HL Deb 11 November 1975 vol 365 cc1780-6

7.52 p.m.

Lord LOVELL-DAVIS rose to move, That the Fuel and Electricity (Control) Act 1973 Continuation Order 1975, laid before the House on 29th October, be approved. The noble Lord said: My Lords, the Fuel and Electricity (Control) Act 1973, which the Motion asks the House to continue for a further year, contains wide-ranging powers. Your Lordships will recall that the Act was introduced by the last Conservative Administration to facilitate the management of a crisis involving severe disruption of our energy supplies. Subsequently, however, the Act has been used in situations where the element of crisis has been absent, in some cases to achieve the objectives of domestic energy policy, and in others to fulfil the Government's international obligations. I shall describe further these uses of the Act in a moment.

The Order before the House extends for a period of one year, to 30th November 1976, the powers contained in Sections 1 to 8 of the Act. These powers enable control to be exercised over petroleum, substances derived from petroleum, any substances used as fuel, and electricity. Thus the controls extend not only to petroleum and electricity but also to coal and gas. I should like to reassure noble Lords that the introduction of emergency measures is not the Government's aim in laying this Order. The Government have no reason to expect that any difficulties will arise in the near future which would necessitate the introduction of such measures.

As we go into the winter coal stocks are generally at a satisfactory level, and this applies not only to those held by the Coal Board but also to those held by distributors and customers, including power stations. Oil stocks are also at a high level, particularly taking into account the reduced level of demand. There is a considerable amount of spare capacity in the electricity supply system also due to reduced demand. Even if extremely cold weather arrived unexpectedly, widespread interruptions of supply are unlikely. The position on gas is also healthy.

My Lords, I should now like to describe the uses at present made of the powers in the 1973 Act; first, those concerned with domestic policy. The House will no doubt recall that during the last year the Government have used their powers under the Act to introduce certain constraints on energy use as part of the package of energy-saving measures announced on 9th December last. In particular, we have brought into force compulsory limits on heating levels in buildings other than living accommodation and certain other categories; and restrictions on the use of electricity for external display and advertising purposes during daylight hours. In both cases the restriction takes the form of an Order under Section 2 of the Act.

Section 4 of the Act provides for the modification of existing enactments where these affect the use of fuel and electricity, and it is under this heading that my honourable friend the Minister for Transport has introduced the 50 and 60 miles per hour speed limits in the interests of fuel saving. These mandatory measures are, of course, only part of our overall programme on energy conservation. The more efficient use of fuel is also being prosecuted through the provision of information, advice and help and through the setting of appropriate economic signals, which chiefly means correct pricing supplemented where necessary by taxation. We believe that a combination of all three lines of action is the right approach, aiming for a programme of measures which complement and reinforce each other wherever possible.

The House will not expect me to anticipate the gracious Speech. But we do recognise that the Fuel and Electricity (Control) Act is essentially a short-term measure, whereas energy conservation is a long-term policy which must be maintained over a period of years. In the context of statutory energy conservation measures, therefore, it is our intention to seek permanent powers. There arc two other ways in which the 1973 Act has been used to further domestic policy. First, it has been used to relieve the British Gas Corporation of a statutory obligation under the Gas Act 1972 to supply gas on request in specified circumstances. Major changes in the world energy situation in the last two years or so have created an upsurge in the demand for gas which the Corporation could not reasonably have foreseen. In order to avoid endangering the continuing security of supply to existing users, prior to the arrival of gas from the Frigg field, the British Gas Corporation has therefore been given an authority under Section 4 of the Act to disregard this statutory obligation as regards new or additional supplies exceeding 25,000 therms per annum. The authority does not affect the Corporation's obligation to continue giving a supply, of whatever size, to existing customers or to new smaller users.

The Act also contains power to regulate the prices of oil products. It is important that this power be retained in the light of the continuing uncertainty about the security of world oil supplies and the regular increases in crude oil prices imposed by the oil producers. Since their introduction during the difficult supply situation in December 1973, the price control powers have been used to control the maximum retail price of petrol, derv and paraffin. But the only current price control is that on paraffin. This has been continued because of its special importance to low income users. The Government are, of course, keeping this control under review.

My Lords, secondly, may I describe the use of the Act's powers in the fulfilment of our international obligations. The Government notified their consent to the Agreement on an International Energy Programme. This was done on 30th October. One object of this Agreement is to secure oil supplies in an emergency. To that end States participating in the Agreement undertake to build up emergency reserves sufficient to sustain consumption at the average level of the previous year for an agreed period. Participating States also undertake to prepare oil demand restraint measures to enable them in an emergency to reduce consumption by certain percentages. They also undertake in an emergency to allocate the available oil among each other in accordance with the rules of the Agreement. The Government need certatin of these powers at present contained in the 1973 Act to implement these obligations, should they be called on to do so. Finally, the Act's powers have been used during the past year to implement EEC Directives under which Member-States are obliged to maintain at all times minimum levels of stocks of crude oil and petroleum products. This obligation, of course, overlaps to some extent with the stockholding obligation under the Agreement on an International Energy Programme.

To draw together the strands of my argument, my Lords, the Fuel and Electricity (Control) Act 1973 contains powers which are needed to honour our international obligations and to implement our conservation programme, and for the efficient management of our energy resources. It is for those reasons, and not because of fears of a disruption of energy supplies, that I seek your Lordships' support for the Order. It is the Government's intention to seek permanent powers in due course, but until that can be done continuation of the powers in the present Act is essential. I beg to move.

