HL Deb 21 November 1973 vol 346 cc1082-114

4.2 p.m.

Debate resumed.

LORD TANLAW

My Lords, with, I understand, only 98 minutes left of this debate, I have no wish to curtail the maiden speech of the noble Viscount, Lord Brookeborough, which I look forward to; therefore, I shall be as brief as possible. The noble Lord, Lord Balogh is not at this moment in his seat, but perhaps he will not mind if I overlook the usual courtesy of thanking him for the opportunity of engaging in this debate. I feel that it should be said at this stage that a debate of this short length is hardly long enough to get the maximum out of this really excellent first Report from the Committee of Public Accounts. I should say for the Record that I believe that the Public Accounts Committee is perhaps one of the most important tools for the protection of the Governmental system that exists in this country to-day.

In spite of its rather dull description, this Report can teach us a number of lesson that we can learn to great effect with regard to the future energy policy of this country. The noble Lord, Lord Harvey of Prestbury, spoke in his speech at the beginning of this debate about an Energy Commission. It will be no surprise to noble Lords that I raise this subject once again from these Benches. If an Energy Commission along the lines proposed from the Liberal Benches some time ago had been used to carry out these delicate and difficult negotiations with the oil companies, a lot of the criticism put forward in this Report would not be there to-day. Besides the noble Lord, Lord Robens of Woldingham, the Royal Society has also come out with a suggestion that there is a real need for an Energy Commission, with perhaps an energy Miniser to look after the problems of energy in this country.

It also might be worth drawing your Lordship's attention to the fact that this Report is in two parts; one, which the noble Lord, Lord Balogh, mentioned, was the cross-examination, or the " dialogue " as I call it, and the other is the written and printed facts and figures produced by the Department. One point that struck me when I read this Report was the immense value of having a direct question answered directly by a civil servant concerning the subject we are discussing to-day, energy. All along from these Benches and elsewhere we have asked many question, some of them most searching, and we have made predictions which have been proved correct by this Report. The answers that we have had from the Government have been noncommittal and uninformative. I feel that reading a direct answer to a question put to a civil servant on this subject takes us an enormous step forward in understanding the subject as a whole.

I go further than that; I have felt that there are times in your Lordships' House when I have entered a debate, often with no more than a Whitaker's Almanack to assist me in the figures, that the debate has carried on, often based on wrong assumptions and facts produced by us on the Opposition Benches because we do not have the real facts. I suggest to the Minister that in view of this Report of the Committee of Public Accounts, in any future debates on energy, because of the seriousness of the national situation, they should allow Opposition speakers to approach the civil servants and ask them, if necessary under oath, certain questions in order that we may start a debate with some of the facts. I regret to say that I feel that some of the speeches that I have made, and I am sure other noble Lords, are not worth reporting in Hansard because we have been presenting our speeches on facts that do not exist, as we have not had the relevant information available. I feel that the time has come when the Government need all the help they can get, from wherever they can get it, to help this country out of the present energy situation. I should like to think that this help will be forthcoming in the future.

THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)

My Lords, while that may have been true in the early stages, quite a number of documents have been published by the Department of Trade and Industry. There is, for example, the document on the reserves of oil and gas of the United Kingdom shelf. There was another one dealing with getting the oil, which gave full facts and figures. I do not think that that lack of facts now applies to anything like the extent that it inevitably did in the early stages.

LORD TANLAW

My Lords, I thank the noble Lord the Minister for his intervention. I would ask only one question which springs to mind: have the Government an energy policy and, if so, what is it? This is the kind of thing that is a useful tool for starting a debate on energy, oil, or gas. I should like to hear the noble Lord's comments on the suggestion made once more for an Energy Commission, and it is put forward not only for oil and gas in the North Sea but also for the negotiations with the coalmining industry, the Gas Board, and anything connected with energy, such as the Electricity Generating Boards. This Commission should be formed as soon as possible as a matter of great urgency. I should like to think that the Energy Commission, if it is formed, would be able to negotiate the next round of talks with the oil companies, and to negotiate the next round of terms based on perhaps knowledge of the errors that were made in the negotiations to which we are committed at the moment.

This brings me briefly to a completely different point raised by the noble Lord, Lord Balogh, concerning tax. I am not a tax expert but I should like to make two general points. The first point is—and I hope that the noble Lord, Lord Balogh, will agree with me on this—that any form of taxation that is considered in the light of this Report from the Committee of Public Accounts is not going to be in any way retroactive, or is not going to be in any way so aggressive or hostile, or interpreted as such by the oil companies, that they may have to reconsider their future operations in this country. The noble Lord, Lord Balogh, is laughing, but he has only just returned from the States and he must be well aware of the fact that the Americans are looking very closely at, and in fact have already begun, offshore oil exploration themselves—and they are as hard-headed as, perhaps the noble Lord, Lord Balogh.

LORD BALOGH

Of course I am, my Lords. But may I just correct the noble Lord? The Americans began exploration and exploitation of the Shelf some 25 years ago. That is why they have been so successful in doing their business here. That is why we have employed them. So far as taxation is concerned, if you reduce the profits from, roughly speaking, 200 per cent. of the investment to, roughly speaking, 25 per cent. of the investment, that is not a frightfully killing affair.

LORD TANLAW

My Lords, I take the noble Lord's points—or one of them, anyway. It is perhaps more true to say that the Americans are looking again, and more actively, at further off-shore exploration and exploitation of their resources, and if it proves to them less costly to develop their own off-shore exploration than to develop the ones in the North Sea because they have been frightened off by too much taxation by this country, then I feel that some of the future we are looking to will not be quite so well assured

But, my Lords, I do not see any real risk in this. I feel that, with the recent increase in crude oil prices—and here I agree with the noble Lord, Lord Balogh —a barrelage tax would be very suitable, but nothing more drastic until the next round of negotiations with the oil companies. I am glad to see the noble Lord, Lord Polwarth, on the Front Bench, and perhaps he will be able to help me. Will the noble Lord consider some form of participation in the equity of the oil companies as part of the next round of negotiations? I think it is too late to undo what has already been done contractually with the oil companies, but in the light of the Norwegian negotiations I should like to see options, perhaps, as part of the package of the next round of negotiations with the oil companies. If those options are taken up, I should like to see the share capital retained in the Scottish Development Corporation, which has been put forward by us on these Benches as a Scottish company to develop oil in Scotland. I feel that one of its assets should perhaps be some of the equity of the oil companies which are exploring in Scottish waters. It is too late to do that now—I must make that quite clear—but I should like it to be seriously considered by the Government in their future negotiations.

