HL Deb 09 July 1974 vol 353 cc477-89

3.44 p.m.


My Lords, with the leave of the House, I should like to repeat a Statement which is being made in another place by my right honourable friend the Secretary of State for Scotland about his proposals for development at Hunterston. I must apologise for the length of the Statement which is as follows:

" With permission, I should like to inform the House of my proposals for Hunterston. A fuller statement of the strategy the Government will adopt, together with the conclusions I have reached on the planning applications now before me have been placed in the Library.

" My principal concern is to ensure that the limited area of flat land at Hunterston is used by industries which both require access to exceptionally deep water and will make a substantial contribution to the Scottish economy. Nothing less would justify the serious environment sacrifice which is inevitably involved. Three major industrial uses have so far emerged as candidates for the use of the site: steel, oil refineries and gravity platform construction for North Sea Oil development.

"I deal first with steel. Present plans envisage the expansion of the steel industry in Scotland by some 25 per cent, over the next 10 years. I am glad to tell the House that the British Steel Corporation has now decided to build a direct reduction plant at Hunterston, the first of its kind in Britain, which will produce 400,000 metric tonnes a year of iron feed for the electric arc furnaces in Scotland and elsewhere. The cost of this will be around £15 to £20 million. In addition, work has started on the construction of the iron ore terminal at Hunterston, and together these two projects amount to a commitment of £55 to £60 million in steel industry development on the peninsula. Hunterston is also one of the sites in the West of Scotland under consideration for the Corporation's new electric arc plant announced in the White Paper on the Ten Year Development Stategy for Steel, plans for which are nearing completion. Together with the developments at Ravenscraig, these new projects wll give Scotland a total stcelmaking capacity in modern plant of 4½ million metric tonnes.

" I consider it essential that sufficient land remains available at Hunterston for longer-term steel development additional to these projects. The continued growth of this industry is essential to a large part of Scotland's industrial economy, and Hunterston is without doubt one of the best sites available for future steel development in North-West Europe. Not to safeguard sufficient space for this purpose would be a serous failure to accept our responsibility for the future.

" The next category of industry is oil refineries. Following a public inquiry in 1970 my predecessor decided against zoning land for a refinery at Hunterston on the application then submitted by Chevron. I now have before me revised applications by both Chevron and ORSI. My predecessor's memorandum of May 30 last year indicated that, although a refinery on its own was unlikely to be acceptable, the case for one could be considered if it was associated with other developments which would together bring substantial benefit to the Scottish economy. In particular, it was suggested that a refinery might be associated with steel development if refinery gas were supplied on attractive terms to meet the requirements of a direct reduction plan. However, the British Steel Corporation have now told me that they no longer see any significant advantage in this form of energy supply as compared with the natural gas which will shortly be available from the North Sea. Furthermore, I am now advised that future steel developments, particularly an integrated basic oxygen plant and the finishing processes that might be associated with it, could need some of the land which is now the subject of the refinery applications.

" I have also had to pay special attention to the conclusions now reached by the Nuclear Safety Advisory Committee after a very lengthy and thorough study. The Committee's Report suggests that provided certain stringent safeguards on siting, design, construction and operation of the installations were strictly observed a refinery would not be incompatible with requirements to safeguard the two nuclear power stations already on the peninsula. My concern is first for life and property in the area, including any risk to a major source of electric power supply to the Scottish economy; and, secondly, to permit no development at Hunterston which could subsequently constitute an unduly inhibiting effect upon further development of land for which the site is specially suited. I have therefore concluded that I should be only justified in permitting refinery development, with all the safeguarding requirements this would entail, if there were overriding reasons for the Hunterston site being chosen for such development. I am not persuaded that such reasons exist.

" I therefore have it in mind to reject both applications, but I do so with regret, and in full recognition of the scale of the developments themselves, 'the substantial projects associated with them and of their potential for future development in the economy.

" Finally, I come to the question of oil platform sites. The rapid growth in the volume of proven North Sea oil reserves and the urgent need for the United Kingdom to reduce her dependence upon imported supplies have created a pressing demand for gravity production platforms for this new industry. Substantial benefits would be derived both for Scottish industry and employment and for the United Kingdom balance of payment from suitable construction sites. I have already a planning application for the construction of these platforms at Hunterston and other projects are expected to follow. This type of development is not incompatible with the long-term use of land for the steel industry and recent studies indicate that Hunterston could well provide good sites for gravity platform construction. Accordingly, I have decided that land should be available for this purpose at Hunterston, and further work is in hand to settle the detailed siting and appropriate scale of development.

