HL Deb 25 May 1976 vol 371 cc153-92

4.18 p.m.

Consideration of Amendments on Third Reading continued.

Clause 5 [Temporary relief from restrictive practices law]:

Lord SHEPHERD moved Amendment No. 3:

Page 5, line 10, leave out (" such an agreement ") and insert (" an agreement exempt by virtue of this section ").


My Lords, I hope that I can give the noble Lord a little time, because he has been addressing his mind to the whole subject of devolution. But I presume that this is simply a drafting Amendment, and that that is why the Government have put it down.


My Lords, that is quite right. I was trying not only to collect my thoughts but to find my place in the folder. It is a drafting Amendment.

On Question, Amendment agreed to.

Clause 8 [Supply and use of off-shore natural gas]:

Lord CAMPBELL of CROY moved Amendment No. 5:

Page 7, line 41, at end insert—

(" (1A) The Secretary of State shall give his consent for the supply of offshore natural gas under subsection (2) below and to the use of offshore natural gas under subsection (3)(a) below when such supply or use is for industrial purposes which are not industrial fuel purposes.")

The noble Lord said: My Lords, I beg to move Amendment No. 5 which stands in my name and in the names of my noble friends Lord Strathcona and Lord Long. I think it would be convenient if the consequential Amendment No. 6 were discussed at the same time. This is one of the most important and crucial points in the Bill, which we have raised at each stage. It concerns mandatory consent being granted for the use of off-shore gas when it is not to be used as a fuel but is to be a feedstock for industry. This is the position under present legislation. There is an important difference between using oil-shore gas as a fuel and using it for chemical purposes, and this is recognised. If it has to be used as a fuel then, under the Continental Shelf Act, the Gas Corporation have first to be offered it. If it is not to be used as a fuel but is to be used for industrial purposes—as feedstock for the petrochemical industry in the first place and then as non-fuel materials for manufacturing industry—there is an obligation upon the Government to give their consent.

Our chemical industry in Britain and the many other industries which they supply can be certain now that they will not be deprived of the essential raw material upon which they are relying for their programmes. We seek to continue that situation with this Amendment. With the considerable increase in gas from our Continental Shelf. investment plans can be made for the great benefit of our balance of payments in Britain and also for the benefit of British industry generally—including, I should point out, the agricultural industry because of fertilisers and food production. However, this can be done provided only that the gas which those programmes are relying upon, or the gas which is being extracted from the North Sea by the companies themselves in consortia, will not be subject to diversion. Unless there is the existing security of supply of natural gas, there is likely to be much less planning and investment in this sector than there should be.

At Report stage the noble Lord, Lord Shepherd, said that this was a complicated subject and he asked for time. until Third Reading, to consider the matter. The Report stage was two weeks ago. Despite the importance, which I emphasised, that we attach to this matter, we tried to give the Government every reasonable opportunity to reconsider the position, and in the light of what the noble Lord said then we did not therefore press our Amendment to a Division. However, I reserved the position to table the Amendment again in order to find out what was the position at Third Reading.

The noble Lord, Lord Shepherd, also spoke about a system of general consents and said that this was what he was looking into. I will say straight away that we cannot see how such a system can satisfactorily meet the situation which I have described, nor is a system of general consents the equivalent of continuing the existing procedure. For example, consents of that kind could have objectionable or discouraging conditions attached to them by the Minister. We shall listen to what is said by the Minister who deals with this point today and we hope that, after looking into the complicated system, the Minister will agree with us. We hope also that that is the reason why there is no Government Amendment on the Marshalled List and that we can retain the satisfactory situation which now exists for British industry. I beg to move.

4.22 p.m.


My Lords, the noble Lord, Lord Campbell of Croy, said that this is an important Amendment. Therefore I hope he will forgive me if I speak at some length in seeking to ease his fears in this respect. I said at Report stage that I would seek to give an indication of the Government's intentions about the supply and use of gas for petrochemical purposes. On earlier occasions we have accepted the need to build greater assurances into general consents. If we do not find a way of doing that, the oil and petrochemical companies will, of course, apply for specific consents in preference to relying upon general consents. In that case, the Government would, through specific consents, honour the assurances I am about to give on general consents. I could give your Lordships a long list of petrochemical uses of gas to which the Government will give general consents. However, to avoid wearying the House, I should prefer to concentrate on the exceptions.

The main exception is the supply or use of methane for the manufacture of methanol. This is the point which the noble Lord, Lord Campbell of Croy, developed during the Report stage. Methanol can be used as a fuel as well as a raw material. The noble Lord, Lord Campbell of Croy, on Report argued that the production from methane of methanol for use as a fuel would not he economically feasible. In making that assertion he was, I believe, relying on the calculations of a prominent petrochemical company. The Department of Energy has itself co-operated with that company in a published study of the economics of methanol production.

The argument that the production of methanol for use as a fuel is not viable rests on vital assumptions about the cost of methane and the value of methanol. Now the additional costs of producing the methane in association with oil can in certain circumstances approach zero; it can in effect be merely an unavoidable by-product of crude oil production. At costs approaching zero for methane, methanol becomes competitive in value with light fuel oil. But the main fuel use of methanol would be a substitute for gasoline, as a component of motor spirit. The value of gasoline is well above that of light fuel oil. It is therefore possible to produce methanol from methane and sell it profitably as a fuel. This is not pure theory because we know that some companies have been considering the production of methanol from associated gas, though so far no formal applications have been made for the Secretary of State's consent. Suffice it to say that there are sufficient grounds for believing that the use of methanol as fuel is a practical possibility and therefore should be under control. Because the heat value of methanol is only about 60 per cent. of that of the methane from which it is made, I hope noble Lords will agree that in the interest of conservation the Government must keep control of the use and supply of methane for purposes of manufacturing methanol. Of course, they would not use these controls as a means of denying British industry its need for methanol as a non-fuel raw material.

Similar alcohols can be made from other gas, for instance ethanol from ethane. We have not examined the economics of producing these alcohols for use as fuel in the same depth as we have examined the economics of methanol. However, it seems sensible for now to exempt these other alcohols from the general assurance I have given until we have made this examination. Of course, the Government may then conclude that there is no prospect that they could be profitably manufactured for use as fuel: in that case, it would be appropriate to consent generally to the use of natural gas for their manufacture.

The Government are aware that some oilfields in the Northern Basin of the North Sea contain large amounts of associated gas. As noble Lords will be aware, Shell/Esso have applied for consent under the Petroleum and Submarine Pipelines Act for the largest diameter pipeline yet envisaged for the North Sea to bring this gas ashore from the Brent oilfield. They have also applied for planning permission for a gas fractionation plant at Peterhead. Only ten days ago, the Williams-Merz Report was published. It was commissioned by the Government and envisages the collection of very large amounts of gas from known petroleum deposits in the North Sea. The immediate need is to find those outlets for this gas, and particularly for ethane, which will bring most profit to the nation.

I cannot do better here than to quote the words used in another place by my right honourable friend the Secretary of State for Energy when he welcomed the Willaims-Merz Report. He said: Gas which would he landed by a gathering pipeline system is of such a composition and quantity that when added to that already expected it indicates the need and opportunity for major petrochemical developments if it is to be put to its most valuable use. It is Government policy to see that the best use is made of the potential for substantial petrochemicals investment in Britain afforded by North Sea feedstocks. For these reasons I have been asked to assure noble Lords, and through them the industries which will be following this debate with interest, that it will be the Government's intention to give general consents for the supply and use of gas for at least the next 10 years for all petrochemical purposes subject only to the exception I have already mentioned of methanol and, possibly, similar alcohols.

Finally, one technical drafting matter. On Report stage, I undertook that certain upstream uses of gas would be exempted from British Gas's first offer. Amendment No. 11 is designed to achieve this among other things. However, if the Amendments we are currently debating were passed, the latter Amendment would not only exempt these uses from the first offer but would also oblige the Secretary of State to give his consent to them. That would go well beyond my undertaking. Accordingly if this Amendment is passed, I shall not be able to move Amendment No. I I standing in my name and that of my noble friend Lord Kirkhill.