I see that the time is moving on, my Lords, and I want just to conclude by reminding the noble Lord the Minister of the three points which I have just made. The first is that in his speech in reply to this debate perhaps he will give some clear guidance on whether the Government are going to form an Energy Commission or whether they are definitely not going to form an Energy Commission. The second point I should like the Minister to answer is this. In view of the Report of the Public Accounts Committee, will the noble Lord the Minister consider some method—I have mentioned one in this brief intervention—by which civil servants are able to advise us verbally of some facts before we enter upon a debate of this kind? Thirdly and finally, before the next round of negotiations with the oil companies will the noble Lord the Minister say whether the Scottish Development Corporation will be considered a proper trustee for any equity participation in the oil companies exploring in Scottish waters?

LORD MOWBRAY AND STOURTON

My Lords, I apologise for intervening before the noble Lord, Lord Wynne-Jones, speaks, but I think it would be for the convenience of the House if I pointed out that this short debate, which starited at 2.48 this afternoon, was interrupted by the Statement on Crown Agents, and that that Statement took 23 minutes. Therefore, the 2½ hours will end at 5.41.

4.15 p.m.

LORD WYNNE-JONES

My Lords, I am grateful to the noble Lord for giving me that extra time, which I promise the House I shall not take. We are indebted to my noble friend Lord Balogh for initiating this debate—and who better, indeed, to initiate it? Because over the last few years he has taken the most prominent part in pressing for information on matters concerned with North Sea oil, and now that we have available to us the Report of the Public Accounts Committee we find that a great deal of what my noble friend used to hint at is indeed verified.

My noble friend has called attention to the problems of North Sea oil and its exploitation. One of the important matters to-day is rapidity of exploitation, because until the last few years we might have argued that we had all the time in the world to develop the resources of the North Sea, but it has now become abundantly clear that we have not got this time, that we must have North Sea oil quickly, and that in order to get it quickly we have got to put an immense amount of resources into the building of the pipelines and into the doing of all the work that is necessary. I believe that the estimate is that not less than £300 million a year will be required in order to develop the resources of the North Sea, and if we are to do it quickly it may be that we shall need to spend more than that sum. Of course, we say that this does not matter because it is left in the hands of companies, and the companies can do it. But, my Lords, the companies do what happens to be to them most profitable at the time: they do not necessarily do what is most valuable and important for the country at the time. Therefore, it is extremely important that we should have what the noble Lord, Lord Tanlaw, has referred to, namely, a body which is capable of laying down a proper fuel policy, so that we know what we are going to do and we can insist that it be done.

We are faced to-day, not with a choice between a large number of different sources of energy, as we were, or thought we were, a few years ago, when we could cheerfully say, "We need not produce so much coal because we can make it up with oil; if we do not have the oil, we can have nuclear energy; if we do not have that, we can have gas from the North Sea", and all sorts of things like that. To-day we are in a different position. The position now is a very serious one, a very grave one indeed, because our production of coal is dwindling. It has been falling steadily, and, as I mentioned in our last debate on this matter, unless we put between £1,000 million and £2,000 million of extra capital into the development of new mines, we shall not be able to maintain our present rate of supply of coal, let alone increase it. It is perfectly true, as the noble Lord, Lord Harvey, just mentioned, that in the Bill that was before us some time ago the Government made extra money available for the mines. But this is not really concerned with new mines; it is almost entirely concerned with dealing with the present state of affairs in the mines, in order to ensure that the mines have sufficient resources to keep themselves going at all. What is now wanted is a further £1,000 million to £2,000 million put into the industry in order to open up new mines, so that we shall be able to increase our production of coal. When one remembers that we are trying to do this at the same time as there is required an increased rate of exploitation of the new resources of the North Sea, one can see that over the next few years an immense amount of capital will have to be put into our fuel resources.

We also have the problem of the nuclear energy industry; and here we do not even know what the Government propose to do. All we know is that the one set of nuclear stations that we have in this country, the Magnox stations, have been working well and that they have been quite successful, but that they are not by modern technical standards up to modern requirements. We have the A.G.R. which was going to be a big improvement. The advanced gas reactor is an improvement on Magnox. The only point is that it has not been built. We are still in the position that the A.G.R.s are not in production because difficulties have arisen which have not been properly solved. This is not something peculiar to this country. The Americans, with their light water reactor which they have been able to sell all over the world, have run into considerable difficulties and practically all their stations have been late in development. Most of this is due to the fact that one is dealing with one of the most advanced and one of the most dangerous technologies in the world. The problems are immense, and although on a small scale they can be solved, we still have not highly successfully solved them on a large scale; so that nuclear energy, much as we may want it, is still something we are not able to get in order to cope with the problem that faces us at once: the problem of shortage of energy.

Incidentally, even if the problems of actually building these stations are solved and we are able to build them quickly and to build ones with a higher technical performance, we are still faced with the difficulty that with a nuclear station there is waste. When one has only one or two stations, there is not a serious problem in disposing of waste; but when people are talking about practically the whole of the energy production of the world being by nuclear power then they must recognise that the amount of waste produced is so enormous that it would be a major problem to know how to dispose of it. A 1,000-megawatt station produces radioactive waste which is equivalent, when evaporated and put in compressed form, to a cylinder about 5 feet in diameter and 12 feet high. This is from a highly radioactive material which is produced by one single station every year. If one imagines thousands of stations, one can see that the problem of disposing of this waste will be considerable. The Americans have tried putting the waste into disused salt mines and so on; but if there is a water leakage in them, then one gets into serious trouble. So we are faced with the absolute necessity of ensuring that we have oil and coal; in other words, that we have hydrocarbons available because they still remain, and will remain probably for the rest of this century, the most important source of energy.

We must therefore have a proper policy for dealing with it. This cannot be done if we insist on treating each one of these separately. My noble friend Lord Balogh put forward the idea of a hydrocarbons commission to deal with the whole of the hydrocarbon field and the noble Lord, Lord Tanlaw, put forward the idea of a general fuel commission. I suggest that we need both: the hydrocarbon commission in order to deal with the oil and natural gas resources and the fuel commission in order to deal with the whole problem of fuel. There ought to be a Minister of Fuel. At the present time, fuel, which is absolutely vital to the whole community, is being treated as of less importance than almost anything else.

We have largely ignored the obvious escalation in costs which have been predicted by a number of people. The American National Petroleum Council have looked at the position and they give figures for the whole costs of oil to all importing countries in the world. The figure for 1970 is 17 billion dollars. That is the total world cost of importing oil. Of that amount, 7 billion dollars were taken by the OPEC countries in the form of tax, royalties and so on. In 1972, whereas the total amount of oil purchased by the importing countries had gone up by something like 11 per cent., the cost had risen from 17 billion dollars to 24 billion dollars, and the amount taken by the OPEC countries had risen to 12 billion dollars. Their estimate—and this estimate has nothing to do with the changed situation: it was an earlier estimate—was that by 1980, whereas the total importation by the consuming countries would have risen by something like 70 per cent. the cost would have gone up from the 17 billion dollars figure of 1970 to 83 billion dollars. Of that, 63 billion dollars would have been retained by the OPEC countries.

