Britoil

HC Deb 23 February 1988 vol 128 cc149-60 3.31 pm

The Chancellor of the Exchequer (Mr. Nigel Lawson)

With permission, Mr. Speaker, I wish to make a statement.

On 1 February I told the House that, following the acquisition by BP of the majority of Britoil's ordinary shares, the Government would discuss with the two companies how we would use the special share. I reaffirmed that the powers of the special share would be used for so long as it was in the national interest to do so. I undertook that, in the discussions, we would take fully into account what was best for Scotland and for the development of the North sea. Those discussions have now been completed, and an acceptable arrangement has been reached with BP. The details are set out in an exchange of letters between BP and the Treasury, and I am placing copies in the Library of the House.

I shall deal first with the undertakings BP has given about its management of Britoil's North sea assets on the United Kingdom continental shelf. BP will seek to achieve an increase of at least 5 per cent. in recoverable reserves from Britoil's North sea oilfields. It has also undertaken to increase exploration substantially. By 1990, BP plans to spend between £300 million and £325 million a year on combined BP and Britoil North sea exploration. This represents a large increase in expenditure, and will lead to a major expansion in the number of wells drilled. BP has undertaken to develop as fast as is practicable all economic North sea discoveries in the combined BP and Britoil portfolio, including those resulting from the increased exploration programme.

All this implies a faster and more effective development of assets in the North sea. This increase in activity should give a welcome boost to the United Kingdom offshore industry.

So far as Scotland is concerned, BP has undertaken that Britoil's Glasgow office will become the business headquarters for the management not only of BP's and Britoil's combined United Kingdom upstream assets but also of BP's Norwegian and Irish interests, and that the overall number of employees in Aberdeen and Glasgow will not fall as a result of the acquisition.

BP has also undertaken to transfer to Glasgow the management of a high technology research and development project for the exploitation of the deeper waters of the United Kingdom continental shelf and elsewhere. As a minimum, between 50 and 75 senior BP executives and other highly qualified technical graduate staff will move to Scotland.

BP expects to increase the existing commitments of both companies in support of United Kingdom continental shelf-related research at Scottish universities. In addition, the company will endow a number of BP research fellowships for postgraduate research in Scottish universities. Both BP and Britoil have an excellent reputation for support for the Scottish community, and BP has undertaken that that will be continued at at least the present levels for the two companies.

The board of Britoil will be headed by a new non-executive chairman without any previous BP connections, whose appointment will be agreed between the Government and BP. Of the rest of the board, the chief executive and the executive directors will be nominated by BP, but the appointment of a majority of the non-executive directors will be agreed between the Government and BP.

If BP, which currently owns some 80 per cent. of Britoil's ordinary shares, ends up with a majority, but not a 100 per cent. shareholding, the same assurances and arrangements will apply, to the extent consistent with the obligations owed to Britoil's minority shareholders. Britoil will then be managed and operated as a separate, independent subsidiary and will have its own chief executive. The proposed staff movements to Scotland will still take place.

The Government have told BP that in return for these assurances, and so long as we are satisfied that BP is complying with them, we do not intend to exercise any of the rights attaching to the special share. After a period of time the Government will review, in the light of the way that these assurances have operated, when the special share should be redeemed. Meanwhile, responsibility for the special share will be transferred from the Treasury to the Department of Energy.

The existence of the special share has enabled the Government to secure from BP these wide-ranging, valuable and public assurances. BP has a high reputation, both internationally and also as a major employer in Scotland, and I am sure that the House will share my confidence that it will honour the assurances it has given.

I believe that this outcome is good for Scotland, good for the efficient exploitation of our North sea assets, and good for the future of the two companies and of their employees.

