§ Order for Second Beading read.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin)
I beg to move, "That the Bill be now read a, second time."
It was only yesterday evening that I explained the object of the Bill which was to be introduced on the Resolution then passed. Now that the Bill is in the hands of hon. Members, I would simply call attention to its contents. In the first Clause the issue of £2,050,000 from the Consolidated Fund is to be sanctioned. The rest of the Bill deals with the technical matters connected with the issue of that sum. In Clause 2, Sub-section (1) arrangement is made for the borrowing of such sums as may be required and for issuing whatever 1862 security may be needed to cover these sums. In Clause 2 a charge is made on the Consolidated Fund of the principal and interest. In Clause 3 statutory provision is made that any dividends receivable shall he paid to the Exchequer. That simply gives statutory authority to what is to-day the ordinary practice. The second Sub-section provides that the dividends and interest receivable from the Anglo-Persian Oil Company shall be used for the redemption of any loan that may be made for the purpose of subscription, after paying any interest that may be due. The wording of these Clauses may look cumbersome, but they are in common form and give effect to what I have described very briefly in simple language. I do not propose to say anything more about the Bill now. I understand several hon. Members wish to offer some comment, and perhaps, with the indulgence of the House, I may be able to say a few words in answer to whatever may be said.
§ Mr. ADAMSON
I assume that the money which this Bill proposes shall be raised is for the purpose of enabling the Government to continue to exercise a controlling influence in the Anglo-Persian Oil Company. We were informed when the Anglo-Persian Oil (Issue of Capital) Act was introduced in 1914 that the money provided for in the terms of that Act was to enable the Government to obtain a controlling influence in the affairs of the Anglo-Persian Oil Company. I also understand that the Anglo-Persian Oil Company has recently been extending their business. I am informed that they have taken over the businesses of a number of shale mining companies in Mid-and West Lothian.
If that is correct, is means that the Government under this Act becomes the principal employers in the shale mining districts of Scotland. As chief employers they are responsible for the wages and working conditions of the miners and others employed in these districts. I desire to bring to the notice of the hon. Gentleman the condition of affairs that exists in the shale mining districts in Scotland at present. Considerable dissatisfaction exists among the employés in other industries with regard both to the wages paid and the working hours. Unless steps are taken to have its causes removed that dissatisfaction may be the means of precipitating a serious position in that industry.
1863 For years past, and this is a point to which I would like to draw particular attention, the employés in the shale mining districts of Scotland have had their wages and general working conditions on a footing similar to that which obtained in the coal mining industry in Scotland. By common agreement with their employers the wages paid and the working hours were similar to those in the coal industry. During the war large profits were made in this industry. These profits would have enabled employers in the shale mining districts to have paid to their workpeople wages higher than those paid in the coal mining districts. Very naturally, employés were anxious to share in the good times that were going in the industry, and they put forward a claim to have their wages increased. But they were met by the argument that by agreement the wages that were to be paid to them were to be regulated by the wages paid in the coal mining industry. The employés did not therefore share in the large profits which were made in the latter years of the War. These men very naturally, therefore, expected, when in the early part of this year, under the terms of the Sankey Award, the coal miners had their wages increased by 2s. a day and their working hours reduced by one hour per day, that they would share in these benefits.
Accordingly they put in their claims, and we are very much surprised indeed to find that the employers refuse to grant either the one or the other, and on the following two grounds: 1, The employers stated that the advance given in coalminers' wages was in consequence of an inquiry into the conditions of labour in the coal-mining industry, and that as that inquiry had not extended to the shale-mining industry, the men could not share in the benefits that had come to the coalminers; 2, that since the War had ended the price of oil had fallen considerably and that they were not in as favourable a position to grant increased wages as were the employers in the coal-mining areas. This treatment very naturally caused great dissatisfaction among the men. A strike was declared. As a matter of fact the men were on strike for one day only. They were then prevailed upon to continue at work. It is very pleasant for the Government and the country to find themselves in a position of having a controlling influence in such an important company as the Anglo-Persian 1864 Oil Company, and of participating in the benefits that will accrue from the operations of this particular concern, but that carries with it responsibilities as well as benefits One of the responsibilities is to give to the employés of that concern as good conditions with regard to wages and hours and other working conditions as are given by private employers. As a, matter of fact, I think it is the duty of the Government on all occasions to be model employers. In these circumstances, if the present condition of affairs is to continue, they will not be in that position. As I have said, the miners and other employés in the shale-mining industry are earning 2s. per day less than similar classes of labour in the coal-mining areas of Scotland and in the areas that surround the one in which they are employed. Apart from that they are working one hour per day more than the miners in the coal areas. This is a question that demands very careful and speedy inquiry on the part of the Government. I would take this opportunity of appealing to the hon. Gentleman in charge of the Bill to remedy the grievance at the earliest possible moment. If I am in order I may take the opportunity during the Committee stage of this Bill of trying to get effect given to my ideas concerning this question. I do not know whether I shall be in order, but I shall discover whether I am or not.