My Lords, I felt that I should make my position clear to noble Lords opposite and to the House. I hope that the noble Lord, Lord Campbell of Croy, will feel that the views that I have expressed and the very firm assurances that I have given this afternoon will satisfy him in this respect, that the petro-chemical industry has nothing whatsoever to fear in regard to this Bill and that it is not necessary to press Amendment No. 5.


My Lords, the points which have been raised in regard to the use of North Sea gas are quite fundamental to our fuel policy. The matter which was discussed at length by the noble Lord the Leader of the House, the question of conversion of methane into methanol, is in particular of very great significance. He has mentioned that work has been going on jointly between an oil company and the Ministry—I think I am right in saying that it has been done at Queen Mary College—in which they have been investigating the economics of converting methane into methanol.

What is quite clear from the present investigations and the present research is that this is an economic process, provided the methane is far enough away from the place where it is to be used; because if you have methane produced, for example, in Nigeria then it has to be shipped over to this country or to any markets in Europe in special refrigerated ships, and this is an expensive way of transporting methane. If, on the other hand, it is converted into methanol at the point where it is extracted, it then becomes a relatively cheap way of transporting it. So it is important to distinguish clearly between the conversion of methane for petrochemical purposes—that is, for work inside a chemical industry for conversion into methanol—and the conversion into methanol as a fuel. The two are quite distinct and I think the Government are quite right to emphasise that whatever they allow to be done in the general petrochemical field they must keep control over the production of methanol as a fuel. This applies to any use that is made of natural gas, because in effect if we are converting it into a fuel we are by-passing the proper use of this natural gas, we are using it in a less efficient way, because the heat value of methanol is less than that of methane and therefore we have done something which is essentially undesirable from an energetic point of view. We have degraded the material in order to convert it into methanol. But if it is converted into methanol for the petrochemical industry it is quite a different thing.

I welcome the assurance which the Government have given once more that it is their intention to allow the use of North Sea gases for genuine petrochemical purposes. This is substantially the statement which was made by the noble Lord. Lord Lovell-Davis, during the Committee stage of the Bill, and we have it now in a clearer form which I think is to be very much welcomed. In my view it would be dangerous to give a blanket approval for all conversion of North Sea gas into any other chemical which might then be used as a fuel.


My Lords, we are grateful to the noble Lord, Lord Shepherd, for having given a fairly full statement after telling us at the Report stage that he was going to have this examined. As he knows, we have raised this at all the stages of the Bill and we have postponed putting this Amendment to the test and postponed a decision on it in order to give the Government further opportunities to look into it. Of course we are grateful for what he said about the assurances, and the 10 years' assurance, with certain exceptions, particularly methanol. He said that it was necessary for the Government to " keep control ". Those were his words. But, of course, this is not a question of keeping control: it is introducing a new control, because at present the situation is that there is not a control for non-fuel purposes because the consent is mandatory.

What we are seeking is that that situation should be continued, and we have sought to make this clear in the Bill. The noble Lord has been telling us just now that the Government hope that by their assurances made in this House, and no doubt elsewhere, they will make it unnecessary for this to be written into the Bill. But we have also indicated that this is a crucial point in the Bill, and particularly in this part of the Bill, and we feel that this wording should be inserted to give the assurance to the industries concerned and to that very large range of British industry which is dependent upon the products of those industries. Therefore, despite the assurances which the noble Lord has given, we feel that we must press this Amendment. The noble Lord will not be surprised because he knows the emphasis we have placed on this and on having something in the Bill rather than simply assurances about general consents, given without anything in the Bill.

I would add that I completely understand his point about Amendment No. 11 and that if this Amendment is now made to the Bill the Government would not feel that they could go further by moving Amendment No. 11. I understood that and I am glad to have his confirmation, but I must ask all noble Lords in every part of the House to support this Amendment, which is one to which the industries concerned attach the greatest weight.

4.40 p.m.

On Question, Whether the said Amendment (No. 5) shall be agreed to?

Aldenham, L. Fraser of Kilmorack, L. Mowbray and Stourton, L. [Teller.]
Alexander of Tunis, E. Goschen, V.
Alport, L. Gridley, L. Munster, E.
Ashbourne, L. Hailsham of Saint Marylebone, L. Newall, L.
Balerno, L. Norfolk, D.
Balfour of Inchrye, L. Hankey, L. Northchurch, B.
Barnby, L. Hanworth, V. Northesk, E.
Belstead, L. Harvington, L. Rankcillour, L.
Berkeley, B. Hatherton, L. Redesdale, L.
Braye, L. Hawke, L. Reigate, L.
Brookes, L. Hornsby-Smith, B. Romney, E.
Campbell of Croy, L. Hylton-Foster, B. Ruthven of Freeland, Ly.
Carrington, L. Ilchester, E. St. Aldwyn, E.
Coleraine, L. Inglewood, L. St. Helens, L.
Crawford and Balcarres, E. Kinloss, Ly. St. Just, L
Cullen of Ashbourne, L. Kinnaird, L. Sandford, L.
Daventry, V. Kinnoull, E. Sandys, L.
de Clifford, L. Lauderdale, E. Sempill, Ly.
Denham, L. [Teller.] Lloyd, L. Sharpies, B.
Dormer, L. Long, V. Somers, L.
Dundee, E. Loudoun, C. Stamp, L.
Dundonald, E. Lucas of Chilvairth, L. Strafficona and Mount Royal, L.
Ebbisham, L. Lye L. Strathspey, L.
Eccles, V. Mancroft, L. Terrington, L.
Effingham, E. Marley, L. Tranmire, L.
Elliot of Harwood, B. Melville, V. Vickers, B.
Elton, L. Merrivale, L. Vivian, L.
Emmet of Amberley, B. Monck, V. Wakefield of Kendal, L.
Exeter, M. Montagu of Beaulieu, L. Ward of North Tyneside. B.
Ferrers, E.
Airedale, L. Gordon, Walker, L. Rathcreedan, L.
Amherst, E. Hale, L. Ritchie-Calder, L.
Ampthill, L. Henderson, L. Rochdale, V.
Arwyn, L. Henley, L. Rusholme, L.
Avebury, L. Houghton of Sowerby, L. Sainsbury, L.
Aylestone, L. Hoy, L. Samuel, V.
Banks, L. Jacques, L. [Teller.] Segal, L.
Beaumont of Whitley, L. Kirkhill, L. Shepherd, L. [L. Privy Seal)
Blyton, L. Lealherland, L. Shinwell, L.
Boothby, L. Lee of Newton, L. Simon, V.
Bradwell, L. Llewelyn-Davies of Hastoe, B. Slater, L.
Brimelow, L. Lloyd of Hampstead, L. Snow, L.
Brockway, L. Lloyd of Kilgerran, L. Stewart of Alvechurch, B.
Buckinghamshire, E. Lovell-Davis, L. Stow Hill, L.
Burton of Coventry, B. Mackie of Benshie, L. Strabolgi, L. [Teller.]
Champion, L. Maelor, L. Taylor of Gryfe, L.
Chorley, L. Maybray-King, L. Taylor of Mansfield, L.
Darling of Hillsborough, L. Ogmore, L. Wallace of Coslany, L.
Davies of Leek, L. Oram, L. Wells-Pestell, L.
Donaldson of Kingsbridge, L. Paget of Northampton, L. White, B.
Douglas of Barloch, L. Pannell, L. Wigoder, L.
Elwyn-Jones, L. (L. Chancellor.) Peddie, L. Wilson of High Wray, L.
Gaitskell, B. Platt. L. Winterbottom, L.
Geddes of Epsom, L. Popplewell, L. Wootton of Abinger, B.
Gladwyn, L. Porritt, L. Wynne-Jones, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

4.48 p.m.

Lord CAMPBELL of CROY moved

Their Lordships divided: Contents, 86; Not-Contents, 75.

Amendment No. 6:

Page 8, line (" subsections (1, leave out (" this ") and insert 1) and (I A) above ").

The noble Lord said: My Lords, this is consequential on the

Amendment which has just been made. I beg to move.

On Question, Amendment agreed to.

Lord SHEPHERD moved Amendment No. 7:

Page 8, leave out line 5 and insert—

(" (b) supply of gas derived from offshore crude otherwise than as a by-product of crude stabilisation; or ").