Mr. John Smith (Monklands, East)

I hope that the Chancellor does not expect the House of Commons to accept that this pathetic exercise in window dressing is an honouring of the specific pledges about the independence of Britoil that he gave when he was Secretary of State for Energy while assuring us of the magical properties of the golden share. Let me remind the Chancellor of what he said to the House when he was Secretary of State for Energy. He said that the special share will act as the most formidable deterrent to anyone who tries to take over control of the board, of the company or of the majority of its shares, and who the Government consider to be unacceptable."— [Official Report, 31 March 1982; Vol. 21, c. 334.] Does the Chancellor also recollect that the then Minister of State for Scotland, now Lord Gray of Contin, said: The articles will contain effective safeguards for Britoil's independence and the safeguards will be triggered if there is an attempt to take over voting control of the company or to control the Britoil board or its composition."— [Official Report, 1 April 1982; Vol.21, c.450.] Is it not right to say that BP correctly judged that the Government would not stand by their own assurances and has now rolled over the Chancellor of the Exchequer?

In exchange for the obliteration of the independence of Scotland's largest publicly quoted company there is an undertaking that jobs will not fall, although there is no guarantee for the future, 50 to 75 executives will move with the research project, which should have been in Scotland in the first place, and the Scottish universities will get a few extra research fellows.

Is it not crystal clear that the Chancellor exacted precious little from BP in exchange for handing Britoil to it on a plate? Is it not typical of the muddle of public relations and doublespeak with which this statement is riddled that Britoil is to be managed as a separate, independent subsidiary"? Does not the Chancellor understand that a subsidiary has ceased to be independent? Was it not the independence of Britoil that the golden share was supposed to guarantee? Is it not significant that BP has sole and unfettered control over the appointment of the chief executive and all the executive directors of the new subsidiary?

Having failed to use the powers of the golden share, the Chancellor is now signalling its end, and even in its limbo period it is so worthless that the Treasury is tossing it over to the Department of Energy.

Does not this whole episode prove that the Chancellor is not to be trusted when he gives assurances to Parliament? The result of the whole exercise is the betrayal of the public interest exemplified by an increase in monopoly power, a move of decision-making power to London and the extinction of a proud and successful oil company.

Will the Chancellor reflect on the irony that, while he allows BP to gobble up Britoil, the Kuwaiti Investment Office is steadily increasing its shareholding in BP—the pathway opened to the Kuwaitis by the Chancellor's decision to persist in selling the Government's share after the crash? Do not the Kuwaitis have a clearer concept of their national interest than the Chancellor has of the British interest?

Mr. Lawson

I am not at all surprised that the right hon. and learned Gentleman got on to the subject of the Kuwaiti holding in BP, because he knew that he was on such flimsy and hopeless ground on the issue about which I made my statement. He also knows of the assurances that we have received from the Kuwaiti Government on the Kuwaiti holding.

I am sorry that the right hon. and learned Gentleman should have decided to imply that BP was such an unacceptable owner of Britoil, as I well recall an earlier occasion—over the BP share issue—when he lauded the merits of BP to the skies. He seems to have changed his tune to a remarkable extent. Also, the right hon. and learned Gentleman has not read the statement very carefully, although he had a long time to do so. The reference to the separate independent subsidiary was in the case where BP did not secure 100 per cent. of the shares and therefore there was a minority outstanding. Therefore, that is an accurate statement in company law. If, however, BP gets 100 per cent., Britoil will not be independent but it will still he subject to the assurances that BP has given. They are substantial assurances and the right hon. and learned Gentleman is wholly wrong to brush them aside. His views will not be shared by anyone who knows anything about the oil industry in general and the Scottish offshore oil industry in particular.

Finally, I would refer the right hon. and learned Gentleman to the statement that I made more than five years ago as Secretary of State for Energy which he quoted. I said that the special share would be a deterrent to the takeover of Britoil by anyone who the Government considered to be unacceptable. The Government have found that a takeover by BP, subject to the assurances that BP has given, is thoroughly acceptable and in the best interests of the British people and the British economy.

Mr. Alick Buchanan-Smith (Kincardine and Deeside)

Will my right hon. Friend acknowledge that there has been a direct challenge from BP to the Government? In those circumstances, my right hon. Friend is placed in extreme difficulty. This is indeed a sad day for the independence of Britoil and of the British oil sector. Having said that, will my right hon. Friend accept that the assurances that he has obtained from BP in these difficult circumstances are very much to be welcomed? Will he ensure —particularly in the future interests of Britoil's staff—that there is no backsliding and that BP fulfils to the letter the undertakings that have been given?

