Control of Fuel and Electricity (Hansard, 13 November 2000)

§ The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell)
I beg to move, That the Energy Act 1976 (Reserve Powers) Order 2000 (S.I., 2000, No. 2449) dated llth September 2000, a copy of which was laid before this House on 12th September, be approved.
On 7 September, following similar events in France, protesters blockaded the Shell refinery at Stanlow in Cheshire. The oil companies told my Department that such action, if repeated at other refineries, could quickly and seriously disrupt national fuel supplies. As a consequence, the Government sought an Order in Council under section 3 of the Energy Act 1976. The Energy Act 1976 (Reserve Powers) Order 2000 was made by Her Majesty on Monday 11 September and laid on 12 September. The order came into force on 11 September, it being considered that the exceptional urgency of the situation justified the order coming into force before it had been laid. Were the House and another place to approve the order, it would expire on 10 September 2001—that is, 12 months after it was made. Failing such approval, it would expire at midnight on Sunday 19 November. The order was approved in another place on 7 November.
Paragraph 2 of the order declares that because there is imminent in the United Kingdom a threatened emergency affecting fuel supplies which makes it necessary in Her Majesty's opinion that the Government should temporarily have at its disposal exceptional powers for controlling the sources and availability of energy, the powers of sections 1 … and 2 … of the Energy Act 1976 shall be exercisable to their fullest extent. Those sections enable the Secretary of State to make orders and to give directions to regulate the production, supply and use of certain fuels, including petrol and diesel.
It was considered in September that it was necessary for the Government to have those powers at their disposal, given the serious threat to fuel supplies, and hence to emergency and other essential services, to the health service and to food distribution. Using those powers, the Secretary of State subsequently made orders designating priority retail fuel sites and priority purposes to facilitate the orderly return to normal when protests ended. Those arrangements would have ensured continuity of essential services for a longer period had the blockades continued.
While the order is in force, the Secretary of State can, under sections 1 and 2, regulate the production and supply of fuel and direct companies and others as to the use of petroleum products or the price at which they are sold. Examples of orders and directions that the Government might want to issue would be directing petrol suppliers to supply only to specified locations and for priority purposes or restricting private, commercial or public transport activity, for the purpose of conserving supplies.
I remind the House of the Government's approach in responding to the fuel disruption in September. The Government made clear from the first our determination to ensure that supplies were returned to normal, in view of the risk that the disruption threatened to national prosperity and, potentially, to lives. As soon as it became apparent that supplies were being affected, we took action to ensure that the necessary procedures were put in place to allow for supplies to return to normal as quickly as possible.
759 The oil industry's standing emergency committee met daily to report the position in the refineries and the effect that that was having on distribution, and to review its list of priority petrol stations and depots. The ministerial civil contingencies committee met regularly to receive reports and co-ordinate action being taken around the country.
As I have said, my right hon. Friend the Secretary of State for Trade and Industry, using the exceptional powers available under the Order in Council, made further orders designating petrol stations and depots around the country priority suppliers, and requesting oil companies to ensure that available supplies were, in the first instance, used to keep those stations open. We received representations from priority users, businesses and the public about the lists, and in response made further orders adding other petrol stations and depots. On the list of petrol stations, we also specified about 300 outlets that were primarily to serve essential users. We issued a list of essential users, including important business sectors such as food distribution as well as the emergency services themselves.

§ Miss Anne McIntosh (Vale of York)
Can the Minister explain why animal feed companies on the list were not granted exemption under the derogation orders?

§ Mrs. Liddell
A number of issues were brought to the Department's attention when the emergency orders were put in place. Since then we have had an opportunity to review those matters. The list of exemptions is now much wider, and the number of designated filling stations is much greater. At the time, the main priority was to ensure that fuel supplies reached essential services—food distribution, in the first instance. The opportunity also existed to extend the orders if the disruption continued.

§ Mr. Simon Hughes (Southwark, North and Bermondsey)
This is a factual question. Can the Minister tell us whether in her view, and according to the advice she has been given, the list of filling stations is now accurate? There were problems with the first list.
Is there now a publicly available list of those who are to be supplied as a matter of priority? And is there is a common place in government where anyone who wants any such information can have access to it on an up-to-date basis, either in the Minister's Department or in any other Department of State?

§ Mrs. Liddell
Let me explain how the list of priority filling stations and depots was compiled. It happened in consultation with the police and local authorities, following representation from essential users. As I have said, there is now a list of some 600.
The DTI is operating a telephone call centre. Anyone can telephone and find out whether their station or depot, or one that they would wish to use, is on the list. We shall certainly take steps to ensure that Members are aware of the full scope. Some have mentioned problems that arose in their constituencies last time. Many of those problems arose because of the speed with which the issues had to be addressed.
In addition to the September list of petrol stations, we specified about 300 outlets that were primarily to serve essential users. We issued a list of such users, including business sectors such as food distribution as well as the emergency services.
760 Although the powers under the Order in Council would have enabled us to issue legally binding directions, we decided that the arrangements should be non-statutory. They were handled by local authorities and the police, and co-ordinated by the Government office in each region. The emphasis was on common-sense decisions on the ground in the light of local circumstances.