In other words, there has been a dramatic change in the whole world position with regard to oil. It is a very natural change. It is because the exporting countries have begun to realise their strength and, by working together, they are in a position now to demand what they want. This should have been obvious, and in fact in a certain sense it has been obvious, but we have not acted on it. The consequence will be grave both from the point of view of oil importation and from the point of view of the vast capital resources which will be held by the OPEC countries. With these resources they can practically dominate large fields of operation. This will be a matter of very great significance to all of us. Unless we are prepared to take the action necessary to protect our own resources in the same way as the exporting countries have been protecting their resources, we shall find ourselves in a hopeless position. So I strongly support the proposals put forward by my noble friend Lord Balogh.

4.29 p.m.

VISCOUNT BROOKEBOROUGH

My Lords, it is an awesome experience for anybody to speak in a Chamber such as this as a new Member. It is made more awesome in that I, as an Ulster man, am being sandwiched between so many Scotsmen, because what I am going to say will concern both Northern Ireland and Scotland. I must humbly ask for your Lordships' indulgence to speak so soon after I first set foot in this Chamber; but, to be fair to myself, I have tried on many occasions to come to your Lordships' House but, whether through the fog of weather or my mental fog, I have, until three weeks ago, totally failed to get here. Even to-day I lefty home at 6 o'clock and spent from 10 o'clock to 12 o'clock circling over London Airport. Therefore I ask for your indulgence in speaking so soon. I should have liked, when here, to have had the opportunity to absorb more of the atmosphere and to have heard somebody else having the same awesome experience as I am having to-day. I therefore ask your Lordships to be tolerant of any lapses that I may make. When I first came into this Chamber, my Lords, it gave me great pride, because it is a very simple occasion to be required to take an Oath of Allegiance to Her Majesty the Queen. I did that with immense pride, because sadly in another place, where I am Chief Whip and an elected Member, that allegiance is no longer required.

I have a further plea to your Lordships. I should like to widen the debate to cover the North West approaches to the British Isles. That is the area to the West of Scotland and to the North of Northern Ireland. It is, in oil company terms I believe, called the North West Approaches. My acquaintance with minerals and oil deposits has been of some years, because I had the honour to be in the Ministry of Commerce in the Government of Northern Ireland. I also had the honour to pilot through a most excellent bit of legislation for the mineral development of Northern Ireland up to the three-mile limit outside the coast. It is a bit of legislation which, among many other bits of legislation, leaves me proud to have had the experience I have had of the fifty years of devolved government in Northern Ireland.

Now, the area of the Continental Shelf to the North of Northern Ireland has the same geological structure as that area in which oil deposits are at present being found; and, furthermore, I understand there have in fact been two rock samples that have shown the rock to be of the same ago as those in the North Sea. While ten years ago it might have been pure speculation to hope that there would be oil discoveries in the North Sea, now, with the absolute certainty and more and more discoveries occurring, I think we can look with considerable optimism to the area to the North of Northern Ireland becoming an addition to our very large reserves of off-shore oil. It is now a better chance than just a hope. It is interesting that the Canadian Government Report says that the United Kingdom is third in the league of proven off-shore oil reserves, and second in natural gas. So the industry we are concerned with is not a fly-by-night one; it is a vast industry from which the whole of Ireland and the whole of the United Kingdom may benefit, not least the part of the United Kingdom I come from. This is a great opportunity, and we should exploit it. The fact that the Suez crisis has come along and added an incentive should not cloud our judgment, and we should make sure that we exploit not only the oil but the total industry that is derived from it.

Your Lordships will be aware of the strategic position of Northern Ireland in relation to the North West Approaches Continental Shelf. We have a developed coastline, we have a very good infrastructure; but I would ask the Government to make sure that in its thoughts it prepares the infrastructure for what most be a revolution—and when one looks at the benefit that would accrue to Scotland, it is an industrial revolution. Your Lordships may not be aware that the Northern Ireland Government has negotiated with our Government here a royalty agreement by which Northern Ireland will benefit from a small royalty from all the oil and natural gas found off-shore. In return for this, Her Majesty's Government—our Government here—will operate the licensing system by which they grant licences off the North coast of Northern Ireland and the North coast of Scotland. That places a tremendous responsibility on Her Majesty's Government because it is so easy to be out of sight and out of mind.

I would ask the Government to make sure that Northern Ireland will not be out of sight and out of mind in granting those licences, because in the order in which they are granted we shall get a tremendous influence on the development of the infrastructure and the servicing industry to service the oil rigs which are going to work in difficult and deep waters. I therefore ask the Government to bear this point in mind, and to make sure that the licences are granted in such an order that Northern Ireland as well as Scotland will benefit. Since the noble Lords who both follow me and preceded me will be asking for Scotland to be included, I would say that we do not ask for anything in preference to Scotland; we ask for the same. So the responsibility on Her Majesty's Government to see to it that these licences are granted in the same order is a responsibility which I feel confident they will discharge in the usual honourable way.

The Northern Ireland Government has appointed a Northern Ireland Finance Committee which, in its turn, appointed management consultants to advise the Government on how Northern Ireland industry could benefit from the existence of off-shore oil. They have recommended that steps should be taken to safeguard the local industry to make sure that the local industry benefits throughout. Having regard to the depth of the deposits, if they are deposits, and the depth of the seabed on the Western Approaches, which is very great and the weather is extremely bad, there is a vast area of technology that must be applied and improved. If we are to allow the American industry to dominate this, then the industry itself will be of little lasting value to us, except in the exploitation and extraction of oil. The benefit to the country I come from must rest on the servicing industry and the development of technology in that area to make sure that the oil rigs and other well-head equipment is developed.

So, in concluding, I should like to ask the Government whether they have examined the question of the possibility of building oil rigs in Northern Ireland. One very large rig was built there by Harland & Wolff. I should like to make sure the Government will consult the Northern Ireland Government, and ensure that the granting of these licences is such as will benefit us. I should like the Government to consider more aid to the industry on the technological side, to see whether we cannot get an exploration and exploitation before 1980–which I gather is the present predicted date. I wonder whether the Government would consider making some agreement by which a percentage of the purchases for the servicing of the industry should be restricted to products produced within the United Kingdom.

