Member for Merthyr Tydfil (Mr. Rowlands), who made a good speech about the general fate of the BNOC and the emergence of Britoil. I shall confine myself to the BNOC. We have had no explanation, either in Committee or elsewhere, about the corporation's position. This miserable order is the basis upon which we are supposed to conduct a debate, in restricted time, about the future of a trading corporation that even the Conservative Party cannot abolish. It will be on the political scene for the remainder of this century and beyond. As the exigencies of the international oil market develop, whichever party is in power must use the BNOC in a wider role that is conceived by this miserable, bookkeeping Government.

I wish the chairman and the board of the corporation well. They have an enormously difficult task; and no doubt, with the problems of the oil market, they will have many disappointments and setbacks. They may have to come to the Government to be rescued from the cash flow difficulties that any oil trading company must face. At times, the corporation will make money, and I hope that those times are much more frequent than their periods of losses. However, I question whether the figures are correct.

I do not wish to be too harsh on my old Department, but this is not the first order. The first was withdrawn, perhaps because the parliamentary draftsmen had a headache after their toils on the Oil and Gas (Enterprise) Act 1982. I do not know whether this is a second attempt at the figures, but they are wholly unconvincing. In his interventions, the Secretary of State Mentioned the magic figure of £30 million, and the Minister of State began to defend it. I am always worried when the Minister wears his red socks. The hon. Member for Antrim, North (Rev. Ian Paisley) has a great prejudice against red socks, so perhaps when the Minister wears them it means that he has a bad case. Tonight he could not explain, even to his own satisfaction, the figures in the order.

If one listened closely to the Minister's remarks, one found that the matter is so flexible as to make the order almost meaningless. The figures are only markers, because there is enough latitude for the Minister to come back and to say that he will provide more money to the BNOC. We are not worried about the corporation making money, but we are worried about it remaining solvent. The hon. Member for Merthyr Tydfil described the corporation as "fragile". Everyone, whatever his politics, must accept that it will be a fragile corporation. It will exist solely on trading. It will be a middle-man. It will have nothing to do but to trade with a limited amount of oil, which is limited because of the participation agreements. The corporation must sell the oil as it comes out of the ground and will have no control over the flow of oil. It will sit there passively receiving oil, and must sell it there and then.

We had an argument about storage. The hon. Member for Dunfermline (Mr. Douglas) rightly asked where we could store the oil. What flexibility does the corporation have for the storage of oil? The Minister did not even tell us about the quantity of oil that would constitute the annual turnover of the corporation, but the amount cannot be insignificant. Even if a good trader thought it wise to store the oil for six months, would he have the capacity to do so, or would he have to rent that capacity at exorbitant rates? Would it be stored in tankers? We have been told nothing about this.

This poor wretched corporation is presented to Parliament in that way. We are not told what it will do. I suspect that the Department of Energy does not know what it will do. No one has thought the matter through.

I do not think Ministers really care. They are anxious to get Britoil on the road, and now they are left with the fag end of the British National Oil Corporation. Therefore, I am glad that we are seeking an opportunity tonight to deny the Government this order. They should think the issue through much more carefully and clearly, and should come back to the House ready for a proper debate so that the future of the corporation can be discussed, because by definition it will remain whichever Government are in power.

The Minister referred to the public sector borrowing requirement and how BNOC would fall within it. It is worth reflecting that, when BNOC borrowed money on the New York exchange in 1976 on the strength of the oil that it would produce, it was rightly argued that it should not have been within the public sector borrowing requirement. That has since been denied, but if a nationalised corporation under Treasury rules raises money in that way the PSBR is taken into account. I have never understood that. I am sure that all hon. Members would agree that the public sector borrowing requirement ought to be divided into two parts—the productive and investment part and the spending part. The assessment of those two matters should be treated in entirely different ways. Given the way in which BNOC is presently constituted, it will be within the spending sector, but it will remain an unpredictable factor.

The order should be rejected not only because it is inadequate and does not explain the position of the corporation but because the House should debate the position of BNOC in relation to its possible future activities.

It has been my privilege and that of the Minister and the right hon. Member for Lanarkshire, North (Mr. Smith) to travel abroad on behalf of this country and to help other countries to explore for and to produce oil in their areas with our assistance. Many countries believe that they cannot allow any "private" companies to go into these areas, and Britoil would be a private company.

