§ MR. LABOUCHERE (Northampton)
I asked a question the other day of the Under Secretary for Foreign Affairs, and, allowing myself to be carried away by my feelings, I made use of language for which I was very properly rebuked by Mr. Speaker. I therefore think it my duty to lay before the House the facts in regard to the intervention of Her Majesty's Government in regard to this Tobacco Corporation in order that they may form an opinion as to whether I was right or wrong in the allegations I made. On the 8th March, 1890, the Shah of Persia gave a concession to a Mr. Talbot, who engaged to pay out of the profits of the concession when it was carried into effect a sum of £15,000 per annum to the Government of the Shah, and one-quarter of all profits. I do not believe that Mr. Talbot actually paid anything to the Persian Government, and his promises were all prospective, 1945 arising out of profits to be made. On the 3rd May Mr. Talbot sold this concession to the Eastern Concessions Syndicate Company. The usual thing when persons wish to bring out companies, and wish to withhold their own names, is that they call themselves a syndicate, and get up a company more or less bogus. Then these syndicates, unless they are intended to bring out other companies, disappear entirely from the face of the City. It is not stated what amount Mr. Talbot was paid for the concession which he sold to this Eastern Concessions Syndicate Company, and, judging from the dates, I should think that in all probability this company and Mr. Talbot were the same individuals. On the 3rd of November the Eastern Concessions Syndicate Company sold this concession, for which absolutely nothing had been paid, for £300,000 to the Tobacco Corporation of Persia. A portion of this money was paid in cash and a portion in shares. But not only were they to receive this amount, but they were also to have a number of founders' shares, which were to draw half of all profits over fifteen per cent. On the same day a prospectus was brought out asking the public to subscribe to the shares of the Imperial Tobacco Corporation of Persia, with a capital of £650,000. The prospectus is much after the usual manner of prospectuses, except that it seems to me rather more exaggerated in its statements than prospectuses usually are. The people who were unwise enough to take shares were asked to imagine that the profits were likely to reach as much as £371,000 per annum, or, in other words, that the Corporation was going to give a return of more than one hundred per cent. on all the capital really expended. In the present year the Government of the Shah found that the people of Persia were indignant at this concession altogether. The effect would be to raise the price of tobacco about one hundred per cent., and really the thing was, in fact, a regie. All tobacco cultivated was to go into the hands of the Corporation, who were to sell it, it appears, at any price they liked. In any case the price must have been excessive if they were to make this large profit. When the people almost rebelled 1946 against this concession, the Shah re-considered the matter and determined to abrogate it, and now comes in the intervention of Her Majesty's Government. I have asked for the contract, but have not been able to obtain it; but we were told at one time that there was a clause in the contract permitting arbitration. But the Shah refused or objected to arbitration, and, therefore, the good offices of Her Majesty's Government were employed on both sides. We have not got this contract, but common sense tells us that if there was any arbitration clause it was not put in with any idea that the Government of the Shah intended to abrogate the concession. What occurred in Persia we do not exactly know, because, although papers have been promised, we have not yet got them. I have elicited that the Persian Government were advised by Her Majesty's Government to pay the sum of £500,000 to the Corporation in consideration of having abrogated the contract. Have the Government looked into the contracts; have they estimated the value of the property of the Corporation; have they discovered what part of the £350,000 has been bonâ fide expended in giving effect to the concession? I gather that they have done absolutely nothing of the kind. The Corporation asked for £650,000, and then said that they would be satisfied with £500,000, and without making any inquiries Her Majesty's Representative at Teheran advised the Shah to pay that sum. We know the pressure put upon the Shah in this matter. We know perfectly well, from what appeared in the Times, that he thought he would have recourse to the Russian Government to get this money which was being extorted by the British Government for the benefit of these extraordinary speculators. Look at the position of the Corporation. None of the £350,000 really passed; and when I asked about that sum today, I was told that the Corporation had expended about £150,000 in Persia, so that between these sums there is an enormous difference. The Shah will receive what the Corporation says is worth about £100,000 in buildings and tobacco. I ask the Committee whether, under these circumstances, it was proper for the Government to interfere? 1947 When Lord Rosebery was head of the Foreign Office a Circular Despatch was sent round to Her Majesty's Representatives telling them they should be exceedingly careful in taking up cases of concessions and endeavouring to obtain money from foreign Governments. I think in all cases where a concession like this is obtained it must be left to the person who gets it to negotiate with the foreign Government, as the matter does not concern us. If it is desirable that these speculators should receive the support of the Government it seems most extraordinary that the Government, with these facts before them, and being able to see the contracts, should have pressed the Persian Government to give £500,000. The Persian Government will not get the money at less than five per cent., and so the unfortunate people of the country will have a charge of £25,000 a year imposed on them to pay a sum the greater portion of which has not been spent by these speculators who will simply divide the spoils among themselves. I have laid the facts before the Committee, and I think it will agree that I have been justified in what I have said.
