§ 2.20 a.m.
§ Mr. Simon Wingfield Digby (Dorset, West)
I beg to move, Amendment No. 1, in page 1, line 14, leave out '£25 million' and insert '£20 million'.
I apologise for having to speak to this Amendment at such a late hour but I was not on the Standing Committee and the subjects covered by the Bill have caused a certain amount of disquiet in my constituency. The Government are taking powers to make grants initially up to £25 million for searching for, for discovering and for testing mineral deposits. Trouble has arisen in my constituency over the search for oil and natural gas. I have received a number of complaints from my constituents, one of whom wrote 407 about the exploding of charges of dynamite strong enough to shake the house. Even the local clergy have weighed in on the subject and at a chapter meeting of the Beaminster Deanery on 25th November the following resolution was accepted and the rural dean and members requested that I be told that:This chapter expresses its concern at the activities of the oil companies in this area. We call the attention of our Members of Parliament and the Ministry of the Environment so that the amenities of this lovely part of England may be preserved for posterity.The Minister is seeking power not only to allow this process to continue but to advance Government money to those who are causing the trouble. Is there due coordination with the Department of the Environment? There is now a great deal of concern about the environment but we can see very little relationship between what is being done in the Bill and what the Department of the Environment is doing.
No planning permission is required before the research activities with their explosions begin. It is not necessary for those concerned to consult the local water authorities, although boreholes are sunk deep into the ground, upsetting springs and, in an area like West Dorset with underground lakes, perhaps endangering water supplies for many years to come.
So many of the areas concerned in this research are either national parks or areas designated as of outstanding natural beauty. Many interesting places are in the vicinity and there is a grave danger that there will be too much exploration there. Some of the research and exploration activities will not cause serious suffering to the environment. Others, like open-cast mining, if it gets to that stage, will cause serious scars on the landscape which will detract from these areas.
It is difficult to elicit information from the Ministry, but it appears that, since June, 1970, 18 licences have been granted. The Minister could not say how many of these affect national parks, although he admitted that some did. For these licences, the paltry sum of £11,000 was realised, against an estimated public spending in future of £25 million.
The smaller petrol companies appear to have been encouraged. If a company does not exercise rights which it has been 408 granted over a certain area within six years, those rights go to someone else. The larger companies have lost interest in certain areas and the smaller companies are now being brought in.
The Minister's argument has been the shortage of minerals and the need to export so many of them. The price of base metals, however, has fallen very low—low enough in Chile to damage the whole economy. The economics of mining, where metal is very low in the ground, have altered a great deal.
I question whether some of these areas, which have been considered and then neglected by the big companies, are as valuable as the Minister appears to think. In my own area, the area of Bridport Sands is of interest for petroleum and natural gas. It does not reach to Bridport, but centres around Kimmeridge, in the Minister's own constituency of Bournemouth, West. But none of these experiments has been going on there, although it is possible to prospect in a big city for petroleum and natural gas, as was done in West Berlin. So perhaps the Minister will direct his attention to his own constituents and leave mine alone for a time.
Are the really worth-while mining companies so short of cash after all? I see little evidence of this in their annual accounts. There is a great danger among the smaller companies of the kind of tax fiddle which bedevilled investment grants under the previous Government, and which led to their introducing special legislation on the subject. The Amendment is an attempt to secure an undertaking that this amount is necessary. It needs justification.
§ 2.30 a.m.
§ Miss J. M. Quennell (Petersfield)
My hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) has done the House a service in moving this Amendment, for at no part of our proceedings have we been told why £25 million was written into the Bill on Second Reading and why the total sum to be made available by way of Ministerial Order has been doubled and now stands at £50 million.
At various times we have had from the Minister a hint to the effect that the underlying reason is the need to provide this country with a geological survey, but 409 what a price to pay. Is that the sole reason?
Nor have we been told why the arbitrary figure of 35 per cent. appears in the Bill in relation to exploration costs. This seems an odd figure, bearing in mind the one-third or one-quarter that is normally written in as the proportion of cost for this purpose. Because this percentage has never been explained, my hon. Friend has done the House a service in bringing the matter to the attention of the Minister.