§ 5.0 P.M
§ Lieut.-Commander KENWORTHY
I propose to vote against this Bill on those grounds. I have a very slight knowledge of oil, but oil investments are nothing but a speculation, and in the nature of a gamble. We are going to invest more money, and we have not got the money, which we have to borrow, and that I submit is unsound business. Persia is not in a very settled state. The Moslem world is in a state of unrest, and is in fact seething. I do not think anyone would admit putting money into Persia is a safe and sound investment. Instead of becoming shareholders to a greater extent, I think we ought to realise our present shares. There might be a call for the protection of Government property in Persia, and where we might not be prepared to send an expedition to protect the property of private individuals we might have a much stronger case for sending an expedition to protect the property of the Government which might let us in for liabilities, military and political, which 1865 at present we should avoid at all costs. Why not put money into other oil companies, such as Shells or Mexican Eagles, or into the newly discovered and about to be developed oilfield of French North Africa, which is kept in order by the French Allies, The oilfield of the Anglo-Persian is not yet really proven. It was better than in 1914, but it is not sure. There is also a great region in the Caucasus where the people have most friendly feelings, and where strategically the oilfield would be just as good as on the Persian Gulf, from the naval point of view, and from the air point of view, a more valuable place in which to have a pied à terre. The Suez Canal was quoted last night by the Financial Secretary to the Treasury as a precedent, but I submit that it is no precedent at all. The Suez Canal is a vital link in our overseas communications. There are dozens of oilfields all over the world, but only one Suez Canal, and to quote that as au analogous ease is most unfair, and I do not think ought to bear any weight with the House. I think it is dangerous for a Government to embark in these great commercial enterprises, and might I point to the example of Germany and the Bagdad Railway? That was in some ways a similar example, where you had a great engineering undertaking which Germany entered into as a Government. It was not left to private enterprise, as I say this work of searching for oil and developing oilfields should be, and it led to much trouble for Germany. This matter was all brought up in 1914, and might I trouble the Committee with only two extracts from speeches made then? One was made by the late Lord Beresford, who was then Lord Charles Beresford, and a much-respected and beloved Member of this House. He said that be felt that this oil was for the Navy, and so he could not vote against it, but he felt very strongly against the project. He said.We are all in the dark. We know nothing. Why all this secrecy? Because the Admiralty are at their wits' end to get hold of oil anywhere and anyhow; because they have built ships before they had the oil in store. That is what has occurred, and now we are asked to undertake this most unbusinesslike proposal."—[OFFICIAL REPORT, 17th June, 1914, col. 1208, Vol. 63.]We have had the War since then, and the expenditure of oil by the Royal Navy has been terrific, but very little of it same from Persia. We have been able to ensure our supplies of oil from other fields, and, therefore, the only case that Lord Charles 1866 Beresford could find for voting for falls to the ground, and, however desirable from certain points of view it might have been to go into that in 1914, there is no case now at all, as regards the Navy at any rate, why we should spend another penny piece of the people's money in this Anglo-Persian Oil Company. Might I now quote a couple of sentences from the hon. and gallant Member for Bury St. Edmunds (Lieut.-Colonel W. Guinness)? The hon. and gallant Gentleman would not, I know, object to these remarks being quoted because they show remarkable prescience. He said:Persia at present can no more stand alone than can an empty sack, and unless we go in there and make it obvious that no other Power will be allowed to interfere—There we have the Tory Imperialist speaking—it is perfectly certain that those great interests, and other interests afterwards, will fall into hostile hands, and anyone who has seen, as I have, the way Russia is penetrating not only Northern Persia, but through the mountains of Kurdestan down to the Persian Gulf, must feel that it is of enormous importance to us to set an obstacle to her progress towards the Gulf. I do not say that it is the Russian Government that is always responsible for this ceaseless penetration, but it is our interest to stop it."