HL Deb 07 November 2000 vol 618 cc1435-40

7.30 p.m.

The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville) rose to move, That the order laid before the House on 12th September be approved [28th Report from the Joint Committee.]

The noble Lord said: My Lords, on 7th September protestors blockaded Stanlow refinery in Cheshire. The oil companies advised my department that action at other refineries could quickly lead to serious disruption of fuel supplies. As a consequence, the Government sought an Order in Council under Section 3 of the Energy Act 1976.

The Energy Act 1976 (Reserve Powers) Order 2000 was made by Her Majesty on Monday, 11th September and was laid on 12th September. The order came into force on 11th September, it being considered that the exceptional urgency of the situation justified the order coming into force before it had been laid. Were the House and another place to have approved the order, it would expire on 10th September 2001; that is, 12 months after it was made. Failing such approval, the order would expire at midnight on Sunday, 19th November.

Article 2 of the order declares that, because there is imminent in the United Kingdom a threatened emergency affecting fuel supplies which makes it necessary in Her Majesty's opinion that the Government should temporarily have at their disposal exceptional powers for controlling the sources and availability of energy, the powers of Sections 1 and 2 of the Energy Act 1976 are to be exercisable to their fullest extent. Those sections enable the Secretary of State to make orders and to give directions to regulate the production, supply and use of certain fuels, including petrol and diesel.

It was considered in September that it was necessary for the Government to have those powers at their disposal, given the serious threat to fuel supplies and hence to emergency and other essential services, to the health service and to food distribution. Using these powers, the Secretary of State subsequently made orders designating priority retail fuel sites and priority purposes to facilitate the orderly return to normal when protests ended. These arrangements would have ensured continuity of essential services for a longer period had the blockades continued.

While the order is in force the Secretary of State can, under Sections 1 and 2, regulate the production and supply of fuel and direct companies and others as to the use of petroleum products or the price at which they are sold. Examples of the orders and directions which the Government might want to issue would be directing petrol suppliers to supply only to specified locations and for priority purposes; or restricting private, commercial or public transport activity for the purpose of conserving supplies.

It may be helpful if I remind your Lordships about the Government's actions in response to the recent disruption. We made clear from the beginning that we were determined to ensure that supplies were returned to normal. As soon as it became apparent that supplies were being affected, we acted to ensure that procedures were put in place to allow for supplies to be brought back to normal as soon as possible.

Using the powers available under the Order in Council, the Secretary of State made further orders designating petrol stations and depots around the country as priority suppliers, requesting oil companies to ensure that available supplies were, in the first instance, used to keep these stations open. Subsequent orders added further petrol stations and depots to the list following representations from priority users, business and the public. From that list of petrol stations we additionally specified about 300 outlets which should service primarily essential users and we issued a list of essential users.

Although the powers under the Order in Council enabled us to issue legally-binding directions to this effect, we took the view that the arrangements should be non-statutory and handled on the ground by local authorities and the police, who were best placed to respond effectively to local circumstances. Guidance was placed on government websites and distributed through police stations, local authorities and health authorities. We also set up two hotlines so that essential users and members of the public could telephone for information.

The situation returned to normal, but to ensure that disruption on this scale was not repeated, the Prime Minister set up a task force which agreed the broad principles of a memorandum of understanding between government, oil companies and the police on the handling of any future emergency.

I mentioned the task force and the memorandum on 5th October in replying to a question from the noble Lord, Lord Campbell of Croy. In another place last week my right honourable friend the Home Secretary confirmed that the task force was putting in place measures aimed at ensuring, in the event of future disruption, the delivery of fuel to petrol stations, with priority for essential users; better preparation for disruption by local authorities and other essential users the availability of Ministry of Defence drivers to drive tankers as a last resort; the protection of food depots and other potential targets; and the keeping open of major roads.