*(8.7.) THE UNDER SECRETARY OF STATE FOR FOREIGN AFFAIRS (Mr. J. W. LOWTHER,) Cumberland, Penrith
I regret that the hon. Member did not wait to see the Papers before making what I cannot but call an attack on the Government. I have already explained to the hon. Gentleman and the House that negotiations are still proceeding; the matter has not yet arrived at an issue, but I have very little doubt that very shortly a decision will be arrived at. Papers are in an active course of preparation, and will be immediately presented to the House. In the meantime, I may point out one or two mistakes into which the hon. Gentleman has fallen. In the first place, I maintain that the Government and Her Majesty's Representative were in no way called upon to inquire into the financial status or proceedings of this Corporation. A concession had been granted without the knowledge of Her Majesty's Government, which took no part in it. The concession was sold by Major Talbot to a Corporation—the Persian Tobacco Corporation. The 1948 Corporation got to work and expended a certain amount of money in Persia, and for a considerable time affairs went smoothly. Then the occasion arose when, in consequence of disturbances, it seemed good to the Persian Government to cancel the concession. Thereupon, a decree was issued by the Government against the concession. The concession contains an Arbitration Clause under which, in the event of misunderstandings arising between the concessionaire and the Government, the matter is to be referred to arbitration, and the words clearly cover this case. What was the action of the Corporation? The Corporation came to Her Majesty's Government and said, "This concession, which it has seemed good to the Persian Government to grant, and from which it may be presumed they were going to derive some benefit, has been suddenly abrogated. We would wish to submit the question of compensation to us to arbitration." The proper course—the only course—which Her Majesty's Government could take—and which they did take— was to suggest to the Shah and the Persian Government the desirability of submitting the question to arbitration. Negotiations went on for some little time. The Corporation pressed for arbitration in the matter; they were perfectly ready to refer their whole claim to arbitration. The Persian Government were not prepared at that time to accept arbitration, and negotiations went on between the Persian Government and the Corporation. The demand by the Corporation of £650,000 for compensation was met by an offer on the part of the Persian Government of £300,000. The two parties, however, did not agree, and negotiations still went on. Her Majesty's Government were again asked to press on the Persian Government the desirability, as they would not agree, of submitting the whole question in dispute to arbitration, and Sir F. C. Lascelles brought that consideration before the Persian Government. Soon after that the Persian Government and the Corporation agreed upon the sum of £500,000. The hon. Member spoke of the £500,000 being extorted; Her Majesty's Government never pressed for 1949 that or any particular sum, all they pressed for was that the whole calm should be submitted to arbitration. The Persian Government did not see their way to arbitration, and made an offer to pay £500,000, and take over the assets. That offer has been accepted. I am afraid it is impossible for me to go into further details as to what has passed since. As I have said before, the matter is not yet concluded, therefore it would be improper on my part if, while negotiations are going on, I said anything further. I assure the hon. Gentleman that Papers are almost ready for presentation, and we expect a settlement will be arrived at in a very short time between the Persian Bank—who are acting for the Persian Government in this matter—and the Corporation. As soon as that settlement is arrived at a full account of the part the Government have taken in the matter will be laid before the House.