—[OFFICIAL REPORT, 17th June, 1914, col. 1248, Vol. 63.]That was an argument in favour of investing money in this oil company. That danger has disappeared. Russia has relapsed into a dozen nationalities. A great empire has resolved into its constituent parts. There is no example in history of a great empire that has once broken up like that being set up again. It will end only in a federation. I submit that for those reasons, which were really at the back of the mind of the Government—for Sir Edward Grey, as he then was, spoke in favour of this at the time—this investment is undesirable from political, strategical, and financial points of view. The state of public opinion now does not favour Governments going into big businesses abroad. We are being criticised in very friendly circles in France for what is considered our slimness in getting a foothold into Persia, and coming to an agreement with the Persian Government. This will lend weight to that criticism. I think it is unfortunate for that reason I am one who hates the whole idea of subsidising companies abroad, the miserable financial Imperialism which has taken the place of the old British Imperialism, of which we have all been proud. The miserable seeking for oil concessions, 1867 backing it up by force, and taking spheres of influence to guard the possessions, is one of the causes that brought on the late War. Hon. Members laugh, but German hunger for territories and concessions abroad, and the great armaments, led to the officer class of junker getting control of the machine. Here we have the same thing. It is a beginning, but it is a precedent, and I think we should stop it. I shall vote against it, and I hope hon. Members will support me.
§ Captain ELLIOT
In this, as in so many other matters, I find myself far more in sympathy with the Leader of the Labour party than with the representative of the little Free Liberal party who has just sat down. The Leader of the Labour party has an ideal of the nation as a whole, and if that stands for anything it stands for helping the nation as a whole. I do not know what the little Liberal party stands for, unless it is for the whole of mankind from China to Peru, and seeking out whatever is most unfavourable to Britain. The Leader of the Labour party made a perfectly straightforward and a very sound appeal, if I may be allowed to say so. Here you have, he said, the British Government partner in a great concern, and we must see that the workmen get good pay and good conditions, and every possible share they can be given of the money we make out of this concern. In that surely the Conservative party will back the right hon. Gentleman to the utmost, for if we get more money we shall share it fairly and squarely with the employés—employers and employés standing together for the good of the industry as a whole. All the more, too, in the shale industry, because the shale-workers have been a very hardworking and a very meritorious section of the community. I do not know if it is recognised by this House that while coal production has gone down, and is now at a very low ebb—I do not know the very latest figures given by the President of the Board of Trade, they change so rapidly that it is a little difficult to keep track of them—shale production is now in the neighbourhood of 600 tons per man. This is nearly three times the tonnage production of the coal-miner. The men who can turn out that amount of stuff are deserving of every consideration that this House can give them.
The shale miners complain, and with great justice, of the last Sankey award, for what they were doing was very much 1868 the same as the coal-miners. They have always shared in the coal-miners' rises before. It was not given to the shale workers In this they had a perfectly legitimate grievance. The only point was that the employers got the strongest figures to bear and, I think, demonstrated to the satisfaction of even the shale miners themselves, that, as a matter of strict figures the industry would not bear the extra rise. The shale miners, with admirable common-sense agreed, and shelved the matter for the time being. In the Anglo-Persian oil concern we hope to get the crude oil from Persia, and in the carrying out of the refining in the Scottish refineries, to be able to make enough money to pay the shale workers well; to give them the full amount of money which they could possibly have hoped to get under the Sankey award or any other award. When you have the Government seeking to invest money—not to waste it—abroad in an honest attempt to raise the standard of living of the workers of this country, I say that is an object for which both the Labour party, and certainly the Unionist party, will stand together. Both find themselves in opposition to the old, unregenerate Liberal party of which the hon. and gallant Gentleman opposite (Lieut.-Commander Kenworthy) makes himself the spokesman in this House, with such assiduity and diligence. He presents their point of view particularly and very continuously, but it is a dying point of view. It is going out. It is past. The Conservative and Labour parties have a plan for the national exploitation of natural resources; the exploitation— [Hon. MEMBERS: Hear, hear: "] Certainly, so far as possible. We all live by the exploitation of natural resources in one form or another. As the hymn says: "We plough the fields and scatter"; that is exploiting the fields. We take the honey from the bee; that is exploiting the bee. Some of us think the exploitation of these resources is better carried out under private ownership. Some think it is better done under public ownership. But that the problem should be regarded as a whole is a thing on which the Conservative and the Labour parties have always agreed, as against the old independent Liberal party, which stood for the principle of "Every man for himself and the devil take the hindmost."
