HL Deb 21 November 1973 vol 346 cc1057-73

2.48 p.m.

LORD BALOGH rose to call attention to the Report of the Public Accounts Committee of the House of Commons on North Sea oil and gas; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion standing in my name. I cannot complain. Lucan said in one of his better verses: Victrix causa deis placuit sed victa Catoni". If my case at the moment is still a losing one, or partly a losing one, I cannot complain about the Goddess Fortuna, for my name and my Motion have turned up for the third time on the top of the list, and at least somebody favours me upstairs. I want to call attention, now reinforced by one of the most brilliant Reports ever written by a House of Commons Committee, to my complaint, and to call attention to one of the most scandalous and costly derelictions of duty by Ministers and their official advisers to safeguard like good trustees, just like ordinary businessmen, the interests and the wealth which was entrusted to their care.

My Lords, before I analyse this situation, may I eliminate the newest of red herrings which overwhelms the scent by its own odour? This is the talk of the renewed and increased need (and justification of past misdeeds) to appease not merely the Arabs but also the oil companies because of the oil shortage threatened by the Arabs' sabotage of the West. Nothing could be more misguided. The advantage of the North Sea, with its political stability, is tremendously increased as a result of Arab confiscations, restrictions and other chicaneries. With their hold on Arab oil steadily weakening, the oil companies, the international giants, planning in the long run, must know that the best way would obviously be to exploit as much as they are allowed of Arab oil and keep as much British oil in reserve as possible. The higher the price which we allow them to get, the greater the cash flow from the North Sea, the less they are then dependent on North Sea production and the more they will restrict it. If then the new argument is that we should be nice to the oil companies because of the Arabs, that is just one more of those things which have beset sanity over this question in the last five years. I do not speak in a partisan spirit. This is evidenced by the fact that my Front Bench did not feel inclined to support this complaint of mine or to support the Report of the Committee, and none of them is on the speakers' list. I quite see their point.

LORD SHEPHERD

My Lords, I am sorry that the noble Lord has spoken in that way. I hope he will appreciate that we from this Front Bench have taken part in two recent debates on energy. There are two debates this afternoon, and we felt that if we were to put up two Front Bench speakers on both debates it would be rather unfair to other noble Lords who might want to take part in the debates. It is certainly no reflection, either on the noble Lord or on the importance of the subject he is raising.

LORD BALOGH

My Lords, I am sure it is not a reflection on me. As I say, I do not speak in a partisan spirit. Some of the Labour Ministers, and especially Mr. Marsh, have been as much, and perhaps more, responsible for this scandal; and he at any rate was well advised as a Minister—I was one of the advisers! They were warned at every step what to do and what not to do. One would expect Mr. Davies, who has spent a large part of his life looking at the world from the up-turned nozzle of a petrol tank, to do this sort of thing, but I very much regret that Mr. Walker, who is, after all, an extremely precocious millionaire of his own making, should in this case have been persuaded by his officials.

However, just as there were, and are, bad men in this multi-million or multi-billion "cops and robbers" story, so there are also heroes; and shining there is the Report of the P.A.C., to which I should like to call attention. Shining also is Mr. Harold Lever, the Chairman of the Committee, who initiated this inquiry, and Edmund Dell, who was mainly responsible for writing the Report. The Report is important far beyond its immediate intent, vitally important though that is for Britain's future prosperity and balance of payments, as I shall show. The Report marks a step towards effective democracy, inasmuch as it was the elected members of that Committee who insisted that this complicated case should be thoroughly investigated and aired. This created a precedent, a warning to bureaucrats that their follies would not go unnoticed and unpunished.