In connection with the need for the sums of money mentioned in the Bill, an interesting article appeared in the November issue of Investors Chronicle by Mr. Christopher Stobart, who analysed the structure of the Anglo-American Company of South Africa, one of the biggest finance houses in the world. I recommend a study of the interrelationships of this company and its inter-penetration of the holdings of other companies as illustrated in that article.
Because of the lateness of the hour and the time taken by our previous business I will not delay hon. Members by quoting from the article, except to point out that Charter Consolidated. Rio Tinto Zinc, the Union Corporation and Selection Trust are all inter-related in many ways. This information sent me looking at the annual reports of some of those companies to see just how broke they were, poor things—in other words, how much they were in need of help from the taxpayer's pocket.
I looked first at the 84th annual report of Consolidated Gold Fields Ltd. At the end of 1971 its reserves stood at £82,900,000, which represented a rise over the previous year, when they stood at a mere £81,529,000. It is interesting to note that in that year the new tin mine, Wheal Jane, was opened in Cornwall, and that project cost Gold Fields some £5 million spread over six years. Nevertheless, the reserves rose, and very conveniently, too.
I was even more amazed by the Chairman's review of the Company's affairs. This document comes out separately from the annual report. The Chairman of Consolidated Gold Fields made a passing reference to the preservation and con- 410 servation of the environment in a rather touching manner. He said:Preservation and conservation of the environment is another subject which is properly attracting more and more public attention worldwide. As an international company we are very conscious of our responsibilities in this field. Rehabilitation of mined-out areas … has been in progress for several years.He went on to say:Companies within this Group have been leaders in both these developments. In this country in co-operation with local authorities and other bodies, Amalgamated Road-stone—a subsidiary—is active in land restoration and in schemes designed to protect our heritage of wild bird life.He comments on the previous page that the contribution of Consolidated Gold Fields operations in the United Kingdom amounted to 19 per cent. of the group's revenue. Amalgamated Roadstone achieved a sharp advance in profits and further strengthened its position within the industry. Turnover increased by 19 per cent. and net profit rose by 73 per cent.
We have the rather beguiling spectacle of public money being used to encourage one group of subsidiaries within this group to make a mess, while another bunch of subsidiaries within the group is handsomely reaping a profit from the mess made by the other group. As a use of public funds, I find that a rather intriguing prospect. If one looks at the reserves of Charter Consolidated, as shown in the annual report and accounts for 1971, again, poor dears, one finds that the company is a little hard pressed. Its revenue reserves are no less than £76,892,000, but that is not a large amount. Union Corporation have a revenue reserve expressed in rands of £39,839,000. I quote those figures merely because it seems of some importance that we should bear in mind that these big mining companies are hardly on the breadline.
We should also bear in mind that mineralised regions are mainly in development areas, and these areas mining work qualifies for free depreciation, anyway. There is a substantial advantage to companies in this country in pursuing their commercial activities there, and we need to have an explanation why we have 411 selected this figure of 35 per cent. We have not been given that explanation, and that is why I think that my hon. Friend's Amendments to reduce the capital sum have done a service to the House.
§ Mr. Alan Williams (Swansea, West)
I think that the Minister has a duty to answer the questions which have been asked by his hon. Friends.
It is worth pointing out that the mineral industry is, by its very nature, international in its investment decisions, and therefore is international in the criteria it adopts in deciding whether it will undertake investment in any given locality. Consequently, it is not just the availability of the mineral but the political stability of the area and the incentives offered in various countries that are taken into account.
I remember, either in Committee or on Second Reading, making the point that one of the major companies at the time of the investment grant regime listed Britain as the fourth most favourable area in the world from an investment point of view. For that reason I support the idea of a grant for the mineral industry, and that the precise level has to be considered, in part at least, in relation to the levels of the incentives that are being offered by other countries competing for mineral development.
The second point to bear in mind is that free depreciation is not a relevant consideration at the exploration stage in mineral operations, and it would not be a particularly relevant incentive to offer.