Mr. Lawson

I thank my right hon. Friend for his remarks. I am quite sure that there will be no backsliding by BP. BP has given solemn assurances to me and, through me, to the House of Commons. But of—[Interruption.]

Mr. Speaker

Order. It is very difficult to hear what the Chancellor is saying when there is so much background noise from a sedentary position.

Mr. Lawson

But of course it is important that the House should be assured that the undertakings that BP has given will be carried out, and that is why we shall be retaining the special share, with all its powers, until such time as these assurances and undertakings have been fully implemented and have been seen to be working satisfactorily for a reasonable period.

Several Hon. Members

rose—

Mr. Speaker

Sir Hector Monro. [HON. MEMBERS: "Oh!"] I will balance up in a minute.

Sir Hector Monro (Dumfries)

Does my right hon. Friend accept that most thinking Scots will welcome a company such as BP with an international reputation developing its operational and administrative role in Scotland? Has my right hon. Friend discussed with BP the likely employment figures over the next two or three years?

Mr. Lawson

I am grateful to my hon. Friend. The employment figures will obviously depend on the success of the exploration programme and the success of the North sea oil industry based in Scotland, but I have no doubt that the arrangements that we have secured will benefit the North sea oil industry in Scotland. It is interesting that the total amount that BP expects to spend on exploration in the UKCS by 1990 of between £300 million and £325 million compares with a total for BP arid Britoil this year of around £200 million.

Mr. Dick Douglas (Dunfermline, West)

Will the Chancellor enlighten us a little on one of the conditions that BP seems to find acceptable — the 5 per cent. increase in the return on recoverable reserves? What timespan does the Chancellor seek to put on that evaluation? Will he or the Department of Energy continue to hold the golden share in order to ascertain whether this is a mere promise on the part of BP, or a promise that looks at the value of a field over, say, 20 to 25 years? How will the Chancellor or the Department of Energy seek to monitor that, or has he, in reality, sold out on a whole range of conditions to an oil company that knows what it is doing when he does not?

Mr. Lawson

The way in which BP conducts itself when it has secured Britoil and its operations in the North sea will be carefully monitored by the Department of Energy, which is one of the reasons why it seemed to me appropriate that the special share should be transferred to the Department of Energy.

Mr. Malcolm Bruce (Gordon)

Will the Chancellor acknowledge that his statement to the House this afternoon is a shameful climb-down on the merit of the golden share? Why was not the takeover of Britain's largest independent oil company by Britain's largest oil company referred to the Monopolies and Mergers Commission? Does not the takeover show the Government's complete lack of understanding on the role that can be played by independent oil companies as opposed to multi-nationals? Will the net effect in Scotland outweigh the fact that BP is now transferring 300 people from Aberdeen to London, and will the transfers to Glasgow be from south of the border or from Aberdeen?

Mr. Lawson

Whether the arrangements should have been referred to the Monopolies and Mergers Commission is a matter for the Director General of Fair Trading and for my right hon. Friend the Secretary of State for Trade and Industry, not for me. The enhanced activity of the combined British Petroleum and Britoil group will mean great benefits for Scotland. The special share has ensured the independence of Britoil for over five years. It has ensured there has been no foreign acquisition of Britoil and it has ensured that BP has given the important undertakings that it has.

Mr. Tim Smith (Beaconsfield)

Will my right hon. Friend confirm that the original object of the special share was to ensure that Britoil remained a British company? What could be more British and more acceptable than for Britoil to be acquired by BP?

Mr. Lawson

My hon. Friend makes a good point. It is deplorable that the Opposition seem to have nothing good to say about BP, Britain's largest company. One might have expected that sort of thing from Members of the Scottish National party, if there are any around; I would not have expected it from Members of other parties who believe in the union.

Mr. Harry Ewing (Falkirk, East)

Will the Chancellor answer a simple question by telling the House what contingency arrangements he has in case BP fails to honour the undertakings that he has given the House today? Is it possible that BP will be divested of its share interest in Britoil if it fails to honour the undertakings which it has given the Chancellor and which he in turn has given the House?