I shall not go over the details of the case; I have done so before and now evidence is available in this extremely interesting Report. That the Report should be so successful shows that cross-examination of experts, of official advisees, by experts is absolutely essential. The only thing I find extremely odd and rather objectionable, if I may say so, is that the P.A.C. has no professional advisers except the Civil Service, some of whom are retired and some of whom have obviously been engaged in this business itself. I shall not pursue that matter further. In the cross-examination it is shown in paragraph after paragraph of the Report that Ministers and, even more so, Parliament, have been deliberately and grievously misled about facts. First, they have been misled about the probable importance of the finds; secondly, about the steady decrease of risk; thirdly, about the sufficiency of legal safeguards of the interests of the nation; fourthly, about the likely profit rate which will result; and fifthly, about the possibility of taxing some of the profits. They were also misled about the horrible gash, the chasm in our tax laws, contrary to the recommendation of the Inland Revenue, through which even the insufficient tax-take would have drained, if not cascaded, away. While I sympathise with the argument that profits earned through a successful strike must carry losses arising from the unsuccessful ones, there is a limit beyond which profits become a scandal.

Finally, whereas in the case of gas there were adequate powers to secure the interests of the nation, these powers were deliberately disregarded and thus by now must be considered as discarded altogether. These powers lay in the right of the Gas Council (now the Corporation) to appeal to the Minister if, in their opinion, a reasonable price was not offered by the oil companies. This implied, among other things, the right to inspect the books to ascertain the true situation. As we have heard from the noble Lord, Lord Drumalbyn—and a more courteous sparring partner I cannot imagine—they do not know: nobody knows. The Committee says that no cost figures have been communicated. This is the more astonishing since the two public corporations are members of two of the most important consortia. Nevertheless, no figures are available to the Minister. What on earth do the Ministry think they are doing?

I shall now examine my case under these headings. Relating to the importance of the finds, I will quote the best United States oil banking estimate—and one ought to go not to the oil companies but to the bankers who are in touch with the oil companies, because the oil companies must disclose the truth (if ever they do disclose it) to their bankers; and these bankers are candid. There is a much greater openness of government in America, as we see from the Watergate case, than there is in this country. I was in Texas last week, preparing myself for this debate; and there is no doubt they think that by the end of the 1970s there will be available 4 million barrels a day, or 200 million tons a year. We have now screwed up the Ministry from 50 (or 25 as they thought at first) to 100. In their Report it is 135, and the true figure is 200. The same sort of understatement, of course, occurred in the case of gas. At the most conservative estimate this gusher should last for at least 20 years. It seems a simple matter of arithmetic to calculate the amount of wealth that this represents. Even prior to the Arab attack upon Israel at only 3 dollars and 5 cents a barrel the total wealth available would be roughly 95,000 million dollars—equivalent to something between £30,000 million and £40,000 million. Lately the price has doubled and it will probably rise still further. In all probability, it will never return to the pre-Israel war level. At this rate, oil alone will be worth between 150 million and 200 million dollars, or up to between £80,000 million and £100,000 million. This is almost twice our national income. It is vastly in excess of anything which we could have hoped for, and we did not take steps to use it prudently.

In all public relations exercises the immense cost of getting this oil has been stressed. The oil production costs in the North Sea, with the inclement climate and restricted working year, are very much higher. But let us keep our sense of proportion. The ex-Chairman of Shell, Mr. Barran, estimated—and a sigh of unbelieving astonishment went up in the world—that it would cost a £1,000 per barrel a day to establish these oil fields. This is something like 15 times the cost elsewhere. What we ought to ask is: how do these costs compare with the value of the thing found? Here it is very interesting. If we say that the cost would be £4,000 million for 200 million tons, what we receive for 200 million tons a year would cost something like £2 billion or £3 billion per year.

Some doubt has arisen even about this estimate, partly because it does not take into account the fact that we learn by doing it. Therefore the cost of repetitive mechanical exercises such as laying pipes, boring holes, and so on, decreases—learning by doing. Also, in the case of Ekofisk more has had to be revealed to the unsuspecting public than is revealed here. Figures were quoted for the cost of Ekofisk which are, roughly speaking, half the figure given by Mr. Barran. But why quibble about a few thousand million pounds? We are confronted with figures of between £60,000 million and £80,000 million over 20 years. The cost figure of £4,000 million or £8,000 million does not matter. The fact is that nine-tenths, maybe only 85 per cent., or only 80 per cent., will be profits. Even those figures are so colossal as to numb the mind. This has also been confirmed by the Public Accounts Committee. They said that each dollar per barrel, or 7 dollars per ton, adds some 1.4 billion dollars—or some £500 million—to the profits of the oil companies. This is what we have to take into account. We must familiarise ourselves with these figures.