I regret that we appear to be faced with threats of further disruption. We have no alternative but to seek extension of the exceptional powers so that we can take responsible action to safeguard essential services. The Government are in no doubt that it is necessary to have these powers available for some time to come in order to take the action necessary to preserve essential supplies and services. The Government are firmly of the view that a situation continues to exist in which there is a real threat of disruption to fuel supplies and that it is our responsibility to be prepared to act quickly to maintain essential services, particularly at this season of the year.

The Section of the Energy Act 1976 in question, Section 3, had not previously been activated. This was not something which we therefore did lightly. Careful thought was given before an order was sought in early September, and very careful thought has been given again to this issue. But it is our considered view that it is right and necessary to extend these powers. I beg to move.

Moved, That the order laid before the House on 12th September be approved [28th Report from the Joint Committee].—(Lord Sainsbury of Turville.)

The Earl of Mar and Kellie

My Lords, the order seeks powers under Sections 1 and 2 of the Energy Act 1976 in the aftermath of the September fuel blockades. I read about them—M the West Australian News. I therefore have no war stories to tell. However, I had to listen to Australians whingeing about their petrol going up to 38p. per litre. I concluded that Australians were lax on fuel use and on their commitment to reducing greenhouse gases.

On the face of it, Sections 1 and 2 seem to be largely written for the purposes of energy conservation and price control. However, reading Section 3, especially Section 3(1)(b), I see that it is more in line with the current situation of threatened disruption to fuel supplies. I understand that an Order in Council under Section 3 is in place and can last for 12 months.

All this has come about because of the blockades and the summer-long fuel price protest. So I have to ask why peaceful and legitimate protest and lobbying spilled over into unconstitutional blockades. I have to hope that the Government have taken all the necessary precautions to deal with the next blockade, if it occurs. That is quite an "if'.

I should like to think that the Government have by now listened to the protest and lobbying and that tomorrow the Chancellor will bring forward measures which will take the heat out of the issue. Should that not be the case, it will be necessary for the right balance to be struck between the right of peaceful protest and lobbying and the need for fuel to be delivered. The world's fourth largest economy needs to be kept on track. It falls to the Government to deal with the issues effectively and not to trigger off another blockade.

We have heard about the training of military drivers and of company directors being reminded of their duty to deliver. Tanker drivers have also to consider the case for safety vis-é-vis blockades, provided that it is not a cover up for collusion.

The Minister is in an unfortunate position being unable, I presume, to give us a foretaste of the Chancellor's Statement tomorrow. I hope that action will be taken to reduce vehicle excise duty, which would be administratively easy to do. That would benefit rural areas where public transport is weak and, to an even greater extent, the remote areas and island groups, particularly in north-west Scotland. In these latter areas, the disproportionately high price of fuel has long demanded a reduction in vehicle excise duty in compensation just to bring motoring costs down to city and urban area levels. I also hope to hear about a measure to equalise the cost of cheaper fuel enjoyed by lorries operating in the United Kingdom and based in Europe.

This order will only be effective if the Government have met some of the demands of the protesters and have made real plans to overcome any blockade action which may still ensue.

Lord Mackay of Ardbrecknish

My Lord, I am slightly surprised that the Minister was able to read his speech with an absolutely straight face, given what everybody knows is going to happen tomorrow. I would like to re-christen this order as the "Helen Liddell to Deeside in the Summer" order. It must have been very pleasant for the Minister to sortie to Deeside to see Her Majesty in the glory of a September day.

That is what we have here and it is being continued. Of course the Opposition agrees absolutely with the Government that when there is a serious threat to order in our country they should take these powers. However, the fact that we are discussing them the day before the Chancellor is due to dish out goodies as though there will be no day after tomorrow amuses me very slightly. The Minister said that there were threats to our fuel supplies. Most of the threats at the moment seem to be concerned with water and not petrol or diesel. That appears to be a far greater threat than to fuel supplies.

