§ Mr. Latham
asked the Secretary of State for Energy whether he will make a statement on the results of his Department in achieving the Government's policy programme since his reply to a similar question by the hon. Member for Melton on 11 June 1980.
§ Mr. David Howell
Short-term problems have not diverted us from the comprehensive long-term strategy which I set out in the reply to my hon. Friend on 11 June 1980: to make the best use of indigenous energy resources and to work both at home and internationally for reduced dependence on oil. We remain committed to the economic pricing of energy but, in consultation with the Government, the electricity supply industry has been able to offer new flexibility in its pricing arrangements to large high load factor industrial consumers, while the BGC has agreed to hold the terms at which it renews contracts with industrial gas consumers at present levels until December 1981. These measures, together with a £50 million scheme for the conversion of industrial boilers from oil to coal, were announced by my right hon. and learned Friend in the Budget on 10 March 1981.
I have also taken a number of other steps designed to secure the efficient and economic distribution and 368W consumption of energy in the United Kingdom. I gave investment approval for the cross-Channel link between the CEGB and Electricité de France. I introduced the Gas Act 1980, which amends the BGC's obligation to supply and contract arrangements in respect of large consumers—over 25,000 therms a year. I introduced the Gas Levy Act 1981 to recoup the benefts of the BGC's windfall profits for the nation as a whole.
I have laid a draft direction before Parliament which would require the BGC to transfer its holding in the Wytch Farm oil licence to the private sector. Pre-construction work on the gas-gathering pipeline has been largely completed. I have taken action to increase exploration for oil and gas through the award of 46 landward exploration licences, 17 production licences and, under the seventh round, 79 offshore production licences. I have published the Petroleum and Continental Shelf Bill, which includes enabling powers for the disposal of BNOC's upstream assets, and other provisions to amend existing petroleum legislation. I have announced the North Sea Oil bonds to be launched this autumn. I have concluded a supplementary agreement with Norway on transport of oil from the Murchison field to the United Kingdom.
As foreshadowed in my reply to my hon. Friend on 11 June 1980, I announced the Government's oil depletion policy on 23 July 1980. In line with that policy, first oil production from the Clyde field has been deferred for two years to 1987, and flaring from offshore oil fields has been reduced by half from its 1979 peak. I have arranged for the major recommendations of the report of the Burgoyne committee on offshore safety to be implemented.
We are continuing to make good progress with the development of nuclear power. Work is proceeding towards the public inquiry on the first proposed British PWR. We have established a task force, which will ensure that firm design proposals, consistent with United Kingdom safety requirements, are developed as quickly as possible.
Capital investment in the coal industry, in new mines and in cost reducing projects at existing pits has continued at a very high level.
On renewable energy, I have launched a major geothermal project at the Camborne School of Mines. Other decisions in this area include the design and construction of a 3MW aerogenerator on Orkney and the offer of a £5 million contribution to a pilot NCB oil from coal plant.
On energy conservation, we have played our full part in following up the decisions of the Venice summit of June 1980. The Energy Conservation Act 1981 provides powers to set efficiency standards for space and water heaters. I have reduced to 19°C the maximum heating limit for places of work. I have announced locations and appointed consultants for more detailed work on the combined heat and power/disrict heating feasibility programme. I have announced a scheme to help voluntary organisations develop insulation projects using unemployed labour for work in the homes of the elderly and others on low incomes.
Our energy policy remains, as always, subject to review in the light of events.