Up to date, the consequences on the oil profits of the miscarried Arab attack would therefore amount, if we were producing at the 200 million tons rate, to £1,725 million per annum. There are well-documented estimates by Mr. Odell which are much greater, but I do not want to base my case on them because the case can be made without them. This absolute refusal to accept the reality when it is so favourable to Britain—especially Scotland —has led to terrible consequences because the Ministry were anxious not to publish high figures, not to be proved wrong on overestimates, and therefore they underestimated the situation. I can see that, but of course it had, as I have said, terrible consequences. First of all, it left British industry, which was accustomed to believing British official statements, wholly unprepared to profit by the spin-off. Even now we have hardly any major scheme which has been landed by Britain. We build ports, we make pipes for the land line; but when it comes to underwater pipes—these tremendous structures —what has not gone to Japan and France has gone to Holland and Norway.

Ministers were misled about the risks involved. This comes out very clearly in the cross-examination of the Permanent Under-Secretary, who said that the Minister was not informed when the second lot of the fourth round was let. On the first lot something like £46 million had been received. This had terrible consequences. If the true magnitude of the find had been realised, obviously one would have also realised that the risks were steadily decreasing; and the chances of finding oil were steadily improving. Did the Ministry at this time stiffen the terms against oil companies as they were absolutely entitled to do? Not at all. They gave better terms when the risks diminished. Insistence on having public corporation participation in these ventures steadily decreased. We screwed it up to 50 per cent.; there was an enormous heave during the Labour Government, and then it collapsed. Decreasing risks and increasing profits: this is the tale of the complete lack of economic knowledge of the Ministry.

May I, in this context, mention one absolutely fantastic sideline? The Secretary of State, in an exchange which I will not quote, said to me that he thought it would be a good thing to pay the French high prices for gas because that would prevent its misuse. Imagine, my Lords! Ever since Ricardo, some 170 years ago, we knew what rent was, and we knew that natural resources carried rent with them. The rent can be appropriated by the producer; it can be appropriated by the consumer, or by the State. But the price to charge to the consumer of a natural resource which is in a natural monopoly situation has nothing to do with what is given to the oil companies. The Frigg field—a very apt name !—was given away to the French under conditions which are nothing less than scandalous. One cannot even say that it was "Pompidou's poodle"—I do not know what sort of animal it was. As the oil countries became more and more aware of the importance of their natural resources and the dependence, at any rate in the short term, of the Western civilisation on oil, they took increasingly strin- gent steps to secure their interest. They took the following steps. These were the Arabs about whom the Foreign Office always said, "Don't let us be beastly to the oil companies, let the Arabs learn from us." They thought the Arabs could not invent tortures for the oil companies; they can invent tortures for almost anything.

The first of these safeguards was the so-called posted price. Most large oil companies are wholly integrated; that is, they control every single aspect of the process, from crude oil to the pump. Naturally, very little buying and selling of the crude oil or intermediate products takes place. They are transferred at the price agreed within the company, and that price will be so arranged that, wholly legitimately and legally—I must say I have no complaints against oil companies whatever: they behave like ordinary good businessmen, and very good businessmen they are—the oil companies minimise the tax liability. So should I; of course I should; everybody would, legally. The posted price therefore is an estimate of what the price should have been had there been an open market, had there been transactions between willing buyers and willing sellers. It is an absolutely essential device, even if they plead it has been misused on the Gulf to squeeze more money out of the West on the basis of the monopoly dependence of the West on oil. There is no safeguard of this type in our system at all, except for gas—and I will say in a minute what we have done about gas. The Norwegians have it, the Venezuelans have it, and I must say I should not mind being called a blue-eyed Arab, as the Norwegians are called now in intimate circles, if I could be certain that my country's interest would be safeguarded.

