Skip to main content

Energy

Volume 889: debated on Monday 7 April 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

International Energy Agency

1.

asked the Secretary of State for Energy whether he will make a statement about the latest meeting of the International Energy Agency.

The International Energy Agency's Governing Board met in Paris on 19th and 20th March. It agreed three inter-related measures of co-operation in the accelerated development of new energy sources. It also discussed the approach that participating countries would adopt in the dialogue between oil consumers and producers, the preparatory meeting for which is taking place in Paris today. 7th April.

Since the agency has powers which are a good deal more supranational than any possessed by the EEC, including powers relating to the allocation of our oil supplies, will the Minister ask his right hon. Friend to seek a suitable occasion to explain how he supports British membership of the agency while opposing British membership of the EEC?

There is a clear distinction between the two sorts of association. The International Energy Agency is concerned to deal with the situation where there is a shortfall in oil supplies, and the automatic arrangements come into effect in that arrangement. They are different sorts of organisations, but both involve a certain element of diminution of sovereignty.

What is the justification for this body taking measures to keep up the price of oil?

The body is proposing to explore the possibility of having a floor price for oil to preserve the investments which some other countries, including this one, are making in alternative energy sources.

Do the Government intend to bring the agreement before the House of Commons? Is any action required by this House before the Government can ratify the agreement, as they have to do before the end of May?

I think that the agreement is published as a Command Paper, and I am sure that the right hon. Gentleman and many of his hon. Friends have read it already. It requires to be ratified by the House.

North Sea Oil Production

2.

asked the Secretary of State for Energy what is his estimate of the expected production of oil from the North Sea in 1975 and in each of the following three years.

My right hon. Friend will be publishing this month estimates of production and reserves of oil and gas in the 1975 Report to Parliament.

Is my hon. Friend reasonably confident that levels of production will not be disappointing in the next two or three years, despite the unusually adverse wind and weather conditions experienced in recent months?

Like all enterprises in the North Sea, ours are subject to the accidents of working in such a hostile environment. It is especially disappointing that there will be a hold-up in production from the Argyll field due to the damage done to the production riser. This is one of the difficulties which cannot be avoided in North Sea oil development. There will be less oil landed this year than was thought at one time. We believe, however, that the targets for the 1980s will be maintained.

A great deal of wind on this subject has come from the Government. Is Government policy itself, which involves the taking of participation in the North Sea fields, accepted by the Government as being the cause of delay in North Sea development?

There is no evidence to indicate that the Government's proposals on participation have had any effect on development in the North Sea. At the moment, more rigs are exploring the North Sea than ever before.

Will my hon. Friend confirm the report in theFinancial Timesthis morning by a stockbroker indicating that there has been no delay due to Government policy in this respect?

This must be the view held by any objective observer of the oil scene. Opposition Members cannot be regarded as being in that category.

Will the hon. Gentleman assure the House that the Government have not been influenced by representations from the Scottish National Party, with its attitude for cutting back in exploration for oil? In view of what the Minister has said, it is worrying for many Opposition Members to feel that there may be some tendency for the Government to yield to pressures from the nationalists.

The Government are willing to listen to representations from anyone, but we treat them with the seriousness they deserve. The policy of the Scottish National Party to cut back oil production to 40 million tons a year would totally ruin the United Kingdom offshore supply industry.

Can the Minister give us some indication of the development of Celtic Sea oil and say whether there is any truth in the story going the rounds in Wales that Celtic Sea oil development is being delayed because of the pressure being put on North Sea oil? Is there any land-based development in terms of ports and adjacent land for Celtic Sea oil development?

There is a difference of opinion between the Scottish National Party and Plaid Cymru. The latter is all for speedy oil development in the waters off Wales. Obviously the Government are interested in future exploration in the seas round Wales, and Wales already shares to a considerable extent in the offshore oil market. At the moment, however, attention is being concentrated on the prolific fields east of the Shetlands. That is understandable since that is where strikes are most likely to be made.

Domestic Supplies (Price)

3.

asked the Secretary of State for Energy whether the cost to the domestic consumer of coal, electricity and gas, respectively, has risen faster or more slowly than the retail price index since 1st March 1974.

Between 19th February 1974 and 18th February 1975, the General Index of Retail Prices rose by 20 per cent., while the constituent subgroups for coal and coke, electricity and gas rose by 26 per cent., 35 per cent. and 10 per cent. respectively.