BNOC therefore represents the only British instrument that could offer exploration and production in countries with collectivist or Socialist economies that might wish to use a State company to carry out their programme. I refer to Petrobras of Brazil which has explored and developed oil in Iraq. That is an example whereby the Iraqis would deal not with a private company but only with a State company. In Britain we no longer have that facility, thanks to our abandoning BNOC. I suggest that BNOC might resume that role at a later stage. We should not approach BNOC simply as a trading corporation. We should consider some other potential, and that should be discussed.

I regret that the Minister of State has presented the order with such an inadequate speech. It is unlike him, but I suppose that this comedy of errors must go on.

10.54 pm

Mr. Dick Douglas (Dunfermline)

I shall be very brief—[Interruption]. The hon. Member for Bedford (Mr. Skeet) may say "Hear, hear", but in Committee on the Oil and Gas (Enterprise) Bill, he tabled a sensible amendment to keep BNOC in British hands as a fully integrated company. Such a company should have an upstream facility for exploration and production, and a downstream facility for sales, not to mention refining and other activities.

The hon. Member for Bedford knows that I supported that amendment, because the logic of oil enterprises is to have upstream and downstream facilities fully integrated. However, in their complete lack of wisdom, the Government have hived off the exploration and production capacities of BNOC into Britoil. Britoil will be able to move downstream into marketing, but we have hived off BNOC in suspended animation to be wholly, singularly and peculiarly a marketing operation.

The hon. Member for Aldershot (Mr. Critchley), writing in The Listener, posed certain questions. He asked how we prevent the sale of Exocets. The answer is "Put the Secretary of State for Energy in charge of them". Others may ask how we produce an instrument that is so precarious that no one other than the Conservative Government would wish to underwrite it in terms of the PSBR. We do so by creating the BNOC as a trading company.

As I have repeatedly said, the oil market is at present more than usually flexible and erratic. No one knows how OPEC will behave in the next few months, but it is a matter of public record that the Saudis are sick to death at the behaviour of the Iranians, the Libians and the Nigerians. They could go one of two ways. They could say that over a certain period they will guarantee the price at $34 a barrel for X years hence. On the other hand, they could say that instead of producing 5 million barrels a day, they will open the valves and produce more. The price might drop to below $20 a barrel if they were to do so.

At present the Minister has an excellent Permanent Secretary in his Department who is an authority on relations with the Arab world, and I challenge the Minister to say how the price of oil will fare. Despite this, the House is being asked to underpin a tradng company that will enter into contracts to buy oil at a certain price—say, $34 a barrel—and it will have to sell that oil at a similar price, either domestically or on the world market.

We know that the spot market is falling. It is all very well for the Minister to say that a small proportion of the oil is traded on the spot market, but that market is an indicator of what the free market will bear. That is what the Tory Government are asking the country to buy and to underpin.

My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands), in an excellent speech, asked certain questions. Where is the proforma balance sheet for BNOC? A costly prospectus has been issued for Britoil. I have no doubt that the scrap paper merchants in Glasgow and elsewhere have made a tremendous coup in gathering in the ones that were not taken up, but we have had no proforma balance sheet for BNOC. What are the assets of the company? Its only assets are the opportunities that were acquired by a Labour Government to purchase oil in participation agreements and other agreements.

The Secretary of State is asking us to underwrite and underpin an extremely precarious corporation. We have not been told the amount of oil or the degree of public sector exposure involved. The Minister of State, who is knowledgeable in these matters and understands their importance to his constituency and to Scotland, must recognise that it is extremely harmful to Britain's status in the world to have a corporation trading in oil unless it is fully and harmoniously backed by the Government of the day. He has severed the connection with the upstream facilities. He has exposed the corporation to a 10 per cent. place in a hazardous international oil market. Therefore it would not be wise to support the order. The Minister of State knows that we should not accept this degree of public sector exposure. Therefore, I hope that my right hon. and hon. Friends will oppose the order and that other Members will be similarly persuaded.

11.2 pm

Mr. Frank Hooley (Sheffield, Heeley)

This is a tidying-up operation after one of the most squalid and corrupt acts of any Government of this century. I say "corrupt" deliberately because there was no case in public policy for selling off to private interests one of our most valuable public institutions. My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) has pointed out that in terms of profitability, expertise and success, there was no reason to fault the record of BNOC in its short history. It had been a wholly successful and wholly publicly funded enterprise and there was no ground to suggest that it was a public liability, a lame duck or incompetent, or that it had failed the nation. Nevertheless, in pursuit of a stupid ideology, the Government decided to destroy a great national asset and to break it up into two component parts, giving what they consider to be the profitable part of the enterprise to private interests to exploit as best they can, but leaving this peculiar rump, which has been the subject of our debate, to sink or swim by itself.

