HL Deb 20 February 1957 vol 201 cc1081-6

3.23 p.m.

THE MINISTER OF POWER (LORD MILLS)

My Lords, I express my regrets if I have disturbed your proceedings, but with the permission of the House I will make a statement on the oil situation.

The measures taken to deal with the severe reduction in petrol and oil supplies have led to an improvement compared with the position in the first weeks of the emergency. It is hoped that this improvement will continue, but this depends upon the restoration of the normal channels of supply. Meanwhile, I should like to express on behalf of the Government our appreciation of the efforts made by the United Sates to help Europe during the present emergency.

The Government have again reviewed the restrictions now in force, with the following results. It remains the Government's intention to remove petrol rationing as soon as practicable, but this depends on the assurance of an adequate and regular flow of supplies, and the possession of a working stock sufficient to ensure proper distribution. The Government think it prudent to proceed on the assumption that a further rationing period will be necessary and to make arrangements accordingly—although these preparations and the issue of new coupons will not prevent an earlier end to rationing should this prove possible. Although a final decision will not be taken until nearer the time, I can say now that we should at least be able to maintain the ration at its present level.

The Government must continue to conserve stocks against the end of rationing, but we appreciate that car owners would like to use their cars to a greater extent at Easter. As the holiday falls just after the end of the current rationing period, arrangements will be made for any coupons unused in the current period to be valid up to the end of April, in addition to the coupons for the new period. This will also apply to coupons held by operators of goods and public service vehicles.

Supplies of fuel oil have improved and the review indicates that restrictions can be limited to their present level throughout April.

The restrictions on gas/diesel oil can now be lightened. As from 1st April next, the cuts will be reduced to 10 per cent., in the case of industry, and 25 per cent. for non-industrial central heating. The restriction of 10 per cent. on agricultural and fishing supplies will be abolished from the same date. Despite these changes, the average saving on gas/diesel will still be of the order of 15 per cent.

My right honourable friend the Minister of Transport and Civil Aviation is also making preparations for a further rationing period from 8th April. Details will be announced to-morrow, but he has asked me to say that allowance will be made for seasonal changes in normal consumption, particularly in the case of coaches, whose allocation will be increased to 75 per cent. of their normal consumption for the period.

LORD LUCAS OF CHILWORTH

My Lords, I am sure that riot only your Lordships' House but the whole country will welcome the statement that has just been made by the noble Lord, the Minister of Power. Reading not only upon the lines of what he said but between the lines, I trust that I shall not be exaggerating if I say that the new rationing period, which will start after April 17, will carry a larger unit value of petrol than it does now. The motoring community of the country will welcome his statement that, as the Easter holiday starts immediately after April 17, they will be able to use their "banked" coupons—which they are "banking" to a considerable extent—up to the end of April.

May I ask the noble Lord whether lie will seriously consider the congestion that may rake place on the Easter period, because the noble Lord must know, and I am sure he does, that one of his difficulties has arisen because motorists have not used their coupons during the rationing period but have "banked" them at home in an attempt to meet just the position which he has now announced. Would it not ease the position if, at some time towards the end of the present rationing period—either in March or April—the Minister considered increasing the unit value of the present coupon, so as to syphon off some of the unused petrol which, if he will forgive my saying so, is causing a little embarrassment to him at the present time? If he would do that, I think he would guard against the position which I fear may arise, that on the Thursday before the Easter holiday, and during the Easter holiday, the "banked" coupons may suddenly, if I may use the expression, be cashed in, with the result that there will be a shortage of petrol due to the physical inability of the distribution trade to cope with the rush. I ask him to consider that suggestion, because I think it might help.

Would the noble Lord allow me to ask him two further questions? I saw in The Times to-day—and he made mention of it—that the output of Texas oil has now been authorised up to 210,901 barrels per day. On my calculation, that is over 7 million gallons of crude oil in excess of what it has been, through the increase in the Texas allowables. Would the noble Lord care to tell not only the House but also the country what effect he thinks that will have on the petrol and oil position of this country during the summer months? The noble Lord has said also that he has now increased his guarantee of fuel oil from March until the end of April. Would he care to give industry some indication of what their anticipation of fuel oil may be from now until the end of the year?

LORD MILLS

My Lords, I am grateful to the noble Lord for his suggestions, which will be carefully considered. I should not like him to assume that it is our intention to increase the unit value of the coupon in the next rationing period. I should rather put it this way: that normal consumption rises very rapidly at that time, and therefore we should hope to be able to distribute more petrol to meet that need; but it depends upon supplies and what the position will look like in a few weeks' time. In any case, I will see that noble Lords and the country are kept informed as we go along. The noble Lord asked about the increase in the Texas allowables. I should like to say that we welcome that decision. We need further supplies of crude oil for our refineries, and hence that decision is a very good one; but, great as the quantity may sound, it is for Europe—we hope it is for Europe—and it represents only about 3 per cent. of Europe's total supplies, so it would by no means close the gap. It would be very welcome and would assist us, but that is just what it is.

