§ 3.31 p.m.
§ The Chancellor of the Exchequer (Mr. Harold Macmillan)
The transaction which we are discussing today was first brought to the attention of the Treasury on 5th June. On that day Lord Baillieu and Mr. Vos saw officials of the Treasury and submitted their proposals. This matter was reported to me on the same evening. Of course, it was apparent from the first that this was not one of the routine applications which come before the Treasury under the Exchange Control Act, 1947. Wider issues were clearly involved and I will be frank about my first instinctive reaction.
It was no doubt much the same as that of many hon. Members and the general public. I felt a sense of regret, even dismay, at the thought that an important asset of this kind, hitherto owned and managed by British interests, should pass out of our immediate control. Nevertheless, I believe that my experience in studying this matter has been the same as that of many hon. Members on both sides of the House. The more I looked into the details and possible alternatives, the more clear it became to me that the Government could have no option but to give their assent in principle. The only question was what should be the conditions.
Those conditions must guarantee two vital interests, first, the over-riding interest we have in strengthening sterling both in the short and long run, for which the United Kingdom has direct responsibility and for which we are the trustees of the whole sterling area, including Trinidad. The second was the life and prosperity of the people of the Island of Trinidad. For this the Government of Trinidad, of course, have primary responsibility, but they have the right to look to us for the strongest support. I think I should add that we should also bear in mind, at this crucial stage, the general interests of the peoples of the Caribbean.
Before coming to those major issues, I should like to say a word about the purely legal question. The assent of the Treasury is required to any transaction of this kind under the Exchange Control Act. The object of this legislation is primarily the protection of sterling. We are all familiar with one aspect of exchange control when we want foreign 1433 currency for any purpose. That is when a loss of foreign exchange is involved, but it is equally important that there shall also be control over the sale by British subjects of assets to foreigners, that is, even when the immediate result is a gain of foreign exchange. In such cases it is necessary to ensure that the sum received and the conditions of sale are such as to make the transaction a sound one.
I think that the House will agree that the effective exercise of such powers depends upon the tradition of fair and equitable administration. If the authorities are to command the confidence of citizens and traders, these powers, which are passed for one purpose, must not be used for another. In this case, however, after careful thought I would certainly not have hesitated to have used them had I reached the conclusion that in the broadest national and imperial interest this particular transaction ought to have been prevented.
There is, in addition to these general powers, a more technical power under Section 468 of the Income Tax Act, 1952. There, as the House knows, the consent of the Treasury has to be obtained if a company wishes to transfer its central management and control from the United Kingdom, so that the company ceases to be resident in the United Kingdom for tax purposes. The purpose of that, of course, it to protect the Revenue. Here again, it is necessary to operate the power in a reasonable manner weighing any prospective loss of tax against the other factors in each case.
Now I come to the major issues in this affair. I make no apology for the Government having taken a week to make up their minds. It is a curious thing that if Governments reach a rapid decision on this kind of thing, then they are accused of rash and ill-considered action. If they pause for a little thought, they are accused of dillying, dallying and dithering. Indeed, in one section of the Press it appears to be the view of some people that it is dilatory action to think at all.
Apart from the very highly technical questions involved, the larger questions also require a good deal of consideration and a good deal of discussion, first, and 1434 above all, with the Government of Trinidad. I also thought it right to communicate with the Government of Canada. There were two questions to be settled. Was the transaction contrary to the interests of the people of Trinidad? Was it contrary to the interests of the people of the United Kingdom? We have a responsibility, although in different degree, for both.
Let me deal, first, with the question of Trinidad. The Trinidad Oil Company has had a long life in that area. The oil supplies and even the probable oil reserves of Trinidad are not important in terms of modern oil production. They have no broad strategic, and little economic, significance, judged by the scale of world considerations. They have. however, a great value and a great importance to the life of the people of Trinidad. The fact that they are small in total makes them, in a sense, more precious and perhaps more precarious.
For a number of reasons the oil business is one where very large amounts of capital are required today. The Trinidad Oil Company has not been able to develop its business on a sufficient scale out of its own reserves, or to obtain sufficient capital for its own development from any other source, in such a way as to keep pace with modern requirements. The supreme interests of the people of Trinidad are the two following considerations: first, that the business should go on in all its different aspects, that is, with exploration and with the production and the refining of Trinidad oil, and also with the refining of such oil as can easily be brought to the island; and, secondly, that capital should be available for the development of all these activities.
On the purely economic aspect, it is clear to us, after consultation with the Government of Trinidad, that if the sale were to go through on the conditions which I set out in my statement last Thursday they would welcome that development and would have general opinion in Trinidad behind them. I think they would be right in this view, for it would assure to them and to their people the backing of a wealthy and powerful group of oil producers who would take the place of an organisation that has not the resources fully to develop those assets. That is the economic aspect from the Trinidad point of view.
1435 The political and social aspects are equally important, and the Government of Trinidad, as the House remembers, very rightly reached a conclusion as to the undertakings which they would regard as essential for the control of the present company were it to pass to new and non-British ownership and management. They communicated those to us, and they also—I think, very prudently—published Them for their people and the whole world to understand.
I think that those undertakings have generally been regarded as satisfactory. The precise form which they are to be given will, of course, have to be discussed between the two Governments and the Company. There should thus be little difficulty in securing that these undertakings are effectively guaranteed when formal consent is given. So much for the interests of the people of Trinidad.
§ Mr. Macmillan
There are very great powers. because, of course, all this is under the control of the Government and the Governor of Trinidad. I do not think that there is any difficulty about that.
§ Mr. Frank Tomney (Hammersmith, North)
There is another important aspect of the matter. In areas where American, capital has been invested is it not the case that the American trade unions have been inhibited by the Governments of those areas from organising the workers there?
§ Mr. Macmillan
I do not know what the answer to that is, but I observe that that is covered in the conditions which are included among the undertakings which the Government I Trinidad require, and which are printed in the White Paper.
I think that what I have said covers the interests and the view of the people of Trinidad. I go further and say that what we want to do is to make sure that a bouyant and developing business, so far as the resources of the area allow, is working to the economic advantage of Trinidad and of the Caribbean; and, indeed, it can well be argued that the larger command of oil resources in general in the hands of the new Company will tend to the maintenance and the 1436 growth of the refinery as well as of the extraction part of the enterprise, and that, from the point of view of the people of Trinidad, is a very important part of the future.
I would go further and say that, unless a very direct and vital British interest were involved, we should have no right to refuse a transaction clearly in the interests of Trinidad, so long as it was subject to proper conditions and while it was favoured by the Government of Trinidad. To do so would, I think, be in the spirit of the "old colonialism"—in the pejorative sense in which this sense is nowadays used or misused. It would certainly be contrary to the principles and practice of the Colonial Empire and Commonwealth of today. So much for the position of Trinidad.
Let me now turn to the interests of the people of the United Kingdom. First, I should like to deal with the economics of the deal itself. It is clear that the price paid is a satisfactory one judged by ordinary business standards. It is also clear that the immediate increase in the dollar reserves which will accrue from the transaction will not be unwelcome and may well be fruitful. Indeed, the price has seemed so high that some people have wondered whether it is explained by a hidden asset or a mysterious, undisclosed Eldorado.
I should like to examine that. Apart from the present development, what are the future possibilities of this business? On the production side, there are two assets, one in Trinidad and one in Canada. In Trinidad, the main hope for new production is in the unexplored areas, mainly submarine, and the rights over those are held by the Company called Trinidad Northern Areas. This asset is shared by the present Company, and will be shared, of course, by its successors, in equal parts with British Petroleum and Shell; each holds one-third of this exploration company. Therefore, whatever the potential importance of those sources of supply may be—I do not know whether they will be great or not, but they cannot be very significant—two-thirds of them are owned by Shell and British Petroleum. So much for the resources of the oil in Trinidad.
Now I come to the asset in Canada. There is a refinery business there belonging to the Trinidad Oil Company. There 1437 is also a distribution business. Neither of those is a very big affair. So far as the production of oil is concerned, apart from those two, the Trinidad Oil Company has done some small exploratory work and holds certain concessions, but, as I told the House last Thursday, of the 100-odd million dollars which have been spent by British interests in the last few years in obtaining concessions or developing potential resources in Canada, by far the largest sums have been spent by the two companies, Shell and British Petroleum. The Trinidad Oil Company's expenditure has been very small indeed in comparison. Therefore, so far as production in Canada is concerned, we are not parting with any substantial or significant part of British interests.
Now, of course, it may be that the particular concession, the particular work that has been done, which, as I said, was about one-tenth of what the others have done in Canada, may prove to be of special value. No one can know. It may be exceptionally lucky, but there is no difficulty at all, except, of course, enough Canadian dollars, in British companies getting concessions for oil exploration in Canada, and they are doing it all the time on a substantial scale; and I hope that we shall be able to give them even greater assistance in their efforts in the future. So there is really nothing, I think, in that part, the possible asset of exploration for oil in Canada.
Then, the House will ask, what is it that has induced the Texas Oil Company to make this large bid? I do not think I shall be committing any indiscretion if I say that it appears to me, at any rate, that one of the objects of the purchase is to develop business in the British market through the Trinidad Oil Company's moiety in the distributive business known as Regent. I think that that is the main purpose of the deal.
This business is already half owned by a company belonging to the Texas and California oil interests. The other half belongs to the Trinidad Oil Company. It is the purchase of this moiety which may, I think, be the chief attraction. Personally, I see no harm in that, unless we are opposed to all competition in the distribution of petroleum. [Laughter.]
§ Mr. Macmillan
If monopoly in oil distribution is to be part of the new programme of the Labour Party, we can understand this reaction on the part of hon. Members opposite.
Seriously, however, what is it proposed to do if we refuse permission for this transaction? The Trinidad Oil Company could not, I think, raise the money on the market. It has not the resources, and could not command the resources, it needs. One of its main difficulties, as is pointed out in its Memorandum which is Appendix A of the White Paper, is that it has no source of cheap Middle East crude with which to support its business. This means that it cannot hold out a promise of a proper return on further capital investments and yet very large sums are required for the full development of its business in Trinidad or elsewhere.
I see that it has been suggested that the British Government should have put up this money and themselves entered this business on a large scale. I personally think that that would be a very dangerous decision, and certainly very unwise if taken precipitately as the result of a sudden situation like this. Even with careful thought and preparation as part of a general plan, I think it would be very imprudent. That is not a practical policy.
One of the large corporations might have come along and taken it over and, of course, this possibility immediately occurred to me. I, therefore, asked the chairmen of both the British Petroleum and the Shell Company to consult with me frankly on this matter. They pointed out to me, in no uncertain terms, that, apart from anything else, they had no interest in purchasing half the Regent business in this country. In the first place, they would be going into a business on a fifty-fifty basis with one of their main competitors. That would not be a very workable partnership. The Regent share of distribution of petroleum products in this country is running at about 6 per cent. Another large supplier, Esso, is controlled by another American group.
1439 Shell and B.P. together supply far the larger part of our market. For what purpose would they want to buy Regent? Why should they buy a half-interest in a set of petrol stations and in a distributive machinery? To close it down? Surely that would be a very unwise action and contrary to the whole view of the House against monopoly. To go on running it? But they have built up their business over a much longer period than Regent. They have far greater expertise and, if they wish to increase their business, they have no desire and no need to do so by purchasing this distributive business.
Therefore, the main assets, and the main attraction to the Texas Company in its offer for the Trinidad Oil Company's share is something which has practically no value to the only possible United Kingdom purchasers, that is, either B.P. or Shell. As to the new exploratory areas in Trinidad, if we regard them as an asset, we retain two-thirds of them. As for Canada, Shell and B.P. have singly and together far greater developments and possibilities. They have spent and are spending far more on concessions in Canada. It would be of no particular value to them to add this small amount to what they already possess. And if they were able to make fresh developments in Canada and we are able, as I hope, to agree to the provision of the necessary currency, there is no difficulty in doing so. There is no need to buy Trinidad Oil shares in order to invest in oil in Canada.
There are, however, two conditions on which Her Majesty's Government must insist, partly in the interests of the United Kingdom and the whole sterling area, and partly in the interests of Trinidad. These are in addition to the specific undertakings to the Government of Trinidad which I mentioned earlier. They are the two conditions in paragraphs 28 to 30 of the White Paper.