Moved, That the Fuel and Electricity (Control) Act 1973 Continuation Order 1975, laid before the House on 29th October, be approved.—(Lord Lovell-Davis.)

8.0 p.m.

Viscount LONG

My Lords, I am most grateful to the noble Lord, Lord Lovell-Davis, for giving us the facts on this Order. I think we might add that now that the captains and the generals have departed he and I have the Chamber, with one or two others of your Lordships, to ourselves, so we can go through this Order fairly quickly. As the noble Lord mentioned, this Order was introduced into your Lordships' House in 1973 during the fuel emergency problems on the three-day week. It was designed to give the Secretary of State vast and sweeping powers to control the production, supply, acquisition, and use of petroleum, its by-products and also other fuels and electricity. It is, of course—we are most pleased to note—not really needed at this moment.

I must confess that the noble Lord seems to have taken the wind out of my sails on one point, because I felt that this Order was nearly old-fashioned or out-of-date, but, on the other hand, he now says something about the gracious Speech, and that, "We shall now have another look at it." In other words, we are probably looking at a new Act of Parliament on energy with powers in the new Session. Perhaps the noble Lord could enlighten me on this. This may be a little unfair because it is too early and no one is allowed to know these things at the moment, but perhaps a wink or two may help me and my noble friends on these Benches. The Order we are discussing is to be for another year. I was also glad to notice that he was not hesitating in his facts about the reserve stocks of coal and oil at the moment in this country. I was slightly worried by this morning's papers when I noticed that the Secretary of State, his right honourable friend Mr. Wedgwood Benn, was a little hesitant in a reply to a Question in another place. Perhaps the noble Lord can reassure the House that all is well.

I might not have heard the noble Lord right—I might have misjudged him—but, if there is an emergency, how long would our stocks last? Would they last two or three months, or have we stocks to get through a severe winter, say, to March? It is important that we should know this so that no one, in looking at this winter, has any fear for the future. On the other hand, I leave it at this: if there is to be a new Bill in the new Session we shall from this side continue to watch over this Order until this new Pill comes into your Lordships'House—if it does. I am most grateful to the noble Lord for the facts he has given us, and I am glad that we have been able for another year to dispose of this Order.

Lord LLOYD of KILGERRAN

My Lords, may I also thank the noble Lord for the clarity with which he explained the facts behind this Order. I was interested in one aspect of his announcement regarding the fact that this Order is to implement certain EEC Directives. May I ask the noble Lord whether he is in a position to give details of those Directives of the EEC which this Order is intended to implement? Unfortunately, I have not given notice to the noble Lord of this request, and if he is not in a position to give the numbers of those EEC Directives at the present time, perhaps he would be good enough to let me know in a letter.

8.5 p.m.

Lord LOVELL-DAVIS

My Lords, I appreciate the importance of the matters that the noble Viscount, Lord Long, emphasised. I hope that what I have said generally has set his mind at rest. In regard to future legislation, I can only restate that the Fuel and Electricity (Control) Act is not a satisfactory basis for a long-term conservation policy, and therefore it is the Government's intention to have permanent powers, and preliminary details will be given in the gracious Speech. I must ask the noble Viscount to wait until next week for enlightenment.

The noble Viscount asked me about stocks. I have here a breakdown of stocks of coal, which show that they are considerably higher than they were at the same time last year. Undistributed stock, for instance, is 9.25 million tons as against 6.21 million tons at the same time last year. Power stations, which last year on the 25th October had 13.58 million tons, now have 18.36 million tons, which is about eight weeks' normal winter rate of consumption. The Iron and steel industry arc similarly well-placed, and have approximately six weeks store on hand. Electricity supply is covered in the stocks which, as I say, amount to over 18 million tons. British Gas expect to be able to cope even with very severe winter conditions; neither natural gas nor its transmission are affected by low temperatures. The situation on oil stocks is that they are at present estimated at 100 days average 1974 demand, or 94 days forward demand. In short, the overall situation, so far as stocks are concerned, is good.

I do not think that in his Written Answer to a Commons Question my right honourable friend the Secretary of State was in any way hesitant or pessimistic. It was simply that he was then setting out the possible hazards that one faced, largely concerned with transport, as they affected the supply of coal, and so on, and therefore of course the supply of electricity. He simply advised consumers to build up their stocks of fuel to ensure against these transport difficulties. I think that this was the message he was trying to get across.

I think that to some extent I have the number of the Directives about which the noble Lord, Lord Lloyd of Kilgerran, asked me. Unless I can find them quickly what I should like to do is to write to him. To save noble Lords' time, I shall drop him a line or tell him immediately after the debate.

Lord LLOYD of KILGERRAN

My Lords, I shall accept it if it is put in a letter.

Lord LOVELL-DAVIS

My Lords, in thanking noble Lords opposite for their constructive approach to this Order, may I say that I am grateful to have had this opportunity of explaining why the Government consider it necessary to continue the 1973 Act in force for a further year, and also to indicate the careful attention which the Government are giving to their energy policy. I think both Parliament and public are all agreed that we must continue our efforts to save energy in order to reduce our import bill and to avoid the waste of valuable resources. The renewal of the 1973 Act is only a part of our energy saving programme, but in approaching a matter of such national importance it remains necessary to have access to statutory powers.