Even if we have a problem the Government will simply issue a list of petrol stations to which people in the emergency services can go. The problem of getting the petrol to those stations does not appear to have been tackled by the Government, unless they have come to some agreement with the fuel companies and the drivers. I thought I saw television pictures of the Minister's noble friend Lord Macdonald of Tradeston sharing a press conference with the leader of the protesters saying that there was not going to be any great trouble. I do not believe that there will be.

I suspect that tomorrow the Minister will buy off the summer protestors. It reminds me of Robert Burns' poem about a mouse in which he says, O what a panic's in thy breastie!". The Chancellor will know that well. There seems to be an amazing panic. I do not believe that we will reduce the price of petrol, but prices will be reduced for some things for the farmers and a bit will be done for the road hauliers and so forth. Yet at the same time that amazing proponent of the English language, the Deputy Prime Minister, tells us that the floods are entirely due to global warming, the burning of fossil fuels and the motorist—and the haulier, I presume, burning petrol and diesel and pouring carbon dioxide into the atmosphere. If ever I saw a Government trying to have it both ways by their performance, I have seen that in the past week. I do not believe that global warming has much to do with it. The rain that normally falls in Scotland has fallen in England—and we have a far better drainage system in the north of Scotland than clearly there is in England. Equally, I remember five years ago there were droughts in England which were attributable to global warming. So it appears that drought and now floods are due to global warming. I am a little sceptical about that.

What I find really amazing is that in the same week that the Government are complaining about the use of motor cars and lorries and global warming, they are also prepared tomorrow to make it actually less expensive for people to motor and use their lorries. The Government have to make up their mind where they stand on this.

I am not going to go on about this. I have said my piece and I do not believe that these emergency powers will be used, as they were not implemented on the last occasion. But if the Government ever really needed to use them properly they would have our absolute support because we cannot allow the country to grind to a halt. The Government will have to be careful that they do not play this strange game too often. I remind them of the little boy who cried wolf far too often. The Government are in severe danger of doing that.

Lord Sainsbury of Turville

My Lords, we have listened with great care to the protesters since they began their cause. My noble friend the Minister of Transport, Lord Macdonald, and the Parliamentary Under-Secretary of State for Transport, the noble Lord, Lord Whitty, have met the Road Haulage Association, the Freight Transport Association and the People's Fuel Lobby, among others.

Government is about making decisions and if we agreed with the views of all lobbyists then the Government would probably be bankrupt within a short space of time.

I want also to make it clear that the reserve powers to which this Order in Council provides access enables us to make special arrangements to safeguard supplies of fuel to essential services. We very much hope that it will not be necessary to use the powers again in the foreseeable future. But we are quite certain that we have a duty to take appropriate precautionary measures. Although the noble Lord may see this order as being unnecessary, I believe he will agree that it is a sensible precaution to take in the circumstances.

He anticipates what the Chancellor will say tomorrow. That is unwise until we hear what it is. We can then debate what is the exact balance between lowering taxes on fuel to help people and the issue of global warming which is intimately related to it. I observe that the noble Lord raised that issue, but he did not say where his party stood on it or where he thought the balance should be struck. I respect him for that because it leaves the noble Lord total flexibility tomorrow to approach the subject from whichever direction he chooses.

He rightly pointed out that these particular powers do not tackle the problem of getting oil to the petrol stations. We have a memorandum of understanding with the oil companies, the police and the other participants on that.

As regards global warming, it is perfectly possible—indeed, the experts believe that it is very likely—that in the end there will be more rain in Scotland and a drier South. I am sure that he will be looking forward to that.

Finally, the Chancellor will deliver his Statement tomorrow explaining what we believe is right for the whole country and not what is right for those who shout the loudest. As a responsible Government we have a duty to ensure that essential supplies of fuel are kept moving. These reserve powers are a means to achieve that goal. I commend the order to the House.

On Question, Motion agreed to.

Lord Sainsbury of Turville

My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to. [The sitting was suspended from 7.50 to 8.30 p.m.]