The first is that the marketing operations should be carried out in such a way as is already agreed with other American companies for the protection of sterling. There has already been developed quite a technique on this matter, and it is essential that the new proprietors should conform to the practice—a practice which we have been able to negotiate successfully with other 1440 American interests. It is, of course, true that we shall have to provide the dollars for any dividends that may be paid, but that is nothing like as important a consideration as the marketing operations. That is vital.
It has been suggested that our industry will lose business because the new owners will buy all their equipment in the United States. In fact, American oil companies buy a great deal of their equipment here. Last year, they spent no less than £23 million with us on equipment, apart from invisible payments such as tanker freights.
The second condition is that the production and refining operations in Trinidad are to be carried out by a company registered in Trinidad. That is to protect the point which the hon. Member for Hammersmith, North (Mr. Tomney) has just raised. It will mean, of course, some tax loss to us, but it will mean a tax advantage as well as an economic and social advantage to Trinidad. With these provisos I feel that the financial and economic advantages of this deal are decisively in favour of acceptance, and I so advise the House. Any dollar loss in dividends or sterling loss in taxation will, I believe, be more than recouped by the dollar proceeds of capital investment by the new owners in the sterling area.
It has been suggested that I should have added a condition requiring the Texas Company to finance the purchase by selling to a United Kingdom interest some part of their holding in the company usually called Aramco in such a way that this country would be represented on the board of Aramco. I do not think that that condition would have been advisable, partly because Aramco is itself formed of three interests, holding exactly one-third each.
In any event, if we want closer relations with the Texas Company and its associates in Aramco, a far better way will be to let the present transaction go through. I believe that it will increase our common interest in the well-being of the international oil industry, and, up to a point, the more our interests and those of the Americans are mixed up, to use a famous phrase, the better it will be.
I have already referred to the strategic interests, but the contribution of oil production in Trinidad either now or in the future cannot be more than of the tiniest dimensions in relation to our vast needs.
1441 Moreover, the Governor of Trinidad has a right, and will retain it in an emergency, to full control over the product and over the refinery.
We are, therefore, left with the argument which, I have frankly admitted, was my first impression—what I would call the argument of political tradition or, if the House likes, of sentiment. We certainly cannot hide from ourselves that it is at first sight something of a blow to see a great asset passing out of our hands. This is natural, but if we look at this matter more dispassionately and from a wider view, especially remembering that we are a country dependent on world trade and overseas investments, I have no doubt at all where the balance of advantage lies.
What should be our policy towards mutual investment, that is, foreign investment in the sterling area and sterling investment abroad? Our policy surely must be to welcome foreign investment where it brings no positive disadvantage to the United Kingdom economy or to the economy of a country in the sterling area. This means that in considering an application for investment, including the transfer of ownership, we should give permission where the proposal promises to a significant extent to save imports, to promote exports, and to introduce valuable new techniques; and we should allow investment in a sterling area country outside the United Kingdom if it promises to contribute to the economic well-being of that country.
Broadly speaking, I think that it has been for a long time an advantage to us to have any foreign investments, especially American investments, flowing into the United Kingdom and the rest of the sterling area. In the United Kingdom we have gained in many branches of industry. We have gained in oil refineries and equipment in the motor industry, tractors and chemicals—to name only a few. The rest of the sterling area, for whom we are trustees, has gained from American, sometimes associated with Canadian, investment; for instance, in the development of bauxite mining in British Guiana and Jamaica, in copper mining in Africa, and in other ways.
All this investment coming from non-sterling area sources into the United Kingdom, or into the sterling area, is to our advantage. But, of course, we also 1442 need to be exporters of capital on an ever-increasing scale, and that is our great aim in trying to earn a surplus with which to do it. Our investment outside the sterling area is being steadily renewed. Special permission is being given for the purchase of the necessary foreign exchange, and this has made possible notable developments in Canada, and, to a lesser extent, in the United States. I will not mention all of them, but there have been some remarkable investments of British capital in the United States during recent months, sometimes in developing new businesses and sometimes in buying back old ones with which we had parted.
In the sterling Commonwealth we are making a great effort. Long-term lending there in the last four years has been at the rate of well over £100 million a year. and that is a great deal. As a percentage of national income it is unrivalled in any country in the world. It also, of course, represents a considerable strain on our reserves and on our balance of payments, but that is sometimes forgotten by the opponents of this transaction. It would be a serious blow to our long-term interests if we were to set up a bar against anything like a two-way traffic in investment.
There is one point I must mention, because it has been mentioned in the House and in the Press. I would like to deal with the suggestions made yesterday at Question Time—and they are very natural suggestions—that the proceeds of this sale should somehow be segregated into a separate account for Common-wealth development. I explained then that this is not really practicable. The dollars accrue to the reserves and we cannot isolate them. Similarly, the sterling counterpart of those dollars is distributed to the shareholders, but this does not mean that the sale does not help us to do more to finance sound development in the Commonwealth.
Of course it will. The healthier the reserves the more we shall be able to allow. This is the object of our policy. But as dollars for investment are made available from the reserves, so it is only right that dollar earnings, whether from the sale of investments or otherwise, should come into the reserves. If we were to adopt any different course I am sure that right hon. and hon. Members 1443 on both sides of the House would realise that we would impose a serious strain upon the continuing operation of the sterling area. We could not act independently in this way.
In the last week, among other activities, I have had a little time to read some of the Press comments on this question. Naturally, I have observed that as the details of this matter became more widely known, the Press as a whole came to the conclusion to which I was forced when I examined the facts dispassionately. There have, of course, been some notable exceptions. By a strange conjunction the three newspapers which have specially opposed this have been the Daily Worker, the Daily Herald and the Daily Express.
It would be indelicate for me to inquire into the spiritual affinity that ties this group together, but there is one extract from the Daily Express of last Friday to which I would call the attention of the House, because it sums up exactly the point of view that I believe to be so dangerous and ill-judged. In part of the leading article, under the sub-heading "Shameful, sordid," there is this statement:Resources like oil and water power are a vital portion of a nation's patrimony. To keep them out of foreign control is an elementary act of self-preservation. Failure to give that measure of defence is irresponsible.To keep oil out of foreign control—[HON. MEMBERS: "Oh."'] Yes, the article states that water and oil power are a vital portion of a nation's patrimony and that to keep them out of foreign control is an elementary act of self-preservation.
I could hardly imagine a doctrine so dangerous to us. The people of this island, 50 million of them, live in a country with very few resources of raw materials. What would be our position if this doctrine were rigidly enforced by all the countries of the world? What would be our position in the field of oil? I should have thought that no nation had a greater interest than our nation in opposing the narrow, exclusionist point of view. We have learned that from bitter exeprience, and I should have thought that we had enough trouble with Mossadeqs abroad not to wish to encourage them at home.
Outbreaks of xenophobia are sometimes epidemic and sometimes endemic 1444 diseases. Sometimes it attacks great continents and sometimes small countries. It may be a symptom of a sense of inferiority in declining nations or in young and growing nations. In an island like ours, however, with its splendid and historic past, and, I do not doubt, its still more powerful future, I think that we should be immune from these prejudices. Economic nationalism or isolationism is the last thing in the world which can suit us. We ought, of all people, to be moved to resist these tendencies, for we have so much to lose and so much to protect.
It is easy. of course, to play upon emotions of this kind. It is easy to make appeals, to appeal to different sections of a community, but I think we ould have regard to our larger and our more permanent interests. By our investment abroad we have secured for ourselves access to many of the most important supplies of raw material on which we depend for our livelihood. Sometimes these are threatened—and they are threatened today—by political or by racial prejudices, but they are certainly not in our interests, and we should not encourage them. Still less ought we to fall victim to them ourselves. We should hold on to our policy of trying to increase the total volume of world trade, for by this means alone in the long run can we maintain the standard of living and the economic life and future of our people.
§ 4.8 p.m.
§ Mr. Harold Wilson (Huyton)
We must congratulate the Chancellor on starting the day, at any rate, in a better mood than he was in yesterday. There were two parts of his speech which greatly entertained the House. One was when the right hon. Gentleman tried to indicate the virtues of free competition in the distribution of petrol in this country, a point to which I will refer in a few minutes. The second was towards the end of his speech, when he decided to pick a quarrel with Lord Beaverbrcok and, in particular, to take to task the Daily Express for the leading article it produced at the end of last week.
I am bound to say for my part that when the Chancellor was reading his lecture to the Daily Express he might just as well, when he was talking about our oil and all that, have been delivering the same lecture to the Prime Minister in respect of a speech that he made at 1445 Norwich a fortnight ago. At any rate it is a change to feel that the Chancellor's quarrel is not with this side of the House so far as that argument is concerned, but with his own Leader and with his own Press supporters.
I must tell the Chancellor that neither his speech nor the White Paper which we had on Monday in any way shakes our view that this is a regrettable transaction which has caused dismay—the Chancellor himself used the word—and despondency throughout the country, and, I believe, in more than one quarter of the House.
I must make clear at the outset what our line is. To use two of the words which the Chancellor has just used, it is neither sentimental nor xenophobic, We feel that this take-over bid should not be the signal for an outburst either of anti-Americanism or economic nationalism. So far we agree with the right hon. Gentleman.
But our case, which we shall take into the Division Lobby on a clear vote of no confidence in the Government on this issue, is twofold. [Interruption.] We shall have with us very many hon. Members opposite if they vote according to their convictions and not in accordance with party discipline. First, and in its widest aspects, we believe that the deal is due to the admitted fact that after four and a half years of Conservative Administration we have not the capital available for an essential project of Commonwealth development. That was the broad point which stood out a mile from the Chancellor's statement.
Our second point is that, even against that background, even accepting the Chancellor's analysis of the economic situation, we believe that a constructive and workable alternative could have been produced if the Chancellor and the Government had had the will to do it.
The Chancellor has ranged over the history. He tells us that the Treasury first heard of this business on 5th June. Yet the offer was made public by the interests concerned that night, the very day when the Chancellor heard about it for the first time. We know what the reaction of the Stock Exchange was at its opening next morning, and from that moment the Government had a pistol held at their head.
1446 I suggest to the Chancellor that he has not taken the right line in what appears to have been his first encounter with these rather slick oil financiers. I suggest that he should have made clear that this was an intolerable approach on the part of the oil companies concerned and that the Treasury should have been approached at a much earlier point in the negotiations so that a coherent line could have been worked out.
I hope we may be told whether there was at any time an approach by the Trinidad Oil Company of Mr. Vos and his associates to the Government of Trinidad. If so, how long ago was it? If it is confirmed that neither the Government of the United Kingdom nor the Government of Trinidad knew anything about the deal until it had practically broken in the Press and the whole matter had come to pistol range, it suggests very bad faith on the part of those responsible for the deal knowing, as they must have known, that from the start it required Government approval.
When the news broke in the Press, the first result throughout the country, except in the City, was consternation. My hon. Friends and I opposed it. The 1922 Committee went on record against it. The mighty Beaverbrook Wurlitzer pulled out every stop it had on the question. Where are these brave souls today? [HON. MEMBERS: "Ascot."] The 1922 Committee has turned tail. In three hours' time we shall see all Lord Beaverbrook's chocolate crusaders trooping through the Lobby in support of the deal. Why will they be doing that?
Personally, I discount the view that hon. Gentlemen opposite have succumbed to pressure from the City, though the pressure has, in fact, been formidable, but I do not think it was that. I do not think it really is that hon. Gentlemen opposite have been converted by the persuasive arguments of Mr. Vos whom some of them met last evening. I think it is simply that hon Gentlemen opposite suddenly realised that their professed love of the Commonwealth was in conflict with their doctrinaire belief of non-intervention in economic affairs. Year after year we have had that. We have had the same conflict about bulk purchase. Commonwealth development and free speculative markets do not mix, and on this occasion, 1447 as before, the free speculative markets have won.
Also, I think hon. Gentlemen opposite are a little worried to find that the only powers that the Government could have used to stop this deal were the products of hotly contested Socialist legislation. The Chancellor made clear that he could have stopped the deal by the Exchange Control Act, 1947, which hon. Gentlemen opposite bitterly opposed. The other power is the residence provision in Section 468 of the Income Tax Act, 1952, also a Labour Measure.
§ Mr. Wilson
Certainly. The hon. Gentleman must realise that the 1952 Income Tax Act was a consolidation Measure and Section 468 simply swept up into it Section 36 of the Finance Act, 1951. Hon. Gentlemen opposite kept us up all night opposing Section 36 of the 1951 Act. I should not like to feel after all these years that hon. Gentlemen opposite were trooping through the Division Lobby during a Finance Bill not knowing what they were voting about. That, I think, perhaps explains the attitude of hon. Gentlemen opposite.