§ Mr. Graham Brady (Altrincham and Sale, West)
My constituency contains a company called Clos-o-mat, which provides toilet facilities for disabled people. Although it is based in my constituency, it provides a service across the country. When I approached the Department asking for the company to be designated an essential user, I was told to advise the company to approach the local authority. Surely in the case of a company that provides a national service there is a need for a national designation, which should not depend on a single local authority.

§ Mrs. Liddell
I will take up the hon. Gentleman's point. I was not aware of the difficulty that was experienced in his constituency. We have learned a lot from the events in September. I hope that we have managed to overcome the problems, as he will find as I make progress, but I will look into the circumstances surrounding the difficulties in his constituency. I understand his anxiety about it.
Guidance on the measures taken in September was placed on Government websites and distributed through police stations, local authorities and health authorities. We set up two telephone hotlines for priority users and members of the public who wanted information. The situation returned to normal. I am sure that every hon. Member hopes that the disruption is not repeated, but the speed and scale of the disruption took everyone by surprise. It remains essential to ensure that disruption on that scale cannot be repeated.
For that reason, the Prime Minister set up a task force, which, on 29 September, published a memorandum of understanding between Government, the oil companies, trade unions, hauliers and the police. Its purpose is to ensure that fuel supply is maintained in the event of any future disruption by committing all signatories to take the necessary contingency action.
On 2 November, the Home Secretary further told the House that the task force was putting in place measures aimed at ensuring, in the event of future disruption, the delivery of fuel to petrol stations, with priority for essential users; better preparation for disruption by local authorities and other essential users; the availability of Ministry of Defence drivers to drive tankers as a last resort; the protection of food depots and other potential targets; and the keeping open of major roads. Last week, we reopened the Cabinet Office's national information and co-ordination centre, which will gather information to enable us to build an accurate picture of what happens throughout the country, so that extra support can be given to forces that need it.
I regret that we appear to be faced with threats of further disruption. We have no alternative but to seek extension of the exceptional powers, so that we can take responsible action to safeguard essential services. The Government are in no doubt that it is necessary to have those powers available for some time to come, in order to 761 take the action necessary to preserve essential supplies and services. The Government are firmly of the view that a situation continues to exist in which there is a real threat of disruption to fuel supplies and that it is our responsibility to be prepared to act quickly to maintain essential services, particularly at this season of the year.
The section of the Energy Act 1976 in question—section 3—had not previously been activated, so that was not something that we would do lightly. Careful thought was given before an order was sought in early September, and very careful thought has been given again to the issue, but it is our considered view that it is right and necessary to extend those powers.

§ Mr. Nick Gibb (Bognor Regis and Littlehampton)
For the record, I should like to declare an interest, which I have put in the Register of Members' Interests, concerning my overseas visit in September to meet representatives of oil companies, oil regulators and the Department of Energy in Washington at the invitation of the United States oil industry.
I listened carefully to the Minister's comments in introducing the order. I also listened carefully last week to the Chancellor's pre-Budget statement. The whole country watched hour by hour as the fuel protest in September brought the country to a complete standstill.
In addition to the order that the right hon. Lady proposes, another key document in the saga, as she mentioned, is the memorandum of understanding between the Government and the oil companies, police and road hauliers. All those documents—the memorandum, the order and the pre-Budget statement—deal with the symptoms of a problem, rather than the problem itself. The root of the issue is the Chancellor's decision from his first Budget onwards inexorably to continue to raise taxation on fuel, mortgages, marriage, pension funds, waste, insurance and property—extra taxation even on people over the age of 60. The total tax burden has added £670 a year to the tax bill of a typical family—over the lifetime of the Parliament £1,500 has been added to the bill of every taxpayer in Britain.
In four Budgets, the Government have increased fuel duty by 15p per litre, from 46p to 61p per litre. That is the principal reason for the increase in the petrol price at the pumps, from 59p when Labour came to power, to 82p now. There has been a 23p increase, of which 15p has been caused by taxation.
I shall put Labour's fuel duty increases in the order that they were made, starting with the earliest first. In July 1997, there was a 4p increase. That was followed, eight months later, in March 1998, with a 4.4p increase. In March 1999, there was a 3.8p increase. Finally, in March 2000, there was a 1.9p increase. That is the correct order of the increases. Now, let us see who in the Government got it right, and who got it right in the fastest time. In fact, no one in the Government got it right at all. There is a tedious dishonesty in the way in which Ministers seek to hide the 15p fuel duty increase.

§ Mr. Nigel Beard (Bexleyheath and Crayford)
Does the hon. Gentleman recognise that, in the past two years, the oil price per litre has increased by 19p, of which tax 762 accounts for only 2p, whereas the international oil market accounts for 17p of that increase? The "information" that the hon. Gentleman is giving us is, therefore, no more than fatuous propaganda.

§ Mr. Gibb
No. The point that I am making is that the Government are deliberately issuing false and fatuous propaganda on the issue. The hon. Gentleman is making the very point—almost verbatim—that the Minister for the Environment made in the House a few weeks ago. The Minister said: Since the March 1999 Budget, petrol prices in the UK have risen from 66p per litre to about 80p per litre today, an increase of 14p, but only a very small percentage—[Official Report, 25 October 2000: Vol. 355, c. 235.]

