§ 4.9 p.m.
§ The PARLIAMENTARY-UNDERSECRETARY of STATE, DEPARTMENT of ENERGY (Lord Lovell-Davis)
My Lords, I beg to move that this Bill be now read a second time. This Bill, which supersedes the Fuel and Electricity (Control) Act 1973, is required to give the Government permanent powers to meet the United Kingdom's obligations under the Agreement on an International Energy Program and as a 461 member of the European Communities, and to develop our energy conservation policies. The Agreement on an International Energy Program entered into force on 19th January 1976 for those States, including the United Kingdom, who have notified their consent to be bound. Under its terms the United Kingdom is required to have available powers which will enable us to impose restrictions on the supply and use of energy in an emergency; to meet our obligations to hold a minimum level of oil stocks, and to provide information to the International Energy Agency. Some of these obligations can be met under the 1973 Act, but this Act requires Parliamentary approval for renewal annually and is therefore not a satisfactory basis on which to undertake international obligations. For that purpose the requisite powers must be permanently available, and seen to be so by other signatories. Furthermore, the 1973 Act was designed to meet an emergency, not to meet the requirements of a long-term programme of international co-operation. It does not, for example, provide wide enough powers, particularly in the field of information, which is an important element of the International Energy Program.
In order to prepare for an oil emergency, we need to have permanently available powers which will enable the United Kingdom to meet its obligations as a participant in the International Energy Program's oil-sharing scheme. Among other things, this requires the United Kingdom to be able to reduce oil demand by the amounts specified in the agreement and to direct the oil companies to re-allocate supplies among themselves and, if necessary, to supply other countries. We have decided, therefore, that the crisis management powers contained in the 1973 Act should be permanently available, but we recognise that they should only be exercisable for IEP purposes at times when the IEP agreement requires them. The IEP agreement defines these circumstances, and noble Lords will note the Government's intention that the extensive powers to control supply or use by order or direction should be used only after Her Majesty has, by Order in Council, activated them as a result of an oil emergency being declared by the members of the International Energy Agency. The IEP agreement also 462 requires us, as part of its provision for cushioning the effect of an oil shortage, to hold a minimum level of oil stocks. We are therefore seeking powers in this Bill which will enable the Secretary of State to require the oil industry to hold a minimum level of oil stocks. The same provision will also enable us to meet our EEC obligations to hold minimum stocks of oil.
We have also to bear in mind the continuing, need to have available contingency measures for controlling the production, acquisition, use and supply of energy, and for regulating oil prices, during a domestic emergency. I am sure noble Lords will agree that it would be prudent to retain powers similar to those in the 1973 Act for domestic crisis management, subject of course, as noble Lords will see from Clause 3, to the same degree of Parliamentary control as provided in that Act.
I turn now, my Lords, to energy conservation. As noble Lords are aware, following on the considerable increase in energy prices that has taken place since October 1973 the Government's energy conservation programme has been launched and is designed to encourage greater efficiency in the use of energy in order to reduce our energy consumption below what it would otherwise be. Fossil fuel reserves are finite, and even though we have coal as well as North Sea oil and gas it is essential that our indigenous reserves be put to the best possible use. Our energy conservation programme has sought to stimulate consumers to help themselves by saving energy. Millions of decisions affecting the use of energy are taken each day; the Government's role is to encourage the decision-takers to save energy to the extent that is economically worth while.
However, there are areas where voluntary restraint is not enough and where Government can reinforce by statutory measures the voluntary effort of consumers in the wider public interest. The Government have introduced statutory conservation measures: limits on heating levels in buildings other than domestic dwellings, restrictions on the use of electricity for advertising lighting and regulations lowering the maximum speed limits on certain roads. These measures are implemented under the Fuel and Electricity (Control) Act 1973, which was 463 renewed in November 1974 and November 1975 and is due to expire at the end of November this year unless renewed. The Government believe that energy conservation is an integral and therefore continuing element in our energy policy, which should rest on permanent powers. The emphasis in our conservation programme—
§ Lord HARMAR-NICHOLLS
My Lords, would the noble Lord bear in mind, when the Government are thinking of future policy, to which he is now referring, that it is a good thing to retain the goodwill of the consumer? For example, we have had too many cases where, by means of a special tariff advantage, people were encouraged to buy storage heaters, which receive their boost during the night, only to find very soon afterwards that the advantage was taken away. People are discouraged from cooperating in the way of making such an investment if the advantages are removed after such very short notice.
§ Lord LOVELL-DAVIS
My Lords, yes. I hope the noble Lord intends to intervene again. He might do so, and thus give me an opportunity to answer him when I come to wind up. The fact is that people using storage heaters still enjoy an advantage, as I am sure the noble Lord recognises. In all other respects, I think it is true to say that we are continuing to go ahead and keep their goodwill. In fact, I think we are encouraging people in showing a good deal of co-operation with industry, and are getting a good deal back in our conservation programme—and, of course, at a domestic level.
As I was saying, the emphasis in our conservation programme must change from time to time, and powers are needed to permit us to introduce new measures as and when we consider them to be necessary in support of the encouraging efforts being made to save energy throughout the economy. We are therefore proposing that the power to control the use of energy, similar to that in the Fuel and Electricity (Control) Act 1973, will be permanently available; but it will be exercisable only by order, which will be subject to Negative Resolution procedure and, thus, to the control of Parliament. The Government have also decided 464 to include a new power to subject fuel consumption in cars to a standard test, the results of which should be brought to the notice of the public. This will enable car-buyers to make a reliable comparison of fuel consumption when contemplating a purchase. The arrangements proposed follow international agreement, and have been agreed with the motor industry and trade.
We are proposing to replace Section 9 of the Continental Shelf Act 1964 with new provisions which will complete our ability to co-ordinate gas supplies to the maximum benefit of the country. In particular, these provisions will enable us to control liquefaction and the conversion of natural gas to methanol. These are processes which waste substantial amounts of gas and are not subject to control under the Continental Shelf Act. For similar reasons, we propose to control all flaring, some of which is not currently controlled by the Petroleum and Submarine Pipelines Act. Finally, we are taking this opportunity to remove some of the anomalies in the present situation, especially by providing only one system of control for gas supplied from refineries.
The Bill also contains provisions which will enable the United Kingdom, as a Member of the European Communities, to implement Council Directives and enforce EEC regulations in the energy field. One important Directive is 73/238, which requires us to have powers for crisis management in an energy emergency when declared by the European Communities. Other Directives implemented under the Bill are 68/414, as amended, which requires us to hold a minimum level of reserves of oil (I referred to this earlier): 75/339, which covers the holding of minimum stocks of fossil fuels at power stations; and 75/404 and 75/405, which cover the fuelling of power stations. Of these, those concerning crisis management and oil stocks are currently implemented by the 1973 Act.
Finally, the Bill contains powers to control prices of oil products. As with the powers connected with energy conservation, it is proposed that these powers should be permanently available, although they will be exercisable only by order, which will be subject to Negative Resolution by either House of Parliament. These powers are currently 465 being used only to control the price of paraffin, which is of special importance to low-income users.
Before going as briefly as may be possible through the clauses of the Bill, I should like to stress again the circumstances in which the Government propose to use the powers to control supply and use. First, in the case of an international oil emergency we are proposing that the full emergency powers are to be activated by Order in Council upon a declaration by the members of the International Energy Agency or of the EEC that an emergency exists. Secondly, for a domestic emergency we propose that the powers shall similarly be activated by Order in Council but that such an Order in Council shall be subject to Affirmative Resolution by Parliament. Thirdly, for energy conservation we are seeking the power to control use only by order subject to Negative Resolution by Parliament. Thus, the United Kingdom will be able to meet its international obligations while retaining Parliamentary control of the activation of the contingency plans for a domestic emergency and measures for energy conservation.
I now turn to the clauses of the Bill. The first four clauses to a large extent re-enact the 1973 Act with modifications to cater, first, for the different circumstances in which the crisis management powers will need to be activated and, second, for the long-term powers to control use of energy and prices of petroleum products which should be permanently available, exercisable by order subject to Negative Resolution. Clause 1 provides that the Secretary of State may make orders regulating or prohibiting the production, supply, acquisition and use of crude liquid petroleum, natural gas and petroleum products and other substances used as fuel, or electricity. The Secretary of State may also regulate, by order, the prices of crude liquid petroleum, natural gas and petroleum products. I will deal with the circumstances in which these powers may be exercised when I come to Clause 3.
