§ Question again proposed, That the Bill be now read the Third time.
§ Mr. PortilloI was pleased to have my right hon. Friend's assurance that that matter could be reviewed from time to time.
I hope that the Bill, which I support, will have a short life as an Act. My right hon. Friend has conducted the proceedings with considerable charm, and I thank him for that. However, he has not succeeded in convincing me that the agency will play a useful role, in particular in enhancing our security of supply. I look forward to the introduction in due course of an oil and gas agency abolition Bill. In November I shall listen extremely carefully to the Queen's Speech to see whether that welcome Bill will be included in next Session's business.
§ 10.1 pm
§ Mr. BruceToday the Government have finished a job which I and the Labour party feel they should not have started. We have reached the point where it is as well to move on to a new policy to confront the changed circumstances. My colleagues and I felt that it was right and proper for the United Kingdom to have an integrated state oil corporation, as the British National Oil Corporation originally was. Its break-up is not in the United Kingdom's interests because it reduces the Government's bargaining power with oil companies. It has not been the Government's most conspicuous performance on privatisation, as many shareholders are discovering. However, it is now as well to finish the business, and for the Government to address themselves to developing an oil and gas policy, which they have not yet done.
We are producing oil at the rate of 1 million barrels of oil a day more than our domestic requirements. There was never any agreement or debate either inside or outside the House that we should move through self-sufficiency to that level of production, but that is what we have done. In reality, the production, pricing and taxation policies of the United Kingdom North sea are determined by the Organisation of Petroleum Exporting Countries, not the United Kingdom Government, and not in accordance with the British national interest. That happens to suit the Treasury's interests.
110 The generation to come will wonder why we produced 1 million barrels a day above our requirements, and why we constructed a taxation system that made it attractive for multinational companies to produce British North sea oil rather than oil from other reserves in other parts of the world, especially as that tax structure did not necessarily suit our national interests.
The Labour party's attitude is often rightly suspicious, but wrongly hostile, towards the oil companies. It does riot seem to recognise that oil companies have skill and expertise which we use, and from which we have benefited. However, the Government seem not to recognise that the interests of multinational oil companies and the British national interest do not always coincide. There is a need for a much stronger recognition of that by the Government and for a much clearer debate on what our policy should be.
Now that we are to pass this Bill, the Government should consider their policy in a clear environment, because it is high time that we had a sensible policy for the future development of the North sea. The Government's present policy will come home to roost soon, when production and revenue decrease and they realise that they have not provided for that sad and rainy day.
§ 10.4 pm
§ Mr. Mike Woodcock (Ellesmere Port and Neston)The present chairman of Rolls-Royce, Sir Francis Tombs, recently said that decision-making in the private sector tends to be market and profit-related whereas decision-making in the public sector tends to he highly variable, politically influenced and slow. He was speaking from vast experience of private and public sector management, and most Conservative Members would agree with his sentiments. Of course, most Labour Members would disagree with them.
That division of opinion typifies the difference between the Government and the Opposition on the Bill. Arguments have dealt with which functions are best carried out by private industry and which are best carried out in the public sector. The British oil industry is typified by fierce, free competition, and its success in exploiting our national oil resources profitably provides an excellent case history of the benefits of free competition. It is a profitable industry that contributes massively to the public purse. It enjoys no subsidy, it is largely free of oppressive trade unions, and it has learnt the lessons of economic reality—all very different from some other primary energy industries.
Those characteristics of the oil industry are clearly typical of many large commercial organisations. However, we would all agree that some functions are better carried out by state enterprise than by private enterprise.
When I examined the Bill, I could see no problem with participation agreements and with royalties in kind. However, with my hon. Friend the Member for Enfield, Southgate (Mr. Portillo) I had some reservations about pipeline operations. We have 1,000 miles of pipeline and 41 installations established for war. Some strategic use remains, but their commercial use has been overtaken by events. One could argue that private interests would have operated the system more effectively than did the public sector, but against that we must consider the fact that the 111 principal reason for establishing the pipeline was strategic, that the strategic element remains and that it could increase in the future.
We must come to terms with the fact that the pipeline system is little used in areas with a high defence use, but is used commercially much more in areas with a low defence use. It is difficult to establish suitable terms when defence and commercial considerations mix. However, the commercial users in my constituency at Stanlow, which is served by the pipeline, and the commercial operators in Humberside convinced me that they were happy with the present arrangements and that the management of the pipelines should remain with the state. That is why I concluded that the pipelines would be better managed by the agency.
The Bill is desirable because it renders to the private sector those functions which should be rendered to it, and leaves in the public sector those functions which are best carried out there. I welcome the Bill, which I am sure will contribute to the ever-increasing fortunes of our oil industry.
§ 10.8 pm
§ Mr. DalyellLike several of my colleagues from central Scotland and the senior staff of the BNOC, some of whom are my constituents, nothing will persuade me that that organisation was broken up for any other reason than political dogma. It is a crying shame, and the nation will learn to regret having given up the BNOC. I am sure that it was a mistake.
