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Mr. Speaker : I am glad to have an opportunity to explain that. The matter that the hon. Gentleman raised took place a month ago. Good though my memory is, I did not immediately recollect it or appreciate what he was saying until later, when he made the allegation. I then recollected what had happened and I made the comments that are clearly on the record in Hansard.

Mr. Stanley Orme (Salford, East) : On a point of order, Mr. Speaker. May I thank you for the clarification and the statement that you have made to the House, following, as

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you have said, representations made to you? Would it not have been better if the hon. Member for Suffolk, South (Mr. Yeo) had made a proper statement to the House and cleared up this matter? Many of us feel that his conduct yesterday was outrageous. His standing has gone down in the minds of many people because of the way in which he conducted himself. While he refuses completely to withdraw his allegation, we can only hold him in contempt.

Mr. Edward Leigh (Gainsborough and Horncastle) : Further to that point of order, Mr. Speaker. I ask for your guidance, because this is a serious matter. I hope that it is not being suggested that it is not possible, in a very important debate, for hon. Members on both sides of the House politely to ask an Opposition or Government spokesmen to give way-- [Interruption.] May I make my point?--so that they can make an intervention. We all accept that organised barracking is wrong, and I was not aware that there had been such a thing by those on the Government Benches. [Interruption.] I am as entitled as anybody else to make my point.

This morning I read in Hansard the debates on the Queen's Speech for the past 20 years, and on every one of those occasions Opposition Front Bench spokesmen were prepared to give way on a number of occasions and discuss what they would do if they were in government. Yesterday the hon. Member for Dunfermline, East (Mr. Brown) gave way on only two occasions and refused to give way to two of my hon. Friends.

Mr. Speaker : Order. I have made a statement on this matter in order to clear it up. I do not think that we want to take it any further, except to say that we have a long tradition in the House that we resolve our disagreements by argument, not by any form of disruption, and I hope that that will always be the case.

Several Hon. Members rose --

Mr. Speaker : No, I shall not hear any more points of order on this matter.

Mr. Harry Ewing (Falkirk, East) : On a point of order, Mr. Speaker.

Mr. Speaker : If it is a different point of order, I will hear it.

Mr. Ewing : It is not a different point of order.[ Hon. Members : -- "Sit down!"] No, I will not sit down, and I will not take lectures on morality from hon. Members who conduct themselves in the way that the hon. Member for Suffolk, South (Mr. Yeo) has done. The reputation and integrity of my hon. Friend the Member for Dunfermline, East (Mr. Brown) have been besmirched, and I say to you quite frankly, Mr. Speaker, that you have a responsibility to protect that reputation. I do not care about myself, but I care a great deal about the way in which the affairs of the House are conducted. I have a great love for the House of Commons, and I care a great deal about the image of the House in the country, and what happened yesterday at the behest of the hon. Member for Suffolk, South has done immeasurable damage to the standing of the House of Commons.

I am worried about two matters. First, my understanding--I apologise in advance if this is not true--is that the letter from the Editor of Hansard to my hon. Friend the Member for Dunfermline, East was copied and

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sent to you. If that is true, it gives me the clear impression that you were not made aware of the contents of that letter and therefore you were caught in the position that you were yesterday, so there has been some breakdown.

The second point is that in successive news bulletins by the BBC yesterday information was given that the speech to be made by my hon. Friend the Member for Dunfermline, East was to be disrupted. That information was given out by the Government. My hon. Friends have said that the apology from the hon. Member for Suffolk, South is insufficient. We are asking too much from the hon. Gentleman. Having seen his conduct yesterday, I do not believe that he has the ability or the standing to apologise properly. I am quite content to leave him in the gutter, where he belongs.

Mr. Speaker : I have one final word to say on this matter, in answer to what the hon. Gentleman has said. I received a copy of that letter about a month ago. It was addressed to the hon. Member for Dunfermline, East (Mr. Brown) and not to me. I hope the House will accept that it is not my practice--nor, I hope, the practice of other hon. Members--to disclose letters addressed to other hon. Members.

Mr. Dennis Skinner (Bolsover) : The month is the point.