The third point to bear in mind is that the industry is by nature a long-lead industry, and there are speculative elements in it. The Minister gave us the figure of about one in ten exploration ventures achieving anything materially significant. In that sense, this is speculative. One has a low rate of success to failure. It is a long road in any case, talking in terms of a decade between the time of the initial decision to undertake research and exploration and the time of converting it—in the one case in ten in which that proves worthwhile—to something yielding a return to the business. That is why I think the hon. Member for Dorset. West (Mr. Wingfield Digby), in a speech of many 412 valuable points, did not fully appreciate the difficulty of a company in looking at current world prices. The hon. Member quoted the current slump in certain prices, but when a producer is having to plan new production in 10-year future cycles, the current fluctuation in world prices becomes less significant.
It is important to stress that we support the mining grant. We think it necessary, but I agree with the hon. Gentleman and the hon. Lady the Member for Petersfield (Miss Quennell) that there are questions which could usefully be answered about the £25 million, £50 million and 35 per cent. figures.
§ The Minister for Industry (Sir John Eden)
At the outset I should like to say to my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) how sorry I am that he and his constituents have had an unfortunate series of experiences in relation to exploration work which has been taking place there. He has effectively brought to my attention by means of Parliamentary Questions, correspondence and direct representation, and in parliamentary debates, the strength of the feelings of those who have been affected in a variety of ways in his constituency. As a result of this, as he knows, I have looked into the episodes as thoroughly as I have been able to do and I think that the company concerned has probably taken careful note of any procedural arrangements which had gone astray there so far. I know that they have also gone out of their way to try to put right, in terms of their relationship with individuals concerned to a material extent, where things have gone wrong and where disturbance has been caused. I know that this could not possibly satisfy every case in question. He mentioned the matter of the water well which has dried up and I know that that is being looked at very closely—not the well but the question of trying to provide an alternative source of water supply if the well cannot be reactivated.
This company has not always had a bad record of this kind. It is a very experienced company and I do not know what has gone wrong in this case, but in one or two instances which have been minor, they have been slightly exaggerated, but in other cases they have been straightforward errors and it is 413 right that people should have protested. I assure my hon. Friend that what has happened in his constituency has not been the general experience and that there will not be a repetition of these episodes.
These are activities in the search for hydrocarbons—oil and gas—authorised by licence issued under the Petroleum (Production) Act, 1934. Even if the Bill had been on the Statute Book, and even if the scheme which I announced in July had been in operation, it would not have affected the work which was going on in my hon. Friend's constituency: those operations would have been outside the scheme.
There is no intention under present circumstances to bring oil and hydrocarbon exploration work within the scheme, because it is evident from the amount of activity going on in that sphere that there is no need to stimulate it or to give it further encouragement. Therefore, the scheme is deliberately limited to minerals which are of economic significance to Britain but for which there appears to be at present insufficient stimulus available to interest the exploration companies to engage in the process of searching for the deposits in Britain.
The licensing arrangements under the Petroleum (Production) Act make it necessary for companies holding these licences to accord with all the appropriate planning procedures where they apply and also to pay attention to the requirement under the Water Resources Act, 1963, to give notice to the appropriate river authority where a mineral operator proposes to sink a bore hole to search for or to work minerals.
§ Mr. Wingfield Digby
Could not my hon. Friend encourage the smaller companies to do what the big companies such as B.P. do, which is to have the courtesy to contact local planners and the local water authority before they move in, even though there may not be a statutory requirement at that stage that they should obtain planning consent? Such action leads to much better relations.
§ Sir J. Eden
I take that point. If there is anything I can do to encourage the proper observance of these requirements, I shall certainly attend to it.
414 In relation to the operation of this scheme special guidance notes have been issued for industry. These notes will be revised and brought up to date in the light of the debates which have taken place in the House and those which are to take place in another place, so that when the Bill reaches the Statute Book the guidance notes will have been revised and full account taken of the points which have been raised. The availability of these guidance notes on the scheme will help to advance the state of knowledge of the planning procedure requirements in relation to the whole range of exploration for mineral resources.
My hon. Friend was reassured by an answer he received from my right hon. Friend the Secretary of State for the Environment last November, when my right hon. Friend said this:Those types of exploration which may cause damage to the environment would normally be of such a nature as to constitute development and would need planning permission." —[OFFICIAL REPORT, 24th November, 1971; Vol. 826, c. 369.]There is a small grey area about which it is difficult to be precise.