Those are not happy figures, and the figures for 1975–76 are likely to be even less happy. Does my hon. Friend accept that increases of this kind bear disproportionately on the poor, and will he consider publishing a statement each time his right hon. Friend approves an increase in the price of electricity, gas or coal, showing the House the impact of the increase on the poor?

I assure my hon. Friend that the effect of such increases on the poor consumer has been taken into consideration. My hon. Friend has referred to this subject previously, and I know that he is interested in the impact on the index of retail prices. I can tell him that the estimated direct effect on the index of the average domestic basic electricity tariff increase of 28½per cent. announced on 25th March will be 0·7 per cent. If my hon. Friend has particular suggestions to make, my right hon. Friend, as he has always said, is perfectly prepared to listen to them.

Would it not at least be helpful if the Department of Energy coordinated its activities and allowed grants to be made available to the relatively less well off for purposes of insulation?

In her statements to the House, my right hon. Friend the Secretary of State for Social Services has made clear that she has taken into account the need to assist poor consumers and pensioners. The question of insulation and grants for that purpose has been raised in the House before, when it was made clear that it would be extremely difficult to start from scratch now to insulate dwellings, this being something which all Governments should have tackled some considerable time ago.

Does my hon. Friend realise that in smokeless zones in my constituency domestic consumers have recently had to face yet another increase in the cost of solid smokeless fuel amounting to 14 per cent., bringing the price per hundredweight bag up to £2? This is causing real hardship to poor people, especially old-age pensioners. Is there nothing that the Department of Energy can do about it?

In the context of my hon. Friend's question, relating to the effect of recent price increases, whether for coal or for smokeless fuel, I can tell him that of the expected £370 million extra revenue accuring to the National Coal Board in 1975–76 only £40 million will come from the domestic market. My hon. Friend expresses special concern for pensioners, and I remind him that there was a record uprating of pensions by 29 per cent. last July, with a 16½per cent. increase in the maximum amounts of family income supplement, and there is to be a further uprating of pensions and related benefits of 16 per cent. this April. Moreover, there have been extra heating additions. If my hon. Friend wishes to pursue this matter, I am sure that my right hon. Friend the Secretary of State for Social Services will be only too happy to give him any information he wants.

Power Station Efficiency

4.

asked the Secretary of State for Energy what study he has made of the efficiency of power stations; what was the impact on this efficiency of the mass employment of outside contractors, evidence of which has been supplied to him by the hon. Member for Cannock; and if he will make a statement.

My right hon. Friend regularly reviews the efficiency of power stations with the Central Electricity Generating Board. The use of outside contractors is, however, a matter falling within the day-to-day management responsibilities of the industry.

My hon. Friend will be aware that an investigation at power stations in my constituency was recently undertaken on my behalf. Will he take it that there is a considerable impression in that area that the employment of contractors, and hence of subcontractors, must involve a profit at each stage and that this can in no way contribute to economic efficiency? Will he accept that there is a dark suspicion among workers in the industry that in some of the employment of contractors and subcontractors there is an element of hidden denationalisation?

I am aware of my hon. Friend's constituency interest and of the information which he has gathered. I understand that he had a full explanation from Mr. Arthur Hawkins, the Chairman of the CEGB. I ask my hon. Friend to accept from me that what he regards as the high level of contractor involvement in Rugeley in 1974–75 was due to a major overhaul at the station, and there was no question of the industry's own staff being underemployed or being prevented from earning their bonuses. On the contrary, the staff have earned the maximum bonus available over the period of the overhaul.

Would not the biggest improvement in the economic efficiency of power stations come if the CEGB were directed to do something about marketing its waste heat? What is the Department doing to speed up that programme?

There is a Question about that later on the Order Paper. I remind the hon. Gentleman that day-to-day matters in the running of the Central Electricity Generating Board are matters for the board.

"Save It" Campaign

5.

asked the Secretary of State for Energy whether he will make a statement about the results of his "Save It" campaign.

My officials will shortly be assessing the first results of a scientific survey into the impact of the advertising during the launch phase of the campaign which opened on 20th January. I am, however satisfied from the evidence of interest by the Press, radio, television and public that the campaign has already made a substantial impact.

I am planning to develop the campaign during the spring and summer at a cost in advertising of £1.8 million. The main thrust of the campaign will be to persuade the public to improve the insulation in their homes.

I congratulate my right hon. Friend on the good sense and tone of his campaign compared with the panicky "Switch off something" and "Clean your teeth in the dark" which we had last year. Is not my right hon. Friend afraid, however, that people will get used to his campaign, just as they have got used to the Government's health warning on cigarette packets?

