§ THE DUKE OF MONTROSE asked His Majesty's Government what is the present position in regard to the production of fuel oil in the United Kingdom, and whether it is the Government's intention immediately to aid an increase in home production in view of the increase of the world's armaments. The noble Duke said: My Lords, I wish to ask the Question standing in my name in order to give the noble Lord who is going to 1083 reply an opportunity to tell us something about the oil supplies in this country. We have heard a good deal in the last few weeks about the increase of armaments, particularly the increase in the Air Force and the increase in the Navy, but we have heard nothing about an increase in oil supplies in order to balance the increase in armaments. When one comes to think of it, it is no use having an increase in aircraft and an increase in the Navy unless you have some form of increase in your oil supply. We can all recollect how in the Great War we suffered great difficulty in connection with our oil supplies. We can recollect all the restrictions that were put into force in order to safeguard our supplies of oil, and we can recollect how, in a week when the submarine menace was at its worst, our difficulty was to get any oil at all into this country.
§ At the beginning of the War we were importing 484,000,000 gallons of oil; to-day we are importing 2,224,000,000—that is, to-day we are using four and a-half times the amount of oil that we were using at the beginning of the War. And just as our oil requirements have gone up and up, so also have the means of attack on oil-carrying ships increased and become more efficient, and if we suffered difficulty in getting oil brought into this country at the time of the Great War we are going to suffer far more difficulties in the next war because our requirements have so vastly increased. I am not sure that I have been correctly informed, but I have been informed that at any given time to-day there is not more than three weeks supply of oil in this country. We require four and a-half times as much to-day as we did at the beginning of the War yet there is not three weeks supply in this country. We are face to face with grave dangers. What are we to do? There are only two alternatives. One is to increase our imports of oil. But what good is that? You simply increase the difficulty and danger of bringing foreign oil into this country. The only other alternative is to increase the home supply of oil. I want to know what is being done by the Government to increase our supply of oil.
§ Of course, we have had a tariff put on imports—a tariff of eightpence on petrol and a penny on crude oil. That tariff brings in a revenue of £40,000,000. On whose shoulders does the burden of 1084 that £40,000,000 fall? It falls mostly on the shoulders of our own people, because the imported oil does not compete with any home-produced oil. There is no home-produced oil worth speaking about in any quantity. The burden of that large sum falls then, by reason of the tariff, on our own people, and our manufacturers and power users say that the tariff affects their cost of fuel by raising it 30 per. cent. I would not mind putting a burden of 30 per cent, increase on the fuel costs in this country if we really got something for it. If the Government could say, in return for the burden upon the fuel users of the country, that we were getting an assured supply of oil, or if they would say: "You are supporting a new industry which is giving employment to our people," I would say then that the increased burden was worth it. But the Government cannot say that the oil required for our defence is assured, and they cannot say that we are yet starting a new industry in this country to give employment to our people.
§ The position of the oil trade is exceedingly disappointing because, notwithstanding the tariff, there are only about two factories working, or two factories which are worth speaking about as working. First of all, there is the factory at Billingham which is being built by the Imperial Chemical Company to produce petrol by hydrogenation from coal. That factory will not be completed for five or six months. That is to say, we shall come to the beginning of 1935 before we get any petrol from that plant. That plant cost £2,500,000 to erect. The company will not erect another plant until they have ascertained the results from this one. That means, possibly, a year's working, and it will bring us to 1936 before they put up a new plant, and it will be 1937 before that plant is finished. Are we going to wait then till 1937 before we get petrol from home supplies under the hydrogenation process at Billingham? The only other alternative is low temperature carbonisation. There is only one factory which is really working the low temperature carbonisation process on a commercial basis. That is the Low Temperature Carbonisation Company's factory, but the amount of fuel oil that they are producing for the Navy is simply a bagatelle in comparison with the quantity that the Navy requires.
1085 Therefore, as things stand to-day, notwithstanding a heavy tariff bringing in £40,000,000, we have really no home supply of oil worth speaking about. What are we going to do? I say that the matter is urgent. There is only three weeks supply of oil in the country, and the difficulties of importing oil are growing greater. I do not know why we are not getting more factories erected. I suggest that a Committee should be appointed to enquire why it is that more factories are not being erected to produce oil from British coal. The answer, one suspects, would be that, whereas there is a large capital ready for investment, capitalists are not ready to put their money into new processes and new industries; they are only ready to put the money into old processes and well tried industries. It requires more than a tariff, it requires Government encouragement to draw capital into this new process. After all, we have had the Government spending money on helping wheat, on helping sugar beet, on helping shipbuilding. Why should they not do something to help coal distillation and the supply of home oil? I would suggest that the Government should give a guarantee for ten years, perhaps up to £2,000,000 with interest on that capital at 5 per cent. The burden would be only £100,000 a year. It is surely worth the Government risking £100,000 a year in order to draw capital into a new industry which will provide an increased supply of oil for home defence. It is terrible to think that at present we have only three weeks supply of oil in this country and that we are using four and a-half times as much as we did at the beginning of the War.
§ THE UNDER-SECEETARY OF STATE FOR FOREIGN AFFAIRS (EARL STANHOPE)
My Lords, as the Royal Commission is now due I suggest this might be a convenient moment for the House to adjourn during pleasure.
§ House adjourned during pleasure.
§ House resumed.