HL Deb 10 February 1992 vol 535 cc454-6

2.59 p.m.

Lord Bruce of Donington asked Her Majesty's Government:

What consultations they have had with commissioners and other officials of the European Community on the Community's proposal that, on some future date, 90 per cent. of Britain's North Sea oil output should be compulsorily acquired by the Community, and with what result.

Lord Cavendish of Furness

My Lords, the Commission quite rightly explores a number of avenues before making proposals to the European Council. We are aware that it has been exploring the possibility of proposing a European strategic oil reserve involving the purchase of North Sea oil fields. We have been able to point out the practical and other difficulties attached to such a possibility and we would hope that the Community does not pursue the option.

Lord Bruce of Donington

My Lords, I thank the Minister for that reply, which does not in any way question the validity of the feature in The Times of 5th February last, on which the Question is based. In view of what the noble Lord says, can he give the House an undertaking that under no circumstances will Her Majesty's Government agree to any such ridiculous proposal from the Commission which will in any way limit British sovereignty over her own oil resources and the income received therefrom? If so, will he tell the House how the Government propose to exercise a veto over such a proposal in view of Article 100A of the Treaty of Rome which prescribes that in certain circumstances decisions may be taken by a qualified majority?

Lord Cavendish of Furness

My Lords, there have been discussions at official level with the European Community on Mr. Cardoso's idea. There are no formal proposals from the EC to buy up the North Sea oilfields and any idea of mothballing them for some future contingency is preposterous. We doubt whether Mr. Cardoso's view is shared by his colleagues in the Commission and a great deal more thought is required if it is to emerge as a serious proposal.

With regard to the second point of the noble Lord, Lord Bruce, should the Commission come forward with a formal proposal it is our belief that it will require Article 235 as its legal base. That requires unanimity. How the UK reacts to such a proposal will depend on the nature and content of it. However, as noble Lords will have heard from the tenor of my replies, it is difficult to envisage the UK supporting such a proposal. It will not come through the avenue of qualified majority voting and we believe the proposals are counter to the concept of a liberalised energy market. It will not work and is not necessary.

Lord Harmar-Nicholls

My Lords, as matters stand at present, has the European Community any power to compulsorily acquire any asset which is at present under the jurisdiction of this country? I refer not only to North Sea oil but also to other assets. If the Community has such power, where is it based, in which treaty and at what point in that treaty?

Lord Cavendish of Furness

My Lords, I can only answer in regard to the Question on the Order Paper. As I said, we do not believe that it is within the power of the European Community to take over our North Sea oil assets.

Lord Stoddart of Swindon

My Lords, is the noble Lord aware that while I welcome his assurance that any such proposal will be resisted, nevertheless many people are worried about the Commission's ideas on North Sea oil? For example, I refer to the proposal to requisition it. Is the Minister aware that in 1972 this country was assured that there was no possibility of a unitary or federal state in Europe and that all we were joining was a common market? Is he further aware that on Friday the Foreign Secretary signed the Maastricht Treaty, which makes us all citizens of a union? Bearing that in mind, is the noble Lord aware that we are anxious that the Government, perhaps unaware of what they are signing—as the Foreign Secretary did not appear to know—should not allow our North Sea oil to be requisitioned willy-nilly?

Lord Cavendish of Furness

My Lords, I must reply in relation to the Question on the Order Paper, which concerns the Commission's proposals to take over our oil supplies. I replied to that Question in depth. I am not surprised that the noble Lord is especially concerned in the matter. However, the proposal stems from an anxiety on the part of the Commissioner with regard to arrangements that may be put in place for coping with an oil supply crisis. We do not believe that they are necessary as they are covered through the IEA arrangements as well as by an existing European Community arrangement. With regard to the rest of the noble Lord's anxiety, I have already given the flavour of my answer.

Lord Dean of Beswick

My Lords, I fully support what my colleague behind me said and the Minister will be aware that we support the Government on the stand that they are taking. We hope that that continues. Bearing in mind that, within the EC, Britain possesses the finest and largest energy deposits, if the oil should pass into the control of the EC would not that make a nonsense of the Government's present proposals to continue to cut the production of coal in this country? Coal is one of our most valuable assets and may well be lost to privatisation.

Lord Cavendish of Furness

My Lords, I made the important point that our chief objection is that the proposal would run counter to the excellent liberalisation moves we are making, which are now receiving credibility within the Community. The notion behind the proposal is that it will be paid for out of a carbon tax. While we do not dismiss that, it is far from being agreed.

Lord Bruce of Donington

My Lords, in view of the noble Lord's earlier reply, will he now find it easy to give the House an undertaking that there will be no further consultations on propositions of this kind? They are a waste of time in regard to the UK.

Lord Cavendish of Furness

My Lords, I wish I could, but I cannot give such an undertaking this afternoon.

Lord Harmar-Nicholls

My Lords, is my noble friend aware that a more categorical answer than the one he has given in regard to protection is called for in view of the reports in the papers and the people who have commented upon them?

Lord Cavendish of Furness

My Lords, I thought that I was being categoric, certainly with regard to the policy of Her Majesty's Government and the best information we have on protection. I can reassure my noble friend that the proposal is believed to he so far off as to be not worthy of serious consideration.

Lord Bonham-Carter

My Lords, I congratulate the Minister on the patience with which he answers these daily Questions by obsessive anti-marketeers.

Lord Cavendish of Furness

My Lords, I thank the noble Lord, Lord Bonham-Carter, for that comment.

Lord Mackie of Benshie

My Lords, does not the attitude of her Majesty's Government depend on the price offered by the Commission? What would their attitude be if the Commission offered 40 dollars a barrel?

Lord Cavendish of Furness

My Lords, neither I nor my colleagues could hear that Question.