I hope not, because 1 believe that those, such as my hon. Friend, who have taken an interest in the campaign feel that it is well worth while, and it is already having a substantial impact. Energy consumption is down already, and I hope to be able to give the House some figures shortly.

Disregarding the complacency of the hon. Member for Nuneaton (Mr. Huckfield), is the Secretary of State satisfied that shops, offices and hospitals are yet making nearly enough savings on heating? If not, what will he do about it?

I hope that the survey will reveal what further needs to be done, and I shall not hesitate to take any action which I regard as necessary.

Is my right hon. Friend aware that motorists are almost entirely disregarding the speed limits which were regarded as part of the campaign to save energy and that anyone with a car of more than 950 cc engine capacity seems to be motoring at the highest speed which his engine allows? Does not my right hon. Friend feel that a call ought to go out from him and from the House that people should observe the limits, not because it is a criminal offence to break them but because it is a national necessity to observe them?

It is a necessity to observe them, and I should be sorry if people were disregarding the law in such circumstances. I have no evidence that the law is being avoided to that great extent. Perhaps it would be helpful if I gave the House some statistics showing that energy consumption has gone down. For example, total energy consumption in 1974 was 4½ per cent. down on 1973. Oil consumption in 1974 was down by over 6½ per cent. compared with 1973. There is a lot more evidence to suggest that savings have been made.

In view of the mild winter, of rising unemployment and of the stagnant economy, why does the right hon. Gentleman think that his figures have anything to do with his Save It "campaign?

The right hon. Gentleman has constantly criticised the "Save It" campaign. I am always loth to criticise him in view of his fine record in energy conservation, but it is about time he started helping the Government in their conservation campaign instead of constantly carping and criticising.

Central Electricity Generating Board

6.

asked the Secretary of State for Energy if he is considering making any changes in the membership of the board of the CEGB.

Is my right hon. Friend really satisfied with the present performance of the board? Would he not agree that it is high time the board was given a fresh impetus by new appointments particularly to improve the management structure and organisation?

I do not want to anticipate the inquiry that I have set up under Lord Plowden. I know that my hon. Friend and the whole House will be looking for suggestions and anything else coming out of the inquiry. If action is required and recommendations are made, I shall consider them seriously.

As the right hon. Gentleman took the wrong decision on the nuclear power policy, will he refrain from altering the board and blame only the Government for their ill-fated position?

The hon. Gentleman is in a minority of two, I think, in the House in his support of the American light-water reactor. I should have thought that recent reports in theObserverwould have confirmed that the decision that the Government took on the SGHWR was the right one.

Quite apart from the choice—and he knows the position of the Opposition Front Bench on this matter—will the right hon. Gentleman recognise that what happened at Browns Ferry was nothing to do with the recommendation made to him by the Central Electricity Generating Board, because it was to do with the boiling water reactor whereas the CEGB proposal was for the pressure water reactor, an entirely different system?

I am not sure that I do know the position of the Opposition Front Bench. I know the position of the hon. Member for Abingdon (Mr. Neave), but the right hon. Member for Wanstead and Woodford (Mr. Jenkin) has yet to express a firm opinion about the SGHWR and I think that he may be the only Member who agrees with the hon. Member for Bedford (Mr. Skeet) in supporting the American reactor.

Self-Sufficiency

7.

asked the Secretary of State for Energy when he now expects Great Britain to be self-sufficient in oil.

9.

asked the Secretary of State for Energy when he now expects the United Kingdom to be self-sufficient in energy.

There is every prospect that we shall achieve self-sufficiency in oil, and in energy generally, by 1980.

If the Secretary of State is saying that the North Sea oil programme is on target, will he be more honest with the House and agree that that is primarily because the shape of the target has been changed as the expected growth in demand in the years immediately ahead is considerably less than it was a few years ago? Does he also agree that overall North Sea production work is now between one year and two years behind hand, that this has led to a loss to the balance of payments of several hundreds of millions of pounds, and that the Government must take no legislative action that will delay North Sea production work even more?

We have not taken any action to delay North Sea oil exploration. I have never denied that there has been some slippage. The slippage started in 1973. Mr. Tom Boardman, then Minister for Industry, announced in the first Brown Book of that year that it was intended that by 1975 we should be getting 25 million tons of oil from the North Sea. The slippage took place then and since then, but the 1980–85 prospect is still OK.

To what extent will the coal industry contribute to national fuel self-sufficiency by 1980? Will the right hon. Gentleman provide figures to show how we shall achieve that by 1980 by stating the expected production from the North Sea for the years between now and 1980, rather than waiting for a miracle in 1980?