" Those who get orders for platform construction must do so on their merits and not simply because they have access to a site. I intend, therefore, to ensure that the Hunterston sites will be available only to firms who obtain orders, and I propose to enter into consultations with Ayr County Council and with the Hunterston Development Company to discuss these matters.

" I have reached these conclusions on the most careful examination of all the evidence now before me. I am to meet Ayr County Council on July 26 to receive their views and to consider action before further planning decisions are taken. My Department are writing to Chevron and ORSI today informing them of my conclusions and inviting their comments prior to my finally deciding their applications."

My Lords, that is the end of the Statement.

3.52 p.m.


My Lords, I should like to thank the noble Lord, Lord Hughes, for repeating to this House his right honourable friend's most important and interesting Statement. I have one or two questions to ask, and the first one deals with the construction of platforms at Hunterston. I am sure all noble Lords fully appreciate the need for such constructions, but I think one must express concern lest this decision is going to inhibit the future use of this area for navigational purposes. There are other deep-sea areas around the coast of Scotland which could possibly be used' for the construction platforms. There is no suitable deep-sea area likely to be suitable for navigational purposes near such an important site, and in the day of the super tanker that is the first point to put to the noble Lord.

My Lords, the next point made by the noble Lord dealt with the turning down by his right honourable friend of the refinery construction at Hunterston. I fully appreciate the cogent reasons given in the Statement for this, but I should like the noble Lord to assure the House that this is part of an overall planning matter dealing with the refinery, and not just a piecemeal decision dealing with Hunterston. Therefore, taking it as being part of a larger picture, can the noble Lord say what progress is being made on the Stewarton refinery near Hunterston? Also, what is the latest information we have on the plan by B.P. to double the output of the refinery at Grangemouth? If we had more knowledge on the plans for Stewarton and Grangemouth, we might be able to see more clearly the general picture of the action taken by the Government on this matter.

I must congratulate the Government on, and also welcome, that part of the Statement dealing with steel. The news that there is to be a direct reduction plant will be welcomed by all. I also welcome the news that the steel capacity of Scotland is to be built up to 4½ million tonnes. As noble Lords will be aware, when we were in government at the end of 1972, we promised to do this as well. I am glad that it is going to be done. While on the subject of steel, and I apologise for asking so many questions, can we be told whether there is any more news of the iron ore pelletisation plant which has recently ben mooted for Hunterston?

3.55 p.m.


My Lords, we welcome the news that a decision has been taken to erect a steel reduction plant at Hunterston, and even more do we welcome the news that extra land will be kept for further development. This is particularly welcome. Can the noble Lord tell the House when this is likely to start? The Statement mentions that work has commenced on the iron ore terminal, but when is a start likely to be made on the plant? With reference to oil refineries, can the noble Lord tell us whether he is seeking to site these refineries elsewhere? Is all possible help being given to those companies to site the refineries in other parts of Scotland?

With reference to platform construction, this is an excellent move which appears to be moving towards some form of central planning in platform construction, taking into account the dangers to navigation. May I ask the noble Lord how many platforms can be built in that area? Will this take off the pressure from areas of great natural beauty like Drumbuie? Would the Government be prepared to spend money on dredging and other works to enable them to site the platforms in this area, thus preventing the ruining of areas of great natural beauty? This means that a great deal of work is going on around Hunterston. Is the noble Lord satisfied that in that area, which is near Glasgow, the infrastructure will stand the increase in work? We do not want the social mess that is going on round Tain, Invergordon and elsewhere which has totally swamped the infrastructure; the large number of jobs has made for the moment a social desert of the area. Is the noble Lord satisfied that the area can take the hoped-for increase in the number of jobs?

3.58 p.m.


My Lords, if I may follow the usual procedure and reply first to the two Front Bench spokesmen, I am grateful to them for the way in which they have received this very important Statement. I apologised for the length of the Statement, but I think that noble Lords will appreciate that to deal with three subjects of such great importance to Scotland could not have been done in a few words.

The noble Lord, Lord Mowbray and Stourton, asked questions on steel, refineries and on production platforms. If I might deal with these, first of all on the question of refineries (and to some extent this deals with the question from the noble Lord, Lord Mackie of Benshie), the Secretary of State will be making an announcement very soon on refinery capacity. This will be the occasion for answering these questions. With reference to steel, the noble Lord, Lord Mowbray and Stourton, asked about the private development which is projected. This will have to be examined in detail, but a direct reduction plant, which produces iron feed from ore, need not be in competition with the British Steel Corporation; so it is possible for them to live together.