§ *(8.17.) SIR G. TREVELYAN (Glasgow, Bridgeton)
We have now had three accounts—that of the Times; that of my hon. Friend below the Gangway, and that of the hon. Gentleman opposite, and they all agree. From the very first moment I had an opportunity of reading an account of the transaction in the Times, I felt, I must say, that it was a very doubtful case, and might become a very painful one. The first point on which no explanation has been given by the hon. Gentleman opposite, and the point on which I think the public would wish to have an explanation, is: Into whose pocket did the real money go—the money, that is to say, which some private influence on the Persian Government has put into the pockets of one or more private individuals? I accept the statement of the hon. Gentleman that the influence was not the influence of Her Majesty's Government; but it was the influence of someone belonging to this nation, and someone whose cause has been taken up by the Government. I do not think the British Government ought to have taken up this case at all unless they were prepared to give the House of Commons and the country explanations which would set the national conscience at ease. What has happened? Some private jobbers have got from the Persian Government a 1950 concession which it is very difficult to estimate at a less value than three or four millions, and with a nominal capital of £650,000, and a real capital of £300,000, the prospectus promised profits of £370,000 a year. That would be a net profit of about £300,000 to be taken from the Persian people, and given by the Persian Government to one or more private individuals for motives of which we know nothing whatever. The Government should have inquired—perhaps they have inquired—as to what those motives were before they took up the cause of these gentlemen. Anyone who has read the Oriental history of the last twenty years knows what tremendous pressure can be exercised by Ministers upon one of these small countries, and on a country which, to some extent, is a dependent country, as this story proves. If the Government had left the matter alone these jobbers would have got certainly not more than £300,000 in what is called compensation; I very much doubt if they would have got anything at all. Now, my belief is that the right hon. Gentleman opposite has as high a standard with regard to financial matters as any man in the House, and I should be very glad indeed if he would look into this matter himself. We must remember that this power of pressure in commercial matters on the part of the British Government is a most valuable one when used in protecting legitimate commerce, and it should never be misused by doing injustice to half-organised and weak countries for the sake of people who cannot be thought to be pursuing legitimate commerce. The hon. Gentleman opposite used one expression which I was glad to hear—he said the thing had not come to a definite issue. I hope that means that the transaction is not complete, and I trust that the action which my hon. Friend has taken to-day will prevent the Persian Government being taxed, not to the extent of £25,000 a year, for the money would not be borrowed at five per cent., but to a far larger extent, to the end of time.
§ *(8.23.) MR. SEYMOUR KEAY (Elgin and Nairn)
I was surprised when the hon. Gentleman opposite told us that the individual who originally 1951 got this concession was Major Talbot. There are so many Talbots engaged in the different stages of this affair that I think he must have made a mistake. I do not think he could have meant Major A. C. Talbot, who is the Political Representative of the Indian Government in Persia. I take it that it would be perfectly absurd that he, in his official seat, should have taken up this concession.
MR. J. W. LOWTHER
It is not the same person. There are two gentlemen named Major Talbot. The concessionee is Major G. H. Talbot.
§ *MR. SEYMOUR KEAY
As a matter of fact, Major A. C. Talbot and Major G. H. Talbot are brothers, and they are family connections of Lord Salisbury, which, no doubt, made the management of the private negotiations much easier. I think my hon. Friend put the case too mildly when he said that pressure only came in when the question of £650,000 or £500,000 was at issue between the Corporation and the Persian Government. My belief is that the transaction took place something in this way. Major A. C. Talbot, Her Majesty's Representative in Persia, gets out his brother, letting him know that something very fine indeed is to be got by a little judicious management.