My hon. Friend the Member for Dunfermline (Mr. Douglas) referred to the volatile nature of the international oil market. It will, perhaps, be relevant to touch upon one or two aspects of that international oil market that could create severe difficulties for any company such as BNOC now trading in oil.

The serious political instability in the Middle East could produce a savage reaction from Saudi Arabia if the Americans flatly refuse to do anything about the Israeli occupation of the Lebanon. I should be out of order to go into the details of that, but we know that there is a powerful political connection between Saudi Arabia's oil policy and the general political situation in Palestine.

A conflict is still going on between Iran and Iraq. A little while ago, Iraq claimed—although, I believe, not altogether correctly—to have sunk several large tankers, or at least to have posed a serious military threat to the flow of oil to and from the key areas in Iran. If that war suddenly goes either way, it could have massive repercussions on the international flow of oil, and consequently on the oil price. It would thus create serious difficulties for BNOC's operations.

Huge oil reserves have been reported off the coast of California. I do not know how positive the drilling and the tests have been, but only a few years ago gigantic reserves were discovered in Mexico. I have not the slightest idea whether the Californian deposits are related to them, but the early reports were of massive reserves of oil off that coast. If that is so, it could considerably alter the future pattern of international oil trade. A fluctuation of 50 or 70 cents in the price of oil means changes of thousands and millions of dollars. To that extent, BNOC—the orphan of the Government's corrupt exercise a short time ago—could be placed in an extremely difficult position.

I understand the Minister to say that BNOC's turnover is about £7,000 million. If I understand the order correctly, the borrowing power of £100 million is, for all practical purposes, the company's working reserve. I would not have thought that a working reserve of £100 million was adequate for a company that will handle a turnover of £7,000 million at least per annum, especially given the volatility and uncertainty of the international oil market.

Therefore, the order may not be the final episode in a very squalid exercise, but it raises many more queries than it settles. So far the order has been handled incompetently, having been redrafted, and re-presented, and that does not give us much confidence that the Department of Energy knows what it is doing.

11.8 pm

Mr. Dennis Canavan (West Stirlingshire)

It is surely a sad irony that the Minister, who represents a Scottish constituency, should introduce an order that represents the latest chapter in the sorry saga of the destruction of public enterprise by the Tory Government. The Government are attempting to destroy one of the most successful public enterprises of recent years.

It is a sad irony that a Member of Parliament who represents a Scottish constituency should introduce such a destructive measure, because the headquarters of the prestigious BNOC were set up in Glasgow by the previous Labour Government. No wonder the Minister is hanging his head in shame. He should be thoroughly ashamed of himself, introducing this shabby order and letting down the people of Scotland.

I do not know why the Minister is now shaking his head. BNOC was one of the most successful public enterprises. During the last financial year it made a profit of nearly £500 million. The Government are so doctrinaire that if public sector corporations or nationalised industries are making what they call a loss, they knock or kick them for making that loss. If they are making a profit, their policy is to try to sell them off.

There is no rhyme or reason behind the order or the Act which initiated it. It is a senseless piece of public asset-stripping designed to reduce BNOC to a company which will merely trade in oil rather than be dynamic and adventurous in exploring for and producing oil. The order is yet another milestone on the way to the complete emasculation of the BNOC. It will make us one of the few major oil-producing countries which does not have a national oil corporation.

The Government are so Right wing and doctrinaire and so much in love with private enterprise that they are even more laissez faire than many other right-of-centre Governments in oil-producing countries. Such legislation and orders show how extreme the dirty, rotten Conservative Government are.

When the decision to sell was made, it would not have been so bad if the Government had managed to handle the sale reasonably competently, but they made a shambles of selling off BNOC. The way in which it was done was contrary to the public interest. The Secretary of State, the Minister and all the other people in the Department of Energy—with perhaps some exceptions in the Civil Service—at ministerial level are collectively so incompetent and irresponsible that I doubt whether they could organise a booze-up in a brewery, let alone an oil refinery.

Their incompetence can be seen by the mistakes that were made in the draft. The original order had to be withdrawn because of the mistakes it contained. A first-year pupil in any secondary school who looked at the parent Act could have drafted this order. The Minister initially introduced rubbish to the House. It had to be withdrawn and re-presented after the mistakes had been tidied up. That shows the crass stupidity and incompetence at ministerial level in the Department of Energy.