In regard to fuel oil, I do not think that there is much more that I can add to my statement. We have to think about next winter. Normally, there is an increase in demand for fuel oil and it is necessary to build up our stocks again to try to steer industry through next winter. That is why perhaps I am being a little cautious on the fuel oil position in announcing month by month, but well in advance, what the position is. I am hopeful that it will be no worse than it is now, but I would ask noble Lords to bear in mind the necessity of building up our stocks to meet the situation next winter.

LORD MILNER OF LEEDS

My Lords, may I ask the noble Lord whether there is any truth in the statement that oil directed to this country, or which would normally come to this country, is now being re-directed to the Continent of Europe?

LORD MILLS

My Lords, in answer to the noble Lord, the European situation is looked after by the allocations of O.E.E.C., the Organisation for European Economic Co-operation, and there is a reserve made which is allotted to different countries. Normally, the American supplies are shared amongst the European countries and we get the proportion agreed upon in Paris by the Organisation for European Economic Co-operation.

LORD MILNER OF LEEDS

May I assume that the answer to my question therefore is "Yes"—that oil directed or normally coming to this country is going elsewhere?

LORD MILLS

My Lords, in answer to the noble Lord, the position is not quite so simple as that. There always has been a flow of oil from this country to other parts of Europe and that practice is, of course, continuing in order to regularise supplies.

EARL HOWE

My Lords, may I ask the noble Lord this question? He referred to supplies to the Continent. Would he agree with me that petrol rationing on the Continent practically does not exist? Of course, it is nominally enforced in France, as the noble Lord and anybody would be told, but is he aware that, when you pass large garages outside Paris, you are asked if you would like a little petrol to fill up your tank and that you can get it without any difficulty at all? May I ask the noble Lord another question? With regard to this Texas oil, am I not correct in assuming that Texas oil is far more volatile than oil from the Middle Eastern countries and that, when you crack it, in order to get your proportion of fuel oil, you also produce considerably more light hydro-carbons, such as ordinary petrol and the like? If, therefore, there is an increase of Texas oil, would it not also lead automatically, when it is cracked, to an increase of petrol?

LORD MILLS

My Lords, in answer to the noble Earl, I hope he will not expect me to deal with or criticise what other countries are doing: I can speak only for this country. We are endeavouring to secure an equitable supply of oil to the citizens of this country, having regard to their needs and within the confines of the supplies we have. If other countries are doing something different, I do not think that that should in any way deflect us from our purpose. So far as Texas oil is concerned, I am grateful to the noble Earl for the technical information which he has given me. If we can get their oil to our refineries, it will, of course, add also to our petrol supplies. As to any comparison with other kinds of oil, I can only regret that I am not in a position to make that comparison.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, do we understand, then, that we are not doing anything very special to make sure that, in getting supplies from the United States, we are getting something really adequate for our needs in comparison with what their needs are on the Continent in relation to their stocks? If we can get petrol so much more freely if we travel in France, surely they cannot be in need of the same reinforcements from the United States as we are.

LORD MILLS

My Lords, in reply to the noble Viscount, I would rather not be drawn into a discussion about what is happening in France or in any other country. What they may do may or may not be equitable as among their own citizens. All I can tell your Lordships is that what we are trying to do is to get an equitable distribution here.

LORD WILMOT OF SELMESTON

My Lords, is the noble Lord aware that the restriction on petrol and other oil in this country is proving a very severe handicap to British commerce vis-à-vis the Continent, and it is very disquieting to think that oil is being diverted from this country to Continental competitors? Is he satisfied that the Government are not unduly over-ensuring the future and penalising the present when, on the evidence, there are ample supplies of oil available for current use, particularly for commerce?

LORD MILLS

My Lords, in answer to the noble Lord, I think we should be very unwise to use up now such supplies of oil as we have got in order to make certain than we are all right at the moment, and not be concerned with the future. We have endeavoured to arrange the maximum distribution of oil now, having regard to a proper conservation of stocks necessary to enable us to go along, and it is a striking fact that, with all our rationing, people are not consuming anything like the value of the coupons we are sharing out amongst them.

LORD DERWENT

My Lords. I am certain that the noble Lord is right not to be pressed and not to give way on this matter of petrol in other countries. But may I ask him to bear in mind that it is worth taking some slight risk with increased petrol supplies so as to prevent a black market rising to the same extent as it is in some other countries?

LORD MILLS

My Lords, I can assure the noble Lord that we are taking all the risks which we are entitled to take. We are not just playing safe; we are dealing with this job on a business basis, to get the maximum amount of oil which we can safely do into the hands of people who need it.