As for BP's employment record, does the Chancellor realise that he simply does not know what he is talking about? As a Scottish Member in whose constituency BP has been throughout my parliamentary life, I know that it has the most appalling employment record of any company in my constituency. I do not regard the undertakings that BP has given the Chancellor as being worth the paper on which they are written.

Mr. Lawson

I find it difficult to contemplate that a company such as BP would give such undertakings to me, and through me to the House, and then break them. If, however, BP did not live up to those assurances, the Government would have full power to use the special share to remove the entire board of Britoil, and to replace it with another board.

Mr. Michael Fallon (Darlington)

Does my right hon. Friend accept that, if the Opposition have no interest in the jobs in Scotland, we would be happy to have them in the north-east and receive similar assurances there? Does he not agree that, if the Opposition cannot attach any value to the concept of a tartan share, it is probably high time that it was redeemed?

Mr. Lawson

I note what my hon. Friend has said. He is always a powerful advocate for the north-east of England.

Mr. Tam Dalyell (Linlithgow)

What exactly has BP given in the way of undertakings? Will the Chancellor look at the small print? For example, paragraph 7 of his statement tells us: BP expects to increase the existing commitments of both companies in support of UK continental shelf-related research at Scottish universities. BP only "expects" to do that. Where are the undertakings? If BP cannot agree to that, what can we expect from it?

If we look at the statement carefully, we see that BP has not given the undertakings that the Chancellor is trying to give the impression it has given. What is meant by "expect"? Why could not even that be a definite undertaking?

Mr. Lawson

What is meant is that the hon. Gentleman can expect BP to live up to its undertakings. If he wants to look at the small print, however, I suggest that he looks not merely at my statement—which is perhaps the large print—but at the letter written by BP, which I have placed in the Library of the House and which runs to no fewer than 32 paragraphs.

Sir Ian Lloyd (Havant)

Will not the public in general, and the Scottish public in particular, be much more impressed by my right hon. Friend's announcement about the increased development in the North sea, and the intensification of research and development in Scotland, than by the accustomed sterile preoccupations of the Opposition with which shares reside in which strong box? Can my right hon. Friend tell us whether this represents any change in the Government's policy towards the independent sector?

Mr. Lawson

I am grateful to my hon. Friend for what he has said. There is no change in the Government's policy towards the independent sector of the North sea, but that is not a matter for me; it is a matter for my right hon. Friend the Secretary of State for Energy.

Mr. Alex Salmond (Banff and Buchan)

Is the Chancellor aware that the exploration figures that have so excited him in relation to BP's projected expenditure in 1990 are less than the combined exploration expenditure of BP and Britoil in 1985? Are we not moving backwards, and are not those figures almost certainly less than they would be if the two companies remained independent?

Is it not the case that, if BP reaches 90 per cent. of the shareholding, the rest of the small shareholders will be forced to sell out? Are there any guarantees for jobs, given that BP plans to expand its job control from Dyce by 1,000 according to its own devices, and that to maintain employment could still conceal a rationalisation of Britoil jobs?

Does not the Chancellor remember telling the House that it is important to protect the character of Britoil as an independent company, responsible for its own management and business strategy"?—[Official Report, 31 March 1982; Vol. 21, c. 334.] Has that been done, and, if not, why not?

Mr. Lawson

On the specific undertakings given by BP, I ask the hon. Gentleman to look at the letter that I have placed in the Library of the House which goes into that in considerable detail, and which I summarised in my statement to the House a little earlier.

As for exploration levels in 1985 and now, I shall let the hon. Gentleman into a secret. At the beginning of 1986, there was a complete collapse of the world oil price, which led to a dramatic fall in exploration world-wide and not merely in the North sea. Therefore, the comparison is between what is promised by BP and what is happening now. As I have said, BP's best estimate of the total amount of expenditure in the North sea by BP and Britoil combined this year is about £200 million whereas the undertaking for 1990 is for expenditure of between £300 million and £325 million. That is a substantial increase.