Clause 2 enables the Secretary of State to give directions to producers of the substances mentioned in Clause 1, as to their production and use, including the prohibition or restriction of the use of any material for the production of the substances and the disposal of stocks. 466 Directions may also be given to suppliers of the substances, as to whom they shall or shall not supply anywhere in the world. These directions will enable us to implement the IEP emergency oil sharing scheme. Such directions may, in the case of crude liquid petroleum or natural gas or petroleum products, require supplies to be made at specified prices. Persons carrying on undertakings using the substances may be given directions prohibiting or restricting their use, including the purposes for which or the periods in which they may be used. The clause also applies to electricity.
Clause 3 covers the circumstances in which the full powers contained in Clauses 1 and 2 may be exercised. If these powers are required to meet the United Kingdom's international obligations, either as a member of the EEC or as a party to the Agreement on an International Energy program, they can be activated by Order in Council, subject only to the order being laid before Parliament. Such action would be taken only in circumstances where either the members of the EEC or the members of the IEA had decided that an energy emergency existed or was imminent, and urgent action was required to fulfil the Government's obligations. If the powers are required for crisis management of a domestic emergency, they will be activated by Order in Council, but this will expire after 28 days unless approved by Resolution of both Houses and will, in any case, automatically expire after 12 months unless renewed.
If no Order in Council is in force, only the use of the substances referred to in Clause 1(1), or electricity, and the price at which petroleum products may be supplied, can be controlled, and then only by order. This permanent power to control use is required to enable us to continue existing energy conservation measures, and to introduce such measures in future as we consider necessary. Currently, the equivalent power in the 1973 Act is being used to control heating in non-domestic premises and to restrict lighting for advertising purposes, and these measures are continued in force under the new Bill.
As to the power to control prices, the only product at present subject to retail 467 price control under the 1973 Act is paraffin, because, as I have said, many old and poor people rely on this fuel for heating. While there is no present intention to control the price of any other oil products, the need to do so could well arise in the future, and the Government consider it prudent to seek the necessary reserve powers. These powers could, however, be exercised only by order, subject to Negative Resolution by Parliament.
Clause 4 provides supplementary powers which may be needed to manage an energy emergency. Like Section 4 of the 1973 Act, it enables the Secretary of State to grant authorities relaxing statutory or contractual obligations, or relaxing certain provisions of road traffic and transport law, as set out in Schedule 1. The clause also contains power to modify, by Order in Council, enactments which affect the supply or use of fuels and electricity, and this extends to modification of an order under the Counter-Inflation Act 1973, if necessary for price control purposes. All these powers are available only in an energy crisis, when an Order in Council is in force under Clause 3(1). In addition, the power to modify enactments affecting use can be exercised for energy conservation at any time, by Order in Council under Clause 4(3). This power supplements the power to control use by order, and its counterpart in the 1973 Act is currently used to impose lower speed limits. The power to impose speed limits for fuel conservation purposes will be preserved under the Bill.
Clause 5 is a logical extension of the underlying purpose of Clause 4; namely, that of preventing normal statutory controls from unnecessarily hindering national objectives in times of emergency. In the case of an oil emergency we will be particularly dependent on the industry acting collectively to implement directions given by the Government. Such joint action by oil companies might infringe the provisions of the Restrictive Trade Practices Acts. Clause 5, therefore, provides partial exemption for certain restrictive agreements made by the oil industry while an Order in Council under Clause 3 is in force; that is only during an energy crisis.
Clause 6 implements the United Kingdom's obligations under EEC Council Directives on oil stocks (68/414 as amended) and the oil stockpiling provi- 468 sions of the International Energy Program, both of which are currently implemented by the 1973 Act. The clause enables the Secretary of State to give directions requiring the holding of stocks of crude oil or petroleum products by undertakings producing, supplying or using these substances. The effect of the clause will be to impose very much the same régime as at present (under the 1973 Act) on the oil companies.
Clause 7 implements the United Kingdom's obligations under EEC Council Directive 75/339 and provides powers to direct electricity boards, and undertakings generating electricity, to hold stocks of fuel, at or near those generating stations, which have a capacity of at least 100 Megawatts. The directions will stipulate that a minimum of 30 days' stocks should be held. The generating boards already hold, for commercial reasons, sufficient stocks to meet that requirement. The number of private generators affected by the Directive will be very small, and we shall frame directions that take account of their particular circumstances.
Clause 8 supersedes Section 9 of the Continental Shelf Act 1964. It provides that persons other than the British Gas Corporation may supply or use United Kingdom natural gas by pipe, only with the consent of the Secretary of State, unless it is being supplied to the British Gas Corporation. This will close the present loophole in the Continental Shelf Act and complete the essential control on the use of this premium fuel. The provision will also enable us to control the conversion of natural gas to methanol and liquefaction. These are processes which waste gas and can be justified only in special circumstances. Opportunity is being taken to clear up the anomalous position of gas dissolved in crude from the Continental Shelf by exempting from control all gas dissolved in crude brought in by ship.
Clause 9 will also provide an important control on the wasteful disposal of our natural gas. The Petroleum and Submarine Pipelines Act only controls flaring by the licensees in connection with activities controlled by the licence; it does not necessarily control flaring at, for instance, onshore stabilisation and treatment plant or in refineries. This clause 469 will make it illegal to flare gas without the Secretary of State's consent.
Clause 10 is designed to remove the potential confusion over the controls applied to gas from refineries. At present, that gas would be subject to the Gas Act 1972, if derived from imported crude, but to the different régime of the Continental Shelf Act if obtained from the North Sea. But the two gases are indistinguishable. It is therefore proposed to establish a single régime, closely following that of the Gas Act 1972, for all gas supplied from refineries.
Clause 11 gives permanent effect to the relief of the British Gas Corporation from its obligation under the Gas Act 1972 to meet demands for new or additional supplies of gas if these would involve supply of over 25,000 therms a year to the premises in question. This relief has been given for the last two years by a special authority granted under the 1973 Act, and needs to be maintained to ensure that demand does not outstrip available supplies through a major unregulated growth of non-domestic use.
Clause 12 will enable United Kingdom obligations under EEC Council Directives 75/404 and 75/405 to be implemented. It requires that the Secretary of State be notified of any proposal to establish or convert an electricity generating station to burn crude oil, petroleum products or natural gas or to enter into new arrangements or extend existing arrangements for the supply of natural gas as fuel for such stations. He may then give directions in relation to the proposals. An order will be made under subsection (4) of the clause to exempt mobile generating stations and stations which are for emergency use only. Consideration will also be given to exempting stations of less than a specified capacity from the need for authorisation.
Clause 13 is an important element in our campaign to encourage people to conserve energy. It provides that the Secretary of State may make orders requiring the fuel consumption of passenger cars to be officially tested and the results to be recorded and brought to the notice of the public. In particular, the official consumption figures will then have to be stated in any advertisement or other promotional material which mentions fuel consumption, and also in manuals and 470 handbooks issued to the first purchaser of a car. It will also be necessary for retailers of cars to display at their premises a full set of official consumption figures, covering all the cars which have been officially tested, not just cars sold at the premises concerned. This will ensure that purchasers of cars will have reliable and comparable information on the car's fuel consumption, compared with other models. This will be a further incentive to car manufacturers to improve fuel consumption, as well as an indication to the consumer of relative running costs in terms of fuel.
Clause 14 raises the upper limit of the contributions payable under Section 2 of the Electricity Act 1972 from £25 million to £45 million, mainly to take account of inflation. Section 2 of the 1972 Act enabled the then Government to contribute to the costs incurred by the electricity boards in carrying out projects which they had agreed to advance in order to promote employment. The largest of these was Ince "B" power station in Greater Manchester. Clause 15 is a general clause relating to the use of orders and directions under the Bill. Apart from the Orders in Council under Clause 3(1), which activate the emergency measures and which I have already dealt with, and orders under Clauses 8(6) (consent for supply et cetera of natural gas) and 21(2) (appointed days), all orders under this legislation will be by statutory instrument, subject to annulment in pursuance of a Resolution in either House of Parliament.