There may be some Conservative Members who believe that this order will be another nail in the coffin of public enterprise, but, thanks to the commitments made by my right hon. and hon. Friends on the Opposition Front Bench, it is clear that if there is a corpse in the coffin it will be resurrected. The resurrection will come after the next election when a Labour Government will breathe life into the British National Oil Corporation and the rest of the public sector. Once again, successful public enterprise will be meeting the energy needs of this country and contributing to the international community, instead of responsibility being handed over to private entrepreneurs who are interested simply in lining their own pockets.

When the next Labour Government introduce the necessary legislation to enable the public sector to bloom again, to bring about the renaissance of the British National Oil Corporation and everything else that the Government have tried to sell off and to extend the growth of public enterprise into profitable manufacturing industry, the final irony could be that some hon. Members will not be here to witness it. I am sure that the Minister of State will be kicked out by the good people of Ross and Cromarty for selling them down the river along with the people of Scotland and the people of Britain. The previous Minister of State, the right hon. Member for Greenock and Port Glasgow (Dr. Mahon), will also, I am sure, be kicked out by the good people of his constituency.

11.16 pm

Mr. Gray

I am grateful to the hon. Member for West Stirlingshire (Mr. Canavan) for his friendly remarks. He always enlivens our debates. His contributions were enjoyed in Committee. I am glad that he has not lost his touch.

I am sorry that the hon. Member for Merthyr Tydfil (Mr. Rowlands) should have described my opening speech as long and rambling. He cannot have listened to much of what I had to say. My speech dealt with a number of points that he raised. The same applies to the remarks of a number of hon. Members. I shall, however, try to deal with some of the matters that have been mentioned.

The hon. Member for Merthyr Tydfil was anxious to know how the British National Oil Corporation would carry out trading. The trading arm of the corporation acted very much on its own even before BNOC was separated and Britoil created. During that five-year period, it managed always to make a profit. Those who were running the trading at that time will still be running it. The board has been split, some of it going to Britoil and some retained in the corporation. The Government have, however, strengthened the board substantially with people of high repute who would not have considered it worth their while to join if they had not seen a future in the British National Oil Corporation.

The hon. Gentleman need not, therefore, worry too much about the trading arm. If BNOC has problems with its trading activity, what would the Opposition like the Government to do? Would they prefer that we should simply leave BNOC? After all, it is 100 per cent. owned— [Interruption] The hon. Member for Dunfermline (Mr. Douglas), who keeps prattling from a sedentary position, must wait until I deal with his contribution. The hon. Member for Merthyr Tydfil is also usually a reasonable man in these debates.

The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) gave some of the reasons why BNOC was retained. It has been retained as such because of the security of supply. The Government will have 100 per cent. control over BNOC and over supplies. We believe that that is the role of the Government. We see no reason why the Government should be involved in the upstream section, which could he carried out much better and at no expense to the taxpayer by the private sector. That is why we split off Britoil and floated it to the private sector, where it has a good future ahead of it and will carry on exploring in the usual way.

The hon. Member for Merthyr Tydfil mentioned the £30 million, which I do not propose to deal with again. My right hon. Friend the Secretary of State answered him with complete honesty and adequacy. He explained the position in the two statements referred to by the hon. Gentleman, and there is no need to elaborate. The £30 million for BNOC will remain in the public sector and cannot be set against repayment of debenture. That is clear.

Mr. Rowlands

There are two points that must be answered. First, in the statement on 10 November, the Secretary of State deliberately left out £33 million in his calculations of the net proceeds, obviously anticipating the type of arrangement that has now been made. When he came to explain on 22 November, to boost the figure to make it look like more, he added the £30 million to the net proceeds that the Government were to obtain.

Secondly, and more important, in what form is the £30 million to be put into BNOC—cash, equity or what?

Mr. Gray

I shall not deal again with these—

Mr. Douglas

Why?

Mr. Gray

I do not know what the hon. Member for Dunfermline is thinking about. He is making another speech from a sedentary position.

The two statements put the matter clearly, and my right hon. Friend has already dealt with this point adequately.

Mr. John Smith (Lanarkshire, North)

What were the net proceeds from the sale of Britoil?