Mr. Gerald Howarth (Cannock and Burntwood) : Further to that point of order, Mr. Speaker. I am sure that the House is grateful to you for outlining the rules on this matter, and I am sure also that the House will take those rules to heart. In view of the significance of the letter from the Editor of Hansard to the hon. Member for Dunfermline, East (Mr. Brown), and the fact that you now have a copy of that letter and that it is rather central to the remarks made yesterday by my hon. Friend the Member for Suffolk, South (Mr. Yeo), would it not be helpful to the House if that letter were placed in the official record, and perhaps you could make arrangements to do that?

Mr. Speaker : It is not for me to read the letter out. It was not addressed to me.

Mr. Skinner : Further to that point of order, Mr. Speaker.

Mr. Robert Hughes (Aberdeen, North) : Further to that point of order, Mr. Speaker. This is a matter that reflects on the integrity of the Chair. Hansard of yesterday shows that you asked the hon. Member for Suffolk, South (Mr. Yeo) to withdraw his allegation against my hon. Friend the Member for Dunfermline, East (Mr. Brown). The hon. Member for Suffolk, South said :

"I gladly withdraw it, Mr. Speaker, if we have an assurance that no Opposition Member will seek to tamper with today's record." You, Mr. Speaker, said :

"Order. No qualification please. The hon. Gentleman must withdraw the allegation absolutely."

The hon. Member for Suffolk, South said :

"I withdraw the specific allegation that the hon. Member for Dunfermline, East falsified the record."--[ Official Report, 29 November 1988 ; Vol. 142, c. 584.]

I put it to you, Mr. Speaker, that that was a sheer defiance of your ruling. It is part of our rules that we do not cast aspersions on individuals, nor on hon. Members in general.

The public in general, not only in this country, but

internationally, look to Hansard for an accurate record of our proceedings, and look to Hansard to understand our

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constitution and to understand the honour of Members. The fact that the hon. Member for Suffolk, South refused to withdraw such an unfounded and unwarranted allegation is a matter of great honour. He would do himself a great deal of credit, and it would reflect credit on the House of Commons, if you gave him one last opportunity to withdraw the allegation and apologise for this disgraceful calumny. Mr. Yeo rose--

Mr. Speaker : Order. I accepted the hon. Gentleman's withdrawal yesterday. Is he seeking to say something more?

Mr. Yeo : I simply wanted to draw attention to the fact that yesterday I said :

"I withdraw the specific allegation that the hon. Member for Dunfermline, East falsified the record."--[ Official Report, 29 November 1988 ; Vol. 142, c. 584.]

Today I have confirmed that I accept your ruling about the manner in which personal allegations should be made. A great deal of trouble would have been saved had the hon. Member for Dunfermline, East copied to me the letter that he received from the Editor of the Official Report.

Mr. Speaker : I do not think that we should have any re-run of this matter.

Mr. Frank Dobson (Holborn and St. Pancras) : On a point of order, Mr. Speaker. It might be better if the House were reminded of what has happened on this matter over a long period. In the debate that my hon. Friend the Member for Dunfermline, East (Mr. Brown) opened and concluded so brilliantly, to the disturbance of Conservative Members, he was asked, in an intervention, about certain matters. He replied that there was no such commitment, or that there were no such commitments. The difference was immaterial, as hon. Members will see if they look at the record. The hon. Member, as I am obliged to call him by the traditions of the House, for Suffolk, South (Mr. Yeo) two days later asserted, without any justification, or without approaching my hon. Friend the Member for Dunfermline, East--

Mr. Yeo : Will the hon. Gentleman give way on that point?

Mr. Speaker : Order.

Mr. Dobson : --had gone to the Official Report and requested a change in the words, and he said that he did not blame the Editor of the Official Report or the Reporters, who might not be entirely appreciative of the significance of the change. So he apparently knew what my hon. Friend had done, and knew that the Hansard reporters were not responsible. That was what he said. You--I regret to say this, Mr. Speaker--apparently without checking with my hon. Friend the Member for Dunfermline, East, gave the impression that he had in some way been party to what had happened.