We have to go all out to get North Sea oil as quickly as possible, but in terms of overall self-sufficiency in fuel the coal industry, management and men, has a great deal to contribute. I want coal production to be not only maintained but improved. The hon. Gentleman will have seen figures over the past few weeks to show that production in the industry has gone up.

Is there any advantage in being self-sufficient in oil if oil can be obtained more cheaply elsewhere?

That is the$64,000 question. I have seen no evidence to suggest that oil prices will fall dramatically. 1 think that perhaps the major oil producers in OPEC will take steps to keep prices up. I hope that that is not the case and that as far as possible oil prices will come down.

Would not my right hon. Friend agree that we have been too dependent on oil from the Middle East and other sources and that various Governments in the past have failed to give sufficient attention to the coal industry? Does he agree that if we had not depended so much on oil from the Middle East, we should not now need to be so humble?

I agree with a great deal of what my hon. Friend says. He and many other members of the miners' group over the years have expressed the view that we ought not to be too dependent on Middle East oil. I can assure my hon. Friend that I for one have learned the lesson of October 1973.

Conservation

8.

asked the Secretary of State for Energy whether he will make a further statement on the progress of energy conservation.

I would refer the hon. Member to the reply given to the hon. Member for Derbyshire, South-East (Mr. Peter Rost) on 24th March.—[Vol. 889, c. 25–6.].

I do not know how to phrase my question to the Minister. Would he care to say what has been the result of the negotiations, which I am sure he will have had with the Secretary of State for the Environment and the Secretary of State for Scotland, about fuel conservation measures in house-building? What steps is he taking to ensure the use of methods that will assist in conservation in this vital respect?

On a point of order, Mr. Speaker. Is it in order for a Minister to refer to an hon. Member by name?

No, it is not in order. Mr. Eadie: I apologise.

There is contact between the Department of Energy and my right hon. Friends, but not of the kind the hon. Gentleman suggested. There is a Scottish aspect to energy saving. For example, the National Engineering Laboratory at East Kilbride has undertaken an assessment of the economics of wave power and the final report is currently being studied by the Department. The assessment was carried out for the Department and was funded by the Department of Industry at a cost of £13,000. The Department of Industry is sponsoring research into design and testing of wave power generation at Edinburgh University with my Department's active encouragement, and this research will cost £65,000 over three years.

Is the hon. Gentleman aware that many householders are dis- couraged from making conservation improvements by the ensuing increases in rates? Perhaps the Secretary of State for the Environment will take steps as soon as possible to relieve householders from rate increases due to such improvements.

I am sure that my right hon. Friend will note the hon. Gentlemen's comments. In any event, I shall draw them to his attention.

Oil Licences (Government Participation)

10.

asked the Secretary of State for Energy if he will make a statement on the Government's discussions with the oil industry on the subject of Government participation in existing oil licences.

Negotiations are continuing on the basis outlined in the answer given by my right hon. Friend the Chancellor of the Duchy of Lancaster to the hon. Member for Bolsover (Mr. Skinner) on 19th February.—[Vol. 886, c. 1338.]

Is the Secretary of State aware that of the 13 billion barrels of oil reserves in Prudhoe Bay in Alaska half is owned by BP/Sohio and that of a similar quantity in the North Sea half is owned by the American oil companies? Is he not suggesting to the American oil companies that they should take a 51 per cent. interest in the reserves in Prudhoe Bay, and would not that be to the detriment of the people of the United Kingdom?

Our research plans in the North Sea in no way affect BP's interest in Alaska.

In view of the evidence published yesterday in theSunday Timesfrom the Wood Mackenzie survey showing the Government's very low taxation take from North Sea oil, will the right hon. Gentleman promise that the Government will not sell the pass in the negotiations on participation as they have done on the question of taxation?

I do not accept what the hon. Gentleman has said about the petroleum revenue tax. Our negotiations with the oil companies to achieve majority participation in existing licences will be voluntary. It may well be that they will vary from one licensee to another, but we shall achieve a fair deal for the British people.

Has not the right hon. Gentleman entirely missed the point of the question of my hon. Friend the Member for Bedford (Mr. Skeet)? Does he not recognise that if the Government break contracts by retrospectively changing the conditions of the licences there is a danger to British investments overseas at the hands of foreign Governments and that BP's investment in Alaska is an obvious target for an American Government seeking to retaliate?