Mr. Gray

My right hon. Friend the Secretary of State made this clear in his statement of 22 November, when he said: The total share issue will raise a gross sum of £548 million. In addition, Britoil will shortly repay, with interest, a debenture of £88 million. Total gross proceeds will be approximately £640 million … In all, the total net proceeds from the disposal of Britoil are estimated to be in excess of £625 million."—[Official Report, 22 November 1982; Vol. 32, c. 596.] Full details of the way that the £30 million w ill be paid will be given to the House as soon as all the arrangements are complete. Labour Members would be the first to complain if matters of this type were rushed, as BNOC has just started in its new role. It must be given a few months to see how it develops.

Mr. Rowlands

The hon. Gentleman has announced the £30 million cash injection into BNOC this evening, and we have no other information apart from what he has told us. It is not a question of months; we want to know in what form that money will be put in. Secondly, and more importantly, will it be subject to any form of parliamentary accountability? Will it be in the form of an order or a financial memorandum? Will the House have to approve it?

Mr. Gray

This is the order in which this is contained. The hon. Gentleman has had it spelt out in detail in my opening speech. If he does not listen to these things, that it is not my fault.

Mr. John Smith

Is the £30 million which the hon. Gentleman has revealed for the first time a grant from Parliament to BNOC? If it is not that, what is it?

Mr. Gray

I have already explained that the £30 million comes from the national oil account. It is not a grant from Parliament; it is a transfer from the national oil account to BNOC. It is not a grant, and it will be accountable. I cannot be more explicit than that. BNOC will be accountable, as it always has been. The fact that Britoil has been split away merely leaves BNOC as the trading arm, which is accountable in the same way as it always has been.

The hon. Member for Dunfermline raised a number of issues, and was concerned about storage. The point has been made that supplies might have to be held for about six months. It is well known that an oil trader would never hold oil willingly for six months. At no time has BNOC held oil for anything like that period. BNOC, as has been its practice in the past, will be in a position to lease tankers for the purpose of storing oil for short periods. BNOC has not and never has had any onshore oil storage. That is not part of its role at all. I explain that for the benefit of the hon. Member for Dunfermline and the right hon. Member for Greenock and Port Glasgow.

Dr. J. Dickson Mahon

The order does not encompass the financing of storage tanks by BNOC. It will carry on in the old way. It will not finance onshore storage.

Mr. Gray

That will be a matter for the corporation. However, we do not envisage circumstances in which the corporation would be likely to wish to lease onshore storage. It seems more probable that it will continue as it always has in its oil trading.

The hon. Member for Sheffield, Heeley (Mr. Hooley) raised several points. I must explain to him that BNOC buys participation oil at market price, as it has done since the system was established. That represents between 500,000 and 600,000 barrels a day. Those are sold in arm's length deals to third parties. BNOC handles 1.2 billion barrels a day of participation and royalty oil, but more than half of that is sold back to the producers who are also United Kingdom refiners.

The hon. Member for Heeley was also worried about the world oil market, which was also referred to by the hon. Member for Dunfermline, who answered his own question. Of course, I am not in a position to anticipate what the OPEC countries may decide. I would not be prepared to estimate the future for world oil prices. Nobody in my position could possibly estimate that. However, that position is not new. BNOC has had to make such allowances and assessments since it was created. As I mentioned earlier, that hazard has been overcome in the past by the trading arm of BNOC and we are confident that it will continue to be able to handle matters.

Mr. T. H. H. Skeet (Bedford)

Of course we have a soft oil market, but if the world price dropped to $30 a barrel or less, would the £30 million reserve be sufficient to sustain BNOC?

Mr. Gray

Yes. The difference in the borrowing power between £100 million and £150 million is also adequate, as the corporation agrees.

Mr. Douglas

BNOC will be responsible for marketing about 25 per cent. of our North Sea output. The Minister is asking the corporation to embark on that on a slim financial basis. Is he absolutely sure that the provision is adequate?

Mr. Gray

The Government believe that the structure will be adequate, and the corporation agrees.

The hon. Member for West Stirlingshire made wild statements. He even suggested that the right hon. Member for Greenock and Port Glasgow and I might not be in the next Parliament. Many of us would not weep if the hon. Gentleman was not in the next Parliament, but that is a remote hope.