Clause 16, with Schedule 2, provides powers to obtain from undertakings information relating both to the substances mentioned in Clause 1, and electricity, and to the undertakings themselves. This latter provision is necessary to implement our obligations under the IEP Agreement to furnish information on the structure and organisation of oil companies. The information may, however, only be disclosed in specified cases, such as to the International Energy Agency, EEC institutions and other Government Departments for the exercise of their functions. The Schedule includes powers to call for documents and, in certain circumstances (and subject to safeguards), to enter non-domestic premises. This clause also creates appropriate offences for non-compliance with provisions made 471 by or under the Bill, and with the EEC Council Regulations listed in Schedule 3, and for making false statements or possessing false documents.
Clause 17 provides penalties for these offences. All are subject to a fine not exceeding £400 on summary conviction, but in some cases there is the alternative of an unlimited fine on conviction on indictment. There may, in addition, be a penalty of up to three months' imprisonment on summary conviction, or up to two years on conviction on indictment, for certain offences. The remaining Clauses 18, 19, 20 and 21 deal with miscellaneous provisions and general matters and cover financial provisions, interpretation, repeals and savings, citation, commencement and extension to Northern Ireland and territories outside the United Kingdom.
I feel sure noble Lords will agree that the provisions I have outlined are necessary in a Bill which is intended to provide a basis for our energy conservation programme, as it develops, and to meet our international obligations. The Government attach the highest importance to meeting these obligations, which are an important part of the United Kingdom's contribution to solving the world's energy crisis. The Government also recognise that the 1973 Act was not a suitable basis for meeting long-term obligations. The Bill now before your Lordships represents a sensible and coherent approach to our energy problems and is an essential part of our energy policy. As I am sure noble Lords will agree, energy is an essential basis of our social and economic life, and it would be irresponsible not to safeguard it by all the means that Parliament can provide. This Bill will achieve that objective, both in normal times and during energy emergencies. I commend the Bill to your Lordships and beg to move that it be now read a second time.
§ Moved, That the Bill be now read 2a.—(Lord Lovell-Davis.)
§ 4.37 p.m.
§ Lord LUCAS of CHILWORTH
My Lords, I am quite sure that we should thank the noble Lord for his very clear, if somewhat long, explanation of this extraordinary piece of proposed legislation. It is perhaps a pity that we have 472 had so little time to study the Bill, the printed form of which came into your Lordships' House only on Friday afternoon. I know that a number of interested parties, apart from having spoken to the Department of Energy, perhaps to the Department of Industry and, I understand, also to the Department of the Environment, last November and December, have very little knowledge of what is contained in the Bill.
I would describe it, in culinary terms, as "a collation of snacks", and those of your Lordships who embark upon entertainment of that nature will know that such a collation brings not the satisfaction of a full meal but gross indigestion. That is precisely what this Bill will bring to us in the next few weeks. Indeed, some parts of it are so badly drafted that we may well have to decide exactly what it is we are to discuss. For example, on pages 2 and 6 there is a reference to "his"—but I wonder whether the reference should be to "hers", "his" or "theirs". What exactly is meant? Perhaps it is worth quoting what might be described as the most incredibly sloppy piece of Parliamentary writing it is possible to imagine. At page 12 of the photostat copy—I imagine it is the same page in the printed version—Clause 13(3)(b) reads:include that information in any manual or handbook compiled with a view to a copy of it being issued to any first purchaser of the car;".Either we are going to print the wretched thing and make sure that the first purchaser has it, or we are not. As to whether or not views about this or that should be incorporated into a Bill, I am not sure: I cannot see the point. I should like to come back to that later.
The Minister explained that this Bill has two purposes: first, to meet our international obligations; and, secondly, to conserve energy. I should have thought that those two purposes differed very widely and that it might have been very much better to deal with our international obligations in a different Bill from one which attempts—and, in many ways, attempts most crudely—to assist in our energy conservation programme, because, while we are wrapping that up in Clauses 3 and 8, we are very severely shackling the hands of the oil producers. We know quite well that North Sea crude oil is very expensive and that the very best use must 473 be made of it, which may not necessarily mean petrol. The Minister is taking power in an emergency—an international emergency or a domestic emergency; and God knows who will decide when these emergencies arise, because we lurch through domestic emergencies from year to year—to determine that any gas which a company may extract, having been offered to the British Gas Council and, presumably, been refused by them, cannot be used for any purpose that the producing company may seek, which may well be animal feedstuff's or some other aspect of petrochemicals. But he may, for devious reasons, determine that it should be used for a completely different purpose, and one which will greatly inhibit the producing companies.
From a conversation that I had with one of the leading petrol companies, it seems that we may very well wish to come back in great detail to both Clause 3 and Clause 8. It is quite extraordinary that a Minister should seek permanent powers for controlling the price of petrol products. During the crisis period two and a half years ago, the Government back-pedalled on price control. The last thing they want to do is to control the price—"Let natural competition take care of the price to the consumer". From personal experience, I can assure your Lordships that in the last 12 months natural competition has brought down the price of petrol to the consumer to a very low figure indeed, and the need for any Government to seek permanent powers to control the price of this product in the name of conservation is absolute rubbish. I do not know the reason for this provision. If I were inclined to wild outbursts, I might suggest that price control will ensure that some supplying companies exist and others do not exist, and perhaps help the ground to be well prepared for the National Enterprise Board to sweep through the lower echelons of petrol supply in a market place which is in complete disarray, so enabling even further inroads by the nationalisation of fuel. But that is very hypothetical.
Legislation of this kind should form part of those committees and groups that were suggested in our debate on 11th March, because, while the Minister said in relation to Clause 13 that the motor industry had been consulted and had 474 agreed, the people in that part of the motor industry that I know do not consider that they have been consulted. Indeed, the best thing about Clause 13 is that subsection in it which promises consultation with interested parties. Of course we are all very glad to see that written in, and we hope that these consultations will continue. At the outset, Clause 13 was an attempt to meet an international obligation regarding consumption figure on all motor cars, notably in relation to the French, Swiss and American markets. But it has now become very much wider, and there are some points which I should like to bring to your Lordships' notice now, because we will be speaking about them later in very much greater detail.
As I said at the outset, much of this Bill, particularly Clause 13, is far more consumer orientated than energy conservation orientated. Or is this a subtle hint that, by publishing figures for the domestic market, users of big motor cars needing a lot of petrol might be shamed into using something smaller, or into thinking that for some extraordinary reason they are contravening the Government's intentions in this matter? I do not know how anybody in his right mind could imagine that the publication of any kind of standard for miles per gallon would do anything whatsoever to conserve energy. The most important saving of energy on a motor car is from the right foot on the throttle. Consumption figures also depend on the road, on the weather, on the load and on the state of maintenance of the engine; and there is irrefutable evidence that motor cars are extremely badly looked after largely because the cost is getting to be very high. But the publication of miles per gallon figures will not promote any greater energy in motor engine design with a view to more efficiency, because all those people who are making, selling and buying motor cars recognise that miles per gallon is only one small facet of this matter. Indeed, if two miles per gallon were able to be saved on a medium-sized family saloon car, that saving would be off-set within eight months by the increased costs of servicing and insurance—items outside the control of the motorist.
In this attempt to conserve energy, can the Minister tell the House what proportion of a barrel of crude oil is used as 475 petrol in motor cars—I suspect that it is probably as low as 10 or 11 per cent.—and what proportion of crude oil purchases this amount of petrol represents. In other words, what kind of saving does the Minister think he will get by sticking a notice in a showroom window stating that a motor-car does x miles to the gallon? Who will carry out this test? There are upwards of 500 new motor variants on sale in this country today, and new ones and altered ones appear every other day. Is the Minister saying that every time a manufacturer makes a small modification to the jet size in a carburettor the vehicle has to be offered for re-test, because substantially the engine has been changed? Let him pay for it. Are the Government going to pay the manufacturer to undertake the test, or is the manufacturer going to pay some other party to undertake the test, or is the retailer going to have to pay? There is only one man who is going to pay and that is the ultimate buyer of the motorcar, and he will not like it. If the Government really want to save fuel by testing mpg, I suspect that they should put it into the annual test and let the consumer pay so that if his car does not come within a certain norm something has to be done. I doubt very much, however, whether Her Majesty's Government would saddle the motoring public with an annual cost of this nature; it comes very near the bone.
Secondly, who is going to see to this? Is it to be the Department of Consumer Protection? What happens when Mr. Brown buys his motor-car and it fails to do x miles to the gallon? Is he to rush down to the Department of Consumer Protection and say, "I wish you to bring an action against XYZ Garage under the Supply of Goods (Implied Terms) Act because my car will not do this gallonage. I am very light; I put my car in the garage; and I do this and I do that"? This is no answer.