I want to tell the Chancellor that our line is not a narrow, still less a peevish, one. It is not the one that encroachment into Commonwealth territories must at all cost be resisted. As the Chancellor fairly said this afternoon and last week, it has been the policy of both parties in this country since the war to encourage American investment in this country and in the Colonial Territories where a clear advantage could be shown. The House will be familiar with the kind of tests that have been applied to projects. Do they bring know-how to the country? Do they bring knowledge of new processes? Do they make possible the creation of some new export industry or export outlet? Do they provide some means of saving imports, especially dollar imports?
We have welcomed very many of these investments. In the Development Areas there are scores, if not hundreds, of factories controlled by American companies which both the Labour Party and the Conservative Party have welcomed into the country since the war. Many of them are playing a big part in our export trade. 1448 Import saving, too. I remember opening an American-controlled factory to produce carbon black. The result of welcoming it here is that it has made us practically self-sufficient in carbon black so that we do not have to import so much of the American product,
The Chancellor has not shown what advantage accrues, to the United Kingdom, at any rate, from this deal. None of those tests has been applied here. Are we going to get some new know-how from the American companies in the marketing, distribution and refining of petrol? Surely that is not possible. Regent advertisements are plastered all over the country with the slogan, "It is British. It is best." If that is true, I do not think it is possible for American know-how to improve upon it. Are we going to get any new exports? Are we going to save imports? The Chancellor stated that it would cost us something in dollars in transmitting the profits.
The Chancellor suggested a week ago that we should welcome the American entry into the domestic market. He has been talking about expertise. I think it is the view of most hon. Members that there is enough expertise already in oil distribution in this country. Too many resources are already being wasted in the phoney, costly oil war going on at present on the high roads of Great Britain.
Consequently, we must ask what really lies behind the deal. What is the motive of the interests concerned? Does the Texas Oil Company want or need Trinidad oil or the refinery? The figures given by the Chancellor make it clear that this is not the bait. Is it Canada? The Chancellor says it is not. He does not seem to think there is much prospect of development in Canada, or, to put it more fairly, perhaps, he rather played it down. He said that there might be a lucky strike, but he could not say anything about it.
§ Mr. H. Macmillan
I did not say there were no prospects of development for oil in Canada. I said that at least ten times as many prospects were already held by British companies
§ Mr. Wilson
Certainly, that is quite right. I did not say that the Chancellor said there were no prospects. I said that he played it down; there was little prospect and that was not the bait. 1449 I think the Chancellor will agree that in his speech today he indicated that there was another attraction far greater than Trinidad or Canada that caused these American interests to want to come into this business, although I am glad that the Chancellor, from his intervention, does not entirely discount the Canadian prospects even of this company. The fact that they are worth only £5 million or something of that order will strike a chord, for, I believe, we sold a considerable share of the Kuwait interests for something like £5 million many years ago whereas today it would be worth a great deal more.
The Chancellor was quite right: the motive is clear. Texas Oil wanted a share in the expanding British petrol market. The figures show that consumption of petrol in this country last year was 11 per cent. up on the previous year, whereas the United States domestic market went up by only 6 per cent. I have referred to the artificial war between the petrol companies. We are all familiar with the costly advertising that goes on, for which the motorist pays. We read advertisements about the mysterious additives which are supposed to improve our petrol. I am fairly certain that there is not a single hon. Member who drives a car who could say exactly what his petrol has in it. much less what additive has been put in by the petrol company.
We are all only too familiar—it came up again at Question Time yesterday—with the unnecessary and wasteful expenditure on unsightly new petrol stations. We are well aware that in the last two or three years private garage owners have been blackmailed and bought up by the oil firms all over the country, all in the name of Tory freedom. I warn the House and the Chancellor that this deal, extending the power of the Texas Oil Company, will add to the already tangled web of restrictive practices in oil distribution in this country.
I do not know whether it is within the knowledge of all hon. Members that the Texas Company has been denounced by the United States Government for its exclusive dealings and the illegitimate pressure that it has put on garages in the United States in respect of the sale of accessories which have nothing whatever to do with petrol. In 1953, for instance—I am taking this from an American Gov- 1450 ernment Report—2¾ million dollars was paid in backhanders by the Texas Oil Company in respect of sales of the products of a certain tyre company. I hope, therefore, that the Government realise the risk they are running in this deal.
Having asked what is the motive of the company, I should like to ask what is the Government's motive in accepting this transaction. I fully accept the Chancellor's statement that on first hearing of this case it filled him with dismay, but I think the first factor in his decision was the Government's unwillingness to interfere with a takeover bid. They do not interfere with Mr. Clore—they have let him pursue his interest quite untrammelled, rejecting all our proposals that such capital gains should be taxed; and so they say, "Why interfere with the Texas bid?"
As I said the other afternoon, this is the Windfall State. Fortunes were made in those first ten minutes after trading began on the morning of 6th June. I saw no evidence in the Press of any appeals for restraint outside the Stock Exchange—I do not know whether the Prime Minister is meeting its representatives in his 10, Downing Street meetings—and no evidence of any plateau of stability on that occasion.
The fact is that a stockholder holding £1,000 nominal of Trinidad oil stock made £6,000, tax-free, in those 10 minutes. To earn that amount—
§ Mr. Wilson
I said "£1,000 nominal." which he would have bought, perhaps, the week before for about £8,000. He still made £6,000 tax-free in 10 minutes. To earn that amount in twelve months, after tax, a person would have to earn at the rate of £50,000 a year to make as much gain as that. If hon. Members do not find the contrast invidious, if we were to take, for example, a coal face worker earning average wages today, to earn that amount after tax he would have to work for ten years at the coal face to earn what such a stockholder could, and did, gain in ten minutes. These are the protégés of the Chancellor.
The Chancellor was obviously tempted by another prospect—and I can sympathise with him in this respect—the prospect of 180 million dollars for his-depleted gold and dollar reserves, those 1451 gold and dollar reserves which fell by a quarter last year under the Lord Privy Seal, as the Chancellor never tires of telling us. There was a background to this. Sterling was weak at the time of this bid. It had fallen ever since the Chancellor's disastrous and expensive speech at Newcastle. That speech of economic abdication—unfortunately, not resignation—cost the country millions upon millions of dollars.
So what better tonic and what better answer could there be to evilly disposed persons in the City and abroad who were forecasting devaluation this summer than a windfall gain to our reserves of 180 million dollars? We have had, as the Chancellor has told us, some increase in our dollar reserves this year at the seasonally most favourable time of the year, but the increase has been much too slow for real safety. Well might the Chancellor have said to himself:the gold reserves climb slow, how slowly,But westward, look, the land is bright.It was obviously a strong argument to the Chancellor, and the sterling exchange rate began to pick up from the very moment that this deal was announced.
I must ask the Chancellor whether this is to be the pattern from now on. Are we to be faced with the position that every time we make a speech, we have to sell another important Commonwealth interest—
§ Major H. Legge-Bourke (Isle of Ely) rose—
§ Mr. Wilson
Wait—in order to pay for it? While it may fairly be said that the Chancellor's speeches are silver, truly his silence, if we could have it, would be golden.
§ Major Legge-Bourke
How can the right hon. Gentleman use this argument when he was a Member of a Government which ate the Argentine Railway proceeds? What did his Government do with the Canadian dollars that they got by loan and and how much of that was reinvested in Canada?
§ Mr. Wilson
I was not entirely unaware that that point might be raised, and if the hon. Gentleman can bear with me in patience a little longer, I shall be very happy to come to it in a moment. [HON. MEMBERS: "Not too long."] No, not 1452 too long. I know that it is rather painful for hon. Gentlemen opposite to be reminded of the great financial cost to the country of the Chancellor of the Exchequer, and lest any of them should think that my remarks are in any way overdrawn, which they are not, perhaps I may quote from The Times of last Friday, which bears out what I am saying… there is no doubt that the prospect of the oil deal going through has brought some support for the pound over the past few days. This is perhaps all the more remarkable in that only a week ago sterling was under considerable pressure largely as a result of certain Ministerial statements.I think that these reasons were pretty decisive with the Chancellor, although they are not the reasons which the Chancellor has given.
The Chancellor justified his decision on two grounds: first, the need to encourage two-way investment; and, second, the need to find capital for essential development in Trinidad. I have already said that we support and welcome American investment when it fulfils the conditions which have been laid down by successive Governments. The conditions currently operated by the present Government are set out in paragraph 19 of the White Paper which refers to… the promotion of exports, the saving of imports, the introduction of new and worthwhile techniques and, in the case of a company operating in a Sterling Area country outside the United Kingdom, the economic development of the country concerned.I have already shown that this deal fulfils none of those conditions, although the Chancellor rests his case on "the economic development of the country concerned," in this case Trinidad.
No one doubts the vital part played by oil in Trinidad's economic life, and that, although oil production has declined there—it has fallen by 20 per cent. since 1946—there is a very great need—I concede this to the Chancellor—for new capital and new development there, especially exploration, including off-shore drilling, which is a very expensive form of exploration, as well as a need, of course, for adequate supplies of crude oil. if the Chancellor's case is that this country, dizzy with Tory success, "Prosperity Plus" and all that, cannot find the few millions which are needed for the purpose, I must remind the House that the Lord Privy Seal, whom we are missing from this debate, committed this country 1453 in 1953 to the task of building up a permanent surplus, year in and year out, of £300 million a year for Commonwealth development. At present prices that £300 million would be £400 million or £450 million.
Now the Chancellor of the Exchequer, faced with the test, has to admit total failure and just as the abolition of the investment allowance marks the end of the Lord Privy Seal's "Invest in Success" dream, so this Trinidad oil deal marks the death of another of his cherished hopes. That is the main lesson of this deal. As a nation, we have failed to provide the surplus needed to discharge our solemn responsibilities.
§ Mr. Bernard Braine (Essex, South-East)
In order to get this matter into perspective, can the right hon. Gentleman inform the House of the total amount in dollars which this Government has had to find since 1951 in order to repay the money borrowed from the United States and squandered by the Government of the day?
§ Mr. Wilson
The hon. Gentleman has always been something of a misnomer, but I did at least think from his previous interventions that his interest in this oil deal was such that if I gave way to him he would make a remark which was relevant to the subject of the oil deal and not raise another question, which I should be very happy indeed to debate with him any time here or anywhere else. [HON. MEMBERS: "Answer."]
§ Mr. Braine rose—
§ Mr. Wilson
I have just said that as a nation we have failed to provide this surplus eleven years after the war. Not one year, not twelve months, but eleven years after the war we have failed to achieve—
§ Mr. Braine rose—
§ Mr. Wilson
If the hon. Gentleman is genuinely seeking information, I shall be very glad to give him all the facts that are needed on the point, but one thing which I think he will recognise is that when lease-lend came to a premature end, which President Truman afterwards said he regretted, it was essential to borrow that money in order to keep people alive in India and elsewhere.
1454 Newspapers which support the Government have made this point very clearly. I quote the Financial Times:This sale was symptomatic of a real and serious economic failure. In the last decade Britain has been unable to make adequate investment in the Commonwealth.Going on, it said:The only alternative is for Britain to provide a large enough surplus to be able to make an adequate investment in the Commonwealth.The Daily Telegraph last week said:The whole reason for the sale is that the Americans have the resources to finance the development that is possible while the British company has not. This is a symptom of the underlying weakness of this country which is generally concealed.It was certainly concealed at the election in May, 1955.The price which the American company is willing to pay is an unmistakable reflection of the incipient capital starvation which is attacking the roots of our prosperity. If the critics would turn their attention"—this is a crack at us—to the real cause of the sale and shout as loudly for the changes in domestic policy which are necessary before adequate capital can be made available to British companies then the noise they are making might be to some purpose.We fully accept that. We shall, at every possible opportunity press for the Chancellor's answer in regard to domestic policy.
The same line is taken in The Times in an article called "Bitter Pill," and in the Observer and Sunday Times. Therefore, I claim that this is no party point. I believe that many hon. Members opposite who opposed this scheme at the outset, have reluctantly come to acquiesce in it—I think that the word is "reluctant"— and with a heavy heart because they felt that, however bitter the pill, we could not provide the capital, and they felt, as we do, that this essential development in Trinidad must go on. I should be going wider than the scope of this debate if I were to discuss the general economic policy of the Government and the measures needed to create this surplus. I am sure that we shall agree that this is the essential part of this debate.