There is not a shred of evidence to suggest that what we are proposing to do in relation to our oil resources in the North Sea affects what BP is doing in Alaska. I can give the right hon. Gentleman and the House that categorical assurance.

Coal And Oil Prices>

11.

asked the Secretary of State for Energy what will be the difference in price per therm between industrial coal and fuel oil after the recently announced round of price increases is implemented.

Industrial fuel prices vary considerably depending upon the quality of fuel used, the location of the consumer and the terms and conditions of supply. Following the increases last December fuel oil prices are estimated to have risen to around 9½ to 10½p a therm, although the trend is now downwards. Following the increases on 1st March typical prices for industrial coal are now between 7p and 8½p a therm—that is, some 2p to 2½p a therm less.

Does the hon. Gentleman accept that if there is another pay increase in the coal industry of the nature of that given earlier this year, coal will become more expensive than oil and probably will be twice as expensive in electricity generation as nuclear power? What do the Government propose to do about it?

We shall have to see what happens in wage negotiations in this in- dustry as in any other. Coal prices are competitive with oil prices.

Will my hon. Friend accept that many of us on this side of the House greatly welcome the Secretary of State's statement of his view of the coal industry in answer to Questions Nos. 7 and 9? Does my hon. Friend agree that irrespective of the price factor. looking towards the year 2000 and beyond, our energy requirements must largely depend on indigenous coal resources?

My right hon. Friend the Secretary of State has repeatedly made clear, particularly in the context of the interim report of the coal industry examination, that the future of the coal industry must be judged against a long-term view of energy prices and that the industry's planning should not be at the mercy of short-term fluctuations in the price of competing fuels.

Power Stations (Fuel Utilisationresearch)

12.

asked the Secretary of State for Energy whether he will make a statement on the progress of the research being undertaken at Harwell on more efficient utilisation of fuel in power stations by combining the generating of electricity with the sale of heat.

The combined generation of electricity and heat from power stations is primarily the responsibility of the electricity supply industry and no practical research is being undertaken at present at Harwell. However, some assessment work is being done by the Energy Technology Support Unit and by the Programmes Analysis Unit. Both units are stationed at Harwell.

When will the Department of Energy accept some responsibility and take the initiative in doing what is happening and has been happening for many years in other countries in Europe —that is, utilising waste heat for industry and domestic heating? How can it be satisfactory for the Minister continually to say in the House that this is not his responsibility but that of the Central Electricity Generating Board?

The hon. Gentleman is a bit out of date, and he should know better. A group on combined heat and power has been set up under the chairmanship of Dr. Marshall, the Chief Scientist. The group will consider the economic rôle of combined heat and power and identify obstacles to the fulfilment of that rôle. The group will report initially to the advisory council. I hope that the hon. Gentleman will agree that he was a bit too quick on the gun.

Oil Developments (Fife)

13.

asked the Secretary of State for Energy what oil developments are currently being undertaken in Fife; what is their total value; and how many jobs they are providing.

There are at present several firms in Fife wholly engaged on work associated with the United Kingdom offshore market. A total of 1,610 jobs is currently being provided by these firms, the largest of which are Redpath Dorman Long (North Sea) Ltd. and Burntisland Engineers and Fabricators Ltd., which are engaged on oil platform construction and module fabrication respectively. No figures relating to the total value of the developments are available.

I thank my hon. Friend for his reply, but does he not agree that a large part of the success is due to the initiative of the Fife County Council in alerting firms, small and large, in Fife to the opportunities available to them in the North Sea for sophisticated and less sophisticated services and equipment? In view of the imminent reorganisation of local government, will my hon. Friend ensure that the new regions and districts will set up similiar machinery to alert the industries in their areas to the opportunities available to them?

I am happy to agree with what my hon. Friend has said about the activities of the Fife County Council and, hopefully, the future Fife Regional Council. I am sure that many other local authorities could fruitfully follow their example of encouraging the participation of industry in the oil industry and elsewhere.

Conservation And Competition

14.

asked the Secretary of State for Energy what discussions he has had with the gas, electricity, coal and oil industries recently with a view to conserving energy and avoiding wasteful competition.

My officials are in close touch with those of the fuel industries with the objective of co-ordinating their energy-saving publicity. The advertising of the fuel industries now has a substantial energy-saving content. The industries already make available to their customers substantial advisory services on how their fuels can best be used.

The House will welcome the action taken by my right hon. Friend and his Department to save energy. but does he agree that much more co-ordination is needed on distribution between the various energy industries? Could there not be joint gas and electricity showrooms? Could not savings be effected in collecting from and reading gas and electricity meters? That is the sort of thing we expect now that the industries are socially owned.