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Following that, very properly, the Editor of Hansard wrote and apologised to my hon. Friend the Member for Dunfermline, East for what had happened and took the entire responsibility for what had gone wrong on his shoulders and said that it was one of the Hansard staff who had got it wrong. If anyone had to set the record straight, clearly it was not my hon. Friend.

Yesterday, the hon. Member for Suffolk, South raised this matter again and wholly falsely asserted that my hon. Friend had brought pressure to bear to falsify the record. Then he said that he had been fiddling the record and only after pressure from Opposition Members did you, Mr. Speaker, get him to make his partial withdrawal. We think that it is quite unsatisfactory for the House to be left in that position and that an apology from the hon. Gentleman would be proper.

Reverting to the beginning of your statement, Mr. Speaker, when you said that you did not like barracking and organised interruptions, you may recall that the hon. Member for Cannock and Burntwood (Mr. Howarth) raised a point of order about this letter. About half a minute later, when you were otherwise engaged, the Tory Chief Whip urged him to try to have another go at you and raise the point of order again. He is the source of all this trouble. The Tory Chief Whip is the person who organises this, and we could do with an apology from both of them.

The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham) : Further to that point of order, Mr. Speaker. I have to say that I consider that to be a most disgraceful intervention by the hon. Gentleman. This is an important matter and I fully support the way in which you have sought to deal with this disagreeable incident. I fully support what you have done. It seems to me that the letter from the Editor of Hansard to the hon. Member for Dunfermline, East (Mr. Brown) set out the facts. I therefore wonder whether you might consider what my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) said and see to it that the letter is published in the Official Report. That would then put an end to the matter.

Mr. Speaker : The letter was not addressed to me.

Mr. Jeff Rooker (Birmingham, Perry Barr) rose --

Mr. Speaker : We must now move on. The hon. Gentleman puts in jeopardy his hon. Friends who wish to speak in the next debate.

Mr. Rooker : This is a different point of order, Mr. Speaker, which is intended to be helpful. We have already spent a considerable amount of time on an important issue. As no hon. Member has made a personal statement, everyone else is fully entitled to raise the issue day after day. With respect, I put it to Conservative Front-Bench Members that they should suggest that the hon. Member for Suffolk, South (Mr. Yeo) makes a personal statement. That could not be questioned. When that is done, that will be the end of the matter.

Mr. Speaker : I am sure that the hon. Gentleman has heard that.

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Ballot for Notices of Motions for Friday 16 December The Members successful in the ballot were :

Mr. John Watts

Mr. Nicholas Bennett

Mr. Nicholas Bennett.

Mr. Speaker : I think that we should have a redraw.


Mr. Nicholas Baker (Dorset, North) : I think that you may have misread the names, Mr. Speaker. Perhaps it was Nicholas Baker?

Mr. Speaker : It looks like Nicholas Bennett to me. I think that we should have a redraw for the final name. It is Mr. Kenneth Hind. Later --

Mr. Harry Cohen (Leyton) : On a point of order, Mr. Speaker. You said that you would redraw the ballot, but all you did was redraw the third name. You left in the name of the hon. Member for Pembroke (Mr. Bennett), who had put in two names and had virtually cheated by doing so. [ Hon. Members :-- "Withdraw."] I withdraw the phrase "virtually cheated".

If an hon. Member votes twice, his vote is cancelled. Whether by accident or not, the hon. Gentleman had two names in the ballot and, according to that ballot, he still has second place. That cannot be right. As you said that the ballot should be redrawn, the whole ballot should be redrawn.

Mr. Nicholas Bennett (Pembroke): I have just had a word with the Clerks and discovered that, inadvertently, it was the same book that was in the Lobby. I was not aware of that and therefore apologise. I certainly had no intention of cheating and, if the House thinks that I should not have second place, I should be happy for you to draw the names again.

Mr. Speaker : I shall draw one more.

Mr. Cohen rose --

Mr. Speaker : Order. The final name is Mr. Robert G. Hughes.