The Financial Times, on Monday, had an interesting analysis showing—and this is its conclusion—The net new investment in the Commonwealth last year financed out of current income was just £4 million1455 in conditions which the Government, in the Economic Survey, described as highly favourable, £4 million against the Lord Privy Seal's programme of £300 million.
The second question that I said I would answer was, even admitting the tight position of the country in regard to investment capital, was there any alternative? We believe that there was. We believe that the Government should have provided the capital for the Trinidad Oil Company, either by enabling the Trinidad Government to finance the developments or by taking shares in the company. Because this transaction was rushed through with so much haste by the interests concerned there has been no proper consideration of the matter. I do not complain at all about the Chancellor's statement that it took them a week. If it had taken them a month and they had got the right answer we should have been more pleased.
§ Mr. Wilson
I was then pressing the Chancellor for a quick decision—because I wanted a quick, right decision. The Chancellor could easily have said "No" as soon as he heard about it. I am sorry that he took a whole week and then said "Yes."
Because of this haste the other alternatives were not considered at all. For example, was any proposition put forward that the Trinidad Company for developments in Trinidad should have had the use of Colonial Development and Welfare funds for developments in Trinidad? Was there any consultation with the Colonial Development Corporation? Did Mr. Vos see the Finance Corporation for Industry, the chairman of which, Lord Bruce, is passionately keen about Commonwealth development? Did he go to the new Commonwealth Finance Corporation about which we heard so much a year or two ago? Did he go to any of these bodies, or to the Trinidad Government? These are things that I hope we shall be told.
What about Canada? Did Mr. Vos seek to get any of the money he needed in Canada? The Chancellor has not told us this, but I see from the last annual report of the Trinidad Company that to finance developments in Canada the Trinidad Company last year raised 13 1456 million dollars, through issues of debentures and equity stock. They had no difficulty in raising money in Canada for these developments. Was this possibility considered? Of course not, because no capital gain was involved. That is the real point.
It is not good enough for the Government to say that they could not raise the money or that the money could not be raised on the private capital market of this country. If Shell or B.P. had wanted to raise this money they could have got it all right. If they had wanted to raise an equivalent amount of money on the Stock Exchange, or in the City, they could have raised it. The money is there if it is wanted. The Chancellor may, of course, be concerned about the small part of the investment which must be found in dollars, for dollar equipment in Trinidad, but if he could not have found that from our reserves there was a clear case for borrowing it from the International Bank for Reconstruction and Development. That is what the World Bank exists for.
Is there anything revolutionary or shocking in suggesting that the Government should have stepped in on this important development? The right hon. Member for Woodford (Sir W. Churchill) did it before the First World War when he took shares in B.P., or Anglo-Persian as it was then called. The £2 million that he paid for them has been a great and most successful investment. Disraeli has been almost deified by the party opposite for his brilliant opportunism in buying Suez Canal shares, but these tired and unimaginative followers of his—these drooping primroses—have tamely let the initiative fall from their palsied hands.
Another possible alternative was suggested by my hon. Friend the Member for Wednesbury (Mr. S. N. Evans). Had this question been properly considered, and had there been time to go into all the ins and outs, the Government might have come to some satisfactory arrangement which would have permitted the Texas Company to increase its participation on the only terms that would have made sense, namely, by bringing in the Middle East. The Texas Company is, as to 30 per cent., in Aramco. I do not need to stress the importance of Aramco, not only in its economic but its political aspects of conditioning—one might 1457 almost say poisoning—our relations with Arab countries. If that company had come in under such terms—the price they would have had to pay would not have been a windfall gain for the shareholders and a large tax-free pay-off for Mr. Vos, but a reasonable exchange of interests between the Caribbean and the Middle East. Here again, the national interest has been sacrificed for purely financial considerations.
As we propose to divide the House upon this matter I do not think that it falls to us to comment in any detail upon the safeguards and conditions set out in the White Paper. History is not concerned with the safeguards which Ethelred the Unready insisted upon in his dealings with the Danes, and I do not think that we are very much concerned with them here. We welcome the conditions designed to protect the vital interests of Trinidad, so far as they go, but we should have preferred the Government to leave to the new Caribbean Federation the decision both upon the deal itself and the conditions to be attached thereto. I hope that the Colonial Secretary will tell us what sanctions will be used if the colour bar is introduced by this company in, say, five or 10 years' time.
I agree with what the Chancellor said about the reserves. This cannot go into a separate fund. But I hope that the Chancellor will feel that the acquisition of these dollars, which we deplore, enables him to go in for dollar developments of a kind that he might otherwise have felt prevented from undertaking.
Hon. and right hon. Gentlemen opposite have been shouting about the Argentine and Abadan. I do not intend to take up much time in dealing with those matters, because it is obvious that hon. Members opposite are not aware of the facts. If they were—and they can find them if they read the report of the debate in the OFFICIAL REPORT for 11th March, 1947—they would know that, in the first place, the deal was made at the request of the shareholders, who found that their earnings were a diminishing asset because of Argentine's State control over railway charges. As for the suggestion of the hon. and gallant Member for The Isle of Ely (Major Legge-Bourke) that we ate the railway proceeds, I would inform him that all the money except £25 million 1458 came out of sterling balances accumulated during the war, and which we had to redeem under the terms of Article 10 of the Mutual Aid Agreement. In other words, it was not my right hon. Friend the Member for Dundee, West (Mr. Strachey), as Minister of Food, who ate the railway proceeds; it was Lord Woolton, during the war.
§ Major Legge-Bourke
I hope that the right hon. Gentleman will remember that Lord Woolton, at any rate, did not have to ration potatoes. Will the right hon. Gentleman now answer the second part of my question? How much of the Canadian loan in dollars was spent by the Government of which he was a Member in British investments in Canada?
§ Mr. Wilson
I am sorry if I am forcing the hon. and gallant Member to draw so deeply upon the material of the 1950 General Election. I would remind him that we have had two or three elections since then. I should have thought that he would at least have used the questions put in 1955. [HON. MEMBERS: "Answer."] I have answered the question. The hon. and gallant Member and, I believe, the Chancellor, referred to Abadan.
§ Mr. Wilson
I can assure the hon. and gallant Gentleman that there is nothing in his point. He referred to Abadan. In that case the action was that of the Persian Government, however short-sighted and wrongly conceived. It was within the sovereign jurisdiction of the Persian Government, and it could have been stopped only at the point of the bayonet. The deal which we are debating this afternoon is within our sovereign jurisdiction, and can be stopped without bayonets, by recourse to Sections 9 and 30 of the Exchange Control Act, 1947.
The main point about this deal is the failure to produce the surplus required. I do not need to remind the House—because I am sure that this is common ground between hon. Members of all parties—of the need to be able to play our part in world development, especially colonial dvelopment. I do not think it too much to say that not only our economic survival, but the survival of the free world as we know it is dependent on the advanced nations devoting a sufficient 1459 proportion of wealth and resources to the task of helping the backward areas to raise their living standards. Let us be frank about this. It will mean sacrifices in our standard of living, not necessarily a reduction in our standard of living, but certainly it will mean the sacrifice of part of the increase which we ought to enjoy as production increases, if and when production does increase again.
We should all be prepared to face this sacrifice, but that is not all. In the wider sense, the work we are able to do in the backward areas of the earth is our answer to the Communist challenge in those areas. But at the very first test, for reasons which we consider inadequate and unworthy, the Government have failed to meet that challenge and that is why we shall divide against them in the Lobbies this evening.
§ 4.51 p.m.
§ Sir Henry Studholme (Tavistock)
I do not think that even my worst enemy would accuse me of having bored the House with long speeches for these last ten years. As hon. Members know, I have been a Whip, and, as such, condemned by custom to an almost Trappist silence. I do not propose to abuse my new-found liberty by making a long speech this afternoon.
I hope that the right hon. Member for Huyton (Mr. H. Wilson) will forgive me if I do not refer to his speech, which was partly a lecture to the Government and partly a knock-about act and very amusing. Nor shall I refer to my right hon. Friend the Chancellor's very able and convincing arguments, except to say that I have come to the reluctant conclusion that the Government have taken the right decision. It may be a decision which is very galling to our national pride but, nevertheless, I maintain that it is an inevitable decision. On Monday, there was an interesting letter—a very sensible letter, if I may say so—in the Daily Telegraph from my hon. Friend the Member for Hornsey (Sir D. Gammans), in which he put the matter in a nutshell. He said:… the Americans have the capital to invest in under-developed countries and we have notHe continued:Until the people of this country decide what they are prepared to do without in order 1460 to develop the Commonwealth, we must not object if the Americans offer to do the job for us.My hon. Friend went on to ask:Can we combine a high standard of living, shorter working hours and the Welfare State with large-scale assistance to our British subjects in overseas territories?That is a challenge which we have to meet, and I think that the real point at issue here is what is in the best interests of this country and the Commonwealth. It is incongruous, to say the least, to see Members opposite appearing in the role of champions of the Commonwealth—[HON. MEMBERS: "Why not?"] In the old days, when the Liberal Party were in power, they were bored with the Empire. They regarded it as rather tiresome appendage and the Socialists have constantly said that they were ashamed of the British Empire—
§ Mr. J. Grimond (Orkney and Shetland)
In the happy days when there was a Liberal Government we added to the Empire. Since Conservative Governments have come to power, the Empire has been steadily reduced.
§ Sir H. Studholme
I seem to remember that Disraeli did a great deal to help the Empire. I seem to remember, also, a speech by the late Sir Stafford Cripps, in which he said that when he thought of the British Empire he bowed his head in shame.
§ Mr. F. Blackburn (Stalybridge and Hyde)
There is a difference between the Empire and the Commonwealth.
§ Sir H. Studholme
When the Chancellor spoke of the greatness of our country in the past there was derisive laughter from hon. Members opposite. I speak with some feeling about this, because quite a number of my forebears went out into the Empire and helped to build it and defend it. I am very proud of that.
I recently put my name to a Motion, in the name of my hon. Friend the Member for Harrow, West (Sir A. Braithwaite), asking the Government to make still further cuts in expenditure, beyond the £100 million already planned, in order that the money saved may be invested in Commonwealth development. I quite appreciate that it is no easy matter and that unless we can earn more abroad we cannot invest more abroad. But I also know that this is one of the main objects 1461 of the Government's financial policy, and, therefore, I support that policy.
Any saving in Government expenditure will help to relieve taxation and make money available for investment in industry and enterprise, both at home and in the Commonwealth. Unfortunately, the moment the Government announce any economies, except in the realm of defence, there are squeals from the Opposition and, to my mind, hon. Gentlemen opposite are very unconvincing champions of colonial development.
To refer again to what was said by my hon. Friend the Member for Hornsey, what are we prepared to do? If hon. Members opposite were to say, "Let every trade unionist, for, say, one year, give 1 per cent. of his wages; let every Member of Parliament, for one year, give 1 per cent. of his salary and, if necessary, let every company put aside 1 per cent. of its dividends; and let all that money be devoted to the development of the Commonwealth," then hon. Members of the party opposite would be talking, and I should applaud them.
§ 4.58 p.m.
§ Mr. S. N. Evans (Wednesbury)
I will not enter into a party political wrangle with the hon. Member for Tavistock (Sir H. Studholme), because this matter is far too serious. This transaction really is a national disgrace. I do not oppose the sale on principle. After all, in the absence of exertion, frugality and thrift, we cannot pay our way in the world and, therefore, the sale of capital assets every now and then becomes inevitable. That is the brutal truth. It is Trinidad oil today, it may be Rhodesian copper tomorrow, and so it will go on until someone succeeds in inducing this nation to live within its income.
I pass from this melancholy aspect of the matter, which is the only one that matters, to something a little less disturbing but only slightly so. But, first, I would emphasise the point that it is a national disgrace by pointing to Holland. Look at what has been done by a little country like Holland. All through the adversities brought about by war and with all the changes, including the loss of Indonesia, Holland still manages to hang on to 60 per cent. of Shell and its vast interests here and in the United States; still manages to hang 1462 on to 50 per cent. of Unilever, and having done those two things, still has enough money to take up a 14 per cent. allocation in the Persian Consortium, when the Abadan settlement was made. When we think of these things which that small nation has done, and when we consider what we are doing today, I feel ashamed. This nation really must pull itself together.
I do not oppose the sale in principle, as I have said, but I am afraid that we are not getting enough out of it. The price may be a generous one, but I should like to know the extent of the American shareholding in this Company at the moment; because, of course, that American shareholding will have to be deducted from the net amount of dollars to be made available to the Chancellor of the Exchequer. The American shareholders will keep their dollars at home and I should like, if possible, to be told the extent of the American shareholding in Trinidad oil.