Your Lordships will be aware of the importance of strategy. This is a matter of both geography and resources. I would submit that the importance of the strategic position of Northern Ireland is still just as great as it ever was in the time of war, or at any other time. May I take completely out of context a compliment which was paid to Northern Ireland by Sir Winston Churchill: But for the loyalty of Northern Ireland… the light which now shines so strongly… would have been quenched. In 1980 we may be glad of that.

4.39 p.m.

VISCOUNT THURSO

My Lords, I have the one purely pleasant task this afternoon, the one purely delightful source of words, and that is to congratulate the noble Viscount, Lord Brooke-borough, on his excellent maiden speech. This is an unadulterated pleasure, because not only do we in your Lordships' House gain someone with his obvious interest, sincerity and ability, but Northern Ireland gains a spokesman in your Lordships' House who I am sure will do great things for their various causes and will look after the interests of Northern Ireland at every opportunity. As a Scotsman, I wish him luck. I wish the Irish luck. I wish them a lot more luck than we in Scotland have had over the question of North Sea oil.

I would agree with the only Englishman who is taking part in the debate this afternoon that this is indeed a fantastic Report that we are debating to-day, and a fantastic indictment of the Government. There are sixteen counts on which the Government are found to be wanting, and two recommendations which are a real rap across the knuckles for them. I hope that they are listening to this. I am only sorry that the man who is described in his office as the Minister responsible for all oil development affecting Scotland, the noble Lord, Lord Polworth, is not sitting here throughout the debate and has not thought fit to take part in it to deal with the way in which we in Scotland feel; namely, that we have been probably more let down than many other parts of the United Kingdom in this matter of the give-away of the oil on our Continental Shelf. It really is shocking. If words fail me, they do not fail the Committee. The Committee have set it down in black and white under 16 headings. I hope that the Government will read, mark, learn and inwardly digest what they have said. Under two headings, at least, the Committee have had to draw the attention of the Government to the fact that we, of all the developed and under-developed countries of the world, have made the worst bargain yet. I hope that they will take these points to heart. It is not too late to do something about it. It is not too late to listen to the advice given by the Committee. It is not too late to listen to the advice given by the noble Lord, Lord Balogh, or to the advice given in the other speeches that we have heard this afternoon.

My Lords, I should like to draw attention to one or two points which have been raised by other speakers, arid particularly the point raised by the noble Lord, Lord Balogh, when he said that we have not had anything like the kind of spin-off of major schemes that we should have from the development of oil in the North Sea. This, again, is why I am sorry that the noble Lord, Lord Polwarth, is not here. The noble Lord should be listening to this debate, and I hope that he will read in Hansard what has been said. We need much more effort to be made to ensure that there is spin-off in industry, because it is not solely a question of grabbing the black gold from the bottom of the sea, but also a question of building something out of this; of using the fact that there is oil there; that there is a source of energy which can be used not only as energy, but also to provide spin-off and technology in industry and so on. In building up the underdeveloped parts of Britain, building up places like Scotland and Northern Ireland and helping us with our problems, this is an immensely valuable thing. I wish that the Minister responsible for all oil developments affecting Scotland was here to hear me say this. No doubt the noble Lord, Lord Drumalbyn, has heard what I have had to say, and I hope that he will pass on to his colleagues how bitterly we in Scotland feel about this, and how we hope to see some action and some real results from the Minister responsible for all oil developments affecting Scotland.

My noble friend Lord Tanlaw and the noble Lord, Lord Harvey of Prestbury, have drawn our attention to the importance of an energy commission of some kind. We now see the importance of planning our energy requirements in this country. Any scientist who has studied environment, development or anything of that kind will say right away that the first consideration in deciding what can or cannot happen to a community and to its environment is the question of energy. If there is to be a certain standard of living available, the first thing you must know is how you will meet the energy requirements of that standard of living. I am afraid that we in this country have gone on for too long blandly assuming that energy will always be there; that somebody will always bring up the coal out of the mines, and somebody will always bring the oil out of some oil well and kindly sell it to us, and that we shall never run out of the energy required to maintain our standard of living, our technology and the growth of our economy. That is something that we cannot in any way assume. We have to work for it and guard it.

We have in the North Sea on our Continental Shelf this priceless asset of oil. A few years ago we did not know that we had it, but now we do know and we must learn the lesson: we must not waste it or let it be frittered away or given away and we must not let it be sold too cheaply. My Lords, I urge the Government, as other speakers have done, to make sure that not only do we seek in any further negotiations better terms for the exploration and exploitation of oil, but that we seek to get even better terms if we can from the exploitation of oil in those areas where exploration has already started and where oil is already known to exist.

My Lords, I do not want to go on for too long in this debate. It is a short debate. It does not need to be a long debate, because the points we are talking about are all set out in the Report. What I, and we on these Benches, want to do is forcibly to draw the attention of the Government to the very bad job indeed which they have done in this country so far in this matter, and to say to them that forgiveness will come from us in your Lordships' House and the people of this country at the ballot boxes only if they turn round now and show that they understand how badly they have handled things; that they intend to handle things better in the future; and to show that they have read, marked, learned and inwardly digested this First Report of the Committee of Public Accounts.

4.50 p.m.

THE EARL OF LAUDERDALE

My Lords, I should like to follow the noble Viscount, Lord Thurso (I was about to call him my noble friend, because I regard him as such although we sit on opposite sides of your Lordships' House), in offering my congratulations to the noble Viscount, Lord Brookeborough, on a quite exceptional maiden speech. I hope that, as an Ulsterman amid Scots, he does not feel himself to be a stranger. Many Scots in the South-West of Scotland have their origins in Ulster and many Ulstermen have their origins in the South-West of Scotland; and together we regard ourselves as part—the best part—of the Celtic fringe of the British Isles. I was much interested in the very interesting and timely attention which he drew to the North-Western Approaches, a phrase which I think has not hitherto been used, at any rate in this House, to describe the area of Continental Shelf reaching out to grid beyond Rockall. It is a subject to which I shall return presently.

The noble Lord, Lord Balogh, gave us some 39 minutes of his wisdom. But I cannot help remarking that one cannot carve satisfactorily in butter, and I found there was some element of confusion in what he had to say. First of all, on the so-called collapse of the endeavours to get the public sector involved in offshore exploration, the fact is of course that the third round was largely a flop just because of the public sector requirement. Secondly, there were references to reserves which appear to me to be baffling—but then I always find it difficult to follow the noble Lord's academic mastery of figures. It has been said that figures, like eyeglasses, blur everything they do not make clear.