The noble Lord said: My Lords, I beg to move Amendment No. 7, and with the permission of the House I will speak to Amendments Nos. 8, 10, 13, 16, 17, 18, 21, 27, 28 and 30. If noble Lords opposite were to move Amendment No. 9, I would advise the House to accept it. However, we shall need to look at its drafting. But I would not wish to mislead the House into thinking that acceptance of this Amendment in any way means that the Government will not seek to rectify what I think was a wrong decision in the previous Division.

Before dealing individually with the Amendments to Clause 8 which I have tabled, it would assist the House if I were to explain their interconnection one with another and with the various assurances I gave on Report about the intentions of the Government. The first such assurance was related to the incidental use of gas to fuel processes essential to effect the supply of that gas to an affiliated company; that relates to Amendments Nos. 15 and 16 on Report stage. Sub-paragraph (v) of Amendment No. 8 is designed to exempt such incidental use from the control of the Secretary of State.

Secondly, when discussing the Report Amendments Nos. 20, 28 and 29, I promised that the Government would propose Amendments to exempt from the British Gas first offer use of gas in oil and gas terminals and related installations. Paragraphs (c) (d) and (e) of Amendment No. 11 were designed to achieve this by, describing the processes for which gas is used there and exempting them from the first offer.

Thirdly, I undertook to propose a method whereby consent could be given to the supply for fuel purposes of gas surplus to British Gas's specifications without that surplus having again to be offered to British Gas. This would be achieved by my Amendment No. 10 which recognises that, in view of the possibility of sellers' option contracts, only British Gas can validly state that a portion of the gas will not fit in with its requirements. and that, therefore, it does not want a further opportunity to purchase it.

Fourthly, I assured noble Lords that it was the Government's intention to subject all gas derived from stablised crude to the Gas Act, so that we could have a single regime for gas derived from imported crude and that derived from offshore crude. Several of the Government Amendments are designed in part or in whole to achieve this. Amendment No. 17 is the linch-pin since it proposes a definition of " stabilisation ". Amendment No. 18 then subjects to the Gas Act all gas obtained from crude except that gas obtained in the process of stabilisation. Noble Lords will notice that the definition of" stabilization is such that the only gas obtained from crude otherwise than in the process of stabilisation must he gas derived from stabilised crude.

Amendment No. 7 excludes the supply of this gas from the requirement for the Secretary of State's consent. Paragraph (iii) of Amendment 8 similarly excludes the use of this gas. Since we would now have excluded from control under Clause 8 the use of this gas. and since the Amendment made on Report to Clause 8(3)(h) effectively excludes from control any likely liquefaction of such gas, there is no longer any need for subsection (5) which Amendment 13 proposes to delete. There is also of course no longer any need for Clause 10, which Amendment No. 21 proposes to delete. As a consequence of deleting Clause 10, the term industrial fuel purposes " would now appear in only one clause of the Bill. It is. therefore, appropriate to insert its definition in that clause, rather than leave it to an interpretation clause at the end of the Bill. This would have been achieved by the bulk of Amendment No. 11 and by Amendment No. 29. Finally, all this requires one paving Amendment. No. 16, and three consequential Amendments, Nos. 27, 28 and 30, which recognise that the Bill would now be one clause shorter.

I am sorry to have introduced these Amendments at such length and with such complexity. I very much hope, however, that by clarifying these interrelationships now I have avoided the need for longer explanations on each individual Amend-merit. Perhaps I could summarise what we have sought to do. I referred to it on Report as seeking a package between the Government and industry. I would summarise it in four points, and they are covered by the Amendments I have made. Where part of a stream of gas is needed to fuel incidental processes which are essential to render that stream as gas fit for supply to an associated company, consent would not he required for its use for those incidental purposes. A route would he found so that gas which British Gas had already refused because it did not fit their specifications did not again have to be offered to British Gas at a reasonable price. Gas supplied for use in terminal and similar installations handling North Sea oil and gas would not have first to he offered to British Gas. Supplies of gas from stabilised offshore crude that is, the gas which comes from offshore crude oil during the normal refining processes—should be subject to the regime of the Gas Act, in the same way as gas derived from imported crude. I believe that these Amendments fulfil entirely the understanding we have reached, after long consultations, with the industry, and I hope that the house will find them satisfactory. I beg to move.


My Lords, this is highly technical stuff, and I am thankful that I do not have to oppose these Amendments. I congratulate the noble Lord's handling, both behind the scenes and on the Floor of the House, of this very difficult and complicated matter. He rightly said that Amendment No. 17, which defines stabilised crude, I believe, is the key that unlocked the door to what I suppose we might call the primrose path, unless I am thought to he introducing a Party interest into the matter in saying that. At any rate, a letter which the noble Lord was good enough to write to us, explaining what he intended to do, enabled us on this side to accept Amendment No. 13, I believe it was, at the Report stage, which amended a previous Amendment which had been put in on Committee stage. The result has been this flow of Amendments. I think the situation has now been satisfactorily resolved to the great delight of everybody on all sides. I am grateful to the noble Lord, and support his Amendments.

On Question, Amendment agreed to.

Lord SHEPHERD moved Amendment No. 8:

Page 8, leave out lines 16 to 19 and insert— ("(iii) use of a supply of gas derived from offshore crude otherwise than as a by-product of crude stabilisation; (iv) use of a supply provided otherwise than through pipes; or (v) use by one company to provide heat or energy in connection with the purification. fractionation or movement thy pipeline or otherwise) of offshore natural gas where this is with a view to supplying that gas to another company associated in the same group: ")

On Question, Amendment agreed to.

4.57 p.m.

Lord CAMPBELL OF CROY moved Amendment No. 9:

Page 8. line 29, after (" purposes ") insert (" which purposes tinder this subsection exclude the use of heat or energy

  1. (i) for a process of crude stabilisation.
  2. (ii) for a process of purification or fractionation of offshore natural gas,
  3. (iii) in connection with the movement of offshore crude or offshore natural gas by pipeline or otherwise;").

The noble Lord said: My Lords, the noble Lord, Lord Shepherd, mentioned this Amendment, and I now beg to move it. When it was discussed at Report stage, I pointed out the anomaly that would arise at receiving terminals if an Amendment on these lines were not made, and the noble Lord, Lord Shepherd, gave a very firm assurance that the Government themselves would produce Amendments at a later stage to exempt these terminals and associated upstream facilities from the British Gas Corporation's first offer. An Amendment on those lines is to he found at No. 11 in the Government's name, hut, as the noble Lord, Lord Shepherd, indicated, because of Amendment No. 5 having been accepted Amendment No. 11 is not appropriate. I am glad that he recognises that Amendment No. 9 does carry out what he accepted earlier was necessary, though he also said that the Government might want to have a look at the wording with a view to possible small changes in another place. In the light of the Government's virtual acceptance of this Amendment in advance, I confidently now commend it to the House.

On Question, Amendment agreed to.

Lord SHEPHERD moved Amendment No. 10:

Page 8, line 35, at end insert (" or have made known, in writing, that they do not require such an opportunity.").

The noble Lord said: My Lords, I beg to move.


My Lords, I should like to record that this Amendment meets a point I made at Report, and it obviates a requirement to offer gas which is a by-product and which is most unlikely to be required by the Gas Corporation. As the Government did not actually say anything in moving the Amendment, its aim is no doubt to meet the point we raised that we ought to remove time wasting and repetitious procedures in that situation.


My Lords, may I make it clear that when I move these Amendments without speaking to them they are all Amendments to which I spoke when I moved Amendment No. 7. The noble Lord is quite correct, but I did mention this in the course of my rather long and involved explanation of an earlier Amendment.

On Question, Amendment agreed to.

The DEPUTY SPEAKER (Viscount Goschen)

My Lords, I shall not call Amendment No. 12, as this Amendment duplicates part of what was Amendment No. 11

Lord SHEPHERD moved Amendment No. 13:

Page 8, line 36, leave out subsection (5).

On Question, Amendment agreed to.

5.2 p.m.

Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 14:

Page 8, line 42, leave out from (" application; ") to (" be ") in line 43 and insert (" (b) subject to paragraph (c) below, may ").