Electricity Bill

Mr. Secretary Parkinson, supported by the Prime Minister, Mr. Chancellor of the Exchequer, Mr. Secretary Hurd, Mr. Secretary Walker, Mr. Secretary Fowler, Mr. Secretary Ridley, Mr. Secretary Rifkind, Mr. Secretary Channon, Mr. Tony Newton, Mr. Peter Morrison and Mr. Michael Spicer, presented a Bill to provide for the appointment and functions of a Director General of Electricity Supply and of consumers' committees for the electricity supply industry ; to make new provision with respect to the supply of electricity through electric lines and the generation and transmission of electricity for such supply ; to abolish the Electricity Consumers' Council and the Consultative Councils established under the Electricity Act 1947 ; to provide for the vesting of the property, rights and liabilities of the Electricity Boards and the Electricity Council in companies nominated by the Secretary of State and the subsequent dissolution of those Boards and that

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Council ; to provide for the giving of financial assistance in connection with the storage and reprocessing of nuclear fuel, the treatment, storage and disposal of radioactive waste and the decommissioning of nuclear installations ; to amend the Rights of Entry (Gas and Electricity Boards) Act 1954 and the Local Government (Scotland) Act 1973 ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time tomorrow and to be printed [Bill 4].

Official Secrets Bill

Mr. Secretary Hurd, supported by the Prime Minister, Secretary Sir Geoffrey Howe, Mr. Secretary Younger, Mr. Secretary King, Mr. Secretary Rifkind and Mr. John Patten, presented a Bill to replace section 2 of the Official Secrets Act 1911 by provisions protecting more limited classes of official information : And the same was read the First time ; and ordered to be read a Second time tomorrow and to be printed [Bill 9].

Transport (Scotland) Bill

Mr. Secretary Rifkind, supported by Mr. Secretary Channon, Mr. Norman Lamont, Mr. Ian Lang and Lord James Douglas-Hamilton, presented a Bill to make provision for the transfer to the private sector of the operations of the Scottish Transport Group, other than its shipping operations ; for the transfer of its shipping operations to the Secretary of State ; to provide for the dissolution of the Group ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time tomorrow and to be printed [Bill 10].

Employment Bill

Mr. Secretary Fowler, supported by the Prime Minister, Secretary Sir Geoffrey Howe, Mr. Chancellor of the Exchequer, Mr. Secretary Hurd, Mr. Secretary Walker, Mr. Secretary King, Mr. Secretary Baker, Mr. Secretary Rifkind, Mr. Tony Newton and Mr. John Cope, presented a Bill to amend the Sex Discrimination Act 1975 in pursuance of the Directive of the Council of the European Communities, dated 9th February 1976, (No. 76/207/EEC) on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions ; to repeal or amend prohibitions or requirements relating to the employment of young persons and other categories of employees ; to make other amendments of the law relating to employment ; to repeal section 1(1) (a) of the Celluloid and Cinematograph Film Act 1922 ; to dissolve the Training Commission ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time tomorrow and to be printed [Bill 8].


Ordered ,

That the draft Merchant Shipping (Safety at Work Regulations) (Non-UK Ships) Regulations 1988 be referred to a Standing Committee on Statutory Instruments, &c.

That the Agriculture Improvement (Variation) (No. 3) Scheme 1988 (S.I., 1988, No. 2066) be referred to a Standing Committee on Statutory Instruments, &c.

That the Customs Duties (ECSC) (Amendment No. 3) Order 1988 (S.I., 1988, No. 2055) be referred to a Standing Committee on Statutory Instruments, &c. -- [Mr. John. M. Taylor.]

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Orders of the Day

Petroleum Royalties (Relief) and Continental Shelf Bill Order for Second Reading read.

5.7 pm

The Minister of State, Department of Energy (Mr. Peter Morrison) : I beg to move, That the Bill be now read a Second time.

I begin by welcoming the hon. Member for Aberdeen, South (Mr. Doran) to the Opposition Front Bench. I congratulate him on his appointment. I know that he has a strong personal interest in North sea oil and gas activities, and the House will be more than aware that he has a strong constituency interest. Indeed, over the past 25 years, Aberdeen has played a vital part in the development of our North sea oil activities, which has not always been an easy task. The Bill is short, and it has two specific purposes. Its first purpose is to end royalties for new fields in the southern basin of the North sea as well as onshore. That will implement the commitment that was given by my right hon. Friend the Chancellor of the Exchequer in his Budget statement. The Bill's second purpose is to implement the agreement that the United Kingdom Government reached with the Republic of Ireland on the determination of the continental shelf.