One theme has been common to this debate, as it was to the debate on energy that we had the week before last: namely, that the noble Lords, Lord Balogh, Lord Harvey of Prestbury, Lord Tanlaw and Lord Wynne-Jones, and now the noble Viscount, Lord Thurso, have all argued the case for setting up an Energy Commission, or a Hydrocarbons Commission. or for a separate Ministry to be set up to deal with these things, presumably with its own representation in the Cabinet. I would add my own name to that formidable list. I believe the case has been resisted up to now, and resisted on inadequate grounds; but the case has to be made. On the other hand, I regret that I cannot follow what I must describe as the Caithnessian hyperbole of the noble Viscount, Lord Thurso, in his indictment of this "shocking giveaway" which he mentions as being listed by the Public Accounts Committee in some 16 counts. I have been through these 16 counts. I found one recommendation at the end, and I am not at all sure that those 16 counts are valid.

However, may I come first to the first recommendation, which is that the Government should substantially improve the tax yield? Seldom has a recommendation by a Select Committee (which was made on February 14) been accepted with such alacrity by a Government—because it was less than three weeks later that the Chancellor of the Exchequer, in his Budget Statement, accepted that this must he dealt with; and he gave certain undertakings. My anxiety is whether he went too far. I am afraid that a precedent is apt to embalm a principle, and what the Chancellor does will stay. I also ask myself whether politicians can ever resist the temptation to make money quickly. We should beware of such splenetic and frenetic reactions once oil has been found. We must surely make quite sure that oil firms domiciled in the United Kingdom are not at a positive disadvantage in competing elsewhere for crude oil resources overseas. After all, they have to compete, for example, with the C.F.P. in France, and also with the Spanish and Japanese oil industries, each one of which is nursed along, protected and assisted, if not subsidised outright, by its own Government.

One of the suggestions in the body of the Report takes us back to the whole question of the desirability or otherwise of a public auction for licences next time round. Of course the attraction is that this is quick and easy money for the Treasury. But what really matters is abundant oil for the economy. Let us take the £21 million that Shell paid for what proved to be, in the end, an unrewarding block in the North. Money spent like that in an auction is money taken out of the cash-flow that could and should, and desirably would, go to drilling. Had that £21 million been put to drilling it might well have driven eight holes in a couple of years and might well have identified a field which might have had the capacity of, say, 200,000 barrels a day, which, at £1 a barrel, represents £73 million a year. We should really keep our heads about this auction proposal. It may not be the real answer, particularly when the oil industry suffers from a cash-flow problem.

Then there is the question of a volume tax which is recommended by the P.A.C. This is suggested against a background, to which I shall come in a moment, that the best blocks have already been licensed. If the best blocks have been licensed, then it is in our interest to make the licences for the remaining less attractive blocks that much more attractive; because our interest is not to milk the industry but to get the oil. So there is a case here for fiscal incentives for exploration rather than fiscal penalties on production.

The mother of mischief, according to a Scottish proverb, may be no bigger than a midge's wing, and I find that in this Report we have one or two nuggets of opinion which are highly contentious. For example, in Annex 8, a paper put in by D.T.I., we have the statement that the Department, as the recipient of information from all licensees, has a more comprehensive picture of the geology of the Shelf than any individual company or group of companies. The statement then goes on to refer to Annex 2 on page 35, which shows how the Department's technical resources have been strengthened, so, as it says, providing the necessary expertise to monitor and interpret with the aid of the I.G.S. What do the figures show? That at the time this evidence was given to the Committee the Department had 9 (I repeat, 9), and no more than 9, technical experts. We have since learnt, from the answers given by my noble friend Lord Drumalbyn to questions in this House, that that number has reached 18. But the figure of 18 experts, as a team, is only about twice what a major oil company would employ on a single field. Yet these 18 experts have the responsibility of helping to frame policy, of making suggestions to Ministers on policy, with regard to the entire Continental Shelf right around the United Kingdom. It is obvious that they are not sufficient in number, however high their quality.

This manifest under-staffing is no doubt to be considered responsible for the controversial assertion made in paragraph 87 of the Report, where we are told that the most promising areas of the North Sea have already been allocated. This, of course, the Committee regard as a matter of concern. But I wonder whether the Committee have properly seized themselves of the evidence on which that statement was based. Sir Robert Marshall's evidence, at Question 220, gives a slightly different slant, when he says this: The greater part of what at present looks the most prospective area.… has been allocated". Then he qualified that, at Question 223, in these words: It is a majority of what on present knowledge looks to be the best part". The point is whether the Ministry knew or could know last January, or even now, whether the best areas have yet been allocated. The view there expressed is at any rate challenged by eminent figures within the oil industry. But the statement of the D.T.I. in Annex 8 goes on to say that basins West of the United Kingdom, which of course include those to which my noble friend Lord Brooke-borough referred in his exceptional speech, other than those West of Shetland and in the Western Approaches, the Celtic Sea, are,"small and unlikely to contain large reserves of petroleum". That is the view expressed by the Department's experts last January. But since then a great deal more exploration has been done. There are at least two sources which I know standing in high regard in the oil industry which take a different view. There is one of the world's well-known firms of petroleum reserve engineers, Messrs. Gaffney, Cline, a British firm, who said last summer that in their view something between 30 per cent. and 50 per cent., of the potential hydrocarbon reserves within the British area, that is, reaching out to Rockall but South of the 62nd parallel, have still not even been licensed. Another firm of leading British consultants only the other day presented a map, which I have here, to the Petroleum Exploration Society of Great Britain. It shows clearly that there is an enormous amount of new potential to be had in the Minches, the Irish Sea, West of Ireland and even out beyond Rockall. That estimate is a serious, responsible professional estimate delivered to a highly professional audience by one of the leading firms of consultants in this field. Plainly, there are three conclusions to be drawn. The first is the golden rule that there are no golden rules. The second is that it is too soon to cry havoc, and the third is that we should beware of any complacency or maybe lack of knowledge due to lack of staff on the part of the D.T.I.

One of the most critical questions which arises out of this Report is how, when hampered by a shortage of personnel which is clamant and affects the oil companies as well as the Government, the universities and everybody, it is possible for the D.T.I. to get and digest better information. One suggestion that I hope my noble friend Lord Drumalbyn will take note of and pass on to the Department is this: when operating companies drill or undertake seismic surveys the D.T.I. should not only have it fed to them in miles of crude data as is done now; in addition the operating companies should be required to give the Ministry the contour maps which they themselves draw on the basis of the surveys. That would enormously foreshorten the labour task now falling upon the D.T.I. and which may not, in fact, be fully discharged.