The second way of safeguarding the nation's interest is through acquiring participation. This can be done in two ways: you can participate after the event or before the event. Participation after the event was carried out by the Norwegians; that is to say, they have the right to finance from the production point onwards, investment into production facilities. The finding of the oil is left to the oil companies; the oil is found, and then the State participates. I have not seen that the Norwegians have been, so to speak, intimidating the oil companies. They have recently had very good offers indeed for their oil. It would also ease the finance problem because, of course, in the North Sea the exploration expenses are much less than the exploitation expenses, and in the exploitation expenses the State would participate on the basis on a borrowing rate of, shall we say, 6½ per cent. or 7 per cent., in the Eurodollar market of 10 per cent., and will get something like 60 or 70 per cent. per annum profit.

However, the taxation system was such that, even if they had incurred liability to corporation tax, they would not have to pay tax. Why not? Because the oil companies have been, as a result of these to-ings and fro-ings in the Gulf, paying out very much higher nominal prices to the oil States than they were receiving internally from their refineries and their transportation ends; that is to say, there was a tax loss accumulating, and the amount of tax loss accumulated by last year amounted to £1,500 million and it was accumulating at that rate well before the war at £470 million. It must now be accumulating at some colossal figure, because what was lost in quantity has been much more than made up in price—maybe £1,000 million per annum. So the whole of the evidence given by the Ministry to the Committee was completely misleading. They said that by 1980 at least full corporation tax would be paid, and only the most close cross-examination disclosed that that was not the case. Indeed, the Chancellor of the Exchequer at the last Budget promised that he would stop this gulf, this chapter, this sink-hole of our future. As I understand it, there are certain difficulties which even the noble and learned Lord the Lord Chancellor, it seems, finds it difficult to overcome. I must say I am very astonished at that. Nevertheless, I think, on the whole, that perhaps we shall get something and we shall save some £6 billion to £8 billion there. So far as cash receipts are concerned, I have I think justified my naturalisation as a British citizen.

Finally, there is royalty. This is fixed at 12 per cent. This is either too much or too little: it is too much for small fields and too little for large fields, and it ought to be changed just as we should have a type of special agreement on the Nor- wegian example. Let me now deal with another red herring. Very much has been made by the oil companies and their supporters not only of the risk, which as we have seen was steadily decreasing, but also about the true value, the low value of the finds. This was achieved with a very neat trick. They applied the so-called discounted cash flow calculation to the oil finds. The discounted cash flow is calculated on how much you sell each year; and you discount that figure for the present and add the thing together and, according to them, that is the present value of the find. Now, of course, if you do this in the case of a motor car or machine tools, which in five years' time will be absolutely obsolescent or worn out, this is a perfectly legitimate way of choosing between investment, but you cannot do this to an oilfield of £60 billion to £80 billion in value and therefore write off the whole of the value of all the oil in the ground after ten years—because at 15 or 20 per cent. discount rate you get one hundred parts by 15 years.

There was a very interesting demonstration of this fact when Keynes bought a house for King's College. He bought it with a 998 year lease and the Ministry of Agriculture in their expert economic knowledge asked him to provide a sinking fund; so Maynard sent a halfpenny stamp to their great expert and said, "My dear Sir, will you apply in 2865," or whatever it was, "the sinking fund as to £1,000 for the house and as to £3,365,989,201.0.11½d to the reduction of the National Debt." This is the sort of method which the oil companies want us to adopt with the oilfields. I must say I do not go with them. It may be that the noble Lord, Lord Drumalbyn, will give better examples than this. The value of the oilfield has to be estimated by seeing how much it costs to develop adding the rate of interest, and then seeing how many years gusher will completely amortise it. On that basis, of course, the profit rates which would come, even if 56¾ per cent. tax and royalty is taken into account, would still be 50 per cent. or 60 per cent. per annum. I should have thought it has to be renegotiated.