Perhaps it would be sensible to put the Bill in the context of the North sea generally before I explain it in detail. It is fair to say that, when I came into office with my right hon. and hon. Friends 18 months ago, the situation in the North sea was a little bleak, and had been so for a while. That had been caused by a massive and entirely unpredicted fall in the price of oil. I am happy to say that the picture now is much better. I can paint an upbeat and optimistic picture, but it is not as upbeat and optimistic as I would like. The House will recall what happened on the evening of 6 July. That was the night of the Piper Alpha disaster. When I went to Aberdeen in the early hours of 7 July, I was met by a stunned city and stunned citizens. I think that hon. Members in all parts of the House and the entire industry remain deeply upset by a disaster of such major proportions. Since then, the aim of my right hon. Friend the Secretary of State for Energy and myself has been to ensure that everything is done to prevent such an accident in future. My right hon. Friend has said many times, as have I, that all the information available should be made public. As for the future, if there are lessons to be learned, they should be learned properly. Hence, immediately after 6 July, the technical investigation was set up by my right hon. Friend, to be carried out by the safety directorate of my Department. Its task was to produce an early report on what had happened. The House will know that the interim report was published on 29 September.

Within a week, my right hon. Friend the Secretary of State announced that there would be a public inquiry under the chairmanship of Lord Cullen, with wide terms of reference. That inquiry will start on 19 January 1989 in Aberdeen. Before then, the technical investigation team will produce a further report, which will be made available

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to Lord Cullen. At the same time, the work of the safety directorate continues. The House will know that the information which has been obtained has already led to the directorate asking that the industry should consider better ways to improve the pipeline isolation systems. At the time of the publication of the interim report, we asked the industry to examine six further areas in the light of what we had learnt.

Mr. Robert Hughes (Aberdeen, North) : I wish to say publicly that I appreciate the work that has been done by the Minister of State and the Secretary of State in setting up the technical inquiry and the Cullen inquiry. The Cullen inquiry has begun in a way that shows that it will be an open and public hearing.

I ask the Minister to comment on the great unhappiness felt by those involved in the oil industry throughout the United Kingdom, and not in Aberdeen alone, about the way in which the debris from the Piper Alpha platform has been dealt with following the disaster. Many bodies are still missing. It is believed that there are technical lessons to be learned on the sea bed. Has the Minister reviewed his position on collapsing the platform on the sea bed?

Mr. Morrison : I am grateful to the hon. Gentleman, as is my right hon. Friend the Secretary of State, for his remarks about our conduct since the disaster early in July. Secondly, if he will bear with me on the abandonment of the Piper Alpha platform and the evidence that is currently below the sea, I shall deal with those matters if, with the leave of the House, I have the opportunity to reply at the end of the debate.

These are technical matters and I can assure the hon. Gentleman that my right hon. Friend and I, along with the entire Department, have examined them extremely carefully. We have consulted outside experts. I think that the hon. Gentleman will be pleased that we have consulted other interests, especially the Scottish fishermen. He may be aware that I have had a meeting with the Scottish fishermen. There are important implications, and a decision will not be taken easily. If it is helpful to the hon. Gentleman and the House, I shall deal specifically with these matters at the end of the debate. The areas covered by the interim report produced by the technical investigation team were permit-to-work systems, automatic initiation of fire-fighting systems, operability of life rafts, evacuation routes, the integrity of emergency systems and venting and explosions. I hope that hon. Members on both sides of the House will agree that safety has always been of paramount importance. That remains the Government's view. It is wrong to say that we are seeking to approach perfection when we examine safety. We do not believe that there is safety perfection, because that would imply that there is nothing more to do. I hope that no hon. Member will take that view. As I have said, we shall want to learn everything that we can from the public inquiry. My right hon. Friend the Secretary of State has made it clear that, if Lord Cullen's report identifies improvements that could be made to the safety regime, the recommendations will be considered extremely seriously.