I know that my hon. Friend is very interested in this question which he has raised before in the House. I am having the matter considered to see whether benefits can arise and in due course I shall report the conclusions to the House.

Will the right hon. Gentleman have another look at this matter? Will he remove the distortions from the gas market and ensure that there is a realistic price for gas?

If I understand the hon. Gentleman correctly, he is saying that gas prices should go up. Many people in the country will note that a leading Conservative Member is advocating an increase in fuel prices.

Will my right hon. Friend pay particular attention to the latter part of the Question, which asks for the avoidance of wasteful competition, and look into the question of what it costs the gas and electricity industries to offer free samples, and so on, in showrooms? Will he endeavour to cut out such waste and adopt a true energy policy for advertising as well as for the production of energy resources?

I certainly want the energy industries and publicly owned energy industries to be realistic. There is a later Question on the Order Paper about free gifts. However, I should be loth, as I am sure my hon. Friend would be, to advocate that the showrooms of the gas and electricity boards should be closed. The showrooms are very profitable sectors of the industry.

Electricity Boards (Sales Promotions)

15.

asked the Secretary of State for Energy how many electricity authorities offer transistor radios in commercial promotions; and at what total cost.

I am informed that since the beginning of 1974 three boards have done so. The total cost of the radios was£19,500.

Does the hon. Gentleman agree that this is yet another example of wasteful competition in a basically non-competitive industry. Would not the money be much better spent in performing some of the energy saving activities suggested today by hon. Members? Does the hon. Gentleman recognise that this matter must be considered in the context of savage increases in electricity prices to the consumer? Surely the Department is fiddling while the consumer burns.

The hon. Gentleman is not correct. The boards have a statutory right to sell and install products. How they should promote them is a matter for their commercial judgment. Why should publicly owned industries be treated differently from private industries which have such promotional aids? The boards are perfectly entitled to do this, but it is a matter for their commercial judgment.

Oil Licences (Fifth Round)

17.

asked the Secretary of State for Energy when the next round of offshore licences will be held.

Will the hon. Gentleman recognise that delay in setting up exploration of the Western Approaches of England is causing suspicion to arise in Scotland that the Government's policy is to exhaust Scottish oil resources while keeping England's oil resources, such as they may be, in retention? Does he realise that if oil is discovered off the Western Approaches, as the French seem to suggest it will be by expressing their intention to go ahead at an early date, it will enable England to get off Scotland's back as soon as possible?

I do not believe that that is a suspicion that arises in Scotland. It is nonsense which is deliberately perpetrated by the hon. Gentleman and his hon. Friends. It is a complete distortion of the picture. The Government's view is that all Britain's energy resources, be they oil, coal, gas or nuclear power, should be used for the benefit of the whole of the United Kingdom. The South-Western Approaches are hopeful territory for oil exploration. As evidence of the Government's good intentions, we are pressing ahead as fast as possible with the French to determine the median line.

Has my hon. Friend's attention been drawn to the remarks made by the right hon. Member for Orkney and Shetland (Mr. Grimond) during the weekend to the effect that Orkney and Shetland will claim the oil off those islands and that there will be very little left for Scotland? Will my hon. Friend give an assurance—and ask the Scottish National Party to give an assurance—that in no circumstances will Orkney and Shetland be allowed to collar that oil?

I do not think it will be possible for the hon. Member for Dundee, East (Mr. Wilson) to give that assurance, because during the last election campaign he promised dominion or federal status to Orkney and Shetland. If that were granted, the prolific east-of-Shetland oilfields would adhere to Shetland and Orkney. This is taking to its logical conclusion the procedure of the geographical allocation of energy resources advocated by those who aspire to Scotland's oil. [Interruption.] I am talking not of hopes but of the published words spoken by members of the Scottish National Party in the last election. They may have been meant to fool the people of Orkney and Shetland, but they were said.

If there is a new round of licensing, will the hon. Gentleman give an undertaking to observe the sanctity of contracts and not tear up the new concessions as he is threatening to do with the old?

I give the hon. Gentleman the absolute assurance that there will not be a sell-out as there was in the fourth round of licensing. We look forward confidently to the next round of licensing. We shall approach it unencumbered by the mistakes made by the previous administration, who were roundly criticised by the all-party Public Accounts Committee. We shall be able to achieve at least a 51 per cent. State participation in all licences allocated in the next round.