What is the solution? I very much hope that even at this late hour the oil companies, if not the Government, will reflect on the injuries inflicted on Britain by the ignorantly reckless and heedlessly stupid bureaucracy, and freely offer a renegotiation of the licences to bring them in line with the reality of the relationship between the oil-producing host countries and the companies: a reality as seen by even the most primitive Arab sheikh. I should sincerely like to avoid at this stage anything like nationalisation. The record of the Ministry and of the Gas Council and the Corporation is a severe warning to enthusiasts of nationalisation who hope that all would be well by taking over a complicated and technically extremely difficult operation, when the Ministry's total ignorance has been well demonstrated and the Corporation as a purchasing agent has visibly acted like an inefficient exploiting private monopoly.

The aims of the negotiation should be to secure, apart from the Corporation tax, which if the assurance of the Chancellor of the Exchequer can be believed may be effective, a variable royalty between 5 per cent. and 15 per cent. so as not to interfere with the exploitation of smaller finds. There should also be a carried interest for the State of between 30 per cent. and 60 per cent., as in Norway with the State financing its share of investment.

It would be essential to concentrate the participation both in the existing consortia and in the consortia to be formed in the future to a special Hydrocarbon Corporation directly owned by the State, which should not merely serve as a training ground for British management and technicians but also be the recipient of the participation payments which it must hand over to the Treasury. It will not do to subsidise gas and coal in this indirect way by the cession of the participation of the State in profit-making undertakings in oil. If the companies should not prove willing to renegotiate, then a barrelage tax should be imposed. This should not be a fixed barrelage tax, as this would severely discriminate against small fields. It should be a variable barrelage tax based on the cost of the various fields and the current price. I do not believe that in this respect the Committee's recommendations could not be improved on.

Finally, I must ask, as everybody who has knowledge of this affair must ask: Why did this happen? I feel it is due partly to ignorance and partly to influence. The ignorance partly comes from the Arabists in the Foreign Office, who since the 1930s have been preaching the doctrine, "Don't let's be beastly to the oil companies"—I have discussed that—and partly of course there is the ignorance of the Petroleum Department. Secondly, there is influence. The British Civil Service is singularly free, relative to other countries, and with only a few lapses now and again, of direct corruption. No specific douceurs are paid for specific compliance. There is, however, in this country, a type of impermissible influence through the increasing tendency (most lately shown by the Crown Agents) of civil servants joining private companies in whose affairs they have been active in their official job, do not wish to go into this matter further. I am sure this has to be looked at most severely, and I beg whoever is the Minister responsible for the Civil Service Department to take this matter very seriously indeed. Its importance cannot be overstressed in a situation in which the State increasingly interferes and directs private interests.

If nothing else, this lamentable story also proves ad nauseam that the creation of monster Ministries must be reconsidered. They were set up to reduce the number of Ministers in the Cabinet. This is not a valid reason. It was an expensive mistake. I do not believe that there is a man alive, or even that a man ever existed, who could administer the Department of Trade and Industry in a satisfactory manner. Like a cancerous growth which has reached into the vitals of the State, it must be excised and divided. My Lords, I beg to move for Papers.

LORD CLIFFORD OF CHUDLEIGH

My Lords, before the noble Lord sits down, I wonder whether he realises, in fairness to his own Front Bench, that two of them took part in my debate on this subject a fortnight ago: the noble Lord, Lord Hoy, and the noble Lord, Lord Shepherd. Further, the noble Lord, Lord Balogh, was the only noble Lord I wrote to before that debate who had not even the courtesy to reply. Finally, I am very pleased to see the noble Lord, Lord Polwarth, here to-day. I know he was in London a fortnight ago. If the noble Lord, Lord Balogh, has read that debate he will see that I went some way on the points he has made.