The Bill provides also that the notice of the tested figure shall be displayed in every showroom. I have already suggested that there are upward of 500 motorcars, so every showroom will have 500 motor-booklets, or a big chart listing 500 motor-cars with little stickers on it for the modifications each year so that the buyer can come along and look. Whenever in 476 our history has it been necessary for a seller of goods, in this case of motor-cars, by law to display information about his competitors? God bless my soul! What shall we have next in the supermarket—a list of 473 detergents, each giving its price, its composition, exactly how many pounds of wet whites, dry whites, mixed whites, colours or what-have-you, it will wash? This is the kind of hare that a Bill of this nature starts.
My time is up. I have attempted to illustrate one or two points which I think we shall have to look at more closely. I will come back to the speed limit at the Committee stage. Oh yes, my Lords, I can see a 50 mpg limit on ordinary roads and the upper limits, brought in under emergency powers, becoming part of our way of life, and I can see this happening not for good reasons being put forward in support but by default of any reasons being put against. Of course, these are matters which are better debated in Committee.
I do not like this collation. In 17 minutes I have got indigestion, although I have sampled only about five of the snacks on the tray. No doubt my noble friend on the Front Bench will get an equal dose of indigestion if he samples the remaining snacks on this rather horrid tray of goodies.
§ Baroness PHILLIPS
My Lords, before he sits down may I ask the noble Lord whether he was a supporter of our entry into Europe? If so, may I ask him whether he appreciates that many of the points he has been criticising stem directly from the need to conform to the EEC regulations?
§ Lord LUCAS of CHILWORTH
My Lords, the noble Baroness knows full well that I was an ardent supporter of our entry into Europe. Indeed, I remain so, despite the many problems that our entry has brought upon us. If, however, the noble Baroness will read what I said, she will see that I said that I could understand the need for Britain's meeting international obligations by some of the measures that are proposed in this Bill and that I suggested they should be dealt with in that context and should not be wrapped up in a wider Bill which also has something to do with energy conservation. If by my support of entry into 477 Europe the noble Baroness thinks I have argued that we should meet our international obligations, but not this one because it concerns the motor-car, she is quite wrong. If the noble Baroness reads what I said she will probably appreciate this point. I said, by all means have a list but do not think for one minute that it will help energy conservation, or that it will stimulate motor-car manufacturers to make more efficient car engines. Then I dealt with the wider aspect of what is contained in Clause 13; namely, what I consider to be unfair competition by having to post up one's competitors. I do not think that either of us is at all apart on what I have said or on what the noble Baroness thinks I meant to say.
§ 4.57 p.m.
§ Lord SLATER
My Lords, during the course of Lord Lucas's speech, which I followed very closely, I came to the conclusion that he is seeking to make a case on the Energy Bill—which I have not read, nor has anybody read it to me—not on behalf of that side of the House but on behalf of the motor-car industry of this country. The noble Lord referred to the price of petrol going down. So far as the consumer in this country is concerned, the question of how far the price of petrol has gone down is more or less negligible. In my opinion, he is paying far too high a price for his petrol, even at the prices which are fixed for consumer consumption. As drivers of motor vehicles we all know that the saving of petrol will depend upon the speed of travel. If a driver with a high-powered car is prepared to travel at 90 miles an hour on the motorways, a gallon of petrol will not take him very far; he will soon be looking for another garage to buy petrol.
While listening to my noble friend's presentation of this Bill and to his outline of the various clauses, I asked myself what is the reason for this Bill. No reference was made to the Gas Bill, the Electricity Bill, the Mines Bill and everything else that is related to the consumption of energy in this country. I cannot understand the reason for this Bill. There were many references in the speech made by the noble Lord, Lord Lucas of Chilworth, to which my noble friend Baroness Phillips referred, to certain Council Directives connected with this Bill. Must we take our directions 478 and instructions from the Council of Europe because we have become a member of the EEC? Have we altogether lost our identity when it comes to the products that we are able to make in this country for the benefit of our people? Or have we to take the wide view and say that this must cover the whole of Europe and not only the United Kingdom?
Up to now the EEC has not done very much for us. Some people may say the contrary, but as an anti-Common Marketeer in the first place I cannot see anything that they have done for us as a nation. Nor, knowing the French as I do, do I expect that they will come down on the side of the people of this nation in giving us any support when we seek to deal with the energy problems with which we may be confronted in the future.
I should like my noble friend to be a little more clear in his reply. I am a great supporter of the Government and I should like him to tell us why the Government have come along at this particular juncture with this Bill, because we have North Sea gas and there is the new oil extraction now taking place from the seabed. Why we should be faced with this issue at this particular juncture I cannot for the life of me understand. After spending so many hours on this subject during the lifetimes of previous Governments and even during the present Government, I do not see why we should now seek to formulate a new fuel policy for this nation, which in my view has been running very well on the policies which have been pursued and which are now embodied in Acts of Parliament. They give all the forms of benefit that people could expect.
§ 5.2 p.m.
§ Lord WYNNE-JONES
My Lords, I have formed a distinct impression that the last two noble Lords have been somewhat against this Bill. The noble Lord, Lord Lucas of Chilworth, spent a great deal of time discussing whether it was miles per gallon or feet on the throttle that made the difference, and he seemed very much concerned with such problems as how the tests were to be carried out. On the other hand, my noble friend Lord Slater was very much concerned with the question of interference from Europe. 479 This is really quite a simple Bill, is it not? It has a number of points in it: I cannot say whether each one of these is a good point or not but the primary purpose of the Bill is outlined quite clearly; namely, to deal with the question of emergencies and stocks, how oil and gas are brought ashore to this country and how they are dealt with. These are basically simple matters, but they involve a certain amount of legislation.
I do not want to make a long speech because I did not put my name on the list of speakers. I had not intended to speak but, because of something I read just before lunch, I decided that I must ask a question of my noble friend the Minister. First, may I ask a question in connection with the International Energy Agency and the European Economic Community. We are members of both organisations, and oddly enough the two bodies are very different in their membership. A number of countries belong to both, but the organisations do not have a common membership. To take a particular instance, France—which always likes to go its own way—is not a member of the International Energy Agency and there is therefore a considerable probability that the recommendations of these two bodies will not be identical.
Therefore, when we look at Clause 3(1), which says:Her Majesty may by order in Council declare the powers of sections 1 and 2 above exercisable to their fullest extent because either—(a) they are required for the implementation of obligations incumbent on the United Kingdom as a member of the European Communities or the International Energy Agency"—I should like to ask: which takes precedence? Supposing the two do not make the same recommendation? Indeed, it is more than likely that they would not make the same recommendation. The International Energy Agency includes the United States of America, which has distinctly different interests and, as I have said, the EEC includes France, whereas the IEA does not. Therefore, it is surely rather important that we should know which of these bodies takes precedence when an emergency arises and if, as could happen—and it is by no means a hypothetical contingency, but from what 480 one can see of the working of these bodies it might easily happen—they do not give the same instructions, which instruction do we take? Is it left entirely to us or are we bound to take the instruction of the EEC? Can my noble friend give some information on this point?
The second matter which I should like to ask him about arises from a short article in the business section of The Times of today, which refers to the fear of the chemical industry that this Bill would affect them. I copied out the relevant sentence, which reads:Government moves to end the automatic right of chemical companies to use any gas they may find during exploration in the North Sea as feedstock is causing concern in the petro-chemical industry.They may well be right, but I cannot find anything in the Bill which ought to give them this concern. Therefore, I should like to ask my noble friend to tell us whether there is any justification for this. The only reference I can find to this is in Clause 8(1):No person other than the British Gas Corporation shall supply off-shore natural gas through pipes to premises in Great Britain, unless the supply is for industrial purposes.I should have thought that completely covered the petro-chemical industry, but perhaps I am wrong. If I am right in my interpretation it seems to me that the article in The Times is completely misleading. In my view there are several matters here which require further elucidation and I hope that my noble friend will be able to provide it.
§ 5.9 p.m.
§ The Earl of KINTORE
My Lords, first I want to apologise for taking part in this debate without having put down my name; but I hope the Minister will forgive me when I say that, living in Scotland as I do, there was not much chance of getting hold of the Bill to read it before I came down here. That being the case, I again apologise if I ask questions to which I should have known the answers had I read the Bill properly.