Mr. Allan Stewart (Eastwood)

Further to his answer to my hon. Friend the Member for Dumfries (Sir H. Monro), does my right hon. Friend agree that, although the number of jobs is, of course, important, the quality of those jobs is crucial and that that is why, for example, the transfer of the sub-sea technology department to Glasgow is so welcome? Can my right hon. Friend give any indication of the timetable for the transfer of that important work?

Mr. Lawson

My hon. Friend is right. On the timetable, BP will carry out that transfer as soon as practicable—[Interruption.] It is of importance. When I visit Scotland the point is often made to me that the jobs that people in Scotland seek are high grade jobs. The jobs to which my hon. Friend referred and to which I referred in my statement are jobs for senior executives and high and top level technologists. They are just the sort of jobs that the Scottish people have wanted to see in Scotland.

Mr. Frank Doran (Aberdeen, South)

On the version in the Chancellor's statement, I think that we can take it that he has battered BP into submission. Is he aware that Britoil's employees in my constituency are still extremely concerned about their job prospects? Did the Chancellor receive undertakings from BP about future developments in, for example, the Don, the Ettrick and the Amethyst fields which would protect those jobs and guarantee their future?

Mr. Lawson

Clearly there were no specific agreements about individual fields, but there was an undertaking to increase exploration activity substantially. That can only be good news for the United Kingdom offshore oil industry based in Scotland.

Mr. Robert B. Jones (Hertfordshire, West)

Will my right hon. Friend note that if he wants evidence of commitment to Scotland by BP he need look no further than Grangemouth because not only is that Scotland's only refinery but there has been a substantial programme of investment there? When Opposition Members huff and puff about BP, will my right hon. Friend remind them that during the oil price crash Britoil laid off people right left and centre, whereas a large conglomerate such as BP was in a much better position to protect the jobs of its employees?

Mr. Lawson

I think that my hon. Friend is implying that, as usual, Opposition Members are completely out of touch with reality and with the British people. He is quite right.

Mr. Alistair Darling (Edinburgh, Central)

Does the Chancellor accept that the undertakings given by BP are remarkably similar to those that were given by the Guinness company, and they were broken? What does the Chancellor plan to do to enforce those promises, or is this another example of major influence on the Scottish economy passing, in this case, not just to London, but to the shores of the Gulf?

Mr. Lawson

I have already explained—I am not sure whether the hon. Gentleman understood it—that we shall for the time being retain the special share, with all its powers, to ensure and to satisfy ourselves that the undertakings are carried out. I greatly deplore the slurs that the hon. Gentleman and his right hon. and hon. colleagues are making about BP.

Mr. Nicholas Fairbairn (Perth and Kinross)

I congratulate my right hon. Friend on achieving what he has achieved as a demostration of his conscious responsibilities as a Minister peculiarly responsible for matters in all parts of the United Kingdom. The opportunities that he has obtained for executives at senior level to come to Scotland will enable them not only to enjoy the highest standard of living in the United Kingdom, but to promote the huge surge of industry, energy and prosperity which Scotland has enjoyed under this Government.

Mr. Lawson

As usual, there is much in what my hon. and learned Friend says. I believe that it would be more constructive and certainly a great deal better for Scotland if right hon. and hon. Members on the Labour Benches would occasionally stop all this carping and tell the world of the successes of the Scottish economy.

Mr. Brian Wilson (Cunninghame, North)

Is the Chancellor saying that anyone who objects to the agglomeration of independent companies into already huge multinational companies is guilty of carping and, by definition, guilty of attacking the company that is doing the acquiring? Does the Chancellor agree that he has made the Secretary of State for Scotland look more than usually absurd? Only last Thursday the Secretary of State for Scotland, in a much-hyped speech, boasted that privatisation led to greater corporate control resting in Scotland. How does the Chancellor equate what has happened to Britoil, with its movement from the public to the private sector and its eventual movement from control in Scotland to Kuwait, with the statement made by his right hon. and learned Friend?