The hon. Gentleman made outrageous and vitriolic remarks about the Government and our policies. The Government's decision to split the corporation into the upstream company, Britoil, and to retail BNOC purely as a trading arm is nothing new. In 1975 when the right hon. Member for Lanarkshire, North (Mr. Smith) was speaking from these Benches, we stated that we would vote against the creation of BNOC and when we were returned to office would examine the situation and, if possible, make improvements. We believe that BNOC should be 100 per cent. State-controlled to look after our security of supply but that the Government should not be involved beyond that. It is right that Britoil should be owned outside the Government but that the Government should retain an interest. We believe that the structure will work well.

I commend the order to the House.

11.33 pm

Mr. John Smith (Lanarkshire, North)

I had not intended to intervene in the debate. I had hoped that the Minister would respond adequately to the important questions raised by my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) about the missing £30 million.

On 22 November the Secretary of State, in a statement to the House said that the total gross proceeds from the sale of Britoil would be approximately £640 million, which included a debenture of £88 million. Of that £88 million, £30 million will be given to BNOC. Indeed, that is what the Secretary of State said earlier. The mystery deepens. On 10 November in another statement to the House the right hon. Gentleman talked about £55 million coming back from the debenture. The difference between the £55 million and the £88 million, which he mentioned later, is what we are talking about—the money for which the Government are asking Parliament's sanction to give to BNOC.

The Secretary of State gave one explanation on 10 November, which is justified by the order. Ashamed at the response to Britoil by the public he dressed up his statement on 22 November and claimed credit. That is inconsistent. Earlier today the Secretary of State gave alternative explanations. One was right and the other was wrong. Unfortunately for him, the wrong one was the one that he gave the House on 22 November when attempting to justify the Britoil issue.

Mr. Lawson

The figures that I gave on 22 November were correct. The right hon. Gentleman has no warrant for saying anything else. The figures were correct and the Government stand by them.

Mr. Smith

In that case will the Secretary of State explain what he meant when he said on 10 November that the proceeds from the debenture repayment would be £55 million?

Mr. Lawson

I did not say that.

Mr. Smith

I shall quote the Secretary of State. He said: The minimum price on the minimum tender price, will be £548 million gross for the equity, plus £88 million for a debenture, of which £55 million will be paid into the national oil account."—[Official Report, 10 November 1982; Vol. 31, c. 549.] That leaves a £33 million difference. What did the Secretary of State mean?

Mr. Lawson

I do not know why the right hon. Gentleman makes so much of that. I suppose it is because his case on the order is so palpably weak. His case is nugatory. As I said on 10 November, the debenture was £88 million. That is in Hansard. It is a fact. There was also a £30 million transfer from the national oil account to BNOC which I deducted because I tried to be helpful to the Opposition— [Interruption.] I felt that I had bent over backwards for the Opposition. When I checked the figures I found that there was no reason to deduct that sum since it is a transfer from one part of the public sector to another part of the public sector. [HON. MEMBERS: "What?"] Yes, it is. That has been made clear. The full figure of £88 million should be counted as the proceeds for Her Majesty's Government. That is the figure that I gave on 22 November. That is clear. Nothing that the right hon. Member for Lanarkshire, North (Mr. Smith) has said has derogated from that.

Mr. Smith

I have never heard a Secretary of State come to the Dispatch Box with such a story of "Now you see it, Now you don't". In his generosity to the Opposition the Secretary of State deducted the missing £30 million in his statement. In Hansard my hon. Friend the Member for Merthyr Tydfil is recorded as saying from a sedentary position "That is bogus". It was. My hon. Friend has never said a truer word. The Secretary of State has been caught out. Now he tells us that the £30 million that we are deciding to give to BNOC is to be counted as an asset. What if it is necessary to use that £30 million to make up BNOC losses? The Secretary of State will say "Never mind. It is still there. We have still got it".

The Secretary of State was either correct on 10 November or on 22 November. He claims to have been correct on both occasions. The only difference is £30 million. That will not do. If the Minister in charge of energy can negligently miss £30 million in 12 days we are in a sorry state.

What is worse, Parliament is being asked to sanction this £30 million without knowing what it is. The Minister of State could not say what it was. Is it equity? Is it public dividend capital on which we will be entitled to a return? Is it a simple grant or a subsidy? What is the nature of the money?

The Minister of State said that he would not rush things and that he could not tell us the details. Surely it is elementary, when the Government are asking for parliamentary approval of the spending of money, to ask them to say how the money will be spent. It is intrinsic to the approval that Parliament should be told that.