The noble Lord said: My Lords, Amendments Nos. 14 and 15 really go together and, with leave, I shall speak to them both. These are a retabling of Amendments Nos. 23. 24 and 25, which we dealt with at Report stage. At that time the noble Lord, Lord Shepherd, expressed no objection in principle to the purport of the Amendments but he was concerned that possibly this would leave loopholes which would be liable to misuse. He cited at that time the possibility that a company might seek to safeguard an investment in liquefied natural gas tankers by saying that they had been acquired for United Kingdom gas transport when in fact they had been acquired for the transport of Algerian gas. The need for some kind of reassurance on the point was recognised, so we have retabled the Amendment in a slightly modified version in order to recognise the need for a safeguard, which is that a mandatory consent was envisaged at the time when the investment was made, and that this, without conditions, would be required by the Secretary of State " having to be satisfied ", and expressions of this kind which are in the Bill at the present time.

The Government seem to be saying that they would have difficulty distinguishing between genuine and not so genuine cases. It is rather hard to accept that this situation could arise. Of course the industry. for its part, accepts that it might be quite difficult to convince the Secretary of State of any Government, but it also recognises that any Government would require this kind of condition in this sort of provision. In other words, what we are saying here is that the onus of proof must rest with the industry and the final say remains with the Secretary of State.

The words " the supply or use is for or in connection with a contract " et cetera were in the Report stage version, and, recognising that these words were open to misinterpretation if one applied one's mind to doing this kind of thing, we have introduced a new form of words saying that it is substantially dependent upon such supply and use. We hope that this may dispose the Government to find this a more acceptable form of words, because at the end of the day what we are seeking to do is to protect contracts which have already been made—and this is what we have said before—undertakings entered into, and investments made before this Bill was enacted. Again one has to say that I hope that the noble Lord will not ask us simply to accept assurances, because we all know the misgivings that people inevitably have about assurances, however much good faith they are made in. We hope that we may persuade the Government that this is a reasonable provision for the industry to seek in protecting the large investments which they have already made. I beg to move.

5.8 p.m.


My Lords, while in no way being personal to the noble Lord, may I say that if ever we should have the misfortune of having the noble Lord sit on these Benches as a Minister and I was sitting on the other side and he then expressed assurances, I would remind him of what he has said and throw it straight in his teeth, because at the end of the day there are certain things you can put in legislation and certain things that you have to give assurances about. If Ministers' assurances are to be questioned in any way, then much of the way in which Parliament proceeds would, I think, become quite impossible.

This Amendment is not acceptable because I will have to tell your Lordships that it seems to me that its only purpose is to hallow contracts or investments undertaken in complete disregard of the existing law. Let us first take gas produced from offshore crude in the normal course of refinery processes. Today a supply of that gas requires the Secretary of State's consent under the Continental Shelf Act; the consent would have to be given only if the supply were for non-fuel purposes. Under the Bill as now amended, British Gas would similarly be obliged to consent to the supply for non-fuel purposes. No applications have been received for consents to supply for fuel purposes; since under present law such consents are at the Secretary of State's discretion, if anyone has made an investment with such a supply in mind, he has acted most imprudently; if he is actually making such a supply, he is acting illegally. Under the Bill, use of such refinery gas within the refinery or by affiliated companies will be entirely decontrolled; under present law it is subject to the Secretary of State's discretionary consent if the refinery is owned by the licensee.

Now let us take the supply of proper offshore natural gas. That requires the Secretary of State's consent under the Continental Shelf Act just as it would under the Energy Bill. It is true that the Secretary of State is obliged to give his consent if he is satisfied the supply is for non-fuel industrial purposes. But since the Secretary of State has to be satisfied, in common prudence anyone proposing such a supply would have first approached the Secretary of State to ensure that he did indeed consider the purposes to he non-fuel purposes. The Secretary of State has neither received applications for consents to supplies for non-fuel purposes, nor has he given advice that a proposed supply would indeed be regarded as one for non-fuel purposes. In any case, the assurances I gave earlier today on general consents should allay the worries of even the imprudent.

The Secretary of State has given his consent on one or two occasions to the use of natural gas by the licensee. The validity of these consents would be maintained under the Energy Bill. The only change regarding use is that use by non-licensees will be controlled under the Energy Bill while it is not under the Continental Shelf Act. A non-licensee could use gas without the involvement of a consent for supply only if he had purchased the gas before it reached Britain. That would be such a departure from normal practice that one would suspect it of being a deliberate manoeuvre to take advantage of an accidental gap in the coverage of the Continental Shelf Act. However that might be, it would be very unlikely that it would have escaped the Department's notice.

As I said at the start, I think the only effect of the proposed Amendment would be to hallow arrangements which are, under present law, at best imprudent and at worst illegal. The oil industry has been asked informally to let the Department know of any genuine cases of investments or contracts committed before the publication of this Bill and which the Bill would put at risk. So far we have not received notice of any such cases. I repeat that invitation through your Lordships' House: then, if any cases of genuine hardship, not occasioned by imprudence. are notified to us, the Government will be able to consider what assurance might be given to cover them. I hope that, with that explanation, the noble Lord will feel it right to withdraw the Amendment.


My Lords, on the general point, there is an old adage which says that the road to hell is paved with good intentions and I think the noble Lord would be naive indeed if he did not know as well as I did that the Parliamentary path is paved with broken undertakings. It is not cynical to say that many a Governmerit—I dare say that that is equally true of Conservative Governments—have reneged on undertakings given in either House of Parliament. Thus, while I repeat that one accepts the good intentions, one has to recognise that in practice they are not always honoured: it is a sad fact of life with which we have to live. The noble Lord has given a complicated and very full answer to the points we raised which, I confess, I found difficult to hoist aboard simply listening across the Floor of the House, and I look forward to reading his remarks later.

I must, however, point out to the noble Lord that throughout these debates the Government have raised a series of hypothetical situations which might arise and have said they must guard against them. One of the underlying purposes of the Amendment is to allay worries expressed by the industry of precisely that kind. The noble Lord has again, most effectively, said that no specific instances have been cited by the industry: but surely he will agree—on many occasions he has said this—that the Government are taking new powers. When they are doing that, it is inevitable that some of them will have an element of retrospectivity, retroactivity, within them. We all accept that this is hound to happen. I cannot see that the noble Lord can argue that it is impossible, when the Government are taking new powers, that some of the effects could not be damaging to some of the contracts which have been entered into, and that is all that we are seeking to do in the Amendment. I do not think, particularly after the noble Lord's very full answer, that it would be in the least proper for us to press the Amendment further. We will merely content ourselves with calling the attention of our colleagues in another place to what has been said here, which will no doubt be very useful to them in resolving this matter in another place, if need be. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.15 p.m.

Lord SHEPHERD moved Amendment No. 16:

Page 9, leave out line 13.

On Question. Amendment agreed to.

Lord SHEPHERD moved Amendment No. 17:

Page 9, line 15, at end insert—

(" and

(d) " crude stabilisation " means the treating of offshore crude to enable it to be safely stored or transported; ").

On Question, Amendment agreed to.

Lord SHEPHERD moved Amendment No. 18:

Page 9. line 19, at end insert—

(" ( ) In section 29 of the Gas Act 1972 (restrictions on supply of gas otherwise than by the British Gas Corporation, etc.), at the end of subsection (11) there shall be added the following words—

" except gas derived from offshore crude otherwise than as a by-product of crude stabilisation.

In this subsection—

  1. (a) " offshore crude " means crude liquid petroleum got in pursuance of a licence under the Petroleum (Production) Act 1934 as applied by section 1(3) of the Continental Shelf Act 1964; and
  2. (b) " crude stabilisation " means the treating of offshore crude to enable it to be safely stored or transported." ").

On Question. Amendment agreed to.

Clause 9 [Disposal of gas by flaring]:

Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 19:

Page 9, line 20, leave out (" subsection ") and insert (" subsections (2A) and ").