The process of exploration can take a variety of forms. There are the geochemical and geophysical tests which involve simply analysis of soil and water samples. These are purely test-tube operations. Then there is seismic testing, which is a specialised form of geophysics and it is very seldom if ever employed to search for the sort of minerals which will be assisted under the Bill, but it is used normally for the detection of petroleum deposits—and it is probably seismic testing with which my hon. Friend is particularly concerned. The process involves the insertion of small explosive charges just below the earth's surface which are detonated, and instruments are used to measure the passage of seismic waves through the earth. In addition, boreholes may be drilled where favourable information has been obtained by either of the first two methods I have mentioned and it is necessary to verify and locate more precisely the mineral deposits which have been identified.
The question of exploration, by its nature, is transient. It is not a permanently established structure or anything of that kind. Some of the damage 415 which my hon. Friend's constituents have suffered has been due, not to seismic testing and explosions, but to the use of heavy vehicles and the dirt, confusion and damage which they have caused. But the situation can be restored.
I wish to answer some of the specific points raised by the Amendments. My hon. Friend the Member for Petersfield (Miss Quennell) referred to the figure of 35 per cent. There is no magic about the figure. It is believed that it would constitute an adequate incentive, and since the whole purpose of the scheme is to provide an incentive it was right to try to gear the matter so that it would achieve the objective without going too far. It is a matter of balance. I readily accept that it is a bit of a guess, but I hope that it is right. I think it is probably right, judging by the amount of interest which has been shown.
If the Amendments were accepted—and I recognise that they are probing Amendments—they would curtail the life of the scheme by 20 per cent., or roughly from 10 to eight years. It is impossible to forecast the response of individual companies. The success and failure rate of projects will very substantially influence the demand for assistance under the scheme. From the number of schemes which are in the pipeline, together with those which we can reasonably expect, it is fair to assume a take-up rate averaging £5 million a year. It might be less in the early years and probably more in the later years as the scheme gathers momentum. The likely cost of each project must be considered in arriving at a judgment. For example, one recent project cost £1 million—and that is just for exploration. The cost could even be as much as £5 million.
There is also the question of the length of time the exploration projects may take. I am extremely grateful to the hon. Member for Swansea, West (Mr. Alan Williams) for the points he helpfully enumerated, which I entirely endorse, and in which he touched on this aspect, that the projects may take five years or more, and some of them considerably longer. I emphasise that this is simply the exploration stage, so it seems right that there should be a minimum period for the operation of the scheme of about 10 years—in other words, on the basis of 416 £5 million a year for 10 years, that £50 million should be made available for this purpose.
What we are seeking to do is to provide an incentive that will encourage exploration to a level where it will develop its own self-sustaining momentum. This will not happen until some major successes have been achieved. Given that in the nature of mineral exploration only a small proportion of projects succeed in finding a viable deposit, we judge that at least £25 million will be required in the first instance. After that has been spent we shall be in a much better position to see what further expenditure may be needed. It is for that purpose that provision is made in the Bill for a further £25 million, subject to order to be approved by the House. Hon. Members will then have an opportunity of stating their views on what additional sums might be needed.
§ Mr. Wingfield Digby
Will my hon. Friend deal with the points about the national parks and areas of outstanding natural beauty? There has been a great deal of anxiety about them.
§ Sir J. Eden
I hesitate to do that simply because there was an Amendment on the Order Paper that has not been selected, and I suspect that the reason for its non-selection was that we had given the matter considerable attention in Standing Committee. My hon. Friend will have seen the extent to which it was covered there. For a long time there has been exploration for, and working of, mineral resources in our national parks. It is not the intention of this scheme to prevent that from happening. Successive Governments have recognised that a particularly strong case is needed before allowing major development proposals in a national park. Recently my right hon. Friend the Secretary of State for the Environment refused permission for exploration work to proceed in a national park. It is a matter of balance. It is not my intention and it is not the intention behind the scheme to lead to any sort of widespread desecration of the beauty spots, certainly not the national parks or the nature reserves. But we need to know the location of the country's mineral resources. Once we have that knowledge we can weigh up, through the proper planning procedures, 417 the balance of national interest and set the value of the mineral resources capable of exploitation against the undoubted value of the beauty of the landscape which might in that process be desecrated. This is a judgment which is properly left to the processes of planning and not one which comes within the purview of the Bill.