On the subject of production platforms, the noble Lord, Lord Mackie of Benshie, asked how many sites there would be at Hunterston. It seems that there could be at least two sites; even more might be possible. Of course, all this must be examined in depth. So far as the effects on Drumbuie are concerned, I appreciate the tremendous interest there is in this, but I cannot possibly at this stage anticipate what the Secretary of State may decide. He has just recently received the Report of the Inquiry and is considering what is to be done there.

On the subject of navigation, which the noble Lord, Lord Mowbray and Stourton, raised, I can assure him that the development which we have in mind for the platform sites will not impede navigation in any way, and suitable warnings to shipping will be given in advance. So far as the Stewarton refinery is concerned, I may say that there are no plans for that at the present time. The final point of the noble Lord, Lord Mackie of Benshie, was on the question of infrastructure. I think I can sum it up by asking whether we are to repeat all the unsatisfactory conditions which have taken place elsewhere having regard to what the state of the land is at the present time and what it might be once the development gets under way? The best I can say is that we hope we can learn from previous mistakes and not necessarily repeat them all.


My Lords, is my noble friend aware that many of us are disturbed by the fact that these decisions in the energy field are being taken on an ad hoc basis? Will the Government consider the possibility of establishing a standing planning inquiry commission on energy matters so that a consistent policy can be evolved?


My Lords, I am not certain it will be done exactly in the form for which my noble friend asks, but I can assure him that in the very near future a Statement will be made which will put matters in a much better perspective than they are at the present time.


My Lords, may I ask the noble Lord this question? We have steel and we do not have oil at Hunterston; that will leave a considerable area of the peninsular presumably not required for industry. Could the noble Lord give some assurance that that area, possibly to the South of the peninsular, could be re-zoned for agriculture at the earliest possible moment. The dislocation of the lives of the farming community of that area over the last six years has been quite appalling; they have never known whether to plant their potatoes or what to do. Some firm decision must be made on what remains of the area when the allocation has been made for the steel industry.


My Lords, I would suggest to the noble Earl that he might wish to consult the very detailed Statement, which will be available in the Library, and after reading it he might feel that it might be of advantage to himself and to the House to put down a specified Question on the subject.


My Lords, may I ask the noble Lord one or two questions arising out of the Statement, which we all welcome in general. Can he tell us on what basis the site or sites considered suitable for gravity platform construction will be made available to firms that have a firm order? My second question is with regard to refinery policy; can he assure us that the desirability of welcoming to this country—in suitable places—service refineries which will export their products to the United States has not been excluded from consideration. Finally, are we to understand that the project for private enterprise pelletising plant is still, in fact, quite open?


My Lords, the answer to the third question is, yes. Could the noble Earl remind me of his first question?


I asked about the terms on which the sites could be made available to gravity platform construction firms who have a firm order.


My Lords, it is a little early to say. As the Statement said, the sites would be made available not to people who would hawk around to get orders, but to people who have got orders. It would be easy perhaps to say first come first served, but obviously one must have regard to what will be the best use of the sites. We must wait and find out exactly what will be the most advantageous method of allocating these sites, so that the best use of them can be made in Scotland's interest. The noble Earl's second question was?


My second question was about the consideration of the desirability of encouraging the establishment of service refineries in suitable parts of Britain so that products can be exported to the United States.


My Lords, I said that there would very soon be a Statement by the Secretary of State for Energy in relation to refinery policy. I would suspect that that Statement would be repeated in your Lordships' House and I would be surprised if the noble Earl did not repeat the question then with the prospect of getting a more satisfactory answer than he can get from me just now.


My Lords, are we to understand that the Government have decided to take over the platform construction sites and lease them to constructors, or is the method of making them available still an open question?


My Lords, the answer to the second part of the question is. Yes.


My Lords, as a commissioner on the Hunterston local inquiry hearing the appeals of local inhabitants, may I ask the Government whether they have really taken any account of those appeals? We made very strong recommendations, and, of course, the Inquiry was only about the actual oil terminal. Have the Government taken into consideration the recommendations we made that this oil terminal was to be screened by various means and the least disturbance caused? We now hear that we are to have oil terminals, we are to have platforms built, rigs built. I feel that the Government have been rather highhanded in this with regard to the local inhabitants. What is the point in having these inquiries if we make recommendations and the Government take no notice of them? There are plenty of places in the Western Highlands where there is very deep water in which the platforms can be built. My point is that I think the Government have completely dismissed the recommendations of the Inquiry and the wishes of the local inhabitants.