The noble Lord said: My Lords, we now return to the vexed question of flaring and this Amendment and its associated ones are basically similar to Amendments Nos. 31 and 34 which we moved on Report, but they have been redrafted to take account of Amendments Nos. 30 and 35 which were moved by the Government on Report and particularly the drafting of Clause 9(3), which was Government Amendment No. 35. We would not want anybody to think that my noble friends and I wish to encourage flaring or oppose the discouragement of it: it is objectionable as being a wasteful and distasteful practice. However, there is no disagreement that plants using natural gas as a feedstock cannot be started up, shut down or operated safely without occasional flaring and indeed the noble Lord, Lord Kirkhill, was good enough to agree with this point on Report. However, the Government's proposal for allowing essential flaring to continue to be lawful is to make general orders which will conic into operation at the same time as the Bill is enacted.

One reason why, I understand. the industry objects to this approach is that such general orders could be made subject to conditions which might in some cases require additional expenditure to he made. Of course. we are here dealing with what are, in industrial terms, quite small amounts of gas, and Lord Kirkhill suggested that comparatively modest capital investments could reduce the need for flaring. That is all very well so far as it goes, but surely we must accept that no operator of a plant will want to waste the material which he hopes to sell if economically he can avoid wasting it—that is the nature of the economic system—and the operator's competitiveness in what is, after all, a reasonably cut-throat market depends on the efficient use of his feedstock. The chemical industry has to compete on the international market and if an operator is wasteful in his operations he will find himself in an uncompetitive situation. It can be argued therefore that it is unlikely that the industry will want to flare gas unless flaring is found for some reason to be really necessary.

The Government went some way to recognising this in their own Amendment when they agreed that gas supplied by the British Gas Corporation would not require consent for flaring. The Government may argue that, having given an inch, they are being asked for an ell—they are both pre-metrication measurements, but I suppose the saying will do but it is also surely true to say that gas supplied other than by the Corporation is likely to be at least as expensive, and possibly more so, and that there would therefore be even less reason for the industry to want to waste it.

The industry is concerned that flaring in plants which use natural gas as a feedstock should be automatic and not covered by general consents. It is concerned that is already has every economic incentive not to waste the gas and that any conditions which may be attached to general consents are liable to result in interference in its operations and questioning of decisions to flare. Also, there is always a danger of an increase in cost which would ultimately reduce the international competitive nature of the industry. We do not believe that that could possibly he in the national interest. I hope, therefore, that the Amendment will commend itself to the Government. I beg to move.


My Lords, the Government accept the principle that industry needs considerable freedom in flaring in the course of operating or maintaining plant and especially for safety reasons, but they consider that there could be other circumstances when flaring is necessary and, furthermore, that there must be some basic restraint against unrestricted flaring which could lead to an appreciable wastage contrary to the national interest. To meet this view, the Government introduced an Amendment at Report. That was our Amendment No. 35.

The intention behind these Amendments has already had a good deal of discussion in this House, both at Committee and Report stages. As my noble friend Lord Kirkhill said earlier, the Government have sympathy with these Amendments which, on the face of it, are common sense, designed as they are to afford freedom of action over the flaring of gas when a plant is started up or shut down and when there are safety reasons. But, these Amendments would grant complete freedom of action and therefore, in my view and that of the Government, go too far. The Government went a long way to meet the Opposition at Report stage, exempting from the Seretary of State's consent the flaring of all gas if supplied by the British Gas Corporation. We were content that the price paid for this gas would militate against waste. That left the relatively few cases of essential flaring of gas not supplied by British Gas —so few that they can be covered by general or specific consent without unduly burdening the bureaucratic services of industry for the Government. I really cannot see that this is other than a reasonable and sensible arrangement and I hope that the noble Lord will feel that this matter has been exhaustively considered and that we have gone, as we did on Report, a long way to meeting the fears of industry. I also hope that the noble Lord will withdraw his Amendment.


My Lords, the noble Lord disappoints me, but I cannot honestly claim that I am altogether surprised. I am sorry that the noble Lord and the Government do not accept the economic argument, which seems to me to be very effective. I do not feel that I can do

Aldenham, L. Emmet of Amberley. B. Newall, L.
Alexander of Tunis. E. Exeter, M. Northchurch, B.
Alport, L. Ferrers, E. Northesk, E.
Amory, V. Fraser of Kilmorack, L. O'Neill of the Maine, L.
Auckland. L. Gainford, L. Porritt, L.
Balerno, L. Goschen, V. Rankeillour, L.
Balfour of lnchrye, L. Gridley, L. Rathcreedan, L.
Belstead, I,. Hanworth, V. Redesdale. L.
Berkeley, B. Hatherton, L. Redmayne, L.
Boothby, L. Hawke, L. Romney, E.
Braye, L. Hereford, V. Ruthven of Freeland. Ly.
Brookes, L. Hornsby-Smith, B. Sackville, L.
Campbell of Croy, L. Hylton-Foster. B. St. Aldwyn, E.
Carr of Hadley, L. Ilchester, E. St. Helens. L.
Carrington, L. Inglewood, L. St. Just, L.
Cawley, L. Kinloss, Ly. Sandford, L.
Chelwood, L. Kinnaird, L. Sandys, L.
Chesham, L. Lauderdale, E. Seebohm, L.
Coleraine, L. Lloyd, L. Sempill, Ly.
Crawford and Balcarres, E. Long, V. Sharpies, B.
Crawshaw, L. Loudoun, C. Strathclyde, L.
Cullen of Ashboumc. L. Lucas of Chilworth, L. Strathcona and Mount Royal, L
Davcntry, V. Lyell, L. Strathspey, L.
de Clifford, L. Macleod of Borve, B. Tranmire, L.
Denham, L. [Teller.) Mancroft, L. Tweedsmuir, L.
Dormer, L. Massereene and Ferrard, V. Vickers, B.
Dundee, E. Merrivale, L. Vivian, L.
Dundonald, E. Monck, V, Wakefield of Kendal, L.
Eccles, V. Montagu of Beaulieu, L. Ward of North Tyneside, B.
Elliot of Harwood. B. Mottistone, L. Young, B.
Elton, L. Mowbray and Stourton, L.
Airedale, L. Donaldson of Kingsbridge, L. Lee of Newton, L.
Ampthill, L. Douglas of Barloch, L. Llewelyn-Davies of Hastoe, B.
Amulree, L. Elwyn-Jones, L. (L. Chancellor.) Lloyd of Kilgerran, L.
Arwyn, L. Energlyn, L. Longford, E.
Aylestone, L. Gaitskell, B. Lovell-Davis, L.
Banks, L. Geddes of Epsom, L. Mackie of Benshie, L.
Beaumont of Whitley, L. Gladwyn, L. Maelor, L.
Blyton, L. Gordon-Walker, L. Maybray-King, L.
Bradwell, L. Henderson, L. Melchett, L.
Brimelow, L. Henley, L. Oram, L. [Teller.]
Buckinghamshire, E. Houghton of Sowerby, L. Paget of Northampton, L.
Burton of Coventry, B. Hoy, L. Peddie, L.
Byers, L. Hughes, L. Peterborough, Bp.
Chorley, L. Jacques, L. [Teller.] Pitt of Hampstead, L.
Darling of Hillsborough, L. Kirkhill, L. Popplewell, L.
Davies of Leek, L. Leatherland, L. Ritchie-Calder, L.
better than quote back at the noble Lord by saying that we cannot see that it is other than a reasonable and sensible arrangement which we are proposing. I feel that this ought to be in the Bill. Perhaps it I will commend itself as reasonable and sensible when the Bill goes to another place. I therefore feel that we should press the Amendment to a Division.

5.26 p.m.

On Question, whether the said Amendment (No. 19) shall be agreed to?

Their Lordships divided: Contents, 92; Not Contents. 70.

Rochester, L. Snow, L. Wells-Pestcll. L.
Rusholme, L. Snowdon, E. White. B.
Samuel, V. Stewart of Alvcchurch, B. Wigoder, L.
Segal, L. Strabolgi, L. Wilson of High Wray. L.
Shepherd, L. (L. Privy Seal) Taylor of Gryfe, L. Winterbottom, L.
Shinweli, L. Taylor of Mansfield, L. Wootton of Abinger. B.
Simon, V. Wallace of Coslany, L. Wynne-Jones. L.
Slater, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

5.35 p.m.

Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 20:

Page 9, line 27, at end insert—

(" (2A) Disposal of gas by flaring does not require consent under this section when it is in connection with the start-up or shut-down of industrial plant or when it is conducted as a measure to ensure the safety of operation of such plant.").

On Question, Amendment agreed to.

Clause 10 [Refinery gas]:

Lord SHEPHERD moved Amendment No. 21:

Leave out Clause 10.

On Question, Amendment agreed to.

Clause 12 [Fuelling of new and converted power stations.]:

Lord SHEPHERD moved Amendment No. 22:

Page 10, line 33, after (" shall ") insert (", unless his case is one excepted by order of the Secretary of State under subsection (4).").

The noble Lord said: My Lords, I beg to move Amendment No. 22 and at the same time speak to Amendment No. 23. Both Amendments are drafting Amendments and make no change in the substance of the clause.

On Question, Amendment agreed to.

Lord SHEPHERD moved Amendment No. 23:

Page 10, line 33, leave out (" the Secretary of State ") and insert (" him ").

On Question, Amendment agreed to.

Clause 13 [Passenger car fuel consumption]:

Lord LUCAS of CHILWORTH moved Amendment No. 24:

Page 12, leave out lines 20 to 22 and insert (" which he deals in or offers for sale and a notice that specified information relating to cars NA hid) he does not deal in or offers for sale is available on request.").

The noble Lord said: My Lords, the purpose of this Amendment is to meet the Government requirements as were set down originally in the Bill and the objections which I made to these proposals at the Second Reading and through subsequent stages. The Government amended the whole of' subsection (3) during the Report stage, hut paragraph (c) remains basically as it was first drafted. There are two major points of difference between the Government and myself. First. there is the impracticability of posting up so as to be clearly legible specified information on the very large number of motor cars that will eventually be tested and the results of which will have to he shown. The second difference concerns whether it is right that retailers of a particular product shall have to display the specified information (that is. the fuel consumption) of products which they do not sell and which may he in direct competition with them.

In most respects we consider that Clause 13 is something of a hotch-potch because at the outset the noble Lord. Lord Lovell-Davis, said that the clause dealt only with testing of motor cars. Later he said that the clause would help consumers to make a choice, and later the noble Lord, Lord Kirkhill, said that the purpose of the clause was energy conservation and that it would also help the balance of payments. So we now have a clause that deals not only with testing of motor cars, with which purpose the motor industry are quite a greed. but we are involved also in energy conservation, consumer choice, and the balance of payments. If all these points are to be embraced in one large notice which shall clearly display the information, then we will have a very large notice—a point which I have made previously.

At Second Reading I suggested that information relating to 500 motor cars and their results might have to be displayed. At that time there was no response at all from the Government; perhaps the Government did not then know. At the Committee stage, when we discussed this matter again, the noble Lord, Lord Kirkhill, said that he thought there would be a hundred variants. He was challenged on this point by my noble friend Lord Strathcona and Mount Royal, and he reiterated that the figure would be about a hundred, whereas I have steadfastly said that there would be 450 or more.

I understand that the Department are now thinking that there may well be 450, and I should like to know just how many motor cars the Government in fact think will have to be tested, just how many sets of specified information will have to be shown. I do not know whether your Lordships have taken a look at any of the current motor magazines, but (if I may use the phrase) errors and omissions excepted, I counted 645 motor cars on sale to the great British public in last week's issue of the Motor. So there are somewhere between 450 and 600-odd motor cars which ultimately will have to be tested; and to contain all this information in a notice that is to be posted up so as to be clearly legible would, I suggest, take a notice some 2 metres by 1½ metres large, which is pretty big.

I do not see the practicability of doing that; nor do I see the practicability of amending such a notice; nor, indeed, do see the extraordinary cost of such a notice being reasonably borne by whoever it may be. And I ask the Minister now: Who is to bear the cost of this end of the motor vehicle testing scheme? I have suggested that the notice should be in a booklet form—very much cheaper to produce, very much more easy to amend and very much more easy to pass to a consumer.

I should like to remind your Lordships of what the noble Lord, Lord Kirkhill, said during Report stage on this question of testing. He said—and I quote from col. 809 of Hansardof 10th May: One of the conditions of the scheme and the noble Lord. Lord Kirkhill, was 'talking about the scheme as it was first presented to the industry—

" read as follows: Motor vehicle distributors and retailers will be required to display conspicuously the most recent copy of the official list of fuel consumption figures at each point of sale of new cars '.

That was how the scheme was presented to the industry. It then became very modified when the Bill was printed, in that it used this terminology: shall keep posted up (so as to be easily legible) ".

My Lords, I therefore think I have demonstrated that, whether the information is to conserve energy, to help the consumer choice or to help the balance of payments, we as an industry accept that the information is quite useful as a matter of reference, although let me say that with overseas competition currently taking about 31 per cent. of the United Kingdom domestic market in motor cars. I wonder whether such information will always be to the advantage of a home-based manufacturer. I also wonder whether my suggestion that the information should be in a booklet or reference book form would not be better.

As to the second point, we in the industry have acknowledged that apart from information centres having the specified information available—and this is a point that I have raised on two previous occasions—perhaps having it at the point of sale may also be useful. Having this information at the point of sale is not necessarily the same as having it at the point of choice—a point upon which the noble Lord, Lord Kirkhill, and I disagreed at Committee stage. We also acknowledge that the fuel consumption of cars displayed or offered for sale should be clearly shown; but it cannot be right, my Lords—it just cannot be right—that information of a competitor's product need be shown alongside.

At this late stage in the Bill's progress I am not going to repeat all the arguments which I made at Committee and Report stages. However, I would refer to the point which the noble Lord, Lord Kirkhill, referred to at Report stage when he spoke about American legislation. I understand that the American law, which is the Energy Policy and Conservation Act, Public Law 94/163, was signed by the President of the United States of America on the 22nd December. It is not generally available, and the US Embassy in fact say that it was published and available to the public only last Friday, so my quotation is that which came on a teleprinter and is not direct from the actual Act. The American Act, as I understand it, says: In addition to the fact that the law states that each car has to have a sticker showing its gas mileage and the gas mileage of the class of car into which it falls approximately four or five classes— each dealer must have available on display and must provide if requested a complete breakdown of gas mileage of cars by make ". This is quite different from what the noble Lord, Lord Kirkhill, said at Report stage. I think perhaps it would be better if I quoted exectly what the noble Lord said. At column 809 of Hansard of the 10th May, the noble Lord said: I think it is also significant that the American Government, who are hardly insensitive to the rights of free enterprise, have recently introduced a law which gives statutory force to a previously voluntary scheme of fuel consumption testing and which requires each car sold to be supplied with a label showing the fuel consumption of the make in question together with the range of fuel consumptions of comparable automobiles, whether or not made by the same manufacturer ".

That, really, is very different from my understanding of what the American Act says.

The noble Lord also referred to other commodities, saying that where a multiplicity of commodities were offered for sale under one roof the competitive nature of each was clearly displayed. I think the noble Lord, Lord Robbins, made a point of this, asking why one brand of medicine should not have upon it the details of a competitive brand of medicine. This really is not quite a fair comparison to make. Certainly if a motor dealer is selling, let us say, Vauxhall motor cars and Fiat motor cars from the same showroom, it is reasonable to say that on the Vauxhall car should be the mpg of that car and on the Fiat car should be the mpg of that car; but it cannot be right that he should have a great big notice saying that an Austin does so and so, that a Datsun Cherry does so and so and a BMW does something else. No can of baked beans carries the specification and details of a rival's can of baked beans. If I say that each item in a motor car showroom is a separate item and should carry an advertisement of its own, that should be enough. The only other comparison that could be made is if two models or more which may be competitive are assembled together under one roof. It would be quite wrong, particularly in an energy conservation Bill, to change t he pattern of retailing, albeit in this instance of motor cars, by compelling the seller of one product to advertise and display prominently the competitive nature of another product which he does not sell.