The first point that worried me a little was flaring. Flaring is all right if you are supplying oil through a pipeline but if you are supplying oil through a single point mooring buoy, as is being done in some of the more remote fields and the 481 marginally economic fields, this might have an awkward bearing on the profitability. I do not know, and have not had time to consult my friends, or anything of that sort, so I merely ask the question and hope the noble Lord can reassure me on that. Like my noble friend, I am a little anxious about giving mileage consumption for cars. Two people driving exactly the same car over exactly the same distance at exactly the same speed will achieve completely different results, depending on how they have driven the vehicle. While I agree that the object is worth while, I am not quite sure how it can be accomplished by putting it in a Bill. This needs a little more explanation.
Other matters which I do not think are hinted at or given any encouragement in the Bill—and, after all, this is the Energy Bill—are housing estates which are centrally heated on a group basis. In this context, there appears to me to be a great potential for saving fuel and energy, so we should encourage group heating for domestic housing. We lay a cold water pipe, we lay a sewage pipe and we lay a gas pipe. Why should we not lay a hot water pipe, properly insulated? Why should we not have a central system as do many other parts of the world? There is a vast potential for saving energy, and we should go into this and give people encouragement to do such things as this.
The fourth point to which I want to draw attention is that there is still competition between the two nationalised gas and electricity industries. Usually, there are two showrooms, side by side, competing with each other. Despite the glib answers one receives, this could be abolished, and one showroom could serve both industries. If one uses electricity generated from fossilised fuels, before it enters the house it is only 30 per cent. efficient; whereas gas is 100 per cent. efficient by the time it is at its point of use, no matter what is done with it afterwards. These matters should be considered when talking about the utilisation of fuel. I do not think that they are considered enough.
There is another side issue: the cost of all these fuels. Why in the world do we not have, and insist on having, meters that can be read from outside the house? The meter reader has now to knock on 482 the door and rouse the housewife. If she is not there, he has to return. So the meter reader has to come back again, and all this is a charge on the fuel bill. In America and other countries meters are situated so that they can be read from the outside of the house. It is perfectly easy to arrange. One should tell the people who build houses that this is to be done. It can save an enormous amount by way of cost, which would be to the general benefit of the country.
When talking about labour, it is an interesting point to note the statistics from research carried out in Aberdeen. Along with many others, I complained that street lights remained on all night. We went into this matter, as did the Department concerned. They proved—on an experimental basis anyway—that to employ a person to stand by and go round to alter the time clocks, costs more than leaving the lights on all night. This kind of labour-effective matter is something we should consider.
My Lords, I am a little perturbed about chemicals. I do not quite see where natural gas liquids come into it. These liquids have been extracted from the gas. Before one can use gas as gas, one has to take off the liquids, which become feed stocks. Secondly, how do we cater for the Norwegian gas which is coming ashore in my part of the world? There is a Norwegian firm who will turn a good deal of it into liquid ammonia, and then will ship it back to Norway as a fertiliser. How will these people be affected by these laws?
Lastly, I was an ardent supporter, and still am, of the Common Market. One of the reasons for joining a club is that if you are a member, you have an equal right with everyone else to change the rules. France pays no attention to any rule of the EEC if it does not suit her. The sooner we take a tough attitude in dealing with the Community rules—some of which are idiotic—the better. Only the other day there was the question of pollution. We are a full member of the Common Market, and, if things do not suit us, we have every right to tell the others to go to the devil.
§ 5.17 p.m.
§ Lord STRATHCONA and MOUNT ROYAL
My Lords, unlike Brutus on 483 the subject of Caesar, I find little enough to praise in this Bill, and frankly, would prefer to bury it. However, I hope I shall not have cause to comment in quite such a trenchant manner as did my noble friend Lord Kintore just now. In seeking the good apple in what I reckon is a generally rotten barrel, I was heartened by the genuflections of the noble Lord, towards at least what I prefer to call energy saving, rather than using the word "conservation", which means a number of other things to a number of other people. I welcome his particular involvement in this matter and, indeed, I am not sure it is not the first occasion, for me at any rate, to congratulate him on being put in charge of this operation.
My Lords, as a number of speakers have said, we have had little time to consider what is, by any standards, a very complicated Bill. Frankly, I find it both a pretentious and depressing Bill; pretentious because the title suggests that the Bill sets out energy policy, which it certainly does not. It is a ragbag of unnecessary and objectionable measures, in my opinion. I find it depressing because it once again shows, I think, the Government and Whitehall approach to legislating our way out of the mess we are in at the moment; whereas we believe that we go in deeper in direct proportion to the degree of Government intervention, involvement and direction.
It is interesting to look back at the remarks made by no less a person than Mr. Benn in the 1973 debate in another place. I believe the rules of the House preclude me from quoting, so I shall have to paraphrase what he said. He was contrasting the wisdom of the civil servants and the intellectual establishment with the wisdom of people with knowledge of the industry. He says that often in his experience the people with knowledge of the industry have turned out to be right, which seems to me at variance really with the objectives of this Bill. The noble Lord presents this Bill as an innocuous tidying-up measure, whereas it really represents a formidable extension of the powers of the Executive. We are bound, I think, to object in principle to this accretion of ill-defined powers. They are expressed, as I find it, on, I admit, an inadequate inspection, in obscure and complicated language, of which I shall 484 give details in a moment. Again, Mr. Benn himself has described these powers as massive. Furthermore, it seems to me that there is an attempt in this Bill to bypass Parliament by making what were essentially emergency regulations into a permanent feature of the legislation.
I was, to some extent, reassured by the speech of the noble Lord, Lord Lovell-Davis, in that, at least his objectives appear to be worthy ones. But, here again, I cannot apologise for being disturbed, and questioning the motivation of a Minister, as he now is, who when he was in Opposition was talking about the original 1973 Act and saying how pleased he was about that Act, because it took powers to control all the oil companies and all the multinationals and to fix all their prices and their distribution systems, and these powers could be used to control every other fuel and its use, including the chemical industry. I have already explained why I do not find those at all reassuring as objectives.
I shall now try to be slightly more specific as I go through some of the clauses of this Bill. I will take, first, Clauses 1, 2 and 3. I find it very difficult in the Bill to disentangle which of these regulations are in fact subject to Negative Resolution. We have to go forward to Clause 15 to discover how this is intended to work. I think I am right in saying that Orders in Council under Clause 3 are subject to Affirmative Resolution, except for the two exceptions, something to do with the origin of gas, and the starting date of the Bill, and these are presumably not subject to any kind of appeal procedure. Then we come to this very strange expression in Clause 3, which I certainly do not ever remember seeing in legislation before; this expression about exercising the powers to "their fullest extent". Could the noble Lord tell us exactly what is less than the fullest extent of the exercise of these powers, and how is less than the fullest extent to be defined? Has this expression been lifted out of some other piece of legislation which I ought to be aware of but am not?
Then, under Clause 3(2)(a) and (b) we find a regulating power, regulating the use, and also a power to regulate the price, which has already been referred to by my noble friend Lord Lucas. These, 485 I would have thought, were powers which were only needed in an emergency situation. It may simply be that the convoluted drafting has defeated me. As I see it, there are orders under Clause 1 which are not exercisable except by Order in Council, except for the regulation under (a) and price under (b). But then directions are excepted from Orders in Council, whereas under Clause 2(2)(b)(iii) they are brought in again, and that seems to be duplicated in 3(2)(b). I am sorry to quote all these references, but I should go on at great length if I tried to quote all the paragraphs in question. Then we find Clause 3(2)(a), and this seems to be a really good all-embracing kind of clause which is one of those "anything I have not thought of before" kind of clauses which Governments always pop in if you are not watching very carefully.
The issue of electricity I find even more confusing. This seems to be like a yo-yo that goes in and out of the regulations in each alternate paragraph. We find it excluded from price control under Clause 2(2)(b)(iii), which we read with Clause 2(4), and then we find it popped back in again under Clause 4(5). I suggest it might be quite useful if the noble Lord tells us what the Government mean to do about electricity. Possibly I could ask him to examine whether it would not be easier, seeing that this is supposed to be a piece of tidying-up legislation, to sweep all these things into one section which a reasonable man might possibly understand.