The Public Accounts Committee, in such a valuable survey of the whole field, curiously omitted one aspect, which is the problem of getting oil ashore. I should like to ask my noble friend whether he would have the Department look into this and at some suitable time no doubt he will give us a reply; I refer to the problem of pipeline provision on the North Sea bed. What is the policy of the Government in that regard? From the Forties field B.P. are taking a pipeline to Cruden Bay. One understands that it will now be of a capacity only to take their own oil and not to take the oil of anybody else as it was originally designed to do. Mobil from the Beryl field are planning a pipe to St. Fergus Head. This in turn will, believe it or not, cross a pipeline proposed by Occidental from the Piper field to the island of Flotta in the Orkneys. Is it really prudent that we should have several pipelines all designed separately, then run by independent and separate interests? What about the other fields that we want to get into production and whose reserves may be marginal unless they can be brought in a common user pipe? There are questions of the minimum security hazard, questions of the minimum capital cost to the economy, of the minimum claim on national resources, of the minimum requirement for onshore facilities and the minimum environmental hazards.

My Lords, time is running on and I do not want to delay your Lordships more than is absolutely necessary, particularly as one wants to leave a fair chance to the Minister to wind up. But before sitting down may I raise one other matter with regard to a future round. The tendency has been to consider that the companies that matter are the majors. It may well be that the smaller companies, whose possibilities of getting into the business depends on a farm-out, may well in future provide a considerable and useful addition to our national investment. Surely it is important that in the next round there should be such incentives as will encourage the smaller companies to go for farm-ins when the "majors", having made a find, concentrate their cash flow on that and require the support of the smaller companies on the basis of a farm-out to complete their drilling programme.

I had hoped to come back to the question of estimated reserves hut, alas! I have not the time now to say what I wanted to say to the noble Lord, Lord Balogh, except that the estimation of reserves of a field is an exceedingly complicated operation. It is really an operation in long division. You take the broad area of the field as measured by the various step-out wells that have been driven. You then multiply it by the porosity percentage which, to take a particular case, is 0.278–it really means it is divided. You then multiply it by the volume of water space in the oil bearing strata, which may well be 15 per cent., requiring a multiple of 0.85. That together gives an estimate of the gross sub-surface volume of oil. This must then be multiplied by the percentage recovery efficiency expected, which could well require a multiple of 0.43. I stress that I am quoting from a particular example of a particular field. This again needs to be multiplied by a shrinkage factor which may be as much as 0.91. The point of my reading out those figures is to illustrate the considerable complexity that is involved in estimating reserves, and the very considerable hazards that derive from generalisations upon them.

My Lords, nobody ever did anything foolish except from some very strong principle. But do not let us be too clever, either. Cunning is the dark sanctuary of incapacity. We simply have to face two or three hard facts. We cannot run our economy as we now know it without any early or ample supply—and this is common ground. The only people who get it are the oil companies, who may very well find lusher pastures elsewhere. Other countries want their expertise just as much as we do.

5.10 p.m.

THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)

My Lords, first of all I would congratulate my noble friend Lord Brookeborough on what really was an outstanding and very re-remarkable performance. I admire tremendously the clarity and conviction with which he delivered his speech, but, as he himself made clear, this was because it was based not only on thought but on experience. It is quite certain that he will be a tremendous asset to this House and I welcome him very much. May I just say one word to him on what he has said in his speech? He asked that Northern Ireland should not be out of sight and out of mind, and that it should be able to take full advantage of the infrastructure and service industries. The Offshore Supplies Office looks after Northern Ireland, as well as the rest of the country, and is well aware of the possibilities there, and I hope that they will be fully developed. I entirely agree with all the points made by the noble Viscount in his speech and I hope that Northern Ireland will be as fortunate as Eastern Scotland has been in the discoveries that may be made.

My Lords, I must congratulate the noble Lord, Lord Balogh, on his success in drawing first place in the ballot for the debate to-day, and in bringing before your Lorsdhips once again the subject of North Sea oil and gas. I even wonder if he should not now be called "Lord Ballot". The subject, of course, goes a little wider than the North Sea, since we are concerned with the exploration and exploitation of our resources in other areas of the United Kingdom Continental Shelf, including Northern Ireland, and also on land, in particular with the Celtic Sea and the Western approaches.

The noble Lord did not refer very much to the Treasury's reply to the Report from the Committee on Public Accounts of which your Lordships will, I am sure, be aware. It was presented to the House at the end of last week and I made a point of sending the noble Lord a copy, which I hope he received. But having congratulated him I am bound to say that I have listened to the figures he gave with considerable reserve as regards both his facts and his estimates. For one thing, I see no reason for preferring the estimates of United States bankers to those of ourselves. He said that the United States bankers thought that we should be getting from the North Sea in 1980 about 200 million tons. My Lords, we shall not be getting 200 million tons—if we do get them—until the companies have drilled the wells. No one can get the oil until then; and further drilling is necessary to prove that it is commercial. Nor can this be done in a very short time and the oil brought on stream. There is a league time of several years—five years or more—before peak production is reached, so that the rate of discovery in the next year or so will need to be considerable in order to achieve anything like the figure mentioned, and even more to sustain it at that rate. Yet the noble Lord has been basing many of his calculations on that assumption. It has also to be remembered that oilfields are generally on peak for only a few years and in the 1980s production from those so far discovered will fall sharply below their expected peak level of 70 million tons.

The noble Lord, Lord Balogh, like other noble Lords, very much underestimates the expertise which the Department of Trade and Industry possesses. Earlier this year my right honourable friend the Secretary of State decided to set up two divisions within the Department of Trade and Industry to deal with oil matters: the Oil Policy Division, to look after the international oil scene and home oil policies, such as refineries, stocks and prices, and the Petroleum Production Division, to look after all aspects of indigenous production both on-shore and off-shore. This second division now has a staff of about 50 who are responsible for licensing policy and current operation from both the administrative and technical aspects, as well as a number of diverse and important related matters such as pollution, safety, health and offshore pipelines. The technical staff have been increased as activity on the Shelf has increased, and a further substantial increase is planned for next year which will double the number of technical staff available to the Department.

My Lords, I have a very short time indeed. I have taken very careful note of what my noble friend has said and I shall study it and shall deal with it. The specialist resources of all the personnel in the field are fully and most effectively deployed. I must say that the noble Lord has made repeated attacks on the staff of the Petroleum Division which is responsible for North Sea petroleum matters. I assure the noble Lord that these charges are completely unfounded. We are all extremely proud of our Civil Service and I believe that the Department of Trade and industry, and the Petroleum Division, for that matter, are equal to anyone. They are certainly a model for the world and I hope that the noble Lord will not allow his own antagonism to cloud his judgment.