§ Mr. Deputy Speaker (Mr. Michael Lord)
Order. I tell the hon. Gentleman and the House that this debate is on a quite narrow subject and hon. Members must not stray into the issue of general taxation, or even too far into the issue of petrol itself.

§ Mr. Gibb
I accept your point, Mr. Deputy Speaker. I am just making some key preparatory remarks before dealing with the order itself.

§ Mr. Derek Twigg (Halton)
When will we get to the order?

§ Mr. Gibb
We shall get to it in due course.
An example of the Government's false propaganda is that, although they accept that there has been a 14p increase since the March 1999 Budget, they say that, of that 14p, only 1.9p was caused by the 2000 Budget. Although that is correct, in the three previous Budgets, regardless of the world oil price, there were duty increases amounting to 13p. If those extra duties had not been imposed, petrol at the pump would be 15p per litre less than it is today. The dishonest use of statistics is one of the things that people find so distasteful about politicians and why there is such cynicism about United Kingdom politics and politicians.

§ Mr. John Bercow (Buckingham)
Will my hon. Friend give way?

§ Mr. Gibb
No; I should like to make some progress before Mr. Deputy Speaker reprimands me again.
People also find the yah-boo arguments irritating. Of course the fuel duty escalator started under the previous Government. However, it started as an honest attempt to reduce fuel use and CO₂ emissions.

§ Mr. Deputy Speaker
Order. The hon. Gentleman guessed aright. I would be grateful if he would now confine his remarks to the order that we are debating.

§ Mr. Gibb
I shall obey your strictures, Mr. Deputy Speaker.
The point is that this is a self-made, self-inflicted crisis, and the Government are using the order to try to deal with its symptoms.
763 The order contains far-reaching powers for the Government. Under the order, as the Minister said, the Secretary of State may provide for regulating or prohibiting the production, supply, acquisition or use of — (a) any of the following substances including petrol, diesel and gas.
The order was made by Her Majesty on 11 September, as requested by the Minister, and laid before Parliament on 12 September. The House returned from the summer recess on 23 October. It has taken the Government until today, 13 November, before arranging for the order to be debated. Nevertheless, in her speech, the right hon. Lady said that the Government took the order very seriously indeed.
The order contains extensive powers which, frankly, should have been debated at the earliest possible time—24 October, or at least in our first week back. In fact, they should have been debated on the recall of Parliament, which my right hon. Friend the Leader of the Opposition called for in September. If the right hon. Lady is serious in her expressed concern that this is the first time that those powers have been used since the 1976 Act came into force, the Government should have recalled Parliament. The fuel protest was a crisis and these are serious powers. Why were the powers not debated earlier? Are they being debated today simply because if they were not, in six days' time they would lapse, under section 3 of the Energy Act 1976, which requires them to be debated within 28 days of the Order in Council when the House is sitting?
If passed, the order lasts for a full 12 months. Could the Minister tell the House about the Government's intentions regarding those powers? If it becomes clear over the next few weeks that they are no longer needed, will she move an order to revoke them? If not, why not? The Opposition would have had no objection to the powers being sought during what was clearly an emergency in September, and we shall not oppose the order tonight, but would it not make more sense simply to exercise those powers when they are needed, rather than now, when it is unclear whether they are required?
The exercise of the powers under the order appears to be something of a shambles. The main order was laid on 12 September. At 4 pm that same day, the Motor Fuel (Designated Filling Stations and Fuel Depots) Order was laid. That was revoked at 2 pm the next day and replaced by the Liquid and Gaseous Fuel (Designated Filling Stations and Fuel Depots) Order which, in turn, was amended some two hours later by the Liquid and Gaseous Fuel (Designated Filling Stations and Fuel Depots) (No. 2) Order.
Some 23 and a half hours after that, both orders were replaced by the Liquid and Gaseous Fuel (Designated Filling Stations and Fuel Depots) (No. 3) Order, which itself lasted three and a half hours until 7 pm on 14 September when the No. 4 order replaced the No. 3 order. The No. 4 order was, in turn, replaced by the No. 5 order at 6 pm the following day.
I am pleased to tell the House that that order lasted a full two weeks until 4 pm on 29 September when the Liquid and Gaseous Fuel (Designated Filling Stations and Fuel Depots) (No. 5) (Revocation) Order was made, revoking the whole lot. Could the Minister explain what 764 was going on with all the orders and revocations? Was it just a case of "Don't panic, Captain Mainwaring. Issue something—anything"? Were the original lists of designated filling stations and fuel depots contained in the earlier orders simply out of date and therefore wrong? Was that the reason for the numerous reissues?
What do those statutory instruments achieve? From reading them, it is not clear precisely what powers are being exercised. Issuing a list of so-called designated stations does not actually achieve anything unless it is accompanied by powers specifying who can use such filling stations, who is entitled to take fuel and who is not. I can see no such powers being exercised under any of the six statutory instruments. Could the Minister explain?
Is not the truth that the orders, as drafted, have no legal effect? The noble Lord Sainsbury said in the other place that the Secretary of State subsequently made orders designating priority retail fuel sites and priority purposes to facilitate the orderly return to normal when protests ended. Could the Minister confirm that that is an accurate statement? If it is, could she tell the House where in the orders it specifies the priority purposes referred to?