This is a working example of enterprise for which the Government deserve the utmost credit. I speak with the more feel 1869 ing because I know the conditions of the shale workers. I have had a good deal of conference with them. The point seems to be this: Owing to our present practical monopoly of coal we have been able to give high pay to those in the coal industry. If we had a monopoly of oil, too, the men in the oil industry, doing the same work, would be getting the same pay as the miners under the coal monopoly. This is a matter in which the shale miners feel a very just and natural grievance, and in the Government bringing in the crude oil and refining it in the Scottish refineries we believe we shall be able to pay better wages to the shale employés. If we get more production, if we turn out more goods, we can give the worker more money. The better section of the workers realise, as certainly many of us realise, the position. I hope the right hon. and gallant Gentleman the Member for Central Hull will find nobody to tell with him in his attempt to divide the House against this proposal.
§ Colonel P. WILLIAMS
I am sorry I cannot agree with my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy), and on this occasion I shad not vote with him. I think he is hardly so innocent about oil as be tries to make out. He instanced an oilfield in Northern Africa, and I have beard something about that question during the last week or two. I am in favour of this Bill, and I merely rise to ask the representative of the Government whether he is going to give us some detailed information as to the policy of the Anglo-Persian Oil Company. I asked him last night if he could give us the information as to whether this increase of capital was to be used for the extension of the present undertaking of the Anglo-Persian Oil Company, or whether it was for exploration work and extensions in other fields. I heard the report that the Anglo-Persian or the Burmah Company were taking much interest in the Scottish shale mine. I do not think the House ought to sanction any increase in capital on this Vote to acquire an interest in the Scottish shale mine, because that would be an extension of the original measure sanctioned by the House. This is an entirely different enterprise altogether. If the Anglo-Persian Oil Company were to take up a big scheme for the development of the oil industry in the Western Indian Islands or South America, the House ought to be Consulted about it first.
§ Major BARNETT
I desire to give a most cordial support to this Bill. Several hon. Members have said a good word for the Scottish shale miners, but the real question before the House is whether we are going on with this great industry in Persia which has been created by the Government, which is one of the few instances of remunerative Government investment. I venture to say that a hundred years hence people will look upon this investment in the Anglo-Persian Oil Company as something quite as important as our investment in the Suez Canal. We have had a remarkable disquisition on oil in general from the hon. and gallant Member for Central Hull, and he is opposed to this investment because of the unsettled state of the country, and because he thinks we might have to undertake military operations in Persia to protect the oilfields. It seems to me that the alternative suggestions made by the hon. and gallant Member were not very happy. It is well known that before the Government invested in Persia on the representations of the right hon. Gentleman the Member for Dundee (Mr. Churchill) and the right hon. Gentleman the Member for Chelmsford (Mr. Pretyman), they went very thoroughly into all the available oilfields, and it was on the advice of the late Sir Boverton Redwood, one of the greatest authorities on petroleum, that Persia was chosen for the investment, of this large sum of British capital. I was present at Swansea last spring when the right hon. Gentleman the Member for Chelmsford thanked Sir Boverton Redwood for the advice that he gave. The old man only lived three or four months after hearing that speech, but he received a tribute, which was very well deserved, for the magnificent advice that he had given to the British Government. The hon. and gallant Member, who is a re ired naval officer, says, "Oh, but in these days of Soviets and universal peace, I do not think that we shall want the Navy any more."
§ Lieut.-Commander KENWORTHY
I am sure that my hon. and gallant Friend does not want to misrepresent me. I am not a retired naval officer. I am on the active list, and my argument was not in any way directed against the Navy. I said that we had been able to get our oil supplies during the late War, and it was unnecessary for us to go to Persia, where we had got very little oil.