The noble Lord, Lord Tanlaw, again suggested an Energy Commission. This is a matter that was raised in the debate on February 28 and again on November 7, and I can only repeat once more the reasons, which we still find very cogent, we see against the establishment of such a body. It is hard to see what powers such a body could have which are not already available to a Government Minister. All the skills and information which are needed for formulating an energy policy are already available to Ministers and their Departments and there is always a danger of unnecessarily complicating lines of responsibility. Finally —and this I would say particularly to the noble Lord, Lord Wynne-Jones, if he were in his place—the national importance of energy matters, which is so much underlined by present events in the oil world, inevitably raises political decisions, and it is hard to see how any Government could step back from their responsibilities by setting up an Energy Commission to stand between themselves and the industry. This is surely very much brought home and reinforced by the present situation. It is simply not true that fuel is being treated as of less importance than anything else.

My Lords, my noble friend Lord Polwarth has been criticised, and I think ought to make it clear that he has direct responsibility, under the Secretary of State for Scotland. for those aspects of oil development which fall within the responsibility of the Scottish Office, and participates fully in consideration of policy matters relating to North Sea oil for which the Secretary of State for Trade and Industry is responsible. He is supported by a task force of senior officials in the Scottish Office, the Department of Trade and Industry and other United Kingdom Departments concerned, and I am glad to see him here at the moment.

Noble Lords—particularly, I think, my noble friend Lord Harvey of Prestbury—asked about housing in the North East. I would reassure him that a massive programme is under way in the North and North East of Scotland by local authorities and the Scottish Special Housing Association. So far, over 3,200 houses, representing a capital investment of about £30 million, have been authorised to he erected by the Scottish Special Housing Association in areas affected by oil-related developments. About 750 are expected to be completed by the end of 1974, and no limit has been placed on the number of houses which local authorities may build to meet the needs of their areas. To stimulate and coordinate action, the Secretary of State has set up the Moray Firth Working Party, chaired and serviced by the Scottish Office, which has among other things arranged joint housing programmes which will maximise output during the period of pressure in the construction industry. I agree entirely with my noble friend on the need to speed development.

I should like to go on now to deal with what the noble Lord, Lord Balogh, has been saying. As the noble Lord has said, recent developments in the Middle East, which result in higher prices for a large proportion of the oil we currently import, and possible reductions in the supply, have demonstrated the very special significance which our own indigenous sources of energy will have on the future of this country. Let me assure him that the Government are at least as determined as he is to ensure that the maximum advantage is taken of the special position in the Western World in which this country now finds itself.

As stated in the Treasury Minute of the Public Accounts Committee Report, which is the subject of this Motion, the Government have been making a full review of licensing policy. It was already under way when the Committee reported, as the Treasury Minute states, and is still in progress. In the course of the review the Government are taking full account of the conclusions and recommendations of the Report as well as of recent national and international developments. As the review is still in progress, noble Lords will appreciate that I cannot say anything to-day about the measures relating to the exploitation of petroleum on the United Kingdom Continental Shelf which were envisaged in the gracious Speech from the Throne. A Statement will be made to Parliament as soon as the review is completed. But our objectives are clear: first, to continue rapid and thorough exploration while paying due attention to the environment, and this requires a balance to be struck between the interests of revenue and an adequate incentive to the licensee to explore and develop. I very much agree with what my noble friend Lord Harvey of Prestbury said: that it is necessary not to let the pendulum swing too far; one has to achieve a just balance in this matter. Secondly, to get for the nation as a whole a fair return from the depletion of what is a national resource; and thirdly, to ensure that British industry receives a full and fair opportunity to compete.

I can assure the noble Lord that in the review we are taking very careful note of the Public Accounts Committee's two recommendations and of their 16 new conclusions, to which the noble Viscount, Lord Thurso, referred—if I may say so, in a speech that I thought generated a little more unnecessary heat rather than light—and also of other points that have arisen in the public discussion of North Sea policy, which their Report helped to provoke. We are indeed grateful to the Committee for the important and interesting points which they have raised; and I agree that it was a very well-thought-out Report. Opinions, of course, may differ on some of their points, but they nevertheless deserve careful study. It was clearly the Committee's desire, as it was that of the noble Lord, Lord Balogh, that the nation as a whole should receive the fullest possible benefit from our North Sea resources. I cannot anticipate what action we shall take on their specific proposals; that must await the outcome of the review. All I can say is that the Government share this desire.

May I, in passing, welcome very much the stout assertion of Britain's rights to receive her share of the proceeds of North Sea oil and gas, which I understand the noble Lord made at the Conference organised by the Financial Times and Petroleum Times in Houston, Texas. That was also attended by, my honourable the Minister for Industrial Development, and he made it clear at that time in the course of his speech, which I may say is published in this week's Trade and Industry, that we are already estimated to be getting about 50 per cent. of the orders for supplies for this industry. That is not bad going after a quite short number of years. So I do not think that the strictures of Lord Thurso on this matter are justifiable, especially when one remembers that we are also supplying 90 per cent. of the gas requirements of this country with natural gas. I do not think it can be claimed that we have handled the situation badly; I think exactly the contrary is the truth.

My Lords, the fact that we have not yet announced the final outcome of our review is in no way holding up the rate of exploration and exploitation of our resources. At present about 17 exploration rigs are actively engaged in drilling in the North Sea, and next year we expect still more. Over 200 wells still remain to be drilled in areas for which licences have been already issued. As Lord Balogh is aware, no date has yet been fixed for a new round of licensing, but I can assure your Lordships that there is no question of a new round before the results of the review are announced. I have already advised the noble Lord on this.

One of the principal matters considered by the Public Accounts Committee was the taxation of oil company profits. They drew attention in particular to the likelihood that under present arrangements the United Kingdom Exchequer would receive little tax revenue from profits arising from Continental Shelf oil production during this decade, because for tax purposes (and this is a point Lord Balogh brought out) losses incurred by the oil companies in their trade in oil in other parts of the world can be set off against these profits. Noble Lords will recall that shortly after the publication of the Committee's Report the Chancellor of the Exchequer announced in his Budget Statement that the Government accepted the Committee's recommendation that they should take action substantially to improve the effective tax yield from operations on the continental shelf". Consultations with the industry on the practical problems involved are well under way, and the Government intend to introduce the necessary legislation in next year's Finance Bill. The Chancellor has made clear that deferring the legislation until next year because of the need for consultation will not result in any loss to the Exchequer.

The first oil field was declared commercial only two years ago. Since then a further eight fields have been declared commercially worth exploiting and a number of other promising finds have been made. We now seem assured of achieving production of 70 million tons in 1980, although at this stage we have no grounds for revising the forecasts set earlier this year of 70 to 100 million tons in that year. The rate of production in the early years will depend upon the solution of a number of technical and other problems which arise as the industry reaches the limits of current technology.