Piper Alpha must remain in our minds. Even so, it would be wrong not to recognise that the story of the North sea over the past 25 years has been one of tremendous success for the United Kingdom. It has come about thanks to the superb managerial and technical

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achievements of the international oil industry. It is a story of success, however, for everyone who has been involved. Too few of our constituents--I speak of those of us who represent constituencies that are not close to the North sea or that do not have a specific oil interest--understand what has been achieved and appreciate the enormous input of North sea oil activities to the United Kingdom as a whole. Even the optimists of 25 years ago could not have dreamt that we would come so far.

We have now entered a new phase. The largest discoveries have probably been made, and oil prices continue to fluctuate. Even so, the North sea oil industry continues to be both vigorous and successful. Given the circumstances, I believe that the industry is more vigorous now than it has ever been. I shall recite one or two facts to demonstrate what has been happening this year.

We in the Department have approved 24 projects so far. That is new investment of about £3.1 billion. It is the largest number of project approvals in any one year. In 1987, 13 projects were approved, amounting to new investment of £1.2 billion. These figures tell us that we are almost £2 billion ahead in terms of new investment. A further 13 projects are currently under discussion.

At the same time, drilling activity is high. So far this year, 121 exploration and appraisal wells have been started. That is a two-thirds improvement over the equivalent period last year. Four discoveries have been made, and a further five announcements have been made on tests on structures adjacent to existing finds. In addition, 135 development wells have been started, against 100 over the first nine months of 1987. That is only 10 short of the record year of 1985. These figures are a tribute to the initiative and determination of the oil industry--and when I say that, I mean everyone involved in it. It demonstrates their great adaptability and will to introduce new technology. It is those traits which lead me to believe that the North sea oil and gas industry has a continuing and exciting future.

Mr. Andrew Hunter (Basingstoke) : There is some confusion, at least among Conservative Members, as a result of the Committee deliberations in June on the Finance Bill, as it then was. Is my right hon. Friend satisfied that the oil allowance of 125,000 tonnes per chargeable period is fiscal neutrality? He will be aware that the producers' argument is that that figure is too low. His comments on these matters will help the development of the debate.

Mr. Morrison : I am grateful to my hon. Friend for potentially drawing me out of order. However, he anticipates remarks that I was about to make about the package as a whole--because this is part of a package, as my hon. Friend rightly said.

The purpose of the Bill is to contribute to the aim that I have outlined-- to continue to create the right atmosphere so that further exploration and development can proceed. It has always been the Government's policy to keep the North sea fiscal regime under review and to make changes where that was desirable to ensure that the climate continues to be favourable to such initiatives. The abolition of royalty for new fields in the northern basin in 1983 was an example of that policy.

The Bill represents a further step in the same direction. There were a number of significant gas prospects in the southern basin of the North sea which were economic

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before tax, but which could have been inhibited by the fiscal regime. The greatest potential obstacle to their development was royalty, because its impact is relatively insensitive to field economics.

As I have said, the ending of royalty for new fields in the southern basin formed part of a package--to which my hon. Friend the Member for Basingstoke (Mr. Hunter) referred--of changes in the North sea fiscal regime which my right hon. Friend the Chancellor of the Exchequer announced in his Budget statement. Taken as a whole over the lives of the fields concerned, that change is expected to be revenue-neutral.

It would not be wholly appropriate for me to go into great detail about the discussions in Committee stage on the Finance Bill earlier this year. However, my hon. Friend the Member for Basingstoke and other hon. Friends will have noticed that the original proposal was for an oil tax allowance of just 100,000 tonnes. After we had listened very carefully to the arguments from the oil industry and examined new evidence presented to us, that figure was increased to 125,000 tonnes. As I have said, that is intended to be

revenue-neutral, and that is the intention of the new figure of 125, 000 tonnes.