My next point is that Clause 5(2)(d) is not in Parliamentary language. What on earth does this mean:…that the agreement is not to the like effect as another agreement made while the Order in Council is in force in respect of which exemption has been withdrawn under subsection (4) below, unless—(i) none of the parties to the new agreement were parties to the previous agreement.Some noble Lords may possibly be reminded of an old Marx Brothers film, in which I recall very much that same language occurring, and I do not really think we should use Marx Brothers script writers in writing legislation for the British Parliament.
When we come to Clause 6, this has already been referred to, and I very much take the point which the noble 486 Lord, Lord Wynne-Jones made, which I must confess I had not spotted. I was going to ask what is the force of these EEC Directives. A number of noble Lords have asked this question. Are we following the EEC Directives exactly, and does the Secretary of State intend to do what he is told by the EEC? I thought I heard the noble Lord say that we were talking about 30 day stocks, whereas my recollection is than the EEC Directives on stocking have raised stock figures from 65 days to 90 days. That, again, could possibly be my confusion.
What exactly are we committed to under the International Energy Program, because the Preamble to the Bill says that we are going to follow the powers under the International Energy Program and I cannot find anything actually in the body of the Bill which does what the Preamble says the Bill intends to do. Incidentally, on the subject of stocks, may I ask one other question. This could be quite an expensive, onerous imposition to place upon a company or an organisation, if they have to finance large quantities of stocks. The question arises as to who is to pay for that and how are these obligations to be imposed. Will they be imposed in a fair-minded manner?
Under Clause 7(2) we specify the minimum size of generating plant to which this is going to apply. However, if we look forward to Clause 12 that particular issue—I admit in a slightly different connection—is left open. I shall return to this point when I look at Clause 12. On Clause 7, the EEC Directive I have, which is L 153/36, says in paragraph 4:Stocks shall be held on the premises of the power station or at a place directly linked thereto. Stocks may be held at a place further removed, provided that they can be conveyed to the power station at all times.Have we, in this Bill, made satisfactory provision for access?—because some of us will remember that during the fuel crisis of 1973 we were in a position where stocks were available but it was impossible to get them into the power stations. Surely that is something that we ought to deal with under the Bill.
The next group of clauses is concerned with the gas industry. I get the impression here that there has been inadequate consultation with the industry. Certainly as expressed to me, the industry have been both painfully surprised and shocked 487 by what is in these four clauses. I shall not go into great detail on these issues because they are more suitably kept to Committee stage points. We are here seeking to extend the Continental Shelf Act 1964 to cover the user of the gas. I would instance the point made by the noble Lord, Lord Wynne-Jones, that the exemption from control of feed stocks has now been brought, as I understand it, within the ambit of the Bill. Furthermore, the Bill now extends beyond methane to, for example, ethane, butane and propane. I think that the noble Lord, himself, said that liquefaction is now coming under the control of the Bill. The danger here is that we shall be putting the whole liquid petroleum gas industry, which is not a Gas Corporation function at all, within the Government's control. This is surely a piece of economic nonsense and liable to create a hopeless distortion of the market, and it is not a function that either by constitution or experience the Gas Corporation is qualified to operate.
When we go back to the objections in principle to a number of these clauses we get back to points we laboriously made under the Petroleum and Submarine Pipelines Bill. I shall have to repeat the argument again, and I hope that perhaps the present Minister with whom we are dealing will be more able to understand the point which I tried to make. Even with the support of my noble and learned friend Lord Hailsham, I could never persuade the noble Lord, Lord Balogh, of what we were talking about. There is an objection in principle to legislation which has a retrospective element in it and which, in effect, by changing a licence takes something away from a company which has paid for the licence. I did not say it, but in point of fact this was precisely the argument we were taking in this House a week ago in another connection concerning Laker. I do not intend to labour the point but it is a serious issue. It has happened too often, and it is something about which we should be very careful, and the Minister can hardly complain if the industry is upset when the Government bring in legislation of this kind.
There is a further objection, in that this kind of legislation tends to decrease the competitive nature of the United Kingdom energy industry, and therefore the 488 industrial sectors which are dependent upon it, and the uncertainty which it creates slows down the decision-making process and has a devastating effect, as we are already seeing, on the ability of the industry to make their rational forward plans.
There are a couple of specific questions on the gas issue. Clause 8(2) states "in the same group", referring to supply between one company and another. If that is put into the Bill is that not going to be an invitation to companies to force themselves into some kind of conglomerate in order to get round that point, and really invite evasive tactics? When we come to Clause 9, about which we have already spoken, on the question of flaring, I think this is going to create a certain amount of worry in the industry because there are technical reasons why they need to have permission to flare. This leads me to wonder whether Clause 9(1) implies, as so many lawyers' points do, that the Minister of States' consent is required. Do we, in Parliamentary legislation, also insert the lawyers' words, "which consent may not be unreasonably withheld"? If that were there, even by implication, this might go some way towards reassuring the industry.
Then, under Clause 10 we talk about refineries, but I cannot find any definition of the word "refinery". Much the same argument applies here as I referred to in regard to the same group. If you say that certain things are not to be done outside a refinery, is not this going to be an invitation to the industry to try and so create their refineries that they can carry on their gas activities within the complex and thereby take themselves out of the Minister's control? I agree that that is a rather technical point.
I have already referred to the apparent difference of approach in Clause 12. As it stands, the Minister's permission would be needed to put in an ordinary diesel generating set. He makes it quite clear that he has every intention of stating a lower limit, but if the lower limit of size is to be stated under the previous clause would it not be sensible to put into the Bill a lower limit below which this permission would not be needed, in the same way as is done in Clause 7(2)?
I do not think that I need to expand on Clause 13, about which my noble friend Lord Lucas of Chilworth is an 489 expert. I am not going to say that I go quite so far as he does in being critical of the Government's intentions here, but it is clear that the industry does express some concern. Under Clause 14 I think the Minister said that the main reason for increasing the aggregate of the amounts of money available was inflation, by which presumably he is suggesting that costs have very nearly doubled between 1973 and 1976, a sad reflection on what has been going on. Could he let us have in due time—I appreciate that he cannot let us have the details now—a list of the projects which are intended or which have been supported under this clause? I recall reading in the Press recently that a generating plant which the Electricity Board did not want was being built as part of the job creation programme. This is something we should know about if we are considering increasing the sum under this clause. When we come to Clause 15, this, as I said earlier, seems to define the way in which the first two clauses operate.
§ Lord DAVIES of LEEK
My Lords, I apologise for not being in my place at the outset; snow was about in places through which I was driving. Before the noble Lord deals with Clause 15, I should like to tell him that I listened with interest to the points he rightly made in connection with Clause 13. While of course preferring to leave certain points until we arrive at the Committee stage, may I draw his attention to Schedule 1 which, in my view, destroys everything that is said in Clause 13, because the Schedule says:A person acting under and in accordance with a general or special authority granted by the Secretary of State…may use, or cause to permit the use of, any vehicle on a road as a public service vehicle—Heaven help us! One could put a boat on the road under that provision. Clause 13, meanwhile, refers to tests and officers, but all of that is made bunkum by what is said in Schedule 1.
- (a) without a licence, permit, agreement or consent otherwise required; and
- (b) notwithstanding that the vehicle does not comply with regulations."
This may be a Committee point, but a number of such points have been made. I simply wish to draw attention to the breadth of permission, so to speak, that is available under the measure. We are in the Common Market and it seems that 490 we could have vehicles as large as the "Lusitania" running through our villages.
§ Lord STRATHCONA and MOUNT ROYAL
My Lords, I agree with the noble Lord that we should raise as many points as possible at this stage—we do not have long before the Committee stage—so giving the Minister notice of the kind of points we shall wish to discuss in Committee. What the noble Lord says reinforces my unhappiness about the drafting of the Bill. I confess that I had not studied Schedule 1; it was rather too near the end of the Bill for me to study in the time I had available.
I am particularly concerned about Clause 15(4)(a) which seems to be another splendid example of gobbledegook, because it says:An order under this Act…may—(a) apply to persons, premises or undertakings generally, or to classes of persons, premises or undertakings, or to particular persons, premises or undertakings, and may so apply either in all areas or in specified areas".If that means anything, it seems to mean everything. There may be a perfectly rational explanation for it and we may be given it in Committee, but at present it defeats me and, in defeating me, it worries me. There is a broader issue here, because the companies feel worried in that the powers in the clause could be exercised in a discriminatory fashion in favour of our old enemy, as I prefer to see it, the British National Oil Corporation. Furthermore, the clause seems to give the Minister power to control the whole profitability of the entire refining industry of this country in an arbitrary fashion. With the best will in the world, I cannot see that that is a power he needs or that we would wish him to have.