It would be unrealistic to expect North Sea oil to provide any significant contribution to solving our problems next year, or even in 1975. The outlook for oil supplies, indeed, the prospects of North Sea oil, at the time when the licences were issued were very different from what they are to-day. As the Treasury Minute says: a misjudgment which made the terms of the licensing too severe would have reduced the scale of exploration, which has in the event produced such striking and beneficial results. The importance to the United Kingdom economy of this rapid development of our resources, resulting from the policy followed by successive Governments, is obvious. North Sea oil is now expected to provide the equivalent of about two-thirds of United Kingdom demand at that time. Last year imports cost us about £1,000 million, mostly in foreign exchange, and these costs will be increased substantially as a result of the recent rise in prices. Estimating the saving to the balance of payments in any particular year is the subject of a very wide margin of error, but in 1980 the saving could be well over £1,000 million.

North Sea developments have already created about 9,000 jobs in the United Kingdom, and a further 10,000 are in prospect. These figures relate only to those created directly by oil developments and exclude any multiplier factor for indirect job creation. The benefit to the economy by the expenditure of the oil companies is also significant. They estimate that by the end of this year they will have spent over £1,000 million on off-shore exploration and development. As the noble Lord said, the future market was estimated in the IMEG Report to be worth £300 million a year on average for the next decade. As noble Lords are aware, we have established the Offshore Supplies Office to ensure that British industry is fully aware of all the opportunities.

As I have said, there are practical difficulties in dealing with the problem of artificial losses in oil transactions. It was for this reason that the Chancellor wanted to consult the industry. However, the Government have made it clear that they are determined to prevent the artificial losses arising overseas being set against North Sea profits for corporation tax purposes.

My Lords, I hope that I have covered as much ground as is possible in the time. I should have liked to speak for longer, for indeed I have a good deal more I should like to say. But I hope that the noble Lord will feel that he has done the House a service in raising this matter and I hope that we have managed in the course of this debate to put things in perspective.

5.30 p.m.

LORD BALOGH

My Lords, as a sparring partner the noble Lord is a very pleasant experience, and I thank him for his courtesy in sitting down and allowing me a little time to speak. I will not indulge in the usual formalities, although I must apologise to the noble Viscount, Lord Brookeborough, for not being here for part of his speech. But I had to go and check Hansard. He will know how important that is for one's future reputation.

May I first say to the noble Lord, Lord Drumalbyn, that I entirely agree with his outline of the strategic targets for his Ministry? They could not have been better formulated: to secure a rapid exploration and expansion of oil; to get the maximum benefit to the balance of payments. These are things for which I have fought for six years. It is when it comes to the implementation that we face certain difficulties, and these difficulties have been very much increased by the noble Earl, Lord Lauderdale, whose speech, if I may say so, with great humility, reminded me of the tactics of a cuttlefish; that is to say, so many arguments of brilliance thrown about that the cause which I have been trying to explain disappeared in opaque darkness.

THE EARL OF LAUDERDALE

My Lords, will the noble Lord permit me to interrupt him for a moment? He used the "cuttlefish" analogy last time: I hoped that he might find another animal this time.

LORD BALOGH

My Lords, the noble Lord is so convincing. I think he first gave a "wigging" to the P.A.C. for saying that they had overestimated the finds. Then he gave them a further "wigging", saying that there was very much more oil to be found in those parts which have not been licensed—as though that was an argument against the P.A.C. conclusions and not an argument strengthening them.

I was most amused by the fact that when the noble Lord, Lord Tanlaw, asked for more information the noble Lord, Lord Drumalbyn, came out with the surprising answer that a very large amount of information has already been given. Yet for instance, we do not know a thing about costs; we do not know a thing about the prices, and from my point of view I cannot reconcile his estimates with the truth. There is the Frigg field, which is French. Apparently we have paid 5.6p per hundred cubic feet, plus an oil clause which means that the oil doubles, the gas doubles and that means that the Frigg field now will cost something like 10p, which is worse than the old Algerian frozen gas purchase and is absolutely out of this world from the point of view of the French.

This is what these great economic and technological experts in the Ministry ought to sit down and work out. The balance of payments of this country will not be improved by that part of either the expenditure or the profits of the oil companies which is not coming home here. In the case, for instance, of the Frigg field the total profit will be transferred to the French. This profit (if the report in the Financial Times on prices is right; and when the Financial Times and The Times have the same report I feel that there might be something in it) might be, in my opinion, at the rate of some 200 per cent. per annum on investment. That is what we do not know. I may be wrong, but we have not been given intelligent figures which show that the interests of this country are well handled.

LORD DRUMALBYN

My Lords, if the noble Lord will forgive me, I am afraid we have now gone five minutes over our time.

LORD BALOGH

My Lords, I have five minutes still to go. I am sorry, but I cannot give the noble Lord those five minutes.

LORD DRUMALBYN

My Lords, I am afraid that I made a mistake in my calculation of the time and sat down too soon.

LORD BALOGH

My Lords, I think the Minister always underestimates.

In regard to the oilfields I agree with the noble Earl, Lord Lauderdale, that it is very difficult to estimate, but Professor Odell has shown that in the leading fields of the world there has been an underestimation of one to ten. I dare say that this field is so completely different, as the Department would have it, although it is unlikely to be very different; and if our experiences with the North Sea are similar to the experiences of the Americans in the Panhandle, as Churchill said, first it is a trickle, then it is a stream and then it is a torrent. That was the American experience, and I hope it will be our experience.

I want to say one word more to the noble Lord, Lord Drumalbyn, who attacked me for being too severe on his staff. I will not mention names, because that would be improper, but I should like him to make a little inquiry, again by his experts—perhaps in this case his sociological experts—as to how many of the heads of the Petroleum Department joined the petroleum industry, or industries which are connected with the petroleum industry, and how many offers there have been made in the last five years to members and heads of the Petroleum Department to join the major oil companies in very high offices. If he then writes to me and says that he is still convinced that what he has said to-day is right, I will accept it; but not before.

It seems to me that this is one of the great historical junctures. If the British will not seize this opportunity to get themselves out of trouble I fear that the combination of our social problems with our economic problems will be such that the awful decline such as that predicted by Lord Rothschild will in fact occur. This is the one great opportunity of a lifetime for this country to pull themselves out of their rut, and I do not think the opportunity will recur. For heaven's sake! let us get together and try to use it.

THE DEPUTY SPEAKER (LORD ALPORT)

Does the noble Lord wish to withdraw his Motion for Papers?

LORD BALOGH

Yes.

Motion for Papers, by leave, with drawn.