3.26 p.m.

LORD HARVEY OF PRESTBURY

My Lords, both Houses of Parliament have had a number of debates on this very important subject, and I have no doubt that many more will follow in the years ahead. Following the noble Lord on successive Governments with their responsibility for the terms of exploration with the oil companies, it occurred to me to wonder whether the noble Lord, Lord Balogh, in his period as adviser to Mr. Harold Wilson, had a hand in advising him on what ought to be done. I do not know. He did not declare an interest in that respect. He did not have to.

LORD BALOGH

My Lords, I beg the noble Lord's pardon and I am sure it is my English which is responsible. I thought that in my speech I specifically dealt with that point.

LORD HARVEY OF PRESTBURY

My Lords, if the noble Lord did, I beg his pardon. I tried to listen and follow, and I did not actually hear this point, but I shall read it, I hope, in Hansard to-morrow. But I think that the Public Accounts Committee Report is really quite a fantastic Report. One may not agree with all of that Report, but there is a tremendous amount of detail in it. It was encouraging to see that in the 1971–72 Account there is included over £45 million in respect of application fees for the granting of licences.

The Committee recommend that: The Government should take action substantially to improve the effective tax yield from operations on the Continental Shelf, and should consider among other methods, the possibility of imposing a system of quantity taxation. Something clearly needs to be done to get a better return from this national asset by tightening up on the legislation on oil taxation and the terms of the future licensing of oil properties I think that the noble Lord will go with me in that respect.

However, it is understandable that before any discoveries had been made, and when the potentialities of the Continental Shelf were unknown, the initial system of licensing in 1964 should be liberal and financially attractive, as an encouragement to the oil companies to embark on exploration and development in highly risky and inhospitable waters. Nobody knew; there was very little to go on. There had been discovery of gas in Holland off the Dutch coast, and that was all there was. But in my view there is a great need for the oil companies to have more than adequate finance for investment. I question, even taking into account all their wealth, whether they have the finance, and Governments have got to be involved. I do not think Governments should undertake this venture on their own, as the noble Lord said. It should not be nationalised; it is an asset which should be exploited by Government and industry combined. There is a danger that the pendulum could swing too far in the opposite and wrong direction, not only to complete public ownership but, perhaps, just as dangerous, to the point where the price exacted by the State militates against the necessary investment by the oil companies.

In February of this year, Mr. Hill, the Managing Director of Phillips Petroleum Products Limited, said: No company, no matter how big on paper, can continue to show the kind of meagre return on investment that a number of oil companies have been showing in recent years. On this, my Lords, if I may expand my remarks rather more than the noble Lord, Lord Balogh, one of the best bonuses that comes out of this whole exploration is the 20,000-odd new jobs for those who are living in Scotland. That is tremendous. But it was not until 1969 that oil was actually discovered in the North Sea—only four years ago—and while one is critical about speeding matters up (and I shall have a few things to say about that later) I think great strides have been made. There were three losses of rigs in the early days and no one should under-estimate the problems. We can all cast our minds back to pictures of helicopters taking the crews off the rigs in gales, and so on.

In my view, the report is right in concluding that the United Kingdom tax revenue from Continental Shelf operations should be pre-empted by the tax demands of Administrations elsewhere in the world, and that for tax purposes capital allowances on extraneous activities such as tanker operations elsewhere should be used to offset profits on Continental Shelf operations. I think this needs to be put right. But having said that, I agree more or less with the figures, so far as we know them, which the noble Lord quoted. Something like 10,000 million barrels of recoverable oil (some of that to be proved) is available. That should give 2 million barrels a day by the end of this decade. It should fulfill the British requirement to something like 75 or 80 per cent., and if gas gives us 1,500 million to 2,000 million cubic feet per day then we are sitting very pretty indeed. But there should be even larger quantities than this. I am sure, from what one hears, that oil will be discovered elsewhere around these Islands.