In coming to Clause 16, very much the same issues apply, especially when one reads the clause with Schedule 2. The Schedule starts by saying:…whenever the Secretary of State thinks it expedient…It goes on to say that he can call for documents, have entry without warrant, or…direct any person carrying on an undertakingor…furnish, as and when specified, estimates, forecasts, returns and information relating to such a substance, or to electricity".491 Here again, these seem to be terrifyingly wide powers of disclosure which will raise all the issues of confidentiality and, again, the thorny question of the danger of unfair discriminatory information as between the BNOC and the oil companies.
I must, in concluding, say as usual that I have spoken at greater length than I had intended. We fear that this measure is a piece of Socialist planning masquerading as legislation to cater for emergencies. I am sure that we shall need to amend it considerably in Committee. Above all, we shall need to try to restore Parliamentary control over what otherwise seems to be an invitation on the part of the Government to exercise almost unlimited and arbitrary and, therefore, in my book, by definition, undesirable powers of control and direction.
§ 5.47 p.m.
§ Lord LOVELL-DAVIS
My Lords, I have found the discussion most interesting and although there have been only a few contributions, they have been very wide-ranging in scope and I am grateful to noble Lords who have taken part for the useful points they have made and the questions they have put to me. I will do my best to answer them. First, the points made by the noble Lord, Lord Lucas of Chilworth. This may seem to him a collation of snacks, the main ones of which, indigestible as he may find them, were first created by the then Government in the 1973 Act, which was designed to meet the energy crisis of 1973 and 1974 and the decision of the noble Lord's Government to enter the Common Market. These are the prime considerations for our drawing them together and meeting the various requirements of the EEC and IEA in this Bill.
In referring to the motor industry, Lord Lucas said that he knew of no bodies which had been consulted. I can assure him that many organisations were consulted about the fuel consumption testing of cars. I will name a few: the Society of Motor Manufacturers and Traders; the Scottish Motor Traders' Association; the Consumer Association; the National Consumer Council; the Motor Agents' Association; the RAC and the AA. We did, in fact, consult a considerable number of the bodies involved. The noble 492 Lord questioned the reason for our introducing this provision in the Bill. In my view it is important. Its aim is to make the industry more fuel economy conscious and to give people the chance to choose the model which is most economical to run. He referred to such things as badly looked after cars; and other noble Lords referred to the different ways people drive. Nevertheless, people must have the ability to judge what the car is capable of; which car will achieve the most miles per gallon or kilometres per litre.
I regret that I cannot answer the noble Lord's question about the amount in each barrel of oil devoted to petrol, but I imagine that he would not expect me to do so. The noble Lord asked who was to carry out the test and gave the impression that every car would be tested. That is not so. Models will be tested and the testing will be selective. The manufacturers themselves will carry out the tests, subject to the agreement of the Secretary of State. The Society of Motor Manufacturers and Traders has requested a year's notice of the scheme in order to be able to carry out the heavy programme of testing necessary. It is therefore proposed that the scheme should come into effect on 1st April 1977, but it is our intention that, at least initially, this will be a matter of self-certification, though the Government will retain the right to supervise testing and to carry out test checks. As the cars tested will be samples from the models and as not every car will be tested the cost will not be much of a charge on the great mass of motorists.
The noble Lord also referred to retailers publishing lists of their competitors' products. Here again, I wonder whether he is suggesting that we should not try to help the consumer make his choice, or does he not think it important that we should attempt to conserve energy in this very vital area? This is an extraordinarily difficult area. We know it ourselves and I am sure that noble Lords are all aware how difficult it is to modify methods of driving so as to conserve energy. There is an enormous wastage in this area and we must try to do something about it.
The noble Lords also asked about speed limits. It is very difficult—indeed it is impossible—to attribute specific 493 savings to the introduction of the lower limits, but there is no doubt that drivers are behaving more economically and that the speed limit must be making a contribution to that. No speed limit is 100 per cent. observed, but the latest surveys showed that about 80 per cent. of drivers were observing the limits and that is a good standard of observance and is, for instance, better than the standard of observance on motorways.
The noble Lord also referred to the EEC aspects of conservation. Clause 12 of the Bill which deals with the fuelling of power stations is directly related to our EEC obligations, and Clause 13 is based on international discussions in ECE, the Economic Commission for Europe. France has already gone ahead with a similar scheme and the EEC as a whole is likely to follow. Clauses 1 to 4, to which the noble Lord referred, especially arise both from EEC and IEA obligations in the case of emergency.
He referred to Clause 13 in connection with passenger cars. It could not and is not intended to affect the rights of purchasers of cars. This would depend on whether the dealer warranted that a particular car would do the miles per gallon specified for that type of car. The clause deals only with testing the models, as I have said. It does not cover the performance of individual cars.
My noble friend Lord Slater asked why we were introducing the Bill. I had hoped that I had clearly set out the reasons for our wishing to do so. I would rather not repeat them. I can only commend the Bill to him once again and point out that North Sea oil and gas will not solve our energy problems. The fact is that North Sea oil and gas will probably run out during the lifetime of most of us. Fossil fuels are finite. We must implement a proper conservation programme. My noble friend referred to other Acts on the Statute Book, but the reason for introducing the Bill is because those Acts do not adequately cover the requirements for which we have designed the Energy Bill. As Members of the EEC and the IEA and as a country responsible, as are all other main energy-using countries, for the world's energy future and for conserving the energy resources which we have at present, we had an obligation to take this step.
494 I am grateful to my noble friend Lord Wynne-Jones. As he said, the matters covered by the Bill may seem complex but the Bill itself is not overcomplex. The fact is that we must be adequately covered for the reasons which I have already stated. My noble friend asked which out of the EEC or the IEA Directives would take precedence in terms of energy directions if the aims of the two were not identical. The Government are making efforts to ensure that the two emergency schemes of the IEA and the EEC shall be as nearly identical as possible. We cannot prejudge the outcome of the meeting later this week of the EEC Council of Ministers, but we are very hopeful that the EEC proposals will mirror those set out in the International Energy Agreement. I do not know whether my noble friend Lord Wynne-Jones had a narrower point in mind, but either body, if it decided to trigger an emergency, would give rise to the use of Clause 3(1). I suppose that whichever came first would apply.
§ Lord WYNNE-JONES
My Lords, I was specifically raising the issue of the possible conflict between an International Energy Agency Directive and one from the EEC because of the difference in the composition of the two bodies. I believe I am right in saying that Japan is included in the International Energy Agency and that France is not. It could easily happen that a body which includes America and Japan could have a different view of an energy emergency to the EEC, which includes France but not America and Japan. The point which I was raising was whether there was any priority given to the decisions reached by the two bodies in so far as their effect upon this country is concerned. Otherwise, we may be faced with a position in which we receive opposing Directives from the two bodies.
§ Lord LOVELL-DAVIS
I take my noble friend's point. The International Energy Agency consists of 18 countries and includes countries which are not in the EEC. Also France is not a member. However, I believe that my noble friend will agree that for either body to take action there would have to be agreement within the body in question and that, if the IBA agreed that emergency conditions existed, this would mean that the 495 majority of the members of the EEC were of like mind, in that they had gone along with the IEA decision. I do not believe that I can say more on this than I have already said. As I said, if either body decided to trigger an emergency, it would give rise to the use of Clause 3(1). My noble friend Lord Wynne-Jones also mentioned a story he saw in The Times. The use of natural gas for petrochemical purposes will require the discretionary consent of the Secretary of State, but there is no question of a general prohibition on its use for petro-chemical purposes—
§ Lord WYNNE-JONES
My Lords, I am sorry to interrupt my noble friend again. The clause dealing with this matter seems to me to state quite clearly that where the gas was required for industrial purposes it could indeed be brought ashore, and a permit would not be required. Clause 8(1) says:No person other than the British Gas Corporation shall supply off-shore natural gas through pipes to premises in Great Britain, unless the supply is for industrial purposes.Well, my Lords, what is feedstock but an industrial purpose?