§ Mr. Bercow
My hon. Friend is patiently taking the House through what passes for the logic of the Government in proposing the orders. We understand ministerial fetishes so far as orders are concerned, but would my hon. Friend be good enough, at this relatively early hour, to advise me what he regards as the improvement in the last order by comparison with the first?

§ Mr. Gibb
My hon. Friend raises a good point. The difference between the later and earlier orders is that the documents attached to them got thicker.
Lord Sainsbury went on to say: we took the view that the arrangements should be non-statutory and handled on the ground by local authorities and the police…Guidance was placed on government websites…—[Official Report, House of Lords, 7 November 2000; Vol. 618, c. 1436.] That reflects what the right hon. Lady said earlier this evening. However, is it not rather a lax approach to place on local authorities and the police the duty to determine who could and could not obtain fuel from those filling stations, without having any legal authority? The basis for determining who qualified was made simply on the basis of a text of Department of Trade and Industry guidance issued on a Government website.
This issue is about the rule of law. To exercise powers—or, rather, not to exercise powers—through so-called guidance is surely an abrogation of that duty by the Government. My hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) gave an example of the difficulties that that causes at a constituency level. Would it not have been right to have issued such guidance through the proper exercise of a statutory instrument rather than through this curious vehicle?
From my experience as a constituency Member of Parliament during the crisis, the emergency planning officers in my area were rather perplexed by the absence of any explicit powers. They were given the duty to decide who should be allowed fuel and, with the police, were expected to enforce that on the ground. Had the crisis continued, the situation on the forecourts could have 765 become ugly, yet the enforcement officers had no legal powers to deal with matters and allocate fuel. What was the Minister's reasoning for that approach?
Another curious non-parliamentary document is the memorandum of understanding drawn up between the oil industry, road hauliers, the police, the Government and trade unions. Paragraph 6 says the UK Government, the Scottish Executive and the Cabinet of the National Assembly for Wales are willing to consider exercising their powers to permit certain flexibilities and temporary changes in the application of regulations … Could the right hon. Lady explain the concept of permitting certain flexibilities? I understand the concept of exercising powers under statute to change regulations. However, I do not understand how permitting certain flexibilities works. Does it involve an order coming before the House, or is it simply Executive action not to enforce certain laws, without any recourse or accountability to Parliament?
Finally, will the right hon. Lady explain the Government's intentions on training the military and requisitioning private sector articulated fuel tankers? Do the Government intend to take powers under section 2 of the Emergency Powers Act 1920, as she said might be the case in her written answer to my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), if the fuel protests that we see today escalate?
New Labour in office is an interesting, if depressing, phenomenon. The Labour party was swept to office because people believed that new Labour had learned the key economic lessons espoused by the Conservatives over the previous 18 years. The truth is that they learned the key economic lessons of the problems that we faced in the past, but they have not understood those lessons, or how to apply the principles inherent in those lessons to future problems and to new circumstances.
Britain's main economic problem today—and it is a serious one—is our failure as a nation to benefit from productivity gains arising out of the new economy.

§ Mr. Beard
What has productivity to do with the order?

§ Mr. Gibb
I shall come to that in a moment. The United States has had five years of such gains. Britain, by contrast, has seen its productivity improvement rates fall from 2.4 per cent. on average to just 1.4 per cent. over the past three years, compared with the United States figure of 2.7 per cent.

§ Mr. Deputy Speaker
Order. The hon. Gentleman is again straying well wide of the mark. Can he please come back to the order?

§ Mr. Gibb
Thank you, Mr. Deputy Speaker.
Productivity is one of Britain's key problems. We can see from the order that the Government are dealing with the symptoms of the problem, not the real problem. We need the Government to deal less with the symptoms of the problem, as epitomised by the order, and to deal instead with the deep-rooted economic problems facing the country.