Mr. Lawson

I agree entirely with what my right hon. and learned Friend said. I assure the hon. Gentleman that there is no question of control moving to Kuwait. As for my right hon. and learned Friend looking unhappy, he does not look very unhappy to me, and I should be surprised if he were because I consulted with him throughout the negotiations.

Sir Peter Hordern (Horsham)

Since this is the first time that the golden share technique has been tested in this way, will my right hon. Friend say whether other companies in which the Government hold a golden share may also be subject to a takeover bid subject only to the consent of the Government?

Mr. Lawson

Each golden share has its own terms and conditions. However, with the exception of Enterprise Oil, where the golden share terminates at the end of the year, pretty well all the other golden shares restrain a holding to 15 per cent. Therefore, the situation is rather different from the situation that pertains in the case of Britoil.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

The Chancellor has made reference to the statements that he has previously made. Does he recall the statement he made from the Dispatch Box about the flotation of Britoil? He said that the purpose of that flotation was to create a new, independent company—independent of the oil majors. If it was a good thing then, why is the destruction of such independence now considered a good thing?

Mr. Lawson

We created a new, independent oil company and freed it from state control and, since then, it has done well. What I also said—indeed it was also said by the right hon. and learned Member for Monklands, East (Mr. Smith) —was that the purpose of the golden share was to prevent a takeover by anybody who the Government considered to be unacceptable. The whole point is that, as a result of the discussions, we have achieved a situation where there is an acceptable takeover of Britoil.

Mr. Bill Walker (Tayside, North)

Does my right hon. Friend realise that there are many Scots who will welcome the statement in the form that it has taken today because they are proud of being Scots and proud of being British? Will my right hon. Friend confirm that BP's independence as a British company — operating as it does in the international market of which, by nature of the business, it must be part — is now much stronger and better because BP and Britoil together are obviously a much safer and better company than they were apart?

Mr. Lawson

As my hon. Friend says, it must clearly be the case that the acquisition of Britoil has considerably strengthened BP.

Mrs. Maria Fyfe (Glasgow, Maryhill)

Will the Chancellor tell us to whom this takeover is acceptable?

Mr. Lawson

It is acceptable to Her Majesty's Government and it would also appear acceptable to the shareholders of Britoil, some 80 per cent. of whom have accepted the offer.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Will my right hon. Friend accept that many of us thought that there was an inevitability about Britoil being taken over by BP and that it now becomes even more significant that BP stays British and does not become Kuwaiti? Will my right hon. Friend let us into the secret at to what his views would be should someone who is not a British national make a takeover bid for one of our greatest British companies in the oil industry?

Mr. Lawson

I do not believe that it is sensible to engage in hypothetical speculation, but I am confident that BP will remain British.

Mr. Terry Patchett (Barnsley, East)

Can the right hon. Gentleman inform the House how much more of the family silver is left to sell off?

Mr. Lawson

That is a pretty tired old simile. I am proud to say that the privatisation programme will continue for many, many years to come.

Mr. Peter Rost (Erewash)

Will my right hon. Friend remind the House that BP was not prevented by the American Government from taking 100 per cent. control of Standard Oil — without any special share — even though Standard Oil is much larger than Britoil and happens to own the largest oil reserves in North America? What is all the fuss about?

Mr. Lawson

I believe that my hon. Friend puts an extremely valuable perspective on the discussions that we have had this afternoon.

Mr. Rhodri Morgan (Cardiff, West)

Does the Chancellor agree that he has brought a considerable amount of this humiliating climb-down on himself? In mid-October 1987, he demonstrated, in proceeding with the share sale, that he was a devotee of the James Anderton philosophy of privatisation—flog the underwriters until they beg for mercy. Does he not agree that had he not alienated the management board of BP on that occasion he would have found the subsequent negotiations when trying, with the use of the golden share, to scare it off from acquiring Britoil far easier to undertake?

Mr. Lawson

I am sure that the BP underwriters will be grateful for the hon. Gentleman's solicitude.

Mr. Quentin Davies (Stamford and Spalding)

Although they have not been mentioned this afternoon, does my right hon. Friend agree that the interests of the Britoil shareholders are worth some consideration? The Government would have had to have extremely strong reasons to justify intervening to prevent them from accepting an otherwise extremely attractive offer.