§ Lord LOVELL-DAVIS
My Lords, I regret that without the information on this point I am unable to answer my noble friend at present, and if I am unable to do so before I sit down I hope he will be agreeable to my writing to him on the matter.
I turn to matters raised by the noble Earl, Lord Kintore. He referred to flaring from a field with a single point buoy mooring. There is no question of absolute prohibition on flaring; problems, such as those mentioned by the noble Earl, would be taken into account by the Secretary of State in considering any application to flare. The noble Earl mentioned natural gas liquids; that is to say, heavier natural gases. These are treated in the same way as other constituents of natural gas. He referred also to imported Norwegian gas. That is not covered by this Bill, which deals with gas from the United Kingdom shelf. Norwegian gas would be caught by the 1972 Gas Act, except for the particular case of refinery gas, which is dealt with in Clause 10, and which applies controls similar to the Gas Act.
496 The noble Earl also mentioned other points, such as the way people drive, and referred to group central heating. This matter has arisen several times in the Department of Energy, through advisory bodies, and is under general consideration. The noble Earl spoke, too, about the possibility of joint gas and electricity showrooms. We have sought advice from the consultative councils of consumers in both these industries, from the unions, and from the industries themselves and the Secretary of State hopes to make a Statement on this matter shortly. The noble Earl also referred to meters positioned outside the house. As he may be aware, I am in charge of an inquiry into methods of payment, collection and other matters, and I shall gladly take note of his recommendations in conducting the inquiry. I do not know whether there are any other points mentioned by the noble Earl which I have not adequately covered.
I now have a note which I hope might answer the question raised by my noble friend Lord Wynne-Jones regarding Clause 8(1). The clause and subsection refers to the supply for industrial purposes, in order to make it clear that domestic supply is the province of the British Gas Corporation. The remainder of the clause spells out the particular controls. I do not know whether that is an adequate reply.
I come now to the fairly lengthy summing-up by the noble Lord, Lord Strathcona and Mount Royal. I am very sorry that he finds the Bill to be a ragbag. In fact it is not a ragbag. It is less complicated than it looks, and has very specific aims, as I said, primarily in terms of the Fuel and Electricity (Control) Act and our entry into the EEC. I will try to answer as many of the points raised by the noble Lord as I can, although I felt that he was at times rather anticipating the Committee stage.
If I may pass back to him the Marx Brothers' film comment on the party of the first part, I should say that I wonder whether we can leave a good deal of this to the party of the Committee part. He said that we had by-passed Parliament. The only way we could be said to have by-passed Parliament in this Bill is in the emergency provisions which, as I explained, relate only to IEA and EEC obligations which, 497 I am advised, need to be as automatic as possible. By making some powers permanent—which were dealt with under the 1973 Act—we are now able to provide that the general powers of the 1973 Act are available only for use in an emergency. The noble Lord referred to Clause 5(2)(d). This provides that an agreement, which is to the same effect as an earlier agreement from which exemption is withdrawn, does not enjoy exemption without the Secretary of State's consent. This controls an obvious way of evading a withdrawal of exemption.
The noble Lord mentioned Clause 3(2)(a) and the use of the word "use", in addition to the price control of petroleum products. Only these two provisions are permanent, outside the emergency provisions of Clause 3(1). The word "use" is wide in scope, but as I explained, this will be employed only in energy conservation measures. The question of EEC stocks was also referred to by the noble Lord—or at least I believe it was the noble Lord. The correct figure for United Kingdom oil stocks in general is 90 days, and the figure of 30 days relates to fossil fuel supplies—that is to say, oil and coal—at power stations. The situation is that the oil companies already have sufficient stocks and therefore we believe that no extra cost is involved.
The noble Lord also spoke about companies which have automatic rights to their own gas and he asked why should they not continue to do so. The Secretary of State will decide on the disposal of all United Kingdom Shelf gas, taking account of the maximum benefit to the nation. Companies' use of gas like that of all licensees will be subject to the Secretary of State's discretionary consent. The use of gas by a licensee for non-fuel purposes will not be subject to any requirement of a first offer to British Gas. The noble Lord asked what were the intentions on electricity. For most purposes the general control provisions in Clauses 1 to 4 of the Bill cover both electricity and other substances. All other emergency powers apply to electricity, except price, and those provisions dealing specifically with gas are in Clauses 8 to 11, fuel stocks are covered in Clauses 6 to 7, the RTPA exemption is covered in Clause 5, and car fuel consumption testing is covered by Clause 13. 498 The noble Lord asked for some details on the appropriation, Clause 14, the raising of the limit from £25 million to £45 million. I believe the noble Lord asked me if I could give some indication—and, although he did not expect me to have them, I have the figures—how the sum breaks down. The principal charge is concerned with the Ince B power station, which accounts for about £36.8 million of the sum. The others are all comparatively minor projects. The CEGB's largest other one is the Leicester Gas Turbine Station; but these six particular projects account for only £1.45 million. There are a number of projects—116—under the area electricity boards; and the South of Scotland, the North of Scotland and the Highlands Electricity Boards also have a number of projects which account for about £3 million. In toto, allowing for contingency, the sum amounts to about £45 million; but, as I say, the primary charge is for Ince B power station.
I should have liked to reply to the noble Lord's request for a definition of a refinery, but I do not think I am able to do so in a very adequate way. We are relying on a common general understanding of what is meant by an oil refinery. We decided there was no need to define the term for the Energy Bill. In attempting a definition, a major difficulty would be that many of the processes carried out in a refinery are the same as or similar to those of a petro-chemical plant, for instance. I believe the noble Lord gave the impression that a gasworks could be built within a refinery. If gas was supplied from a gasworks built within a refinery, like any other gas supplied from the refinery it would be subject to the control of British Gas with, in the case of non-supply, a right to appeal to the Secretary of State.
The noble Lord referred to Clause 15(4)(a) and said this might be favouring BNOC. This clause provides the necessary flexibility required for orders made under emergency conditions. I would refer briefly to three other points that the noble Lord, Lord Strathcona and Mount Royal, raised. The Bill does not extend control to ethane, propane and butane. These substances are, and always have been, natural gas. Nor does the Bill bring British Gas any further 499 into liquid petroleum gas than did the previous Act. The provision to grant consent by order is intended specifically to reduce uncertainty. For that reason, no Parliamentary procedure is necessary. So far as flaring is concerned, when this is really necessary it will now be covered by order.
Finally, I come to the matters raised by my noble friend Lord Davies of Leek. I should like to point out first of all that Schedule 1 is only for emergencies, and Clause 13 is a permanent provision, hopefully with effect from the 1st April 1977. My noble friend also referred to paragraph 1 of Schedule 1. This is related to Clause 4(2), and enables a public service vehicle to be operated without a licence or permit required under Part III (control of operations of public service vehicles) of the Road Traffic Act 1960; (1) a road service licence for the route and (2) a public service vehicle licence for the vehicle. A permit under Section 30 of the Transport Act 1968 is an alternative to the first, for the route. The regulations referred to are described in paragraph 1(2), and relate specifically to psv's. Clause 4(2) would permit these relaxations, but only when an Order in Council bringing the emergency reserve powers into operation was in force.
§ Lord DAVIES of LEEK
My Lords, I apologise to my noble friend, because really this is a Committee point. Consequently, rather than make heavy weather of it I will take the opportunity of raising it again during the Committee stage, when I am sure my noble friend will be able to satisfy us.
§ Lord LOVELL-DAVIS
My Lords, I am grateful to my noble friend. I found myself getting into rather deep water there, and was in danger of sinking. I hope noble Lords will feel that I have managed—I am sorry I have taken such time to do so—to deal with at least a major proportion of the issues raised today. There will no doubt be further points in the minds of noble Lords, particularly when they have had more time to study the detail of this important measure, which we shall have the opportunity to consider when we take the Bill clause by clause through the Committee stage. The essential characteristics of the Bill are, once more, to fulfil United King- 500 dom obligations to the IEA and the EEC and to provide, as well as the specific conservation measures in the Bill, general powers to control the use of energy for conservation purposes by order, subject to Negative Resolution. In an energy emergency we would need to adopt one of two alternative courses: for an IEA or an EEC emergency, the Government would lay an Order in Council before Parliament which would be subject to no further Parliamentary sanction; for a domestic emergency, the Government would proceed by Order in Council subject to Affirmative Resolution. Having said that, I commend the Bill to your Lordships' House.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.