My Lords, the noble Lord reminds me of the days when I was in local government and one of the most difficult problems was trying to find a site for a public convenience. Everybody recognised the necessity for it, but everybody wanted it somewhere else. The same applies to industrial development on virgin sites; everybody accepts that this is very necessary for the economy of Scotland, provided that somebody else gets all the disadvantages and they share in the advantages. I can assure the noble Viscount that the Secretary of State, as was his duty, took into account all the evidence given to Inquiries; he will not depart from that. As every Inquiry is necessary, because they start off with totally conflicting views, it must inevitably follow that when a decision is reached some people are more pleased than others.


My Lords, the Minister referred to a new steel industry in Scotland. May I ask him whether Her Majesty's Government will bear in mind that in Mauretania in Africa we have a good friend—they have huge iron ore deposits—and that in the consortium there is a 19 per cent. British holding? At the moment, we are fortunate in having as a guest in this country, His Excellency, the Mauretanian Ambassador who is on an official visit from Paris. In view of these circumstances, would it be possible to consider increasing our imports of iron ore from that part of Africa?


My Lords, the noble Lord puts forward a very interesting piece of information. It does not directly arise from this Statement, but I am certain it will be of interest to my right honourable friends if they are not already aware of it. I will certainly make sure that their attention is drawn to what was said.


My Lords, may I ask the Minister—because, I as he knows, I am involved in this question of oil in Ross and Cromarty—whether he would please impress upon his honourable friends in another place to let us have a directive as soon as possible regarding the overall requirements for the siting of oil refineries.


My Lords, this sounds another very useful question to put after the Statement on oil refinery policy is made.


My Lords, can the noble Lord tell us whether the Government will publish a list of sites apart from Hunterston which they would approve for oil rig construction and, if so, when?


Yes, My Lords, soon.


My Lords, will the noble Lord remind us as to the area of land that is to be taken over for these various purposes? Can he further say how it is to be acquired, and who is to own it in the future?


No, My Lords, I am afraid I do not know the answer to those questions. I am quite certain that that is ' because the noble Lord, with his usual ingenuity, has produced a supplementary for which I have not been briefed in advance. If he will put it down as a specific Question, I am quite certain that I shall be placed in the position of being able to answer correctly, rather than guess at it at the moment.


I am grateful to the noble Lord.


My Lords, may I ask the noble Lord whether the preference by the Steel Corporation for the use of North Sea gas, rather than gas from the refinery, is due to the difference in the quality of the gas or to other reasons?


My Lords, this was a technical decision made by the British Steel Corporation. I have no doubt that they have consulted their own best interests in this matter, which will probably be the interests of Scotland generally in that, presumably, they wish to produce the end product at the lowest possible price.


My Lords, may I ask my noble friend one question about the acreage of land that is to be retained for future use by the British Steel Corporation? Can my noble friend tell me how many acres will be involved, and when it is anticipated by the British Steel Corporation that they will use this land?


My Lords, the immediate requirements for the projects that have been indicated are of the order of 400 acres, but the total which might be required could be of the order of 1,500 acres. It may be a number of years before all of these projects can be finalised. This is why my right honourable friend considers it important that the land should not be put to use in the interval on a short-term basis which would in any way prejudice the long-term need for this land for steel purposes. The order of time during which these projects might be developed would probably be somewhere around 10 years.


My Lords, arising out of that last answer, and while welcoming the news of the steel reduction plant, may I ask the noble Lord to be a little more precise on the timetable? If the British Steel Corporation is to take 10 years or more to get down to work, will they allow others to participate in some part of the work?


My Lords, I hope that I did not give the impression that it would be 10 years before anything started. I talked about a 10-year duration for these decisions. The decisions that have been taken will be started very soon indeed, and the construction time is of the order of three years in each case.


My Lords, while adding my congratulations that the Government have now come to this very important decision which has been pending for so many years, might I put in a small plea that the Government will not forget that there are other parts of Scotland where Hunterston steel and oil play no part, and where large industrial developments are being planned? I am thinking of my own area of Tweedbank. I hope that the noble Lord, who also lives in an area where steel and oil do not necessarily operate, will see that those of us on whom what is being done in Hunterston has very little effect at all, will not be forgotten in the development plans for Scotland.


My Lords, my own desires in these matters coincide with those of the noble Baroness, and, as she is aware, I disagree with her only if it is absolutely essential that I should do so. Our interests coincide and, if possible, I will see that they are not forgotten.


My Lords, is the noble Lord aware that there are plenty of deep sea sites in Wales? Will he not forget Wales as well?


My Lords, as I said in reply to a question the other day from my noble friend Lord Maelor, we have enough trouble without my going to Wales looking for it.