We ought to examine the political aspects of this matter with great care. We have had very considerable trouble with the Texas Oil Company and its partner, Standard of California, and that trouble still persists. I wish to ask the Government what assurances they have received from the Texas Oil Company that their good will in the matter of the Buraimi Oasis dispute will now be at our disposal. As the House knows, Texas and Standard of California are very close partners and soon they will be trading in this country under their trade name, used throughout the world, of "Caltex". They are to join our family and British motorists will be asked to buy their products.
I think it important that we should get the future attitude of Texas Oil Company to British interests in the Persian Gulf established before this deal goes through, because I should not like there to be a repetition of the boycott which took place in this country between the two wars. Hon. Members will recall that there was a campaign to boycott R.O.P. sales in this country. If the British people got an impression that the money they were paying for Caltex oil was being used in part to finance propaganda and activities inimical to their interests, they might feel tempted to restore the kind of ban or boycott on Caltex products in this 1463 country which characterised the attitude to R.O.P. between the wars.
That would do untold harm to Anglo-American relations. I am not anti-American; I am devoted to the Anglo-American partnership. But I think that the partnership is a bit one-sided and that our American friends are a little nearsighted about what is due to a partner. Even so, I am dedicated to the Anglo American partnership. Therefore, I should like the Colonial Secretary to tell us what approach has been made to the Texas Oil company about its future attitude to the Buraimi Oasis dispute. Buraimi has been British protected territory for 136 years and Aramco has been infiltrating into the Buraimi Oasis. To his eternal credit, the Prime Minister threw them out, but we do not want that sort of business going on, because it does damage to harmony between the two great English-speaking nations.
I ask whether this assurance has been sought because all down the 600 mile long Persian Gulf we are getting anti-British propaganda which, of course, is financed out of moneys put at the disposal of King Ibn Saud by Aramco royalties. I could not accept that the Americans are not in a position to say, "You must not use this money in a manner which does harm to our loyal allies." I could not accept that our American friends, the most powerful nation the world has ever known, could not say that to Aramco and that the message would not be passed on to King Ibn Saud. When the Buraimi Oasis dispute blew up it was followed by the dispatch of 18 25-ton tanks to Saudi Arabia, and in the Middle East that was interpreted as a kick in the teeth for Britain.
I spent the month of March in the Middle East talking to Nasser, Feisal and Hussein, and there is no doubt that the dispatch of those tanks was regarded as a kick in the teeth for the British by their American friends. That is the kind of thing we have to avoid. Therefore, I ask the Colonial Secretary whether any assurances have been received from Texas Oil Company that in future it will have a high regard for British interests throughout the Middle East and stop financing anti-British propaganda.
1464 We have heard a lot about Nasser lately. I talked to him for an hour and a half and complained about anti-British propaganda. I went to his Foreign Secretary, Mahmoud Fawzy, who said to me, "Mr. Evans, I wish you would settle your dispute with Saudi Arabia over the Buraimi Oasis. Neither Colonel Nasser nor I care what the terms are so long as they are mutually acceptable." This was a cry from the heart because every time Ibn Saud and Aramco have a row with the British, Nasser has to put his propaganda machine to work to villify the British. He cannot help himself because the capital for development for the last few years has come from Saudi Arabia.
I ask that these Texas people should be asked for a declaration as to their future attitude to this country and to British interests in that part of the world, because these are the roughest, toughest people in the game. These are the people who threw us out of Abadan. It would be wrong for anyone to think that that was a dispute between the Persian Government and the British Government, or between the Persian people and the British people—nothing of the kind.
It was a dispute between the American companies and Anglo-Iranian Oil Company. Abadan was the pay-off for the 1948 Andes Agreement when we sold 2½ million cubic metres of oil in return for Argentine farm products. The British had to be taught a lesson and, by heaven, we were. The notoriously anti-British Captain Rieber, a dominating personality in Texas oil, was sent to Teheran and from that moment we were on our way out.
These are the kind of people we are dealing with. I make no complaint because I was brought up in a rough, tough world. I understand these things. What I complain of is the continued timidity of British Governments in dealing with these people. In this Trinidad Oil deal we have cards in our hands. Why should we not have a share in Aramco? If a consortium was good for Persia, why should it not be good for Saudi Arabia? It was said that the Persians resented colonialism. I do not know which is the worst, a benevolent colonialism which results in Nigeria and the Gold Coast 1465 having freedom, or this economic imperialism in Saudi Arabia, because there there is the most decadent, sordid, regime in the world, backed by the Americans.
The point is that we were outed from Abadan. Abadan was built with British sweat, tears and capital and engineering ingenuity. It was a marvellous monument to the British people. At the time there was talk about the Russians. On 21st June, 1951, I said in this House that I discounted this fear of the Russians; what I feared was that when the dust over Abadan had settled it would he found that it was our friends who have taken our place, not our enemies. How right I was.
These were the boys, these Caltex people, who are now coming to sell us their petrol, I do not mind. Let them come. I will meet them at Liverpool, if necessary. But I want to know that the money paid by British motorists for Caltex products is not going to contribute to profits which are, in turn, used to the detriment of my countrymen's interests. That is what I want to know, and this is the time to find out.
We are dealing with very weighty matters. There can be no doubt that the dangerously disordered state of the Middle East today is largely due to the failure of us and the Americans to find a common policy, and that, in turn, is very largely due to the conflicting claims of the oil companies. I agree with what the Chancellor said today. I agree that the more these companies and our affairs can get mixed up the better for both of us. If the capitalists are going to destroy each other then, of course. the Kremlin has no struggle to win; it is in the bag.
Therefore, I come back to the proposal that I made that payment for Trinidad oil should be in the form of a transfer of shares from the Texas Company's holdings in Aramco. An hon. Member opposite says that they would not agree. Has it ever been put to them? How do we know that they would not agree if they are hungry enough? If they want a footing in the market here, and that is what they do want because they cannot get rid of their Middle East oil—I know why they want to come here—if they are hungry, we do not know what price they would have paid or in what form.
1466 My complaint is that not all aspects of the matter have been thoroughly gone into. This transaction has very considerable political connotations as well as economic and financial. My complaint is that there has been no serious study of all the implications and possibilities of this deal. I said earlier that these are rough, tough, people, but they respect people who are equally rough and tough. This was an occasion when we should have laid down the terms upon which this Commonwealth asset was to be transferred to the Texas people.
I will not say any more except that there can be no doubt at all that unless we and the Americans can hammer out a common policy for the Middle East, a policy designed to achieve sensible and realisable goals, a policy based on a 100 per cent. recognition of each other's interests, the Anglo-American partnership will be subjected to very great strains. I hope that the occasion of this deal will be taken to put that point of view to our American friends.
§ 5.15 p.m.
§ Mr. Walter Elliot (Glasgow, Kelvin-grove)
The House has listened to one of the characteristic speeches of the hon. Member for Wednesbury (Mr. S. N. Evans) bringing a breath of fresh air into the discussion which we are having, and saying many things which should have been said from his Front Bench when this debate was opened. Like him, I spent the earlier part of this year in the Middle East, and I had the opportunity to look at some of these developments, both economic and political, to which he made reference. I can confirm many of the comments which he made.
In this country we do not realise the importance of the oil struggle which is going on in the Middle East, the injury which it is doing to all the hopes and aspirations of the West, and the potential peril which it involves. I do not think that any of us has fully grasped the implications of the fact that from now on this country will have to import 1 million tons of fuel a week, and the figure is rising. Nearly all that fuel will have to be in the form of oil, a great deal of which will have to come from the Middle East. It does not appear to have been grasped that around the shores of the Persian Gulf there is being produced now more fuel than is produced in the whole of the collieries of the United Kingdom. 1467 These are the new factors to which we have to become accustomed.
I must say that at least some of the references of the right hon. Member for Huyton (Mr. H. Wilson) were not up to the level of the debate upon which we have embarked. However, time is short, and I do not intend to speak for long and I cannot discuss his speech at length. I am sorry that we have to discuss this enormous subject in so short a period. It is perhaps one of the most important subjects which we shall have to discuss in the whole of the course of this Parliament—not merely this particular transaction, but all that it means and implies.
It is true, as the hon. Member for Wednesbury said, that this debate reflects the fact that we are not able to find enough capital to carry out the development of the Trinidad area. But I do not think that it is possible to deal with that problem by merely diverting money from one part of our resources to another. We are faced with a general capital shortage. We have to accustom ourselves to the fact that this country, which during the whole of the nineteenth century was a capital exporting country, is now the centre of a large developing area which it is impossible to finance solely from the savings of this country, however great they may be.
Therefore, we have to accept, on what terms have been mutually negotiated, capital resources from outside. I am sure that the xenophobic argument that we should never allow any of the resources inside the Commonwealth area to be invested in by anybody outside the Commonwealth area is a purely fallacious argument. That has been said in the course of these arguments—[Horn. MEMBERS: "Only by the right hon. Gentleman's side of the House."] No, it has been said from the other side of the House as well. I was listening to the comments made from the bench below the Gangway, and the xenophobia was sizzling with fury as it came across to us. Xenophobia is not confined to the ill-educated on one side of the House only.
The fact of the matter is that we have to consider first whether this transaction is necessary, and then whether the terms upon which it is offered are satisfactory. I think that the Chancellor made out the case that the transaction was necessary. 1468 I think that his main argument, that we had no right to forbid a transaction which was of benefit to one portion of the Commonwealth, unless it was clearly to the great disadvantage of another portion of the Commonwealth—in this case, ourselves—was a sound argument. I think that the onus of proof that this was going to produce a great disadvantage to the United Kingdom lay, and lies, on those who oppose the transaction, and I do not think that that case was made out.
I do not think that we should accept the dog-in-the-manger attitude that if we cannot develop some portion of the Empire nobody else shall. We certainly have to deal with a switch from time to time, and I would simply ask if this transaction is a switch or simply the dissipation of our capital resources. I think it ought to be firmly insisted upon by every speaker in the debate that this must be a switch, and not merely consumption of foreign capital for current need.
There are many great transactions in which we shall have to embark in developing other portions of the Empire, for which we have found even greater difficulties in raising capital, and to which we should give our attention. I have spoken more than once of the important schemes like the Volta River scheme in West Africa—the first of the great developing schemes in West Africa—which is now assuming the most formidable proportions in respect of capital requirements—maybe about £300 million, and more. It may well be that, since it is a more unknown area than the Caribbean, it will be correspondingly more difficult to raise capital for it, and we shall need to raise both pounds and dollars in very large sums if such schemes are to go through. I can see every reason for such a switch as is proposed, if foreign investment in the Caribbean area results in giving us greater freedom to develop the less developed portions of the Empire, of which I have given one example.
I am sure that although, as the Chancellor quite rightly says, he cannot simply earmark every dollar that is received with a little tab stating that it is to be used only for capital development within the Commonwealth, there is a moral obligation on him to say that these resources which are now being made available 1469 should be used for capital development elsewhere, and not squandered on everyday requirements. I listened throughout with very great attention to the right hon. Member for Huyton, but I could not feel that when he came to his constructive alternative proposals he had brought forward anything at all. The right hon. Gentleman quoted with great admiration extracts from the Daily Telegraph indicating that the real danger was the shortage of capital, and saying that measures ought to be taken by which greater amounts of capital could be made available. He said that he went all the way with the Daily Telegraph on that. If he did, he went all the way with his tongue in his cheek.
I do not believe that any of the remedies which commend themselves to the Daily Telegraph would also commend themselves to his right hon. and hon. Friends, not, at least, judging by the adumbrations of financial policy which we have been able to read in the newspapers in recent days. The right hon. Gentleman's remedy for the shortage of savings is to assault savings in every possible way, and to tell everyone who saves that, if he is mug enough to save, the Chancellor will take it from him in death duties in the end, or alternatively, if he tries to spend it, the Chancellor will tax him out of existence while he is still alive. That seems to me to be a poor way of encouraging anybody to save.
I do not think that the two quotations which he gave to justify the policy of nationalisation, his only constructive remedy, were very attractive ones. He quoted the investment of my right hon. Friend the Member for Woodford (Sir W. Churchill) in Anglo-Persian oil and the buying by Disraeli of the Suez Canal shares. I do not think that the history of our relations with Egypt is such as to show that that is an infallible way to produce friendship and co-operation with the country in which we invest. Government investment is not one of the surest ways to international friendship.