§ Major BARNETT
I am sorry to hove misrepresented the hon. and gallant Member by saying that he was a retired naval officer, but he has really enforced my argument, because, as an active officer of the Navy, be must know that oil is wanted and is forthcoming at the present time in large quantities from Persia, and will be forthcoming in greater quantities when the facilities for refining are carried out. I do not think that Baku, which is the alternative suggested, is at all a suitable place from which to draw our supplies compared with Persia, which is within easy reach of the Persian Gulf. Even if the Navy ceases to be and the Soviets spread their Bolshevik happiness all over the world, I suppose we shall need a Mercantile Marine, and they will want oil. The great difficulty about the Mercantile Marine taking up oil as a fuel is that they cannot be sure of sufficient supplies. Therefore, if the Government themselves do not want the oil of Persia, I can assure the hon. and gallant Member that the Mercantile Marine would be very glad to have it. This is really a good investment, and I congratulate the Government upon having made it. I hope it will continue to prosper, and I think this House will be proud of having endorsed the Government policy in this matter.
Without going into the question of the policy with regard to this measure, I think I may say that I am in general accord with my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy), but I think the course which the Government has pursued in this matter has been a very straightforward course, both on the occasion of the 1914 Act and on the occasion of the present Act. As far as I know this is the first case since that of the Suez Canal in which the Government has taken shares in a private company. In doing that in 1914 they brought the matter before the House in a Bill, and gave the House every opportunity for discussing it, and on the present occasion, when they want to increase the capital, they have pursued the same course, which is a very straightforward course, and one which I think ought to be followed. I want to ask on what principle the Treasury proceed in this matter—what makes them decide that in one particular case, when they take shares in a company, they bring in a Bill, and in another case they do not? Within the last three or four months the Treasury has sanctioned the acquisition of capital, to 1872 an amount almost equal to that in the present case, in another company, the British Dyestuffs Corporation. As far as that acquisition of share capital is concerned, no Resolution was put before the House, and no Bill was brought before the House, and I should like to ask the Minister in charge of this Bill upon what principle the Treasury in this case come forward with a Bill, and, in the case of the British Dyestuffs. Corporation, take up share capital without giving the House any opportunity of discussing the matter?
§ Mr. BALDWIN
I will, if I may, answer first the point put by the hon. and gallant Member for East Newcastle (Major Barnes). I speak from memory in a case like that, but there are two ways in which money can be voted by this House for any purpose. It can be provided in an ordinary Estimate, in which case Debate takes place upon that, or it can be provided by a Bill. If my recollection serves me, in the case of British Dyes there was a Board of Trade Estimate, and that certainly was discussed.
§ Mr. BALDWIN
I am sorry I have no recollection of that. I shall be pleased to speak later on with the hon. and gallant Member, and to give him the information. I do not happen to have it at the moment.
With regard to the provision of the money required to pay for the shares in this company, I estimate, as far as it is possible to estimate, that, if there is no falling off in the dividends paid by the company—and we have no reason to anticipate that there will be—the full amount should be repaid in five or six years. I want to say a few words on the point that was alluded to by the hon. and gallant Member for Middlesbrough (Colonel P. Williams), and which was spoken upon at some length by the right hon. Gentleman the Leader of the Labour party (Mr. Adamson) and by my hon. and gallant Friend the Member for Lanark (Captain Elliot). I do not think I need say anything about the earlier- part of the right hon. Gentleman's speech, because it dealt with history which is now past, namely, the relations of labour in the shale industry to the private companies that controlled it until almost the present time; but I should like to say a word or two to elaborate what he said, and that will also answer the quetstions put by the hon. And 1873 gallant Member for Middlesbrough. He was wondering, and I think it is a legitimate course of wonder, how the Anglo-Persian Oil Company came to be interested in the shale industry in Scotland. The money that is being provided by this new issue for the Anglo-Persian Oil Company will be devoted principally to additional pipe-lines and extensions in Persia, to the completion of that large refinery which, as he is probably aware, is being constructed at Swansea, and, most important, for additional fuel-oil bunkering accommodation and tank steamers. Of course he recognises the fact, which was touched upon by a previous speaker, that the increasing use of this fuel for marine engines means that there must be increasing accommodation for obtaining oil for bunkering purposes, and the development of that is part of the policy of this great corporation.