§ *MR. SEYMOUR KEAY
I have known Major Talbot for a quarter of a century, and I can assure the hon. Gentleman that he has spent an enormous part of that time in service in or near the Persian Gulf, and his absences have not been long. I think I remember that he has occupied some position there longer than eighteen months. He has long been acquainted with Persia, and had all the opportunities I have mentioned, if he chose to use them, and could put up his brother and aid him in getting a very good thing if he went out to Persia. A Political Resident is all-powerful where such private and semi-private matters are concerned. I know this, having seen something of the Hyderabad-Deccan scandal, which was the subject of an inquiry in this House, and I was in Hyderabad in time to be 1952 the first to expose the swindle. In my mind the getting out of this brother and putting pressure on the Persian Government to entertain the matter of the concession was probably compassed in exactly the same way as the Hyderabad Government was duped into practically giving away a million of money for nothing at all to certain Europeans. As the hon. Gentleman did hot inform us to the contrary, we must assume that Mr. G. H. Talbot went to Persia with the knowledge of his brother, now Her Majesty's Representative in the Persian Gulf. We are now told he went there unknown to Her Majesty's Government, and obtained this gigantic concession unknown to the Government. Is the hon. Gentleman prepared to say that he obtained it unknown to his brother?
MR. J. W. LOWTHER
His brother was not in Persia at the time; he was an Anglo-Indian official in Turkish territory.
§ *MR. SEYMOUR KEAY
I do not know what he was doing in Turkish territory, as he has always been engaged at or near the Persian Gulf. Perhaps the hon. Gentleman will tell us in what part of Turkish territory he was; how long he was absent from Persia; and what was to prevent him knowing what his brother was doing? There is no reason why the affair should not have been planted between the two brothers, and the Government have made no inquiries on the point. Or if they have made any inquiry, the hon. Gentleman has not told us that Her Majesty's Government are prepared to advise the Indian Government to take due notice of such a matter having been arranged between their public servant and his brother. Although he was not at that moment technically Her Majesty's Representative, he had spent years in service in Persia, and must be held to have a thorough knowledge of matters which would enable him to plan out such a concession and bring the required pressure to bear on the Persian Government.
§ (8.30:) MR. BRYCE (Aberdeen, S.)
Whether this was the case of a "plant" between these two brothers or not is a question which I do not intend to go into. But the Government have admitted 1953 enough to give much cause for suspicion. The first point which was left in doubt by the Under Secretary of State, and which I think suggests some serious questions, is: What is the nature of this Arbitration Clause? An arbitration clause in a contract usually is a clause providing for a reference to arbitration of differences that may arise between the two parties to the contract; but here we have a suspension of the contract altogether. Here the contract itself is nullified and put to an end by the Persian Government. The hon. Gentleman has not told us, and I should say that it is unlikely, according to the usual practice in these cases, that the Arbitration Clause is one which contemplates a suspension of the contract. Such a clause usually comes into force should a difficulty arise in the interpretation of the contract. Therefore, I do not think that the Committee will be in a position to form a correct judgment upon this matter till we see the Arbitration Clause. The hon. Gentleman tells us that the Persian Government refused to go to arbitration, although the Corporation was willing to do so. Why did the Persian Government refuse? Who suggested this arbitration? I do not think the Persian Government would have fared worse by going to arbitration than it eventually seems to have fared in the arrangement that was made, because the Persian Government was asked by the Corporation to pay compensation to the extent of £600,000, and ultimately they paid £500,000, although at first they offered them no more than £300,000. And I must say, judging from the facts, that that was very ample compensation, because it seems to be very far in excess of what the actual business of the company was worth, including the stock-in-trade and the expenditure which the company had incurred. Therefore, when we find that the Persian Government persisted in offering only £300,000 and then suddenly gave £500,000, we must conclude that the operation was only owing to the beneficent intervention of Her Majesty's Government, because nothing less would have induced the Persian Government to acquiesce in what was an exorbitant demand. If that is not pressure I do not know what pressure is. Surely nothing less than 1954 pressure applied by a powerful State, such as