§ Dr. Vincent Cable (Twickenham)
My colleagues and I, and particularly my hon. Friend the Member for Southwark, North and Bermondsey (Mr. Hughes) in his response to the Home Secretary last week, have made it clear from the outset that we fully supported the Government's efforts to assume whatever powers were necessary to prevent massive disruption of emergency supplies and the economy. If it was right in principle to have powers to prevent Arthur Scargill's flying pickets from disrupting emergency supplies and the national economy, it is surely right that right-wing Arthur Scargills who are not bound by trade union legislation should be constrained in a comparable way. There must, of course, be a right to protest, and we defend it, but what has happened has been well in excess of what is acceptable.
In many ways, the order is probably academic. Its purpose has already been achieved. The combination of the threat of these powers and the ability and willingness of the police to act professionally to enforce the law over the past few days has effectively meant the crumbling of the protest movement to the point at which it is no longer a serious threat. Introducing the order is probably largely superfluous, although there may be contingencies under which problems could recur.
I shall devote most of my speech to the Minister's remark that we have learned a lot over the past two months. As we look back over the initial crisis, we can ask why the distribution system unravelled so rapidly and disastrously. If the emergency powers are designed to counter the problems that caused that, we should ask how they arose in the first place.
I used to work in the oil industry, although I have rather lost contact with it now. The origins of the problem lie in the fact that the mental picture that most of us have long had of the industry no longer applies. The old picture is of a command and control system and of oil that flowed from pumps in the ground to petrol pumps through integrated companies in an orderly fashion that ensured security of supply. That model has completely broken down. The distribution sector is now extremely competitive, comprising three quite different types of company. The first type is the big oil companies and some small and medium-sized companies, which still operate in the traditional way. Secondly, Tesco and Sainsbury's in many ways dominate oil distribution. Thirdly, independent companies compete with each other. It is a cut-throat and competitive industry in which margins are small.
There has, consequently, been tremendous pressure within the industry to cut costs and, arguably, corners. That has happened in two main ways. First, the industry runs on low stock levels. As in most industries, there is tremendous pressure to have minimum stock because stocks are costly. Inventories are run down to the lowest level possible, and that meant that the industry was exposed to disruption when, for the first time in its existence, it was seriously threatened. Secondly, to cut costs, the industry sub-contracted its tankerage operations, which meant that it did not have the power to instruct drivers to carry loads. Drivers were bound by contracts and penalty clauses, but they were not employees and no one could control them.
A further important factor, which has not been publicly discussed, is the health and safety culture of the industry. Since the Piper Alpha disaster and a series of others, 767 such as the Exxon Valdez, there has been a proper preoccupation with health and safety. Everyone in the oil industry is aware that every tanker, on road or on sea, is a mobile incendiary bomb. Enormous care must be taken. I do not know whether the arguments advanced in the emergency about health and safety were excuses or were reasonable, but that was one factor advanced by the industry to explain why so little could be done to get tankers on the road.
Having offered an analysis of the problem, I must turn to the action that the Government have taken. I shall only ask questions about that; I do not know the answers. If a memorandum of understanding exists with the industry, how far is it binding on all parts of the industry? I can understand how it is possible to have a memorandum of understanding with, say, BP, but it is less clear how a meaningful memorandum that is binding on large numbers of independent companies or supermarket chains can exist.
If there is a health and safety concern, how will that be met in emergency conditions? If an Army driver is driving a commandeered truck in an emergency and an explosion occurs, who has liability for such a disaster? Is it the company or the Government? Who is responsible for maintaining the health and safety standards that the industry believed to be a major constraint on its operations?
If the crisis has revealed a chronic stock shortage, have the Government decided what the proper level of stock should be? Presumably, there is a figure for the stocks of petrol or crude oil that we need to hold within our national boundaries for a week, a month or three months. An analysis must have been made, and it would be useful to be given some information about that. How far does the industry fall short in the provision of adequate security of supply through stocks? Who will pay for that? Under whose instructions will such stocks be provided? All those questions arise from our experience of the crisis. Can we learn from that for the long term?
In effect, the order updates a previous order made in 1976, when conditions were different. That measure incorporated substantial elements of price control. Is it intended that if the emergency powers were to be activated price control would apply, or is that a historic legacy from the previous measure? Is it an active provision under the emergency powers? How would price control powers be utilised?
We are all aware of the obvious problems of price control; for example, there would be a practical problem if the Government decided that in order to prevent profiteering in an emergency, the price of an oil product should be fixed, but as the operating company would be buying and selling crude oil in a volatile market, who would carry the risk associated with such price-controlled transactions? Is price control part of the package? Is it intended to be used actively?
Under the order, price control applies to natural gas. However, the price of natural gas is already controlled by a regulator. Do the powers supersede those of the regulator? To what extent are those powers over price control relevant to the action that the Government propose?
I was forcibly struck by the fact that suppliers anywhere in the world would be subject to the order. I do not understand what that means currently, although I can 768 understand what it might have meant in 1976. At that time, BP was still a mainly nationalised British company. Under emergency powers, for example, BP's activities in Alaska would have been governed according to British priorities. However, as that is no longer the case, it is difficult to understand how such powers could be applied extraterritorially, as would seem to be the intention. What is the meaning of the statement that supplies anywhere in the world should be subject to the order? What is its contemporary relevance?
We fully support the general principle that the emergency powers should be used to prevent the disruption of emergency supplies and of the national economy.

§ Mr. Keith Darvill (Upminster)
I fully support the order. There are law and order issues to be addressed. The people who took it upon themselves to restrict the flow of fuel to the nation were clearly putting lives at risk. They did so with no electoral mandate. They took to themselves rights that are denied to people involved in an industrial dispute. The reserve powers were thus needed for the protection of the public.
My second point is on the use of the powers. I had some experience of the crisis in the London borough of Havering, where the community management team worked to keep essential services going. The community management team is made up of the police, the local authority and representatives of the health and emergency services. It met immediately the fuel crisis arose, and put into effect policies to assist wherever possible.
After the crisis ended, the team reported to the community planning forum to which Members of Parliament in my area are invited. We discussed the powers and how efficient the team's planning had been. The only criticism was that there had been a lack of co-ordination at a central level in terms of the guidance that was given by Government Departments. At a local level, plans were made to meet the problems of keeping fuel flowing and providing special services, but the implementation of those plans was not helped by the different advice received from different Departments.
Different parts of the country had different experiences, so it would be useful to analyse those experiences to see whether the reserve powers will be able to deal with circumstances such as that arose during the crisis. An inquiry or report into those experiences should be debated on the Floor of the House, because it may be necessary to have different reserve powers on the statute book in future so that much more efficient arrangements can be put in place. I do not want to be critical, because the crisis was a unique experience that arose suddenly; none the less, I would like to hear my right hon. Friend the Minister's response to those points.