If the industry responds positively to the package, there is a real prospect that most, if not all, of Britain's gas requirements for the 1990s can be found from our own resources. In fact, there is already evidence that the industry is responding. As the House will know, earlier this year Hamilton Brothers announced a decision directly as a result of the Government's intention to abolish royalties in the southern basin to develop the Ravernspurn North field. That development represents an investment of £600 million in 1.25 trillion cu ft of gas reserves which would not otherwise have taken place. The Bill will also end royalties for new onshore fields. That will provide a useful encouragement to onshore development. That aspect was also foreshadowed by my right hon. Friend the Chancellor in his Budget. While talking about onshore exploration, I want to raise another point. I am more than aware that other difficulties must be overcome to promote onshore exploration and development. Of course it is right that local authorities are and should be concerned about what is involved in onshore developments. However, it is also of the greatest importance that local debate should be well informed and should not be misled by the exaggerated fears and anxieties that sometimes arise.

As those hon. Members who have had the opportunity to visit British Petroleum's Wytch Farm development will know, a well run oilfield onshore can be a perfectly acceptable neighbour as far as environmental impact is concerned. One of our oldest onshore oilfields at Dukes Woods near Eakring, Newark has been recognised as an ideal environment for wild orchids, moths and butterflies which are rare in Nottinghamshire. In 1972, the area was notified as a site of special scientific interest and, through the collaboration of the industry and the Nottingham Trust for Conservation, the well sites have been preserved as a nature trail. I mention that because of the irony that, if the same development were proposed today, it would no doubt be the subject of great concern on environmental grounds. The other elements of the package of the North sea fiscal changes which my right hon. Friend the Chancellor announced in his Budget statement have already been approved by the House and implemented through the

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Finance (No. 2) Act 1988. As Opposition Members will recall, in Committee on the Finance Bill the then Opposition spokesman, the hon. Member for Islington, South and Finsbury (Mr. Smith), said that he believed that the Government were right in principle to remove the penalty of royalties.

We must ensure that the momentum to which I have referred is maintained. It is no exaggeration to claim that the United Kingdom is becoming the offshore oil capital of the world. The North sea has created nearly 30,000 offshore jobs, and, according to the most recent reports that I can find, some 75,000 onshore jobs in Scotland alone. That represents a valuable part of our industrial base, which we must do our utmost to sustain.

Clause 1 will exempt new fields in the southern basin and on shore from royalties as from 1 July this year. Clause 2 is needed only to ensure that the similar exemption already granted for new fields elsewhere in the North sea will apply to licences issued in the 11th round and subsequently.

The Bill's second purpose, to which I referred earlier, is to enable the United Kingdom to implement the agreement negotiated recently with the Irish Republic on the delimitation of the continental shelf. That is dealt with in clause 3. The agreement resolves an issue which has been outstanding for 25 years. Agreeing boundaries will open up new opportunities for the oil and supply industries if exploration in the areas should prove successful. I hope that all hon. Members will agree that that represents an important step forward. As the House will be aware, copies of the agreement have been available in the Library since 8 November, when my right hon. and learned Friend the Foreign Secretary informed the House that he had signed the agreement.

I want to explain a little more about the agreement. At present, we have powers to designate areas for offshore activity on our continental shelf, but we do not have powers to de-designate, and those are what the Bill is taking. When I was first told that, I must admit that it did not mean very much to me, and I suspect that it does not mean all that much to my hon. Friends or to Opposition Members. Let me try to make it a little clearer. There are areas off the west coast of Scotland which in the past have been claimed by both sides. After considerable negotiation, it has been agreed that the Republic of Ireland should give up some of its claim and so should we. However, we cannot give effect to that, because we do not have the necessary powers. That is the purpose of this small clause : it covers that agreement and that agreement alone. I assure the House that it would not permit the Government to do anything similar elsewhere. As the House will see, the Bill refers specifically to the agreement signed in Dublin on 7 November--no more and no less. Some hon. Members may believe that the territory of Northern Ireland is being given up as part of the agreement. I give a categorical assurance that that is not so. The line in the north- west starts at latitude 55.28 north and longitude 6.45 west. That is well to the west of any conceivable boundary between the continental shelf of Northern Ireland and that of the Irish Republic.

In July this year, I invited applications for further offshore licences in the 11th round. Two hundred and twelve blocks are on offer, which makes it the biggest

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