Great Britain, would be sufficient to induce the Persian Government to make such a concession to this Corporation as to pay them £200,000 extra. The hon. Gentleman has adverted to the circumstances under which this was done. I am bound to say if there is any case of a country where the power of the Foreign Office ought to be carefully used, it is the case of a country like Persia. Persia is a country which occupies a very peculiar position. It lies between, so to speak, two great Powers. One of these great powers is Russia, and the other is the Indian Empire; and if Persia is dependent upon any country, it is dependent no less upon its Indian than upon its Northern neighbour. Under these circumstances, our Government ought to be very careful not to press Persia unduly, not to make the Government of this country unpopular in Persia, and not to urge undue demands. Considering what the attitude of the other neighbours of Persia is, I should have thought that this was one of the cases in which the general principles that guide the Foreign Office in dealing with other Powers ought to have been very scrupulously applied. The Committee knows what are these principles. If hon. Members will consult the Papers laid before the House in 1886, they will find there laid down, following the Circular issued by Lord Granville in 1881, the principles that ought to be applied by the Foreign Office in its endeavours to support British subjects in pursuit of their commercial enterprise abroad, and especially in their efforts to obtain concessions from Foreign Powers. It was there laid down by Lord Granville, and afterwards by Lord Rosebery, and so far as I know it has hitherto been uniformly followed by both Parties in the State, that attempts to obtain concessions ought to be dealt with by the Government, and by Her Majesty's Representatives abroad, with most cautious care and tact, not only because it is desirable not to waste our influence, which should be reserved for political purposes, upon mere pecuniary matters, but also because a great deal of suspicion is likely to attach to the Foreign Office and its Representatives 1955 if they endeavour to press the claims of their own subjects. These are the principles which will be found to be in force, and the cases stated in the Despatches amply justify the view I take. I put it to the Under Secretary that the action of the Government was not taken in obtaining a concession but in endeavouring to obtain compensation.
§ MR. BRYCE
I must repeat that I look at the matter by the result. What is contended on the part of the Government is that all our Representative did was to ask the Persian Government to go to arbitration. What we see is that the Persian Government which offered £300,000 found itself obliged to pay £500,000; and we can only account for that change by attributing it to the pressure and undue influence exercised by Her Majesty's Government through their Representative. I submit therefore to the Committee that in a matter of this kind, so far as my present information goes, the principles which ought to guide the Foreign Office seem to have been transgressed; and that that influence, which ought to be reserved for purely political cases, or at any rate for the promotion of commercial enterprise and not for the purpose of promoting mere personal speculation, has in this instance, so far as I can learn, been abused. Her Majesty's Government will be bound, when the proper times comes, to give a much more complete justification than they have given to-night for conduct which on the face of it has the appearance of being unfriendly towards Persia and calculated to bring Her Majesty's Government into disrepute both in Persia and wherever else it is known.
§ *(9.10.) MR. WINTERBOTHAM (Gloucester, Cirencester)
I wish to say a few words on the tobacco concession in Persia, and I should not have said anything at all about it but for what has been stated in this House. I think this is too grave a matter to pass without a protest against the very insufficient explanation that has been given by Her Majesty's Under Secretary of State for Foreign Affairs. He began his speech by saying that my hon. Friend the Member for 1956 Northampton (Mr. Labouchere) had been guilty of several inaccuracies. But, Sir, so far as I heard, I failed to find a single point upon which any inaccuracy was pointed out. On the contrary, as the explanation of the right hon. Gentleman went on, the case appeared to me to be graver and graver, and to require more and more explanation. I wish to state what the facts are as they appear to me, without any knowledge of them beyond what has passed in this House tonight. Two gentlemen, said to be brothers, alleged to be officers of the Queen, one of them holding high diplomatic service, hailing from Hatfield, stated in the Debase to be relations of the Prime Minister—statements not denied—a concession obtained from Persia, upon what terms? Talk about company-mongering! I have the published prospectus in my hand. Here is a capital of £650,000; a profit estimate of £558,000 a year; 80 per