It is quite true, for reasons which were given very clearly by the hon. and gallant Member for Lanark, that this year, in contradistinctiol to its position during the War and before the War, the shale industry in Scotland is in a very parlous condition. From inquiries I have made and from representations which have been made to Departments of the Government I think it is extremely unlikely that private companies could possibly have carried on the shale industry in the future. The trouble the industry was in was common knowledge, of course, in the oil world. The refineries were unused. The Anglo-Persian Oil Company were anxious to procure refineries because it is better to buy a refinery than to put one up at the great cost that would entail, so they thought that they might acquire at any rate the unused refineries belonging to the shale companies. This led them on to the next point. It occurred to them that it was quite possible that, by unifying the industries concerned in the shale industry and by utilising to the full the refineries that they had, they might be able to carry on that industry in this country. It has always been a very desirable industry to carry on, for two reasons; first, of course, the displacement of labour, if the industry came to an end would be very serious, and, secondly, it has always been desirable to get as much oil as you can get—it is only a small amount—inside the confines of the United Kingdom.
I would point out to my right hon. Friend the Leader of the Labour party 1874 that the position has very much improved by the Anglo-Persian Oil Company coming in. Whereas, on the one hand, you have the possibility of the whole industry stopping, on the other hand you have the certainty of the refineries working and a very large measure of probability that the Anglo-Persian Oil Company may be able to do, what the small companies could not do, that is, carry the shale industry itself on their back. I understand the position of labour in that district to be that there is an agreement between the company and the men that in the new year they are to meet together and go thoroughly into these questions of wages and hours of labour. I am assured by the managing directior of the Anglo-Persian Oil Company, with whom I have discussed the matter, that they have no desire at all except to utilise the refinery. It is their desire, if they possibly can. do it, to carry on the shale industry as it has been carried on in the past, and if they find that they can make both ends meet in this matter they will be only too pleased to pay the Sankey wages. My right hon. Friend must, of course, recognise that it is a commercial proposition. No one in this House, I am sure, however greatly he might desire to see the industry go on, would really suggest that the money should be used as a subsidy to carry on an industry which cannot carry itself on. I hope and believe that with unification and with the management and development of the refineries, it may be possible to do as he wishes. I shall certainly represent to the company what is the feeling in this House, and use whatever endeavours I may be able to use to accomplish the end the right hon. Gentleman has in view.
§ Lieut.-Commander KENWORTHY
Does that apply to the labour in Persia as well? Will steps be taken to see that labour in Persia is as well treated as labour in India?
§ Mr. BALDWIN
I do not think this applies to Persia. The whole difficulty is that the conditions in the shale industry are governed by the surrounding districts where the coal is mined, and although it is not a coal industry they have always been accustomed to having the same terms as the colliers. We hope to take the Committee stage on Monday and to get the Third Reading on Tuesday, 1875 because it is of great importance that we should receive the Royal Assent before Parliament rises.
§ Colonel P. WILLIAMS
There is no other oil venture going on in any other part of the country? The Government, in conjunction with the Anglo-Persian Oil Company, is not intending to develop other fields beyond those the hon. Gentleman has indicated?
§ Mr. BALDWIN
Not that I know of, but, frankly, I have no information on the point. It is not a subject which has ever interested me, and I have no firsthand knowledge of it. I have not approached the company on the matter, but I shall be pleased to make inquiries and give the hon. and gallant Gentleman information on the point.
§ Colonel YATE
I am glad to hear that the negotiations with the Persian Oil Company may succeed in getting going the shale industry in Scotland. It is one of the most important things to get as much oil in our own country as we possibly can, and if only that result is achieved it will be a great thing. I do not think there can be anything more advantageous to the country than the advance of this money and the taking of shares in the Anglo-Persian Oil Company. We have seen the company going on year after year, and I am sure we all wish it the greatest success. I trust all the refineries which are now being established by the Persian Oil Company will bring more prosperity to this country and will be advantageous in every way.
Question put, and agreed to.
Bill accordingly read a second time, and committed to a Committee of the Whole House for Monday next.—[Lord E. Talbot.]