Does my right hon. Friend also agree that it would have been quite absurd and totally wrong to use the golden share as a way of freezing the structural shareholding of a particular company in a particular way for all time? Markets evolve and in the past few years the oil market in particular has changed substantially. It would have been wrong to prevent BP from having the chance to emerge in the future as a greatly expanded and strengthened major vertical company based both in England and in Scotland.

Mr. Lawson

My hon. Friend makes a number of pertinent remarks. I would only repeat that I believe that the arrangements that have been put in place are good for the North sea oil industry and good for Scotland. My hon. Friend is right to mention the position of the Britoil shareholders. That was certainly one of the factors that I had to take into account.

Mr. D. N. Campbell-Savours (Workington)

Will the Chancellor confirm that nearly two thirds of the shares recently sold in BP have been bought by the Kuwaitis? Is he protesting about that to the Kuwaiti Government? What have they said in response? Have they given any assurances or does he intend that they build up a holding of 29.5 per cent. before he does anything?

Mr. Lawson

It is well known that the Kuwait Investment Office holds a little more than 20 per cent. of the ordinary shares of BP. It is also well known that the Kuwaitis have given an undertaking and an assurance to the Government that they regard this as a long-term investment and that they have no interest whatever in the control and management of BP.

Mr. Ian Bruce (Dorset, South)

Does my right hon. Friend agree that the overwhelming stench of humbug coming across from the Opposition Benches today should be repudiated? In view of the undertakings given by BP, perhaps he will take into account my constituents, who have Wytch Farm in their area and rely on BP's good name for maintaining the oil interests of my constituency. When he next talks to BP, and given that Scottish Members do not want headquarters jobs in their constituencies, perhaps he will consider bringing jobs to Swanage and Wareham.

Mr. Lawson

Wytch Farm is the most successful onshore oilfield in the United Kingdom. I am sure that it brings considerable benefits to my hon. Friend's constituents, about which he is fully aware.

Mr. Dennis Skinner (Bolsover)

One thing is certain: the Chancellor of the Exchequer has proved the old adage, as my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) has just reminded me, that all that glitters is not gold. What guarantee have BP and the Kuwaitis given him that they will not break their promise in the same way that he broke his promise to the House on the golden share? Is he aware that all the shenanigans that have taken place with British oil companies have provided the Left with a perfect platform for arguing the case for public ownership in the future?

Mr. Lawson

I was not aware that the Left of the Labour party, or, indeed, any part of the Labour party, needed any excuse for arguing the virtues of state ownership. It appears to have done it without any excuse. When the Labour party has been in power, it has done great damage to this country, but that will not happen again. I strongly resent the accusation that I have been dishonest with the House of Commons. I have not.

Mr. Phillip Oppenheim (Amber Valley)

Surely what is best for British business and thus for British jobs is that there should be no politically imposed Scottish solutions on British business — [Interruption]— but rather that Britoil should be free to make its own commercial decisions, free from political interference and special pleading.

Mr. Lawson

I am afraid that there was so much noise from the Opposition Benches that I was not able to hear that question.

Mr. Geoffrey Dickens (Littleborough and Saddleworth)

rose—

Hon. Members

Oh!

Mr. Speaker

Order. Let us hear this question.

Mr. Dickens

Does my right hon. Friend agree that in answering questions—[Interruption.]

Mr. Speaker

Order. Give the hon. Gentleman a chance.

Mr. Dickens

Does my right hon. Friend agree that, when Ministers are replying to questions similar to that of the hon. Member for Bolsover (Mr. Skinner), we ought to remind hon. Members that the British Government have the sanction of removing the board of Britoil if it goes back on its agreement, and that it is the British Government who issue licences for exploration and place a tax structure on oil companies? With all that behind us, why on earth are we worried about a multinational company which has to compete with other multinational companies? We cannot be parochial any longer. We must compete with the rest of the world and, to do that, we must be strong.

Mr. Lawson

I was able to hear that question, and I agree with everything that my hon. Friend said.