§ Mr. Wingfield Digby
In view of what my hon. Friend has said, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 3.0 a.m.
§ Sir J. Eden
I beg to move Amendment No. 3, in page 1, line 19, at end insert:(3) It shall be a condition for the making of a contribution in pursuance of this section in respect of any operations that the person applying for the contribution shall have agreed that geological information obtained in the carrying out of the operations will be communicated (in appropriate form and detail) to the Secretary of State and, for the purposes of the geological survey of Great Britain, to the Natural Environment Research Council.During Committee stage I said that I would seek to move an Amendment to deal with the points made in debate by the hon. Member for Swansea, West (Mr. Alan Williams) on the question of the provision of information. The hon. Member's concern, with which I expressed sympathy at the time, was that the requirement for an applicant company to make available to the Government geological information arising from an assisted project should be written into the Bill rather than be dealt with on a contractual basis only. The Amendment takes care of that point. It provides that the information should be made available in a form acceptable to the Government and that such information will be passed to the body responsible for the geological survey of this country.
§ Mr. Alan Williams
I thank the Minister for bringing forward this Amendment. It is, as he said, the consequence of an Amendment moved by me in Committee. I think we were right in our judgment then that, since the contents of the contract were utterly at the discretion of the Minister, there was an element of doubt about the availability of information from exploration activities in the indefinite future. The Amendment meets the requirements of the Committee. Many 418 of the Minister's hon. Friends at the time were sympathetic to the move we had made, and I thank him for moving this Amendment.
§ Amendment agreed to.
§ Mr. Wingfield Digby
I beg to move Amendment No. 6, in page 2, line 4, after 'expenditure', insert:'in the case of British companies or 20 per cent. of that expenditure in the case of foreign companies or their British subsidies'.
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
It will be convenient to take also Amendment No. 7, in page 2, line 9, at end insert:'and, in the case of foreign companies or their British subsidiaries, terms limiting the percentage of any subsequent profits to be eligible to be remitted overseas'.and Amendment No. 8, in line 18, after 'Parliament', insert:'and such report shall include a statement on the action of recipient companies in transmitting funds overseas'.
§ Mr. Wingfield Digby
The Minister has been at pains to say in justifying the Bill how important it is to save foreign currency and to exploit our own resources. It is one thing to encourage British companies to mine in Great Britain, but it is another thing to encourage foreign controlled companies to come here and mine and he allowed to take away 85 per cent. of the proceeds, only 15 per cent. remaining in this country. If it is a valid argument that the object of the exercise is to save foreign currency, we must look a little more closely at what is happening.
The only oil well in this country is in Kimmeridge in Dorset, and it is being exploited by B.P., so those considerations do not arise. But with some of the small companies which are moving into the less likely areas which have been discarded by the big companies, we wonder what there is in it for this country. Recently 30 licences have been given for the extraction of petroleum and national gas. The list of companies supplied by the Under-Secretary of State contains no familiar names, and only one company appears to be a United Kingdom-controlled company.
I see a grave danger in this, and I am seeking in the Amendments to ensure that the resources out of our own ground redound to the benefit of this country 419 and are not exported in the form of £s to America or wherever it may be. There are several ways of achieving this under the Amendments.
§ Mr. Thomas Swain (Derbyshire, North-East)
Is the hon. Gentleman aware that from Gainsborough in Lincolnshire to Eakring in Nottinghamshire there is a wide expanse of oilfield being exploited? It would be interesting to hear from the Minister just who is exploiting this oilfield.
§ Mr. Wingfield Digby
I am interested in this because the company concerned in my constituency is foreign-owned. The head of it flew over from Calgary when we had a public meeting in my constituency. I wondered how much of that money, if it was successful, would remain in this country and how much would be remitted to the United States. It seems to defeat the argument for the Bill which is trying to save foreign currency.