cent.; Persia to have £15,000 a year and a small share of surplus profits out of it, and to begot out of the unhappy Persians for the payment of shareholders £543,000 net profit. You have to go back, in my opinion, to the old days of the jobbery under the East India Company to find anything more utterly atrocious than this affair. Then you find popular indignation in Persia aroused; the Persian Government quite unable to withstand it, and I do not wonder at it. Even in a country like Persia there is such a thing as public opinion. Poor Persia, obliged to cancel the concession, offers £300,000 to buy off these robbers, and it is refused. Why? Because they have got the English Foreign Office at their back. It has been owned by the right hon. Gentleman that our diplomatists, our representatives, in Persia pressed upon the Shah's Government that they ought to refer this thing to arbitration. Why did they not turn round and say: "This thing is a swindle; £300,000 is double the money you have spent; take your plunder and go?" The explanation given to-night casts a slur upon officers and public men, casts a slur upon the English Government, and casts a slur upon the Diplomatic Service, and cannot rest where it is. It must be cleared up—I sincerely hope 1957 it can be cleared up—and I think those Papers must be produced at once. They have been promised; we must have them at once, and we must have the fullest explanation. There is only one other thing that I want to say, and that is that these Papers and this explanation must come before a settlement is completed, and not after. I understood the right hon. Gentleman to say that the matter was not completed, and it ought not to be completed. If there is any truth in the facts as they appear to any impartial man who has heard the Debate, and has heard the lame and impotent explanation of the right hon. Gentleman, I say that, for the honour of England and for the honour of our statesmen, the transaction ought not to be allowed to be completed until the Papers are before us, and until a full explanation has been given of the facts.
§ *(9.15.) MR. MORTON
I do not desire to prolong this Debate, because I understand that Papers have been promised, but it must be quite obvious that the matter cannot rest where it is at the present moment, because it has been proved, so far as you can prove these things, that the influence and power of the British Government have been used to induce, in some way, the Persian Government to find a large sum of money, said to be £500,000. It is also mentioned that some of the parties concerned in what you may fairly and properly call plunder are not only officers of Her Majesty, but relations of the Prime Minister. I should like to ask the right hon. Gentleman—I am not making any accusation against the right hon. Gentleman, who not only answers questions very fairly, but is also always very courteous—whether the statement that these officers who have been mentioned are relations or connections of the Prime Minister of this country. It is just as well to tell us at once, because you cannot conceal it for very long, and we ought to know. There is another reason why I think this matter should be sifted to the bottom. We ought to take care that no wrong is done so far as we can help it. It is all very well for the power of this country to be used against a weaker and smaller Power for getting money in this way, but it 1958 always leaves a bad feeling behind, and it may be the cause of war at some future time. There is hardly one of the many little wars in which we are engaged from time to time which is not due to some extent to the ill-feeling created at some time in connection with money affairs. It is very unfortunate with regard to Persia, because the Russian Government is brought into the matter in some way, although we are told that the Persian Bank is going to find the money. But the Persian Bank will not find the money without it has security of some kind, and it is very likely that ultimately it will be British money that will be found to pay this large sum. I hope this Committee and the House of Commons will take care, if these statements are true, that the power and influence of this country are not in any way used to benefit these speculators or company-mongers, or whatever you like to call them. I am satisfied that if I, or any other humble Member of this House like myself, were to be engaged in trade, and wanted the Government to assist in collecting our debts, they would very properly refuse to do so Are these favourites of the Government, and relations of Ministers, as it has been said, who use the power of this Government to compel smaller and weaker Powers to find these large sums of money? I think it is high time, not only for the interests of the country, but for the honour of the country, that we should put a stop to it if it is so. I do not propose moving a reduction in this case, as Papers have been promised, but I trust these Papers and the fullest possible information on the subject will be forthcoming at an early date.
(9.20.) MR. HUNTER (Aberdeen, S.)
