HL Deb 02 December 1971 vol 326 cc468-71

3.8 p.m.

LORD BALOGH

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government whether statistics are now available for the

  1. (a) exploration expenditure;
  2. (b) profits;
of the consortia who obtained gas and oil exploration leases since 1964 in the British sector of the North Sea.]

THE MINISTER WITHOUT PORT-FOLIO (LORD DRUMALBYN)

No, my Lords.

LORD BALOGH

My Lords, I thank the Minister for that very unresponsive response. May I ask him four supplementary questions. First, does he realise that Oil Exploration Holdings Ltd. has published these figures in respect of the Hewit field on November 15? Secondly, does he realise that in that case, and in respect of 4.26 per cent. of the share of the total of the Hewit field, the expectation of profit on an investment of £ 500,000 is £ 400,000 per annum, that is to say, roughly 80 per cent. per annum? Thirdly, does he realise that 80 per cent. of the total is held by foreigners, who will gain most from the find, as a result of the incompetence of the Ministry? Fourthly, and finally—

SEVERAL NOBLE LORDS

Order, order!

LORD BALOGH

My Lords, this will take longer. Finally, is the Minister aware that the great advantage, especially in the oilfields in the North, will in the same way be of most benefit to the foreigner, and that noble Lords who were led to believe that these fields would benefit mainly Scotland and England have been gravely misled?

LORD DRUMALBYN

My Lords, I shall try to deal with those questions. It is, of course, open to any particular organisation to publish its figures, but the results of any particular oilfield where oil or gas is being withdrawn cannot be taken as typical of the total expenditure on exploration. It is only in a comparatively small number of fields that oil or gas is discovered. As to the point of a large part being held by foreigners, it is the case that in order to be licensed you must either be an individual citizen of this country or else a company incorporated in the United Kingdom, so that they are subject to United Kingdom tax as well as having to pay 124 per cent. royalty on the proceeds of production. And, of course, the oil or gas comes to this country; that is where the major benefit lies.

LORD BALOGH

My Lords, does the Minister not realise that he, too, has been misled? First of all, if one company can publish these figures obviously all other companies can too, provided the Government wish them to. Does he further realise that these figures would then give a more logical and balanced picture, because the failures about which the Minister speaks would then be brought in? Therefore, he was misled in not giving me the answer, because obviously publicity will be given to a very bad case indeed.

LORD DRUMALBYN

My Lords, I think the noble Lord will recognise that it would be difficult in any case until there had been some years of exploration to say what the total exploration costs are and what the total proceeds are; otherwise you are merely going on estimates. So for that reason I could not agree with him that it would necessarily be significant, even if all the results to date were published. But in point of fact, of course, there is no condition, and there never has been a condition, attached to the licences that the statistics should be published.

LORD BESWICK

My Lords, would not the noble Lord agree that there is a good deal of public interest in this matter and that it is important to have access to as much information as possible? Would the Government consider publishing what is available now?

LORD DRUMALBYN

My Lords, the people who need the information are those who are actually negotiating the price to be paid for the gas, and here of course the Gas Council is well placed to know what exploration costs are and also what the incidence of success is, because they are partners in consortia.

LORD BESWICK

My Lords, is it not the case that the nation as a whole is interested in this? It is not simply the two negotiating parties. We want to know whether a reasonable bargain has been struck in the interests of the nation as a whole. Therefore would he consider again whether the information can be published?

LORD DRUMALBYN

My Lords, I will consider that, but I would enter the caveat that the information at the present stage would not be particularly significant.

LORD DOUGLAS OF BARLOCH

My Lords, although it may be the case that at present the information is not significant, is it not true that these concessions are a monopoly and that it is essential, in dealing with monopolies, that the full facts of costs and profits should be disclosed?

LORD DRUMALBYN

My Lords, there is of course a monopoly in the sense that there is a concession; and there is also a monopoly buyer, or practically a monopoly buyer, which is the Gas Council in this case, so far as gas is concerned. They are charged with the duty of promoting and assisting the co-ordinated development of efficient and economical gas supplies in Great Britain.

LORD BALOGH

My Lords, does the Minister realise that some other countries, such as Norway, have taken a completely different view, as also has the United States of America? Both countries have quite intelligent Civil Services and it seems to me, especially in view of the Government's attitude against monopoly, that this would be really a very logical step to take.

LORD DRUMALBYN

My Lords, one simply cannot compare what happens in one country with another.

LORD BALOGH

Why not?

LORD DRUMALBYN

Because in America you have a wide range of distributors, and even the distributors recognised that the price paid for gas in America was far too low.

LORD BALOGH

My Lords, I fear that the Minister has again been misled. Does he realise that in America there are only four distributors, the four pipeline companies?

LORD HAWKE

My Lords, would Her Majesty's Government ask the noble Lord, Lord Balogh, whether he really believes that a North Sea gas field can be established for half a million pounds, or did we hear him wrong?

LORD BALOGH

My Lords, does the noble Lord realise—

SEVERAL NOBLE LORDS

Order, order!

THE LORD PRIVY SEAL (EARL JELLICOE)

My Lords, I think we are getting very out of order at the present time. Questions ought to be addressed to Ministers. I also think that we might now turn to the next Question.