§ Mr. Christopher Chope (Christchurch)
I want to ask a few brief questions. I have the privilege of having the headquarters of the defence fuel group in my constituency and the crisis has shown the importance of that tri-service organisation. Its reorganisation has proved to be effective and the group has worked hard to make contingency plans. I would like to show my appreciation of the work that it has done.
769 Is it correct to suggest that, as a result of the introduction of ultra-low sulphur petrol and ultra-low sulphur diesel, this country will depend increasingly on imported refined products? Traditionally, we have refined the product in this country, having imported it in an unrefined state. However, is the ability of United Kingdom refineries to deliver the Chancellor of the Exchequer's commitment that everyone would have access to ultra-low sulphur petrol by next March achievable only—

§ Mr. Deputy Speaker
Order. The hon. Gentleman is straying outside the terms of this debate. I would be grateful if he would confine his remarks to the order and its effects.

§ Mr. Chope
I shall certainly do that, Mr. Deputy Speaker.
It is my understanding that, under the powers in the order, the Secretary of State can intervene to direct the distribution and production of particular types of fuel. Because the order will extend over the next 12 months, will the Minister tell us whether it can be used in any circumstances to ensure that ultra-low sulphur petrol is distributed to 100 per cent. of petrol stations by March, as the Chancellor has said it would be?
Under the price control mechanisms in the order, did the Department—and particularly the Prime Minister—intervene in September to ensure that the price of petrol at filling stations did not rise above 79.9p immediately after the ending of the fuel protest and at the start of the 60-day period? It has been said that the Prime Minister used influence—backed, perhaps, by the powers in this order—to put pressure on the oil companies to keep down the price of fuel at the filling station. Consequently the wholesale price of diesel increased by about 8p a litre, and within a fortnight no fewer than 164 of the country's small filling stations went out of business. They will not reopen, and that will exacerbate the distribution problem to which the Minister referred in her opening remarks. I would be grateful if she could tell us who took responsibility for that price control exercise, and under which powers.
Will the Minister also deal with the point made by the hon. Member for Twickenham (Dr. Cable), among others, about the impact of tax on the availability of stocks? As I understand it, filling stations large and small have to pay the 75 per cent. tax on fuel as soon as it is brought out of the refinery and delivered to them. Not surprisingly, they do not want to hold large stocks that they cannot sell within two or three days if they have to pay that much tax in advance. However, the refineries do not have to account to the Exchequer for the tax that they receive from the filling stations for 60 days. Does the Minister accept that the need for the order would have been significantly reduced if the Government had changed the tax regime as it impacts on individual filling stations?
Finally, the Minister said that many lessons had been learned in the past few weeks. Do the Government now believe that it would be more sensible to make greater use of pipeline distribution of fuel than has been the case hitherto?

§ Mr. Simon Hughes (Southwark, North and Bermondsey)
I return to my earlier point about the definition of priority users which was picked up by the hon. Members for Altrincham and Sale, West (Mr. Brady) and for Upminster (Mr. Darvill). I understand that under the current arrangements, which were introduced in September in the order approved by the Privy Council, priority users are defined by local authorities even though they may service the whole of the United Kingdom. In my area and elsewhere, that led to confusion. The arrangement also makes it difficult for people to access information about priority users centrally because central Government Departments will tell them to ask their local authority, as the hon. Member for Altrincham and Sale, West said.
Would it not be better if priority user categories were decided centrally? Otherwise, as my hon. Friend the Member for Twickenham (Dr. Cable) has pointed out, and as the events of the past few months have demonstrated, there will be confusion locally and nationally. There may also be a sense of injustice because someone who may be regarded as a priority user by one local authority is not regarded as such elsewhere. Such an arrangement does not work well for industry advisers or for those who are trying to go about their business.

§ Mrs. Liddell
I have taken careful note of several points that have been made. The hon. Member for Southwark, North and Bermondsey (Mr. Hughes) made a common-sense point, and I undertake to ensure that my officials consider it carefully.
I regret to say that the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) has misjudged the seriousness of the situation that we are discussing. He sought an opportunity to engage in party political tit for tat, and the importance of these issues transcends that. I urge him to take a leaf out of the book of his colleague Lord Mackay of Ardbrecknish, who spoke on these matters in another place. We are discussing steps to ensure the protection of the vulnerable in our society and of the prosperity of the nation.

§ Mr. Gibb
I accept that these points are very serious, but I do not believe that the right hon. Lady believes that they are very serious. If she did, she would have agreed to the recall of Parliament as proposed by my right hon. Friend the Leader of the Opposition a few days after the order was laid. If such matters are so important, why did not she, her party and the Prime Minister recall Parliament?