The question before the House has, I think, taken a very serious and grave aspect; and before another step is taken by Her Majesty's Government in a matter which appears, at all events, to gravely compromise the honour of the Government, there should be a special and searching inquiry before a Committee of this House as to the nature of this concession—not merely as to the circumstances under which it was granted, but as to the consideration for which it was granted, 1959 and as to the position of the Persian people. It does not seem to come within the category of those legitimate mercantile or commercial transactions which deserve the assistance of the Government. It is a strong measure for a Government to interfere to promote private interests in foreign countries. That is not the object of the establishment of diplomatic relations; and although undoubtedly diplomatic pressure may in certain circumstances legitimately be employed for legitimate commercial transactions, it is most important that the Government should not go one hair's breadth beyond what would be recognised by everybody as an honest and fair commercial transaction. But what is this? On the face of it an impecunious gentleman goes out to the Government of Persia. It so happens that his brother had for many years occupied the very influential post of British Representative in these dominions. We are told that at the moment when this transaction occurred the brother was not actually there, but it is impossible to disregard the fact of the Persian Government having entered into negotiations with Mr. Talbot. That is a matter which should be searchingly inquired into. But it is not all. Mr. Talbot gives no consideration for this concession. It is nothing more nor less than a conspiracy entered into between Mr. Talbot on the one hand and certain officials of the Shah on the other, to extort unreasonable and monstrous prices for tobacco from the people of Persia, the greater part of the plunder to go to Mr. Talbot and the smaller part to the Shah. The Persian people dealt with it as we should have dealt with it. They rose in rebellion against it, and I believe it is entirely due to the extortions practised by the concessionaries that they did so. Had they been moderate they might have been successful, but they wanted to make £370,000 a year for no consideration at all. Having regard to the relationship which exists between the gentleman who got the concession and his brother, a British officer closely connected with Persia, and having regard to the relationship existing between these brothers and the Foreign Secretary, it seems to me that this was of all 1960 cases in the world one in which the Government ought to have been very careful about interfering. "Cæsar's wife ought to be above suspicion." The answers which have been given are not satisfactory or sufficient, and we ought not to wait for Papers, but, before another step is taken, or the honour of this country is compromised any further in this equivocal and apparently discreditable transaction, the whole subject ought to be made a matter of inquiry before this House.
*(9.26.) MR. J. W. LOWTHER
I think that hon. Gentlemen have magnified the matter very considerably, certainly so far as the part which Her Majesty's Government have taken in the proceedings. Hon. Gentlemen have asked whether Mr. Talbot is a relative of the Prime Minister. I believe he is, but allow me to point out that the concession which has been referred to was obtained without the knowledge of Her Majesty's Government. Her Majesty's Government were not informed that it had been applied for, they knew nothing whatever about it, and therefore I do not exactly see the relevancy of that suggestion. The action of Her Majesty's Government in the matter of compensation was called for after the concession had been rescinded—not before. The Corporation proposed that the question of compensation should be referred to arbitration.
MR. PRITCHARD MORGAN (Merthyr Tydvil)
Did the proposition for arbitration come from Her Majesty's Government?
*MR. J. W. LOWTHER
No, it came from the Corporation. There was an Arbitration Clause in the agreement, but even assuming that there had not been, was it not a reasonable suggestion that the question of compensation should be a matter for arbitration? The Corporation admittedly had spent considerable sums of money on the faith of the concession by the Persian Government. They said they had spent no less than £139,000 or £140,000 in Persia; they had in addition purchased the concession for £300,000; they had also spent in salaries £55,000; and if hon. Members will add these figures together they will find they reach very nearly the sum of £500,000. I can only repeat that the proposal to refer the 1961 whole matter to arbitration seemed to Her Majesty's Government to be decidedly reasonable, and they therefore supported it. I have been asked what were the reasons of the Persian Government for refusing to submit the matter to arbitration, but I am not in the counsels of that Government, and I am afraid I cannot answer the question. No statement was ever made by the Representative of the Persian Government about the reason for that refusal. It seemed to Her Majesty's Government to be a reasonable and proper way to arrive at compensation, but the Persian Government for reasons of their own preferred to make an offer of £500,000, taking over all the assets. The Corporation were anxious that the matter should be referred to arbitration, and that was a proposal which Her Majesty's Government, supported. Thus it was that the arrangement was arrived at between the Corporation and the Persian Government—an arrangement for which Her Majesty's Government are in no way responsible. The Persian Government did not see their way to accept the proposal that the matter should be referred to arbitration, and therefore the terms of arbitration were not entered upon.