The other reference to Anglo-Persian oil was by the hon. Member—I almost called him my hon. Friend—for Wednesbury. It was about the case of Abadan. He said that we were outed, squeezed and elbowed out by American oil companies as a piece of vengeance for some sales which we had carried on 1470 in an area which they had regarded as their private territory. It was not all due to that. A great deal of it was due to the financial policy of the Anglo-Persian Oil Company, which was really the financial policy of the Chancellor of the Exchequer of the day, who refused to allow reasonably high dividends to be paid, because dividends were an accursed thing and should be kept as low as possible. Consequently, the Persian Government found themselves faced with a very small return from the Anglo-Persian oil development and determined to get their hands on that money by hook or by crook, and did so. The impetus behind that was the attitude towards dividends of the Chancellor of the Exchequer of the day.
§ Mr. S. N. Evans
I do not accept what the right hon. Gentleman is saying, but may I put this point to him? After this policy of undermining the British in Persia was started, they soon slung Mossadeq overboard. Once the object for which he had been brought to power had been achieved, he was thrown off like a discarded shoe. If the right hon. Gentleman says that the sole motive of the Abadan business was that the Persian Government wanted to get more money for their people, how does he explain that phenomenon?
§ Mr. Elliot
I do not go the whole way with the hon. Gentleman in this cloak-and-dagger attitude to international affairs. I like to hear his romantic imaginings, but they go a little too far. They recall the fascinating romances of the late E. Phillips Oppenheim a little too closely to be serious contributions to the debate. If the hon. Gentleman thinks that nationalism in Persia and the Middle East is entirely evoked by the Texas Oil Company, he is in pursuit of a phantom which will lead him a long, long way from reality. Nationalism and a desire for money is quite as strong among Persians as the Texas Oil Company. If he feels that Texas Oil tycoons are rough, tough people, believe me, some Middle East gangsters are pretty rough and tough, too.
We come back to this question of the shortage of investment capital from which undoubtedly this country is suffering. In his closing sentences, the right hon. Member for Huyton made use of a phrase to 1471 the effect that we should have to subject ourselves to an arrest, and maybe a diminution, of our standard of living in this country. If he is willing to go on a platform and preach that, he will find that he will receive a very interesting response, but I cannot promise him that it will be universally favourable. If he is holding out for a standstill in this country of the continually rising wage demands so that money may be available for investment overseas, he will find a great deal of co-operation, not only inside but outside this House, but not in quarters which usually support him and his party.
This is a question which we have not yet begun to tackle. We are the centre of this great area which is crying out for development. We know that there is in addition a great deal of development to be conducted here at home. Much of our equipment and our processes are worn out and need replacement. That will demand capital development on a very large scale here, too. I do not think that we have grasped these facts fully. That is why it seems to me that this debate is so important, and why I wish it had been possible to continue it for the whole day, instead of only half a day being devoted to it.
§ 5.28 p.m.
§ Mr. E. L. Mallalieu (Brigg)
The right hon. Member for Kelvingrove (Mr. Elliot) has followed a very usual line or argument. If one really has no case, or only a case that may be and has been successfully attacked, one must put up some Aunt Sallies, or say that something has been said against oneself which, in fact, never has been said. The right hon. Gentleman spent a considerable part of his speech in saying that we on this side of the House were unfavourably disposed towards foreign investment in the Commonwealth. He is quite wrong. We have never said anything of the sort. On the contrary, we want to see the Commonwealth developed, and we are very glad to have the assistance of outside capital when sufficient of our own is not forthcoming. We are very keen indeed to welcome outside investment in the Commonwealth in proper cases.
The whole question we are debating today comes to this. What is this case? Is it a proper case? I must confess to having derived a good deal of quiet fun 1472 from the antics of hon. Members opposite in the last week or ten days. At first almost all of them were genuinely, obviously and sincerely against this proposal. I believe that privately they still are against it, but of course in the meantime the City has got busy on them. I am not so generous as my right hon. Friend the Member for Huyton (Mr. H. Wilson) in this matter; I believe that the City influence has been busy on them, on all of them individually.
§ Mr. Elliot
The hon. and learned Member has made an accusation against me individually. Does he dare to repeat that? Does he say that the City has got after me individually, because that is what he just said.
§ Mr. A. E. Cooper (Ilford, South)
The hon. and learned Member has made a most infamous suggestion, Mr. Deputy-Speaker, and since it is completely devoid of truth, is it not in the tradition of the House for him to withdraw it or substantiate it?
§ Mr. Mallalieu
If I had said that hon. Members opposite, having directorships in the City, had been told by the City or some mysterious people that their directorships were in jeopardy, then the hon. Member would have had some justification for his intervention. What I meant to say, and what I said, was that the City, in defence of its own interests, has always made it perfectly clear that there are very many other interests more important than the national interests—and one is the interest of private profit.
§ Mr. Elliot
That is not what the hon. and learned Member said. He said that the City had got after each individual Member; he said "individually." I ask him whether he applies that to me; and if he does, I demand that he withdraws it.
§ Mr. Mallalieu
The right hon. Gentleman is a little too clever. I said nothing 1473 of the kind; I did not say that any individual had been persuaded by direct pressure to take a certain point of view, but I do say that the whole of the influence of the City, from which he is probably not immune, has always stood for private profit, even when, as some of us think, that private profit was against the national interest.
§ Mr. Elliot
The hon. and learned Gentleman has repeated the accusation. It was in specific terms applying to myself. I say that I am absolutely immune, that I have no shares or stocks of any kind, that I have no acquaintanceship with anybody in the City who has come to me in any way and that I am absolutely untouched by any suggestion such as that which he has made. It is a most unworthy suggestion, and if I had made it against him I should have expected him to rise, as I do now, and ask that it should be withdrawn.
§ Mr. Mallalieu
I will rise to tell the right hon. Gentleman that I am quite sure that he is immune from all the things he has said, in the sense that no amount of possession of shares by him in this instance has had the slightest effect.
§ Mr. F. M. Bennett (Torquay)
On a point of order. I am not trying to be obstructive here, but this is not a matter which concerns only my right hon. Friend the Member for Glasgow, Kelvingrove (Mr. Elliot), sympathetic though we may all be towards him. Irrespective of my right hon. Friend, who made out his own case and with whom we are naturally sympathetic, the important point is that the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) said in these words—and my hon. Friend will bear me out—that the City had got at each one of us individually. That is an imputation on our motives in changing our minds. I must press on you, Mr. Deputy-Speaker, that that is a point of order which we are legitimately entitled to make.
§ Mr. Deputy-Speaker
I have already ruled on that point of order. I think it is a reasonable debating point.
§ Mr. Braine
Further to that point of order. There is an additional aspect of the matter. This debate—most unfortunately, having regard to the subject—is scheduled to end at seven o'clock. The 1474 right hon. Member for Huyton (Mr. H. Wilson), for reasons best known to himself, took an inordinate length of time to make his speech and—
§ Mr. Deputy-Speaker
Is this a point of order? Up to now it has nothing to do with a point of order.
§ Mr. Braine
Further to the point of order raised by my hon. Friend the Member for Torquay (Mr. F. M. Bennett). The charge made by the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) was directed—and he used a gesture in order to emphasise the point—
§ Mr. H. Wilson
On a new point of order. The hon. Member for Essex, South-East (Mr. Braine) has accused me, as he said, for reasons best known to myself, of taking an inordinate amount of time to make my speech. The reasons are indeed known to me—because I spent so much time dealing with footling interruptions from the hon. Member which had nothing to do with the subject.
§ Mr. Braine rose—
§ Mr. Braine
While I bow respectfully to what you said a little earlier. Mr. Deputy-Speaker, when charges are flung across the House it is usual to allow time for those against whom the charges are made to reply. In this instance, owing to the short time allowed for the debate, that is quite impossible. I ask you whether in those circumstances the most unwarranted charge made by the hon.and learned Member—
§ Mr. Deputy-Speaker
Order. I have already given my Ruling on that point, and I hope it will be accepted.
§ Mr. Mallalieu
I will go through the points which I have to make as quickly as I can and I will certainly keep very carefully to the rules of courtesy generally shown in the House. I am not one of those who generally go beyond them, and I shall certainly not do so on this occasion. 1475 I believe that the influence of financial quarters in this country has been definitely in favour of private gain—for good reasons or bad reasons. Hon. Members opposite believe in them. Some of us do not. The sort of private interests which must in this instance have helped to shape opinion are the interests, for instance, of the egregious Simon Vos, because he is not only getting his £50,000 free of tax out of this, but for many years he has been edging towards an influence in the interstices of United States oil-magnatedom. He will get good things out of that, and it would not surprise me one bit if in the very near future he came out as a fully fledged director of Caltex. That is all right for him. It is part of the spoils of the free-for-all game in which hon. Members opposite believe.
There are, too, the interests of the very many speculators who have bought Trinidad Oil Company shares lately and, having made capital gains, tax-free, have to have their interests guarded now. I believe that the result of the Government's policy is to guard the interests of those people. Whether they are doing it for that reason or not I leave hon. Members opposite to say. All I submit is that the effect of the Government's policy is to give great protection to the interests of these people.
Why? Because hon. Members opposite, and presumably right hon. Members on the Front Bench, believe that the taxation in this country at present is very much too high and that it prevents people from earning sufficient money. They therefore believe—does not the Chancellor believe this?—that capital gains of this sort are the kind of thing one has to leave to the boys in a system of high taxation like ours. They all believe that, and they therefore follow such policies as this.
§ Mr. Elliot
I must demur from everything the hon. and learned Gentleman has said, and we will leave it at that. Everything he has said is wrong, but some of it is "wronger" than the rest.
§ Mr. Mallalieu
That desire on the part of right hon. and hon. Gentlemen opposite to safeguard such interests as these prepared the way for the Chancellor's speech the other day when he announced the complete sell-out—the speech from 1476 which he has not much departed today, since he has largely repeated what he said earlier. He made some unexceptional remarks, in my submission, about the necessity to defend the interests of Trinidad and the people of that Colony. Of course we agree that their interests have to be defended, but it is a complete red herring to suggest that that consideration is relevant, when dealing with the question whether this company should be American-controlled or otherwise. What has happened is that this matter has been dragged as a red herring across the track when we all know that, whether this takeover bid succeeds or not, we all have to defend the interests of the people of Trinidad.
The Chancellor of the Exchequer, when he made his original statement in the House, laid a great barrage to try to show how very complicated this deal was. This deal is not really very complicated. It is perfectly true that there are wonderful ramifications, with one company owning part of this company and another company owning part of another. It is very complicated from that point of view, but that does not happen to be the point of view that matters in deciding whether or not this deal should be allowed to go through. The fact is that, as the Chancellor and all right hon. and hon. Gentlemen who have already spoken today have shown, there are, roughly speaking, three interests. They are the interests in Trinidad itself, with which we are concerned, the Canadian interests and the Regent interest here in Britain. Of course, it is the Regent interest here that is really at the core of the whole matter. That is the whole thing.
It may be that it would be possible to transfer one or two parts of these activities of the Trinidad Oil Company to the American or to any other company. Those activities can quite easily be split up; even though the shareholdings are somewhat tortuous from one company to another, it could be done. There is not the slightest doubt of that. I just do not believe that it is impossible for the Trinidad Oil Company to obtain in Canada the capital it needs for its Canadian undertakings.
It could be done by a transfer to Canada. As far as the Canadian interests are concerned, the whole business could be transferred to Canadian interests—if it 1477 were still desired that the Trinidad Oil Company should get rid of them. It is possible also to give the Trinidad interests —the particular ones situated in Trinidad itself—to the American company provided, which I do not accept, that the Trinidad people really want those interests to go there. It would be possible to split up the deal in that way. But what I submit would be very wrong indeed would be to allow the Regent end, this end, to go.
It is said that the Trinidad Oil Company cannot get enough capital to carry on at this end. What is the present position? The position, of course, is that it has half the holding in Regent and the other half is with Caltex. The position also is that if it remains allied to Caltex in this way it will have a half share in the new refinery now to be built in the Southampton area. The planned output from that refinery is to be in the neighbourhood of 5 million tons per annum.
If this Regent distribution service and all it stands for goes over to Caltex, the oil that is to come through that new refinery in the Southampton area will not come from Trinidad or from any other non-dollar source, but from Saudi Arabia. The result will be, as my hon. Friend the Member for Wednesbury (Mr. S. N. Evans) pointed out so much more forcibly than I can, that—since the Saudi Arabian Government derives a "50–50" share on the profits of crude oil taken from its territory—on the distribution of Caltex oil in this country there will be a £10 million per annum gift to the King of Saudi Arabia to build his palaces and to conduct his anti-British propaganda.