§ Mrs. Liddell
The greater responsibility at the time was to ensure that the country was no longer disrupted. Indeed, that view has been broadly shared among many hon. Members. I deplore the way in which the hon. Gentleman is trying to engage in a post mortem of a situation in September. He asked why the order is before the House this evening. It is because the order runs out on 19 November and it is important to ensure that the Government can take action if necessary.
The hon. Gentleman asked why there was not an earlier debate. I suspect that he has not been paying attention. There was a debate on the fuel crisis during the first week 771 following the summer recess—the week beginning 23 October. The Home Secretary made a statement on 2 November. In another place, there was an oral question on the matter on 5 October, and a debate on the order on 7 November. There have been many opportunities to debate the fuel crisis. Tonight, we are about trying to ensure that we have the measures in place to protect essential services and the prosperity of the nation should there be future disruption in the event of action taken at filling stations or elsewhere.
The Energy Act 1976 provides the Government with temporary and exceptional powers to regulate or prohibit the production, supply, acquisition or use of fuel and electricity, either where there is imminent and actual threat of emergency in the UK affecting fuel or electricity supplies, or to meet international obligations. The hon. Member for Twickenham (Dr. Cable) referred to that. We must meet certain international obligations. I bow to the hon. Gentleman's knowledge of the oil industry. Some of his points on changes in the way in which the oil industry does its business were very important. The introduction of the just-in-time system, not just in the oil industry but in manufacturing, was very much underlined by the situation that we faced in September.
While I am on health and safety issues, I should point out that, following Piper Alpha, any one employee in the oil industry who has an anxiety about safety may, without reference to a superior, cause a stoppage or conclude the process in which he or she is involved. That is understandable in the wake of Piper Alpha.
I know from discussions with tanker drivers—I visited the refineries—that many were very much aware of what they were driving. In effect, as the hon. Member for Twickenham explained, they were driving a highly explosive device—a mobile bomb. Because of the 180 cases of intimidation, details of which are available in the Library, drivers were anxious about what might happen to them. There were instances of bricks, plumb lines and so on being thrown from bridges, and of tankers being forced on to the hard shoulder. That is very frightening not just for the tanker driver but for society in general. The worry about what might happen was considerable. The issue of health and safety must predominate in the oil industry, and I, as the Minister with responsibility for Energy, would not want it to be otherwise.
The hon. Member for Bognor Regis and Littlehampton asked about the use of Ministry of Defence drivers. Such drivers have been trained, but in the hope that it will not be necessary to use them. I should point out, however, that, in directing those controlling the tankers to co-operate with the police or the military in securing supplies, we are not taking powers directly to requisition tankers. That is an important point, which must be borne in mind.
The Emergency Powers Act 1920 provides wide powers to make regulations which could be used to control goods or instruct members of the public or companies where the community's essentials of life or transport system are threatened by disruption of the supply and distribution of goods, including fuels. In such circumstances, the Act could be used to requisition tankers or create exclusion zones around specific sites. However, I am sure that the House, like me, hopes that the likelihood of that is extremely remote.
772 The hon. Member for Bognor Regis and Littlehampton tried to make political capital out of the previous orders that were laid. The speed, scale and effect of the disruption last time took everyone by surprise, and measures had to be implemented quickly. I accept that there was a degree of confusion, and we have reviewed the arrangements so that we are better prepared for any repetition of the disruption. The changes in the regulations reflect consultation with business, local authorities and the police. Rather than criticise, Conservative Members should congratulate local authorities, the police and business throughout the country on the hard work that they put in to ensure that fuel supplies were maintained as far as possible and normality returned as quickly as possible.
The orders demonstrate flexibility in a fast-moving situation. We are trying to ensure that we have in place orders that allow us to act flexibly and to take into account the nature of future disruption, which I hope will not occur.

§ Mr. Gibb
Will the right hon. Lady explain the purpose of the five orders issued under the previous Order in Council? What do they achieve legally?

§ Mrs. Liddell
The purpose is to give the Secretary of State powers, for example, to designate priority filling stations and depots. I am sure the House recognises that that is critical, especially as, although many public service and local authority users get their fuel from depots, a significant number, especially those in rural areas, get their fuel from ordinary filling stations. That is why it is necessary to designate such filling stations.

§ Mr. Gordon Prentice (Pendle)
I have gone through the 25 pages of the documents, and I can find only two designated filling stations in my constituency, which is a big one with a large rural collar. There are 600 outlets nationwide. Is there a cap on the total number of filling stations that can be designated, or can local authorities, in conjunction with police, propose additional garages?

§ Mrs. Liddell
Local authorities, in conjunction with police, constructed the list. There is no artificial cap. I undertake to examine the position in my hon. Friend's constituency.

§ Mr. Gibb
Will the right hon. Lady explain the effect of designation? As far as I can tell, all that the lesser statutory instruments issued under the order do is provide a list of filling stations—that is it. They provide no powers other than the power to create a list. What is the legal effect of creating the list?

§ Mrs. Liddell
The filling stations will be given fuel on a priority basis—that is the purpose of the list of designated filling stations.
I must now try to address the substantial number of points made during the debate. The hon. Member for Christchurch (Mr. Chope) appears to have misunderstood the purpose of the order, in that he talked about ultra-low sulphur petrol and dependence. I am sure that his intention was not mischievous and that he of all people recognises the importance of these matters. It is the responsibility of the Secretary of State to ensure that fuel of whatever sort is needed is available. In September, some areas 773 experienced a shortage of unleaded petrol; in such cases, the Secretary of State would be anxious to ensure that unleaded petrol was supplied to filling stations, even if leaded petrol was available at those stations. The same applies to supplies of diesel and ultra-low sulphur petrol. I hope that the hon. Gentleman was not trying to score some petty political point. The key requirement is to make sure that fuel is available in filling stations for essential services.