My Amendment, which I invite your Lordships to decide upon, sets down that any person dealing in or offering for sale motor cars shall keep a notice at any place where the cars are sold giving the specified information of the cars he sells. This could be a sticker on the windscreen, which would certainly be legible and attributable directly to that product. My Amendment also says that he shall keep posted a notice which says that the information relative to other motor cars which he does not sell or deal in is available upon request, so that a consumer can go to a showroom, look at product x and see that it does so many miles to the gallon, and say, " This is all right, but what do product y and do? ''. He can then be referred to the booklet. In this way, we can meet the Government claim that relevant information should be at the point of sale. We have a package of information which is easy to look after, to modify, to present to the customer and we have, at one and the same time, the protection that the retailer who wishes to sell one product only has the opportunity of selling his product without compulsorily having to have competitor information alongside it. I beg to move.


My Lords, I ought to mention to the Government at this stage that this list which is proposed to be exhibited appears to be a gross breach of Section 4 of the Trade Marks Act 1938. Whether proceedings could be taken against any seller who put up the list, I do not know; but it has been held by the Court of Appeal in the case of Bismag Limited v Amblins (Chemicals) Limited, regarding some medicines, that if you put up a notice which says, " Our product, 20p with the competitor's product next to it at 25p, that is an infringement of the competitor's trade mark if he happens to have it registered. I do not know whether the Government had that in mind when they decided to introduce this question of the exhibition of lists as to the consumption of fuel.


My Lords, I rise with as much of a smile as I can muster in the light of the last intervention: but the objections to posting fuel consumption data for all types of cars at points of sale, which the noble Lord, Lord Lucas, advanced both during our proceedings in Committee and on Report and which in my view were fully debated on both occasions, and to which he alluded again today with his usual perspicacity, stand against the more general proposition—although I concede readily that he has argued in considerable detail—which I announced on 10th May that the Government objective is to ensure a conspicuous display of comprehensive fuel consumption data in car showrooms and similar places in order to catch the eye of customers and inquirers, to arouse their interest in comparison of fuel consumption and to enable them to make choices with full knowledge of how a particular type of car compares with others on the market.

Nevertheless, the noble Lord, Lord Lucas, has asked me two specific questions this afternoon which relate to the earlier discussions, although he has again touched on these points today. First, he asked me who would bear the costs of these posters to which I refer. The cost of the posters would he borne by the trade. The dealers would buy from the Stationery Office. The cost would he spread over a large number of copies and the cost of each is therefore likely to he very small. The noble Lord also asked whether I could confirm that the earlier assertion as to the number of models bore an accurate relation to reality. Although I felt that I answered him honestly at the time, I am bound to say that I am now advised that the number of models will probably he about 400: but we have undertaken an examination of this problem and we certainly intend to continue the discussions with the industry on this problem of posting information. There can he no doubt about that.

I accepted earlier that doubts have been raised about the effectiveness of the consultation process which led to the procedure agreed with the representative bodies of producers and distributors earlier this year and on which the clause as now drafted is based. I assured the House then, and I repeat that assurance today, that there should be further consultations with these bodies before the clause receives detailed examination in another place. These further consultations will enable full consideration to be given to the possibility of meeting our basic objectives by means other than the one proposed so far. We shall certainly be ready to consider very carefully any alternative suggestions made by those directly concerned with carving out the new requirements.

My Lords, before I make the final Government position clear to the House, I should say in response to the question by the noble Lord, Lord Lucas, about the United States Act that I shall certainly look at the US Act, but that my understanding is that there is no inconsistency between what I said on Report and what the noble Lord, Lord Lucas, has said today about its effect. In the light of my remarks I do not recommend the House to adopt the noble Lord's Amendment but I ask the House to accept our assurance of careful consideration of further views submitted to us by the industry and the trade before the form of the requirement is finally settled.


My Lords, the noble Lord is in a conciliatory mood but we are at a rather late stage of the Bill at which to leave my noble friend Lord Lucas much room to manoeuvre. My understanding is that he is simply saying that instead of asking sellers of new motor cars to have a large chart in the showroom they should have a notice saying that there is available a small booklet giving the required information. I must say that when I listened to my noble friend moving his Amendment I found myself attracted to this suggestion partly on the ground of practicability. When I heard the noble Lord, Lord Kirkhill, say that the cost of this operation should be borne by the retailers themselves I was, if anything. more attracted to my noble friend's Amendment than I had been before.

It seems to me that one of the problems that will arise will be that of keeping one of these large charts up to date. We do not want to have these continually reprinted. In leaflet form this would be relatively simple. I dare say that a number of noble Lords may feel that this is a comparatively small point: but it is evident from what my noble friend is saying that it creates a great deal of heartburning in industry. I confess that 1 find their case convincing and I sincerely hope that the noble Lord will be able to elicit sufficient support to carry this through so that further consideration can be given to it in the Commons.


My Lords, may I intervene for a moment? I have been involved for the last few days in this matter. I am very grateful to my noble friend Lord Kirkhill for taking at the last moment the responsibility for answering this particular Amendment. I do not think that there is anything between us as to what we are seeking to do: which is to conserve fuel, to make people particularly minded about the way in which fuel and energy is used and the need for information and, also, if I may say so, perhaps to stimulate the motor manufacturing industry to put research into this field so that we may consume less while getting the same degree of reliability and service out of our motor vehicles.

The difficulty that my noble friend and I are in is that we are in the midst of consultations. I will be frank with the House, I have a personal sympathy with the Amendment before the House, not necessarily exactly with its wording. I would not want to prejudice the position of the Government: at this stage in the consultations the Government cannot come along and recommend to your Lordships that this particular Amendment should be accepted. On the other hand, we are not minded to oppose it hook, line and sinker because if we were, then consultation has no meaning whatsoever. I would therefore ask the noble Lord to withdraw his Amendment. If it will help the noble Lord as to whether I or my noble friend is being serious, if he insists on his Amendment I do not intend to divide. I shall negative it: I shall not divide on it.

Frankly, I do not want the Government to he committed in opposition to the noble Lord's Amendment. It is up to the House to decide whether these words are put in the Bill. They may technically be at fault; they may not reflect what, in the end, consultation will bring about. If the noble Lord will accept from me and my noble friend that this is a matter which only divides us upon implementation, that this is something we ought to hammer out with the industry and for the matter to be dealt with in another place—and it will come back to us—then 1 have no doubt that we can give further consideration to it.

I congratulate the noble Lord, Lord Lucas of Chilworth, for his persistence in this matter. He is very much like his father, a very dear friend of mine, who also was highly persistent from both the Front Bench opposite and the Cross-Benches to which I regret he found his way. I hope that the noble Lord will think of my intervening as Leader of the House as trying to be helpful and seeking to bring the right conclusion to this difficult matter. We have to reach a solution to it and it is best arrived at through consultation and understanding between the Government and industry.


My Lords, f am grateful to the noble Lord, Lord Kirkhill, and the Leader of the House. A couple of points arose and I must say that I am shattered to think that the retail motor industry are going to have to pay the cost of this. When I raised this question much earlier the whole system of testing was to be borne out of monies virtually already spent by manufacturers. So far as catching the eye is concerned, the noble Lord is not being altogether fair. because if one takes, for example, the tobacco industry—and tar content is something far more serious to the health of the community—it is not required that a tobacconist has to have a big notice in his shop pointing out the tar content of various competitive brands of cigarettes. It is sufficient that there is a notice on the cigarette packet reminding the consumer and it is for him to go away and find out.

If I challenge the Leader of the House, I hope he will take it in the spirit of inquiry in which it is made. I quote from Hansard, col. 810 of 10th May. The noble Lord, Lord Kirkhill, said: …the noble Lord, Lord Lucas of Chilworth, has raised doubts about the effectiveness of the consultation process on the procedure for publication of this information. In view of this, I am happy to tell your Lordships that the Department of Energy, together with the Department of Industry, will be ready to discuss the matter further with the appropriate interests before the clause receives detailed examination in another place. I do not hold out expectations of departure from what the Government consider to be necessary,… That is exactly what he said. About a week ago I also invited the noble Lord. Lord Kirkhill, to discuss this Amendment. I gave notice that this was a proposal of mine. I know that the Motor Agents' Association have also attempted to have further words with the Department of Industry. There was no reply from the office of the noble Lord. Lord Kirkhill. Is it really fair of the Leader of the House to ask me to accept his assurances when the Government's categorical answer was set down only a few days ago? It was that they do not expect to depart from their present thinking. Only four days ago from the noble Lord's office came the following: " I am sorry, we do not like it and we are going along with what we have ". Even in that short time I am invited to change my mind. I find it difficult to accept the suggestion which the noble Lord the Leader of the House has made. I wonder if, because of procedural matters, he would care to interrupt me in order that I may finish.