One question that arose out of the debate has not been answered. Suppose that there is an understanding between British Petroleum and the Government. Is it sensible and right that that understanding should be in the form of a letter from a head of department in BP to a Parliamentary Under-Secretary of State? If there are these understandings, without going too much into the heirarchy about it, for heaven's sake, is not the right thing to have it from the chairman of BP to the Secretary of State? If they are so important, why is it done at such a low level?
§ Question put, That the Bill be now read the Third time:—
§ The House divided: Ayes 185, Noes 94.
114| Division No. 274] | [10.10 pm |
| AYES | |
| Alison, Rt Hon Michael | Bruinvels, Peter |
| Ancram, Michael | Buchanan-Smith, Rt Hon A. |
| Baker, Nicholas (N Dorset) | Buck, Sir Antony |
| Beaumont-Dark, Anthony | Budgen, Nick |
| Beith, A. J. | Burt, Alistair |
| Bellingham, Henry | Butterfill, John |
| Benyon, William | Carlile, Alexander (Montg'y) |
| Bevan, David Gilroy | Carlisle, Rt Hon M. (W'ton S) |
| Biffen, Rt Hon John | Carttiss, Michael |
| Biggs-Davison, Sir John | Channon, Rt Hon Paul |
| Blackburn, John | Chapman, Sydney |
| Blaker, Rt Hon Sir Peter | Chope, Christopher |
| Boscawen, Hon Robert | Clark, Hon A. (Plym'th S'n) |
| Bottomley, Peter | Clarke, Rt Hon K. (Rushcliffe) |
| Bottomley, Mrs Virginia | Cockeram, Eric |
| Bowden, Gerald (Dulwich) | Colvin, Michael |
| Bright, Graham | Coombs, Simon |
| Brinton, Tim | Cope, John |
| Brooke, Hon Peter | Corrie, John |
| Brown, M. (Brigg & Cl'thpes) | Couchman, James |
| Browne, John | Cranborne, Viscount |
| Bruce, Malcolm | Currie, Mrs Edwina |
| Dorrell, Stephen | Pollock, Alexander |
| Douglas-Hamilton, Lord J. | Porter, Barry |
| Dover, Den | Portillo, Michael |
| du Cann, Rt Hon Sir Edward | Powley, John |
| Dunn, Robert | Proctor, K. Harvey |
| Dykes, Hugh | Raffan, Keith |
| Eggar, Tim | Rhodes James, Robert |
| Emery, Sir Peter | Rhys Williams, Sir Brandon |
| Evennett, David | Ridley, Rt Hon Nicholas |
| Eyre, Sir Reginald | Ridsdale, Sir Julian |
| Fairbairn, Nicholas | Robinson, Mark (N'port W) |
| Fallon, Michael | Roe, Mrs Marion |
| Favell, Anthony | Ross, Stephen (Isle of Wight) |
| Fenner, Mrs Peggy | Rowe, Andrew |
| Fox, Marcus | Ryder, Richard |
| Garel-Jones, Tristan | Sackville, Hon Thomas |
| Gower, Sir Raymond | Sainsbury, Hon Timothy |
| Greenway, Harry | Sayeed, Jonathan |
| Gregory, Conal | Shaw, Sir Michael (Scarb') |
| Griffiths, Sir Eldon | Shelton, William (Streatham) |
| Hamilton, Hon A. (Epsom) | Shepherd, Colin (Hereford) |
| Hayhoe, Rt Hon Barney | Sims, Roger |
| Henderson, Barry | Smith, Tim (Beaconsfield) |
| Hind, Kenneth | Soames, Hon Nicholas |
| Hogg, Hon Douglas (Gr'th'm) | Speller, Tony |
| Holland, Sir Philip (Gedling) | Spencer, Derek |
| Howells, Geraint | Spicer, Jim (W Dorset) |
| Hunt, David (Wirral) | Stanbrook, Ivor |
| Jenkin, Rt Hon Patrick | Steen, Anthony |
| Knowles, Michael | Stern, Michael |
| Lang, Ian | Stevens, Lewis (Nuneaton) |
| Lawler, Geoffrey | Stevens, Martin (Fulham) |
| Lennox-Boyd, Hon Mark | Stewart, Allan (Eastwood) |
| Lightbown, David | Stewart, Andrew (Sherwood) |
| Lilley, Peter | Stewart, Ian (N Hertf'dshire) |
| Lloyd, Peter, (Fareham) | Stradling Thomas, J. |
| Lord, Michael | Sumberg, David |
| Macfarlane, Neil | Taylor, Teddy (S'end E) |
| MacKay, Andrew (Berkshire) | Tebbit, Rt Hon Norman |
| Maclean, David John | Temple-Morris, Peter |
| Maclennan, Robert | Terlezki, Stefan |