§ Mr. Chope
Will the right hon. Lady give way?

§ Mrs. Liddell
I would prefer to make progress.
The hon. Gentleman asked whether the price control powers were used in September. They were not. He also mentioned the use of pipelines. Pipelines are used to supply operations such as major airports, but they are expensive to install. It is unlikely that additional pipelines will be constructed in the year in which the order will apply.
The hon. Member for Bognor Regis and Littlehampton asked about the explanatory note. As set out in the explanatory note to each order, the depots and filling stations were designated to allow the Secretary of State to make further orders or to give directions under the Energy Act 1976 by reference to those premises. In the event, in September the oil companies agreed on a voluntary basis to direct fuel to the designated sites and to supply at those sites only the categories of persons that the Secretary of State had instructed should be supplied.
A great deal of publicity was given to those arrangements at that time. Many of the 24-hour news channels on television had text at the bottom of the screen giving details of the filling stations available in particular areas.
I am grateful to the hon. Member for Twickenham for the support that he has shown to the Government on this matter. We hope that the need for the orders is academic. The hon. Gentleman suggested that the need for them may have passed, but I believe that it is prudent for the Government to ensure that we can protect the most vulnerable and the nation's prosperity. That is the reason why the orders will lie, whether or not we need them during the next year.
On the points that the hon. Gentleman made arising from his own experience, the oil industry has learned a lot from the past couple of months. It has learned how its procedures can lead to disruption. With his background, the hon. Gentleman will be aware that a certain level of stocks are held—not in the same way as the strategic supplies in the United States, but there is a minimum level of 63 days, I think, in case of a major disruption of supply in the UK. We believe that those stocks should be used for emergency purposes, not as a means of manipulating the market. They should be available, should some extraneous event cause a disruption to UK supplies.
The hon. Gentleman asked an important question about liability for tanker accidents. An indemnity has been negotiated with the oil companies and hauliers to cover losses arising from tankers being driven by service drivers. Where a service driver was at fault, the Secretary of State for Defence would be vicariously liable in any event.
774 The hon. Gentleman asked about price controls. Those were not necessary during the September disruption, and we hope that they will never be necessary, but the Government are determined to do whatever is necessary to maintain supplies. As this point, it is important for us not to second-guess what attempts might be made to disrupt supplies.
My hon. Friend the Member for Upminster (Mr. Darvill) made an important point about the need for co-ordination and communication. I hear what he says. The Government have been examining closely the requirements for co-ordination and communication and have been taking advice from many of those with whom we had dealings during the September situation.
As regards behaviour in the marketplace, the hon. Member for Christchurch asked about the difficulties of some small filling stations. The Director General of Fair Trading is responsible for monitoring markets and considering complaints about anything that may be construed as anti-competitive behaviour. The Office of Fair Trading has received complaints about differential pricing policies and is examining the matter. The OFT has written to oil companies to ask for information on their wholesale pricing policies. I am sure that the hon. Member for Christchurch acknowledges that it is up to the Director General of Fair Trading to consider whether action under competition legislation is required.

§ Mr. Chope
Will the Minister give way?

§ Mrs. Liddell
I must try to draw my remarks to an end.

§ Mr. Gibb
Will the Minister give way?

§ Mrs. Liddell
I shall take one final question, and then I wish to make progress.

§ Mr. Gibb
This is an important question, which I asked earlier. If it becomes clear in the next few weeks or months that the powers are no longer required, will the Minister return to the House with a revocation order, or will she leave them in existence for a full 12 months?

§ Mrs. Liddell
In considering that question, we get into interesting debates about what would make it clear that no further disruption will occur. I am sure that the hon. Gentleman would expect a responsible Government to take responsibility for decisions. That means that we have to consider access to powers, in case we need them. I cannot discuss what would make it clear that no further disruption was likely. We are taking action to maintain supplies to essential users and essential industries. One of the regrettable aspects of events in September was that people at refinery gates tried to define essential and non-essential users.
The hon. Member for Bognor Regis and Littlehampton tried to score political points at the beginning of his remarks. I stress to him that responsible government means making decisions that mean that some people are sometimes disappointed. The Government are working to provide a long-term future for the whole economy, based on low, stable interest and mortgage rates and sound public finances on the basis of which people and businesses can plan ahead. We will not sacrifice the 775 economic stability that we have built up by reacting to short-term pressures in the way the hon. Gentleman suggests.
The reserve powers to which the Order in Council provides access enable us to make special arrangements to safeguard supplies of fuel to essential services. I emphasise that we hope that it will not be necessary to use them in the foreseeable future. However, we make it clear that we have a duty to take appropriate precautionary measures. Given the clear potential of the disruption of fuel supply seriously to damage society, business and the most vulnerable, I see no scope for disagreement, and I commend the order to the House.