Amendment No. 6 would give less aid to these foreign companies. After all, there are plenty of predominantly British companies which could operate to the advantage of the British exchequer. The hon. Member for Swansea, West (Mr. Alan Williams) made a good point when he said that these companies had international ramifications. I do not see why it is necessary to encourage small subsidiaries of American companies, which would tend to take away all the profits they could in the event of successful exploitation. Amendment No. 6 would give foreign companies less Government aid than British companies. Amendment No. 7 would refer to remissions overseas if profits were built up by these companies exploiting our resources to make sure that the whole of the 85 per cent. was not immediately transferred to Canada or the United States.
Amendment No. 8 calls for a report on these remissions abroad in the annual report to which the Minister has agreed. If the balance of payments are important we have to look a little further than giving grants to those people and hoping that they will leave a lot of this money here.
§ Sir J. Eden
The business of mineral exploration and the development of mineral resources is international; it is 420 not just a question of companies being international, it is the business which is international. Whether they are British companies or foreign companies they will either operate in this country or elsewhere depending upon where the mineral resources are, the extent of the resources, the extent of the encouragement given to them and the nature and proximity of the market for the product.
It is the international nature of the business that makes it, in my view, right for us to ensure that the encouragement to exploration here is no less attractive than elsewhere. Amendment No. 6 would restrict the contributions receivable by foreign companies or from British-based subsidiaries to 20 per cent., while under the terms of the Bill British companies would continue to receive up to 35 per cent. of the contribution towards exploration expenditure.
I do not agree with my hon. Friend's proposals. The Amendment would fly in the face of our policy, which has been long practised by this country, of non-discrimination against foreign firms. It is not justified in this case. We have never had discrimination of this nature. For example, there is no discrimination in applying the exploration arrangements for the oil and gas deposits in the North Sea, nor is there in the application of the system of regional grants and incentives. They are available to foreign companies. Any move in the direction of discrimination as proposed in the Amendment would have very wide implications. What is more, it is not only this country that has a tradition of non-discrimination. This will apply in the case of the E.E.C., and one has to watch that aspect, too.
The Amendment would also be directly contradictory to our policies on inward direct investment. In general, we have tended to encourage inward investment in this country for the inflow which such investment brings and for the possibility of new employment provided by foreign-owned companies, many of which are encouraged to go to development areas.
However, in order to encourage inward investment, we must as a counterpart give freedom to remit dividends, profits and the net proceeds of disinvestment overseas. That is why I find equal difficulty in accepting Amendment No. 7, which seeks to limit overseas remittances 421 by foreign-owned companies which have benefited under the scheme.
It follows from that that Amendment No. 8 is also unacceptable. Moreover, if only a few foreign-based companies were involved, a provision on these lines could well involve disclosure of commercially confidential information. I have given clear undertakings on that point. In Committee, I underlined the fact that information supplied to the Government in association with a company's application for a contribution towards exploration expenditure is given in strict confidence. It would not be right to operate in any other way.
In the course of my hon. Friend's speech, the hon. Member for Derbyshire, North-East (Mr. Swain) referred to certain exploration work which is going on near his constituency. I believe that that is being carried out by B.P. This rather underlines a point that I made earlier. B.P. is also engaged in Alaska. In using the word "foreign", I am not sure whether my hon. Friend intended his Amendment to apply equally to the Canadian companies. I think that he has some experience of Canadian companies in this regard. But I doubt whether it would apply to Canadian companies.
I shall not go into detailed points, but it is important to emphasise the general point that this is an international business. By the very nature of the business, companies should take themselves to all parts of the world where mineral resources are likely to be found and are capable of exploitation. This Bill provides a stimulus to bring these companies here, in order that we may find out the extent of mineral resources in the country.
§ Mr. Alan Williams
I understand the hon. Gentleman's point about the need to preserve confidentiality. However, we are talking about confidentiality in terms of the nature of the operations and the nature of discoveries which result from exploration work. What breach of confidentiality does the Minister envisage arising from the Amendment proposed by his hon. Friend who merely wants disclosure of the amounts of funds which are being transmitted abroad?
§ Sir J. Eden
There is a limited number of companies which come for the purpose of exploration here, and it might be pos- 422 sible to discern from the amount of information disclosed and published in that form the extent of the resources available. This is one of the possibilities against which we have to guard.
§ Amendment negatived.
§ 3.15 a.m.