The Secretary of State misled the House gravely in the discrepancy between his two statements. He should reflect overnight on whether his pugilistic stance is in his long-term interests. He might do better to reflect carefully and consider making a personal statement to the House. He should consider whether he owes an apology to the House for his statement on either 10 November or 22 November. On his admission, both cannot be correct. He must make a choice between one or the other. He misled the House either on one occasion or on the other.

Mr. Canavan

Apologise.

Mr. Smith

It is time that the Secretary of State took his responsibilities seriously. I see that the Minister of State wants to give an explanation.

Mr. Gray

The right hon. Gentleman must have forgotten that the money is being transferred under his Act. It is being transferred under the powers of the Petroleum and Submarine Pipe-lines Act, which the right hon. Gentleman was responsible for putting through. It is as simple as that.

Mr. Smith

That is a dazzling point. Because Parliament gives powers to a Minister, Parliament is presumed to have endorsed all the stupid uses of the powers that Ministers will get up to. That is a bald proposition, even from the Minister of State.

The Minister of State and the Government, supported by the Secretary of State and his inadequate explanations, have come before Parliament with an ill-prepared and ill-thought-out order. When Parliament does the necessary job of probing it and asking for explanations, they are found to be singularly lacking. The Secretary of State has been caught out by his own words in Hansard because of the discrepancy between his statements on 10 and 22 November.

It is about time that the Secretary of State and his colleagues realised that they have perpetrated an enormous fiasco with the splitting up of BNOC and the floating of Britoil. Many people are bitter about it. The Secretary of State will be well aware that some of the underwriters whom the Government leaned on during this issue suffered the loss of millions of pounds, as did the Post Office superannuation fund, the chief executive of which is also a director of Britoil. He wanted the Government to ensure that there was a massive investment in Britoil, but about £2 million of the fund has been lost as a result of the exercise, which was carried out to perpetuate the ideological obsessions of the Government rather than to pursue a genuine concept of the public interest.

This is an appalling order. The debate has been useful because it has flushed out not only its inadequacies but the capacity of the Secretary of State to mislead not only himself but the House. The matter will not be left where it stands. It will be pursued actively in the weeks and months ahead.

Question put:—

The House divided: Ayes 128, Noes 79.

Division No. 32]	[11.43 pm
AYES
Alexander, Richard	Knight, Mrs Jill
Ancram, Michael	Lamont, Norman
Aspinwall, Jack	Lang, Ian
Atkins, Rt Hon H.(S'thorne)	Lawson, Rt Hon Nigel
Atkins, Robert (Preston N)	Lester, Jim (Beeston)
Atkinson, David (B'm'th,E)	Lloyd, Peter (Fareham)
Baker, Nicholas (N Dorset)	Loveridge, John
Beaumont-Dark, Anthony	MacGregor, John
Benyon, Thomas (A'don)	MacKay, John (Argyll)
Berry, Hon Anthony	McNair-Wilson, M. (N'bury)
Bevan, David Gilroy	Major, John
Biggs-Davison, Sir John	Mates, Michael
Blackburn, John	Mather, Carol
Boscawen, Hon Robert	Maxwell-Hyslop, Robin
Bright, Graham	Mellor, David
Brinton, Tim	Meyer, Sir Anthony
Brooke, Hon Peter	Mills, Iain (Meriden)
Brown, Michael (Brigg & Sc'n)	Moate, Roger
Bruce-Gardyne, John	Montgomery, Fergus
Buck, Antony	Morrison, Hon C. (Devizes)
Budgen, Nick	Mudd, David
Carlisle, John (Luton West)	Murphy, Christopher
Carlisle, Kenneth (Lincoln)	Myles, David
Carlisle, Rt Hon M. (R'c'n)	Neale, Gerrard
Cope, John	Nelson, Anthony
Corrie, John	Neubert, Michael
Cranborne, Viscount	Newton, Tony
Dorrell, Stephen	Onslow, Cranley
Dover, Denshore	Osborn, John
Dunn, Robert (Dartford)	Page, Richard (SW Herts)
Eden, Rt Hon Sir John	Parris, Matthew
Eggar, Tim	Patten, Christopher (Bath)
Elliott, Sir William	Pattie, Geoffrey
Emery, Sir Peter	Proctor, K. Harvey
Fairgrieve, Sir Russell	Rathbone, Tim
Faith, Mrs Sheila	Rhodes James, Robert
Fenner, Mrs Peggy	Roberts, M. (Cardiff NW)
Fletcher, A. (Ed'nb'gh N)	Roberts, Wyn (Conway)
Fletcher-Cooke, Sir Charles	Rossi, Hugh
Forman, Nigel	Rumbold, Mrs A. C. R.
Goodlad, Alastair	Sainsbury, Hon Timothy
Gow, Ian	Shaw, Giles (Pudsey)
Grant, Anthony (Harrow C)	Shepherd, Colin (Hereford)
Gray, Rt Hon Hamish	Sims, Roger
Griffiths, Peter Portsm'th N)	Skeet, T. H. H.
Gummer, John Selwyn	Smith, Tim (Beaconsfield)
Hamilton, Hon A.	Speed, Keith
Hampson, Dr Keith	Speller, Tony
Hannam, John	Spicer, Michael (S Worcs)
Hawkins, Sir Paul	Sproat, Iain
Heddle, John	Stainton, Keith
Henderson, Barry	Stanbrook, Ivor
Hogg, Hon Douglas (Gr'th'm)	Stevens, Martin
Howell, Rt Hon D. (G'ldf'd)	Stewart, A. (E Renfrewshire)
Hunt, John (Ravensbourne)	Stradling Thomas, J.
Jopling, Rt Hon Michael	Taylor, Teddy (S'end E)
Kaberry, Sir Donald	Temple-Morris, Peter
Kershaw, Sir Anthony	Thomas, Rt Hon Peter