On the other hand, I want to point out to your Lordships some of the problems which are well known, although I do not think they can be re-emphasised too often. First, the shortage of materials, not only in this country but all over the world. I heard this morning that there is a shortage of cardboard packing cases; one cannot get plaster board, chemicals are in short supply—in fact in every commodity you look for, there is a long delivery date, including steel. The Government must give the highest priority to this operation. It must have a top priority, as during the war when we were building Spitfires and Hurricanes. I believe we have to apply the same methods to directing our energies to the North-East. These shortages of materials are bringing about delays in construction. Then there are the difficulties with planning permission and a whole lot of political problems thrown in for good measure. One must add to this the fact that drilling has taken place in depths of water previously not known. Gales of over 100 m.p.h. at the beginning of this week damaged two rigs.

Furthermore, in East Scotland there is an acute shortage of housing. Here I would say to my noble friends that the first priority must be to build more homes on the East coast of Scotland, because it the homes are not there, there will be nowhere for the workers to live. I also foresee a problem in getting workers. Not many of them want this, perhaps dangerous, dirty work, stuck away up in the North-East of Scotland. I hope they will be well rewarded, but, if not, could not men be recruited from Southern Europe? In my view all these things must be tackled vigorously by the Government and I should like to hear more about the planning of the details to get this operation moving. I say again that unless the houses are built we shall not get the workers to go there. It will be the same problem as in the South-East of England, where workers are unable to buy a home.

Taking into account all these problems and to avoid overheating the economy in East Scotland, there is no time to be lost in co-ordinating every one of these problems. There are many committees at work—I do not know how many; probably too many—and no doubt my noble friend Lord Polwarth is applying his energies to these problems. What we have seen of him here and what he is achieving is very impressive. But has not the time come for a change? I was listening to the noble Lord, Lord Robens, on the radio early this morning when he emphasised again that he thought there ought to an Energy Commission. Maybe he is right. He has had a long experience in these matters and I have a great respect for him. But I believe what we really need is a Minister of Cabinet rank who will tackle all these affairs himself and direct all his energies to it. To see this matter being run by an enormous Ministry like the D.T.I. I do not think is "on". I think we need a separate Minister to tackle the problems, to give his whole time to them and to have the ear of the Prime Minister in demanding what he requires—houses and so on.

While respecting the problems of the environment, these things can sometimes go too far. I respect them myself, and nobody wants to see the Scottish coastline ruined in the process. I think most Government Departments are aware of this, but the Government should not stop onshore developments of support facilities from taking place. We must go on with it. Far too much is at stake, including the jobs in Scotland and the other points which I have already mentioned. We have seen what happened in the United States of America, where Congress held up the laying of the pipeline in Alaska for over two years. They have wasted two years and we do not want to see that happen here.

Is enough being done in the shipyards and other yards on fabrication of rigs and equipment? It is estimated that something like 20 to 50 platforms will be required in the next ten years. Just imagine, my Lords, what it could do for the workers of Britain and our economy if a good percentage of these could be made in this country instead of the work having to go abroad. I should like to hear from my noble friend whether our shipyards are still accepting attractive contracts for ships and tankers instead of applying themselves to this new technology of building rigs and platforms and thus sending the work abroad?

What are the plans for additional refineries? Are these in hand at the end of the day? The Prime Minister stated only on Monday of this week that we should have a fuel shortage well into the 'eighties, and that is what we have to take to heart. There is no time to be lost. The future standards of living of our people depend upon the speed of the cutting out of red tape to ensure that in the foreseeable future the country has the energy it requires. If we deal efficiently with all these problems then I believe in Britain, with an abundance of coal under our soil and the new capital investment programme outlined a year ago by the Government, the coal industry holds out a great promise if we can satisfy the men who are working in the mines. That is thanks to Government action last year.

We have deep harbours all round our coastline. The country's technology is second to none. I believe that if we could get busy and really apply ourselves and get the right spirit among the workers and the people who are running these industries, Britain could be, in a matter of seven or eight years, one of the most prosperous countries in the world.