| Madel, David | Thompson, Patrick (N'ich N) |
| Major, John | Thorne, Neil (Ilford S) |
| Marlow, Antony | Thornton, Malcolm |
| Marshall, Michael (Arundel) | Thurnham, Peter |
| Mates, Michael | Townend, John (Bridlington) |
| Mather, Carol | Tracey, Richard |
| Maude, Hon Francis | Twinn, Dr Ian |
| Maxwell-Hyslop, Robin | van Straubenzee, Sir W. |
| Mayhew, Sir Patrick | Waddington, David |
| Merchant, Piers | Wainwright, R. |
| Mills, Iain (Meriden) | Wakeham, Rt Hon John |
| Mills, Sir Peter (West Devon) | Walden, George |
| Moate, Roger | Wall, Sir Patrick |
| Montgomery, Sir Fergus | Waller, Gary |
| Moore, John | Ward, John |
| Morris, M. (N'hampton, S) | Wardle, C. (Bexhill) |
| Morrison, Hon P. (Chester) | Warren, Kenneth |
| Murphy, Christopher | Wells, Sir John (Maidstone) |
| Neale, Gerrard | Wheeler, John |
| Needham, Richard | Wiggin, Jerry |
| Nelson, Anthony | Wilkinson, John |
| Neubert, Michael | Winterton, Nicholas |
| Newton, Tony | Wolfson, Mark |
| Nicholls, Patrick | Wood, Timothy |
| Normanton, Tom | Woodcock, Michael |
| Norris, Steven | Yeo, Tim |
| Osborn, Sir John | Younger, Rt Hon George |
| Ottaway, Richard | |
| Page, Sir John (Harrow W) | Tellers for the Ayes: |
| Page, Richard (Herts SW) | Mr. Donald Thompson and Mr. Tony Durant. |
| Peacock, Mrs Elizabeth | |
| Percival, Rt Hon Sir Ian |
| NOES | |
| Archer, Rt Hon Peter | Bennett, A. (Dent'n & Red'sh) |
| Atkinson, N. (Tottenham) | Bermingham, Gerald |
| Bagier, Gordon A. T. | Bidwell, Sydney |
| Banks, Tony (Newham NW) | Brown, Gordon (D'f'mline E) |
| Benn, Tony | Brown, Hugh D. (Provan) |
| Brown. N. (N'c'tle-u-Tyne E) | Evans, John (St. Helens N) |
| Buchan, Norman | Ewing, Harry |
| Caborn, Richard | Fatchett, Derek |
| Callaghan, Jim (Hey w'd & M) | Fields, T. (L'pool Broad Gn) |
| Campbell-Savours, Dale | Fisher, Mark |
| Clark, Dr David (S Shields) | Flannery, Martin |
| Clarke, Thomas | Foster, Derek |
| Clay, Robert | Gilbert, Rt Hon Dr John |
| Cocks, Rt Hon M. (Bristol S.) | Godman, Dr Norman |
| Cook, Robin F. (Livingston) | Golding, John |
| Corbett, Robin | Gourlay, Harry |
| Corbyn, Jeremy | Hamilton, James (M'well N) |
| Cowans, Harry | Hardy, Peter |
| Craigen, J. M. | Hart, Rt Hon Dame Judith |
| Dalyell, Tam | Haynes, Frank |
| Davies, Ronald (Caerphilly) | Hogg, N. (C'nauld & Kilsyth) |
| Davis, Terry (B'ham, H'ge H'l) | Home Robertson, John |
| Deakins, Eric | Hoyle, Douglas |
| Dewar, Donald | Hughes, Robert (Aberdeen N) |
| Dixon, Donald | Lambie, David |
| Dormand, Jack | Lamond, James |
| Duffy, A. E. P. | Leighton, Ronald |
| Eadie, Alex | Lewis, Terence (Worsley) |
| Eastham, Ken | McCartney, Hugh |
| McDonald, Dr Oonagh | Powell, Raymond (Ogmore) |
| McGuire, Michael | Prescott, John |
| McKay, Allen (Penistone) | Randall, Stuart |
| McKelvey, William | Redmond, M. |
| McNamara, Kevin | Robertson, George |
| McTaggart, Robert | Rogers, Allan |
| McWilliam, John | Rowlands, Ted |
| Madden, Max | Short, Ms Clare (Ladywood) |
| Mason, Rt Hon Roy | Skinner, Dennis |
| Maxton, John | Stewart, Rt Hon D. (W Isles) |
| Michie, William | Stott, Roger |
| Millan, Rt Hon Bruce | Thompson, J. (Wansbeck) |
| Miller, Dr M. S. (E Kilbride) | Tinn, James |
| Oakes, Rt Hon Gordon | Wardell, Gareth (Gower) |
| O'Neill, Martin | Wareing, Robert |
| Orme, Rt Hon Stanley | Wilson, Gordon |
| Parry, Robert | |
| Patchett, Terry | Tellers for the Noes: |
| Pavitt, Laurie | Mr. Lawrence Cunliffe and Mr. Sean Hughes. |
| Pike, Peter |
§ Question accordingly agreed to.
§ Bill accordingly read the Third time, and passed.