Does the Chancellor of the Exchequer want that to happen? I do not believe that he can. There is a very good way by which he can avoid it. One way has already been suggested by my right hon. Friend the Member for Huyton (Mr. H. Wilson). There is another way which, in my submission, is even simpler. Supposing he, with his interest in B.P.—and no one suggests that he has not an interest—were to say to B.P., "The Trinidad Oil Company is to keep Regent in this country and will, therefore, have a half share in this new refinery that is coming. Now, B.P., you must supply the crude oil that Regent will require for that refinery and share the profits with Regent." If Regent were able to go to the City 1478 with that assured income it could get all the capital it wanted.
That is a very easy way, but nothing was said about that possibility by the Chancellor. He is not interested in finding other ways but interested only in selling out, merely because he is imbued with this spirit of private property. It shows just how far he will go. Frankly, it will surprise me if he accepts either my suggestion or that put forward by my right hon. Friend the Member for Huyton, but if he turns those suggestions down at least he will show to what extent he is ready to go in defence of private property, even when it conflicts with the national interest.
§ 5.45 p.m.
§ Mr. A. E. Cooper (Ilford, South)
For a long time the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) has, I think, had the respect of all hon. Members on this side. He has not been one of those hon. Members with whom we associate vituperation or mud-slinging, but after the quite disgraceful and un-warranted attacks which he has made tonight on my right hon. and hon. Friends it will be some time before we have our previous feelings of respect for him. I challenge him to make the same statements outside this House, where he does not enjoy Privilege. Some of us on this side of the House who are not very happy about this deal have been accused of having made a complete turnabout. I do not know how hon. Members opposite can know that, because none of us has had much opportunity this last week to make speeches on the subject. I want to put one or two points to my right hon. Friend the Chancellor which I hope he may consider with some sympathy before this debate finishes.
Not unnaturally, hon. Members opposite will use this occasion to make a few party political points. I do not complain about that at all, but I find it a little hard to accept criticism from them on this subject when they agreed to bring and, indeed, were among the prime movers in bringing, American capital to this country in the first place. Nevertheless, I feel, and I know that a number of my hon. Friends also feel, that this is a sorry day for us. It is tantamount to selling the seed corn, but the responsibility for this rests fairly and squarely on the shoulders of all Governments in this country since the end of the war which have imposed 1479 such a swingeing level of taxation as has made it impossible for private individuals to accumulate capital, for industry to accumulate capital, or for our gold and dollar reserves to be at a level which would enable us to invest in the way that we ought to in our own Commonwealth.
I think that the case which was put forward by my right hon. Friend on economic grounds was pretty well unassailable, and if this decision were judged on economic grounds alone I think that all of us in the House, and probably in the country as well, would admit that a pretty good deal had been done. The implications are much wider than that, however, and we really must consider the full political consequences of the action which it is now proposed to take, and there, I submit, there is room for honest doubt as to whether the decision taken is in the best interests of the Commonwealth at this present time.
Whether we like the words or not, we are still a great colonial Power, with very considerable responsibilities and obligations to develop parts of the Common-wealth which are at present in need of very great assistance. It is our duty and our responsibility to see that we discharge these obligations, and it really becomes very churlish of anybody in the country to argue that if we cannot provide the funds to do it ourselves we must prevent anybody else from doing so.
We are at fault in not having built up our own reserves in these past years, and this has resulted in the present situation. It is possible to exaggerate the importance of this incident, but a great point of principle is at stake, and I join with my right hon. Friend the Member for Kelvin-grove (Mr. Elliot) in deploring the fact that we have been allowed only half a day for this debate. We should have had a full day in which to debate this subject.
What we have to consider, in addition to the question of building up our own reserves in order that we may discharge our obligations, is whether we can continue to permit unrestricted foreign investment in the British Commonwealth. I should like my right hon. Friend to realise that in practically every country in Europe, in India and in certain of the South American countries it is not possible to acquire more than 49 per cent. of the equity of any industrial organisation. 1480 It may well be argued that if we were to impose any such restriction here, it might have serious repercussions upon us from the point of view of our own overseas investment. Of course, there are dangers of that sort and there are risks which we have to accept, but so long as the sterling area remains economically weak and we try to insist upon a high and rising standard of living in all sections of the Commonwealth, and if at the same time we permit unrestricted investment within the Empire, in the long run it will be much more difficult to find the dividends in foreign currency with which to pay the necessary return on the capital invested here.
If we have to develop in the Commonwealth, which is our responsibility and obligation, we must make the necessary sacrifice here at home to provide funds to fulfil that obligation. Hon. Members should bear in mind that if the position were exactly reversed—in other words, had this country been the U.S.A. and had we been established in Trinidad as a foreign Power—this deal would not have gone through. It could not have gone through under the existing American law. Therefore, it seems to me that if the American Government are prepared to legislate to prevent their own assets going out of their country, it is only just that we should take similar action to defend our own life blood.
§ Mr. Deputy-Speaker
Order. On the Adjournment one should not suggest legislation, which is what the hon. Gentleman appears to be doing.
§ Mr. J. T. Price (Westhoughton) rose—
§ Mr. Price
This is a valid point. I am agreeing with the hon. Gentleman's argument. He said that if the position were reversed, the deal could not have gone through. I agree. But if the political complexions in this House were reversed, would the hon. Gentleman consider what hon. Members on the benches opposite would be saying about the action of the Labour Government?
§ Mr. Cooper
I do not think it is necessary to deal with a hypothetical situation which is not likely to happen in this country for a very long time. 1481 I should like to ask my right hon. Friend a question, the answer to which many of us attach great importance. Indeed, reference has already been made to it by certain hon. Members opposite. The Government have imposed certain conditions which have to be fulfilled by the Texas Oil Company as a matter of principle before this deal can go through. We have not yet had a satisfactory answer from the Government as to what they can do if any one of these conditions is not fulfilled by the Texas Oil Company.
It seems to me that if any one of these conditions is not fulfilled, the Government will be in an exceedingly awkward position because somebody will have to find the money to keep the Trinidad Oil Company going. I am advised that in about two or three years' time, unless this extra capital is forthcoming, the Trinidad Oil Company will be seriously financially embarrassed. It is important to us to know precisely what the Government have in mind if any one of these conditions is not fulfilled.
My final point deals solely with the economic situation within the Caribbean Federation, and Trinidad in particular. Of course, we all know that for many years there has been a considerable investment of American capital within the Caribbean. It seems to me that this step will in due course virtually close the Trinidad market to British exporters, because obviously and naturally when American personnel get on the island they will want their own magazines, food, and so forth; they will want their way of life to be established. The result will be that considerable exports will flow from the United States to Trinidad to the detriment of our own exporters.
There is a matter which causes me to have grave doubts about this decision. What is going to be the ultimate decision of the Caribbean Federation when it can be shown quite clearly that Great Britain is not able to find the capital to develop the Caribbean area and that the money for such development has to come from the United States? I submit that the knowledge of that fact among peoples in that part of the world must have a serious effect upon our position there.
§ 5.57 p.m.
§ Mr. W. T. Proctor (Eccles)
The right hon. Member for Kelvingrove (Mr. Elliot) said that we do not understand the peril in which we stand. I do not 1482 think that anybody who listened to my hon. Friend the Member for Wednesbury (Mr. S. N. Evans), who put this matter into the correct perspective, could misunderstand the peril in which the country stands at present.
I hope that the Colonial Secretary will call the attention of the Prime Minister to the weighty words which he used, and which were reported in The Times on 2nd June, when he said:No Cyprus, no certain facilities to protect our supply of oil. No oil, unemployment and hunger in Britain. It is as simple as that today … The United Kingdom's vital interest in Cyprus is not confined to its N.A.T.O. aspect. Our country's industrial life and that of western Europe depends today, and must depend for many years to come, on oil supplies from the Middle East. If ever our oil supplies were in peril, we should be compelled to defend them. The facilities we need in Cyprus are part of that defence. We cannot, therefore, accept any doubt about their availability.That is one of the most serious statements that any British Prime Minister has ever made, because it indicates that if our oil resources are interfered with in the Middle East we are ready to embark upon unilateral war. This whole matter of oil is one which should concern the British House of Commons as well as everybody in Western Europe —indeed, the whole world—because it may be the trigger that sets off the third world war if we are foolish enough to allow the oil companies, instead of the democratic Governments of the world, to make the decisions. Therefore, I say that this occasion should not pass without the House using the opportunity to raise the question of the oil situation as a whole.
For the present Government, in the course of a week, to agree to hand over a tangible asset of the British Common-wealth to an American oil company without more consideration and thought on the subject than has been given to it, is one of the most irresponsible acts which I have ever known any Government to commit. I beg the House of Commons to realise that this is an important matter. I would ask the Government and those who are considering it not to consider the matter this evening as one which is decided. Let them take the opinion of the House, and let them think it over again.
I believe that the only real solution for the oil problem of the world is public ownership. I am not foolish enough to 1483 think that, in the capitalist world in which we live, that is going to be brought about overnight; but I believe that the Government of this country should take effective steps to be represented, and effectively represented, on the boards of the great oil companies. We should be justified in asking the American Government to do likewise; we never know what American policy is in the Middle East unless we get it from the oil companies, not from Washington itself. It is of supreme importance that this matter should be dealt with in a manner quite different from that which the Government propose, in order that we might feel a certain security and safety as to our oil supplies for the future.
The Government should have, to consider the matter, a commission, a Select Committee, or some special consideration by the House of Commons, so that we might consider the whole oil situation whilst there is yet time. It is a matter of life and death for Western Europe industrially, and it may literally mean the latter if this system is to be allowed to poison the relationships between the countries of the world.
There is plenty of oil in the world for everyone, if it is properly used. The great sorrow of humanity at the present time is that so much is being wasted in tanks instead of being used in tractors. There must be a grand gesture of going to the United States Government and asking them to sit down and consider the oil situation of the whole world. Let us have the courage to go to the Soviet Union also and say the same thing. The fate of Western Europe may depend on oil. Indeed, the fate of humanity itself may be decided by oil, unless we take steps to settle the problem now.
It is stupid, when there is plenty of oil for everyone, not to take the necessary measures to deal with the problem. It is alarming to think of what the great resources which Western civilisation is pouring into the Middle East are being used for at the present time. I am sure that if we had the best minds of America, the best minds of Western Europe and of Britain, and, if there were good feeling, the best minds from the Soviet Union itself. considering the oil situation, we could lift the standard of life of the ordinary Arab peoples and not engage in 1484 exploiting their nationalism to the detriment of us all.
I beg the Government to review this question, to read very carefully what my right hon. Friend the Member for Huyton (Mr. H. Wilson) said about this problem, and to think again before they make any final decision.
§ 6.4 p.m.
§ Sir Alexander Spearman (Scarborough and Whitby)
The right hon. Gentleman the Member for Huyton (Mr. H. Wilson), in opening this debate, described this sale as a very regrettable transaction. I know that there are hon. Members on both sides of the House who are unhappy about it. I do not share their dismay, and I should like to say why.
I believe that this transaction will facilitate investments in the Common-wealth more profitable to this country. In fact, I believe that there are as good, or better, fish in the sea as any which have come out. I do not think this fish is a particularly attractive one from our point of view. First, to develop these resources it would be necessary to make an investment which is far beyond our ability at the present time, or, indeed, what the balance of payments position at any time in the last 10 years would justify. If we cannot provide the development resources, then, clearly, it would be very unfair to Trinidad to deny to them the chance of obtaining them elsewhere. Secondly, this Company, at present, I believe, spends a good deal more in buying dollar oil than the value of the oil which it produces.
The price seemed to me to be a satisfactory one. I know there are those who will say that if this Company is worth so much to the Americans, then it must be worth that much to us. But, in fact, properties very often are of much more value to the buyer than they are to the seller; otherwise many transactions would not take place. In this case, the Chancellor has told us of some of the reasons why this concern is worth much more to the Americans than to us. There is another reason to which he did not refer, namely, the method by which in this country we tax companies operating abroad. I hope that my right hon. Friend will read the very clear letter from my hon. and learned Friend the Member for Northwich (Mr. J. Foster) in yesterday's 1485 Daily Telegraph, showing how desirable it is that there should be a reform of taxation in this respect.