Thompson, Donald	Watson, John
Thorne, Neil (Ilford South)	Wells, Bowen
Townend, John (Bridlington)	Wilkinson, John
Trippier, David	Young, Sir George (Acton)
van Straubenzee, Sir W.
Waddington, David	Tellers for the Ayes:
Waller, Gary	Mr. David Hunt and
Warren, Kenneth	Mr. Tristan Garel-Jones.
NOES
Alton, David	Hughes, Robert (Aberdeen N)
Atkinson, N.(H'gey,)	Janner, Hon Greville
Bagier, Gordon A.T.	Mabon, Rt Hon Dr J. Dickson
Beith, A. J.	McElhone, Mrs Helen
Bennett, Andrew (St'kp't N)	McGuire, Michael (Ince)
Booth, Rt Hon Albert	McKay, Allen (Penistone)
Brown, Hugh D. (Provan)	MacKenzie, Rt Hon Gregor
Callaghan, Jim (Midd't'n & P)	McWilliam, John
Campbell-Savours, Dale	Marshall, D (G'gow S'ton)
Canavan, Dennis	Marshall, Jim (Leicester S)
Cocks, Rt Hon M. (B'stol S)	Martin, M (G'gow S'burn)
Cook, Robin F.	Millan, Rt Hon Bruce
Cowans, Harry	Morton, George
Craigen, J. M. (G'gow, M'hill)	Oakes, Rt Hon Gordon
Crowther, Stan	O'Neill, Martin
Cryer, Bob	Palmer, Arthur
Cunningham, Dr J. (W'h'n)	Parry, Robert
Dalyell, Tam	Penhaligon, David
Davis, Terry (B'ham, Stechf'd)	Powell, Raymond (Ogmore)
Deakins, Eric	Prescott, John
Dean, Joseph (Leeds West)	Rees, Rt Hon M (Leeds S)
Dixon, Donald	Robertson, George
Dormand, Jack	Ross, Stephen (Isle of Wight)
Douglas, Dick	Rowlands, Ted
Dubs, Alfred	Skinner, Dennis
Duffy, A. E. P.	Smith, Rt Hon J. (N Lanark)
Eastham, Ken	Snape, Peter
Ellis, R. (NE D'bysh're)	Spearing, Nigel
Evans, John (Newton)	Steel, Rt Hon David
Field, Frank	Stoddart, David
Foulkes, George	Stott, Roger
George, Bruce	Strang, Gavin
Grant, John (Islington C)	Tinn, James
Hamilton, W. W. (C'tral Fife)	Urwin, Rt Hon Tom
Hardy, Peter	Welsh, Michael
Harrison, Rt Hon Walter	Winnick, David
Haynes, Frank	Woolmer, Kenneth
Hogg, N. (E Dunb't'nshire)
Home Robertson, John	Tellers for the Noes:
Homewood, William	Mr. Lawrence Cunliffe and
Hooley, Frank	Mr. Hugh McCartney.
Howells, Geraint

Question accordingly agreed to.

Resolved, That the draft British National Oil Corporation (Borrowing Powers) Order 1982, which wad laid before this House on 9th December, be approved.