Yes, my Lords. Before the noble Lord sits down. I have no idea of the communications that the noble Lord. Lord Lucas of Chilworth, has had with Lord Kirkhiffs office. All I know is I was alerted about Lord Lucas's Amendment. I looked at it and started " beavering " away. That is the only reason I gave the noble Lord the assurances that I have just given. This is going to be looked at in consultation with the people directly involved. I do not give assurances lightly: if I did I would not get away with it very long. So far, after 22 years, nobody has yet tripped me up. If I give the noble Lord that assurance it sticks.


My Lords, of course I am most grateful to the noble Lord for his intervention. Your Lordships' House have been extraordinarily patient in debating this matter time and time again and most interested parties are now very well aware of what is involved, and where each side stands. As the noble Lord says, the difference is narrowing debate by debate. With the assurances which have been given and the fond hope that further consultations will be more meaningful than those consultations promised in December to the industry, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord SHEPHERD moved Amendment No. 25:

Page 13, line 15, after (" 4(3) ") insert (" or 21(4)").

The noble Lord said: My Lords, this is a drafting Amendment. I beg to move.

On Question, Amendment agreed to.

Lord SHEPHERD moved Amendment No. 26:

Page 13, line 18, after (" 4(3)") insert (" or 21(4)").

The noble Lord said: My Lords, this is a drafting Amendment. I beg to move.

On Question, Amendment agreed to.

Clause 16 [Administration, enforcement and offences]:

Lord SHEPHERD moved Amendment No. 27:

Page 14, line I I, leave out (" to 10 ") and insert (" and 9 ").

The noble Lord said: My Lords, I spoke to this with Amendment No. 7. I beg to move.

On Question, Amendment agreed to.

Lord SHEPHERD moved Amendment No. 28:

Page 14, line 34, leave out (", 9 or 10 ") and insert (" or 9 ")

The noble Lord said: My Lords, I beg to move this Amendment, which was spoken to with Amendment No. 7.

On Question, Amendment agreed to.

Clause 21 [Citation, commencement and extent]:

6.11 p.m.

Lord SHEPHERD moved Amendment No. 30:

Page 17, line 8, leave out (" 10 ").

The noble Lord said: My Lords, this again is an Amendment I spoke to with Amendment No. 7. I beg to move.

On Question, Amendment agreed to.

Schedule 2 [Administration and other matters]:

Lord SHEPHERD moved Amendment No. 31:

Page 19, line 14, at end insert—

(" (3) In this paragraph " specified " means specified by the Secretary of State's directions.").

The noble Lord said: My Lords, this is a drafting Amendment. I beg to move.

On Question, Amendment agreed to.

An Amendment (Privilege) made.

6.11 p.m.


My Lords, on behalf of my noble friend Lord Kirkhill, I beg to move that this Bill do now pass. I am very grateful to all noble Lords who have taken part in our debates on this Bill, and particularly to my noble friend Lord Kirkhill, who has always made himself available to all Members of this House. I should like to place that very firmly on the record. I am also very grateful to the noble Lords, Lord Campbell of Croy, and Lord Strathcoria and Mount Royal. I must admit that I thought they might have been a little more flexible. If they had matched my own flexibility this stage of the Bill might have been dealt with a little quicker and perhaps there would have been less tramping through the Division Lobbies. The Bill will now go to another place and it will he looked at with great care. I have no doubt at all that the Bill will he returned to your Lordships' House for further consideration.

The Bill deals with a matter of great importance to this country; that is, the conservation of those resources we have available. We may have to take certain measures to conserve them. This may mean some infringement for those who in the past have thought they had rights to those raw materials; but when one takes the view which I hope will he taken by noble Lords, that we are in this world today as mere temporary tenants and we have to have regard to those who are following us in the next century, we have a right and a duty to seek to conserve, without fear or favour and without any form of partiality, these very precious resources. This Bill probably marks the first step in seeking to do so.

Moved, That the Bill do now pass.—(Lord Shepherd.)

6.12 p.m.


My Lords, I should like to thank the noble Lord the Leader of the House for what he has just said. I am delighted that once again he has introduced into our debate the word " flexibility we really would hardly have felt at home without it. I should also like to thank the noble Lord, Lord Kirkhill who picked up a difficult brief at short notice, and who has been helpful to us.

At Second Reading, the noble Lord, Lord Lovell-Davies, who has been with us quite a lot today, said that the purpose of the Bill was to meet the United Kingdom's obligations under the Agreement on an International Energy Program and as a Member of the European Communities, and to develop our energy conservation policies. We have probed these intentions fairly carefully during the passage of the Bill, and it has emerged that the Bill does a good deal more than just what the noble Lord was suggesting, which was to consolidate the Fuel and Electricity (Control) Act 1973. On the emergency side, the Opposition have not attempted to limit the powers as such, but rather to ensure that they are used only in times of genuine emergency. We also wanted to ensure that the powers required to honour our international obligations were not equally available for dealing with quite separate domestic purposes. I think we have made a number of improvements to the Bill in this regard, because there was scope for any future Government to ignore the undertakings given by this Government during the passage of the Bill. That is something which no doubt the other place will want to explore further. Certainly I believe the domestic powers are now more firmly anchored to domestic crises.

There is still an element of doubt in our minds that powers taken with a view to dealing with international crises might be used outside those circumstances hut, as the noble Lord has said—and it is an unfortunate fact that the so-called conservation aspects of the Bill have exercised us most—we are all against valuable resources being wasted, and to that extent we are certainly all in favour of conservation. We had been concerned lest there should be no limits to the control being taken by the Government in the name of' conservation, which might or might not be used for such a purpose. I do not mean it in a trivial sense when I say that it is always easy to find a noble label for something which some of us would regard as a mischievous intention We have been doing our best to ensure that conservation is not a smokescreen behind which the Government might seek to intervene in the oil and chemical industries, and that the word " conservation " should he regarded in its true light.

During the passage of the Bill we have removed permanent price control as part of the conservation argument. We felt the existence of this could, and in most cases would, conflict with any desire to encourage the sensible use of fuel. Indeed we believe that nothing could he more discouraging to the cause of conservation than to prevent prices signalling the true costs involved in the provision of resources. One of our main preoccupations has been to question the Government's proposals for powers over the supply and use of offshore natural gas. All kinds of gibes could no doubt be poked at us. I think we have at least had to appear to he experts in the natural gas field, and we hope that the practical effect. whereby the Government were greatly extending their control over both the oil and petrochemical industries has been to some extent limited. There was a real danger that the confidence of the industry could have been sapped by some of the powers the Government intended to take, some of which, frankly, were ill-conceived from a purely practical point of view. I really must give credit to the Government for recognising and meeting many of the points we raised in this connection.

Finally, but by no means least important, the Bill has proposed very extensive powers over the collection and disclosure of information. Nobody wants to deny the Government powers to collect the information they require, particularly if it is needed to honour international obligations. But I hope the Government have not felt there was any intention on the part of the Opposition to go " nitpicking in this matter. We believe that one really cannot be too careful when trying to protect the individual or the company against the powers of an intrusive Government. It is all too easy for Governments to assume that the public interest inevitably benefits from all information being made readily available to the State. But certainly we on this side feel that an all-knowing and all-powerful State is not necessarily a universally agreed objective, and this is an area in which we seek to avoid any future abuse by Governments of the powers which were being asked for under this Bill.

One can sum it up by saying that at times we have disagreed with the Government on both the practicalities and the principles of the Bill. I believe we have made a useful contribution to improving at least the elements of practicality in the Bill. Clearly, issues of principle are less easily resolved between us and this Bill now passes to be considered in another place. I should like to end by saying that we have greatly appreciated the way in which all noble Lords opposite have handled the Bill, and in particular the real assistance which the noble Lord the Leader of the House has given us in meeting what at times have been far from easily resolved problems.

On Question. Bill passed, and sent to the Commons.