§ Mr. Wingfield Digby
I beg to move Amendment No. 9, in page 2, line 20, after 'earth', insert'except oil or natural gas'.I was glad to hear my hon. Friend tell us that at present there is no intention to use this subsidy for oil and natural gas in view of the amount of exploration which is going on. That being so, I am not quite clear why he wishes to include them within the ambit of the Bill, especially as he seems so certain that he will wish to spend the full £25 million. I see that in some ways exploration for oil and natural gas will do less damage to the environment than some of the other metals which might be more valuable to the national economy but which tend to leave large scars.
There is a good deal of misconception about exploration for oil and natural gas. Landowners are under the misapprehension that they will get a lot of money out of it, and local people think that it will bring a lot of employment to the areas concerned; but we know only too well that that does not happen. Therefore, I wonder what object the Minister has in leaving these matters within the ambit of the Bill.
I notice that when the Minister made his original statement in the House on 8th July that the Bill was to be introduced, the formula which he then used did not appear to include petroleum, but rather metals. What has changed his mind? Does he think that it might be wiser, to prevent too much misapprehension, to remove these matters from the Bill altogether?
§ Mr. Alan Williams
In Committee we raised the question of the discretionary power of the Minister. Indeed, I accept his point that 'it is better that the range of minerals should be discretionary rather than spent out in the Bill, because it can be more difficult to effect necessary changes of policy at a future date.
We asked the Minister to consider a particular question. In the memorandum 423 which his Department put forward, the hon. Gentleman justified excluding sedimentary minerals from the Bill on the ground that the location of such minerals was already known. I put the point in Committee that that may be an argument which he could put forward and try to defend at the Box in relation to dry land, but that it was not an argument which he could put forward in relation to the Continental Shelf where the location and quantity of such deposits is not known. I asked the hon. Gentleman, if he insisted on excluding sedimentary deposits on dry land, whether he would consider extending the opportunity of the incentives offered in the Bill to sedimentary exploration work which takes place on the Continental Shelf. Has he, as yet, had a chance to look at this point? If so, will he take this opportunity to tell the House what he has decided?
§ Sir J. Eden
To answer my hon. Friend, the main reason for including hydrocarbons in the definition of mineral deposits is to provide the Government with the necessary powers to extend the proposed scheme to hydrocarbons if at some future date it is decided in the national interest to do so. I admit that it is hard to envisage now the circumstances in which the need for that might arise. But I am thinking primarily of the possibility at some future date of the need arising to cover this in inland exploration. This in part, though not sufficiently, is the answer to the hon. Member for Swansea, West (Mr. Alan Williams), that concerning this aspect of the possible extension of any scheme, one is looking especially at present at the opportunities which may need to be stimulated for landward exploration. As the hon. Member knows, the work on the Continental Shelf is taking place satisfactorily at present, and this has been the subject, in relation to hydrocarbons, of separate legislation. We have not yet completed the assessment of the likely range of minerals which are capable of development either close to or further out from our coastline. This is still under study. I feel unable to say anything precise on this subject until we have carried this study considerably further than is the present state of our knowledge.
Throughout his consideration of the Bill my hon. Friend has been primarily 424 concerned with the question of land-based exploration for hydrocarbons. In spite of what I have said, he can be reassured certainly for the foreseeable future, because there is every indication of sufficient activity taking place. This seems to be gathering momentum at present. Whether it will continue in that way I just do not know, and I am thinking especially here of gas.
This is something that one needs to have in reserve, and it is a reserve power. It is not in the scheme at present, but should the need ever arise the scheme can be altered to include this within the purview of the Bill.
We have to have in mind the two separate things, the Bill and the scheme. The scheme is limited in the first instance to these particular minerals which I have already identified and for which certainly we wish to see added stimulus being given by the Bill.
§ Mr. Wingfield Digby
I am glad that my hon. Friend has reaffirmed that there is no immediate intention of including oil and natural gas, because I have, as he rightly said, been very concerned about this, although I should have thought that on land it was fairly well known where these deposits are likely to lie and there would not be much point in trying to encourage exploration in areas which are known perfectly well geologically to be very unlikely indeed.
In view of what my hon. Friend has said, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.