This transaction must materially improve our facilities for investing in the Commonwealth. Surely the limiting factor to what we can do is not the projects which are available for investment, but our resources with which to invest. If anyone has any doubts about that, or has any feeling that because this concern is in the sterling area we could afford investment, he might well read the leading article in the Financial Times of Monday, 18th June. I should like to quote one sentence from that article which sums up the argument very clearly.The truth is that last year there was nothing available to invest in the Sterling area beyond what was borrowed from it or from other countries.In conclusion, I would just like for a moment to discuss the broader aspect. The repercussions which might have occurred if the Government had taken a different decision with regard to this transaction. It would seem to me that this country, of all countries, which has benefited so much from investment abroad, would be inviting disastrous discrimination against it if we had put a veto upon the investment of other countries. Secondly, we have benefited a great deal from the flow of capital from the United States, for example, from what General Motors has been spending at Luton and what the Standard Oil Company has been spending at Fawley. Could it be wise to discourage that flow of capital?
In the present disturbed and threatening state of the world, I just do not believe that we can afford a policy of narrow economic nationalism. Today, the savings of this country are totally inadequate for all the investment we want to make and should make here and in the Commonwealth. Surely we must welcome capital from the United States. It will develop Commonwealth projects, to our mutual benefit, and bind us closer together in a partnership on which so much depends.
§ 6.10 p.m.
§ Mr. J. Grimond (Orkney and Shetland)
If we were asked tonight to pass a Motion of censure on the Government for their failure over past years to make 1486 room in the economy for adequate savings, the Government would be very hard put to defend themselves. Presumably, their answer would be a counterattack upon the Opposition. There is no doubt that the policy put forward at the last Election for the Opposition would have led to more consumption and not to more savings.
What we are asked to do today, however, is to say to the Government that they should have stopped this oil deal. I find that difficult to justify, and I noticed that the right hon. Member for Huyton (Mr. H. Wilson), when speaking for the Opposition, did not deal with the point made by the Chancellor of the Exchequer that the people of Trinidad, through their Government, have asked that this deal should go through. That, it seems to me, is the vital point.
§ Mr. E. L. Mallalieu
Is it not a fact that the Parliament of Trinidad is at present dissolved? In addition to there being no Parliament, one of the big opposition parties is completely against the deal and there has been much opposition to it in trade union circles.
§ Mr. Grimond
All that may be true, but the best evidence we have had is that of the Governor and his Government.
As the hon. and learned Member for Scarborough and Whitby (Sir A. Spearman) has said, it is surely fatal for us, of all countries, to set the cry that we cannot tolerate foreign capital. In any event, we cannot supply the capital ourselves, and it would be a dog-in-the manger attitude to deny anyone else the opportunity to provide it.
I want to direct my few remarks chiefly to the problem of savings and of savings for risk investment. I rather regret that the Government have not used this opportunity, when public interest is focussed on what I regard as the deplorable event of the sale of this oil company, to stir up public opinion in the matter of adequate savings for development, both at home and in the Commonwealth. I do not regard it as the vital point that we will have a considerable gain for our dollar reserves, agreeable though that is. Incidentally, if Mr. Vos falls out of a job, it might be a good thing to persuade him to join the Treasury, for he has done more to add to our dollar reserves in the last five or six 1487 years than anyone else. We shall soon dissipate this gain, however, unless we put our house in order quickly.
The real message to go out from this debate today should be that all sides of the House are united in saying that we must have more savings. Nevertheless, we do not get the savings. It is a sign of the impotence of the Government and of Parliament that we should all come forward to stress the necessity for savings but must, nevertheless, admit that savings are totally inadequate.
We should draw a clear distinction between savings which can be used for production and development and those which are not available for these purposes. In fact, one-third of our savings has been applied to things like housing and capital expenditure in welfare services, which are necessary and agreeable, but in the meantime we are starving private industry, on which we depend for our livelihood.
Private industry gets about 25 per cent. of our savings while it is responsible for 40 per cent. of our output and 94 per cent. of our exports. We have been told by successive Chancellors of the Exchequer that we need a surplus of £300 million for the Commonwealth alone, quite apart from the extra savings we need for investment at home. As yet, however, we have not begun to come anywhere near that figure.
I do not believe that there is any single solution to the position in which we find ourselves. Surely we must all face the fact that in the Welfare State, of which I, like all Members of the House, am a supporter, we have created a gigantic organisation for consumption. We should say that we cannot further extend the Welfare State until we have built up production and, built up the investment savings which are necessary for higher production. I believe, too, that we may have to adapt our Welfare State to the new conditions with a view to solving the difficulties of getting extra production and extra productivity in the age in which we live.
A great deal of the Welfare State has been built up on the thinking of the 'thirties, when mass unemployment and the need to pump extra purchasing power into the economy were what was wanted. We cannot afford to go on fighting inflation simply by damping down the 1488 economy. We must find a method of encouraging people to move about from industry to industry as automation demands. Unemployment pay might well include a lump sum payment for this purpose. We must find a way of holding inflation in check without damping down productive investment in industry and in Commonwealth development, but so far we have seen no sign that any new thinking has been effective in these directions.
Once again, it is surely beyond doubt that we must cut Government expenditure to make room in our resources for the type of investment we want to undertake. The obvious field for cuts is defence. We should say urgently to the Government that they must get on, as a matter of the greatest importance, with cutting down what might be called the conventional armed services.
Then, in spite of the findings of the Royal Commission, I believe that a reduction in taxation would give some incentive to production and would result in extra savings. It is, however, necessary to maintain a sense of proportion over the figures. If we were totally to abolish Surtax, for instance, and the resultant sum were saved, it would add only £133 million to our savings which, as a total, run at about £3,000 million a year. Company savings alone account for over £1,200 million a year, Profits Tax for under £200 million, while the Shell Company proposes to invest about £300 million a year. We are dealing in astronomical figures and I am afraid that we cannot look for a reduction in taxation alone to make good the gap.
There is, however, the question of taxation on companies working overseas and most of us were extremely glad at what the Chancellor said yesterday in reply to the hon. Member for Somerset, North (Mr. Leather) on this vital subject. We are only sorry that it may be some time before anything is done, but as the concession is to be backdated, presumably the effect will be felt fairly soon.
It would be inappropriate to discuss in detail today proposals directed to encouraging productivity, but all this throws into sharper relief the need for technical education, which we are soon to discuss, and the need for a review of the workings of the City in its mobilisation of savings into the right channels. Although I do not intend to go into 1489 that now, I do not believe that we have explored fully the possibility of mobilising savings through trust companies, and so on, and getting them away from non-productive and into productive channels.
None of these things alone will do the job, but surely the result of this debate must be to say that it is no good trying to get round the difficulties that face us and no good saying that the Government should have provided the money, for that would be merely to shift the savings from one sector to another. Nor could the British Petroleum Company have provided the money, because, the Chancellor has told us, it is not in that company's interest or that of the country that it should do so. What we must do is to increase the amount of savings available for that type of investment. Even then we must encourage and not discourage American participation.
It has been stressed this afternoon that we are becoming more and more dependent on oil. Two-thirds of the world's known proved resources of oil are in the Middle East. I support what has been said on the vital importance to this country of that area of the world. Like the right hon. Gentleman the Member for Kelvingrove (Mr. Elliot), I do not believe in the full panoply of cloak and dagger work as expounded by the hon. Member for Wednesbury (Mr. S. N. Evans), but there is no doubt that we cannot afford friction between the oil interests in that part of the world. There was. I know, such friction over the Redline agreement and over other matters. We should strive to use our influence in the Middle Eastern countries with a view to forming them into a larger federation and giving them greater stability, and on the oil companies to impress upon them that co-operation is necessary between them.
While all this interest is focused on the deal in Trinidad, it is of interest to note that the Gulf Company has acquired a controlling interest in British American Petrol, in Canada, the second biggest integrated concern in the Dominion. I do not object to that—I do not suggest it is an exact parallel of the Trinidad case—but it has aroused no interest whatever in this country. It is largely a matter of luck whether these affairs come into prominence. 1490 I am certain that this Trinidad deal may not prove as sorry an affair as it might at first sight appear, if it means that a real effort will be made to mobilise savings and if it impresses upon the country its increasing and inevitable dependence on oil in general and on Middle Eastern oil in particular.
§ 6.19 p.m.
§ Mr. F. M. Bennett (Torquay)
I understand that the right hon. Member for Llanelly (Mr. J. Griffiths), who is to wind up for the Opposition wishes to speak at 6.25, so I shall compress the remarks I had intended to make and direct them to one single aspect of the debate; but an aspect which, I think, is of the utmost importance, even if not controversial. It follows the question asked by my right hon. Friend the Member for Kelvingrove (Mr. Elliot) about the subsequent use of the dollars which will accrue to this country.
I would, first, assure hon. Members opposite, especially the hon. and learned Member for Brigg (Mr. E. L. Mallalieu), that there is no covert or secret influence by the City upon me in my views on this question. As my right hon. Friend the Member for Kelvingrove said—and I fully agree with him—whether this deal will be ultimately acceptable, certainly to most of us on this side of the House, entirely depends on whether or not the subsequent use of the funds is for Commonwealth investment purposes in the future. I know the arguments about earmarking, and I am not running into that difficulty.
First, either this Administration or the one preceding it at some stage must have given to the Trinidad Oil Company permission to invest a certain number of dollars, 8 million or 10 million dollars, in Canada, and as a consequence of this deal we are to lose that Canadian investment. Quite apart from any question of future earmarking or future devotion of those dollar funds as a whole, there is the immediate, primary, moral duty upon the Chancellor to permit the reinvestment of at least an amount which is equal to the net loss of this country of Trinidad's dollar investments in Canada.
For good reasons we are not told, although we have made inquiries about it. what the sum invested may be, because I understand that it is not the practice to disclose such facts. It is, however, possible to make an intelligent guess. and my estimate is that the amount is, as I have 1491 said, between 8 million and 10 million dollars. That is the existing investment of this concern in Canada, and our total investment in Canada will be reduced by that amount as a result of this deal for which we are to be paid dollars in cash. Our first duty, therefore, is to see that that amount is replaced.
Turning to the dollar payment as a whole, yesterday I asked the Chancellor about our existing rate of investment in Canada, and I got the answer that last year it was 35 million dollars and that it is 18 million dollars so far this year. Provided that the same trend is maintained, it means that the annual rate should be again over 30 million dollars this year.
Now, however much we may blink at what has happened it is the fact that we are now selling out a Commonwealth capital asset, and if we are to sell out a Commonwealth capital asset it is the plain duty of this House, irrespective of party, to insist that the funds dollars or sterling resulting from the deal are reinvested. It may be that we cannot do so by earmarking because of the regulations and because of the accepted pattern of behaviour of the sterling area, but the Chancellor has within his absolute discretion the right markedly to relax the rate of dollar investment, as he ought to do in permitting this deal.
As I understood him, my right hon. Friend said today that this accrual of dollars would give us an opportunity of strengthening our reserves, and that later it might well be possible for us to make more Canadian and other investment. I would point out to him that there is a distinction between what he has said so far and for what most of us are pressing. There is a very big distinction, as one can illustrate from the point of view of the individual, and I ask my right hon. Friend to bear it in mind.
If I am a shareholder in this company I shall be paid 80s. 3d. a share when the funds are paid out. There are two things I can do with that money. One is to reinvest it immediately in Government or other securities, and that, I have no doubt, my right hon. Friend would welcome. There is something else I can do with it. If I have a temporary overdraft, or am facing temporary financial strain, I can pay it into my deposit or current account.
1492 I can then say, "Provided things look up a bit in a year or so, or provided my income goes up a bit, then I will buy some Government or other shares." [HON. MEMBERS: "Premium Bonds."]
I am asking the Government to make sure that it is the former of these courses that they follow and by their example encourage others to follow, for I feel sure that that is exactly the sort of conduct my right hon. Friend would wish in the individual shareholder when he receives his cash, when the payment on the shares is made.
The hon. Member for Wednesbury (Mr. S. N. Evans) has suggested that the Government ought to have insisted that part of the payment for the deal should be made in Aramco shares. As that is not possible, I throw out the idea, too, that the Government should use some of these dollars to buy shares on the market in that company. Then, if they buy enough of them, they will get a seat on the board and accomplish by another method what the hon. Member suggested.
§ 6.24 p.m.
§ Mr. James Griffiths (Llanelly)
The case against this deal has been put so cogently and convincingly by my right hon. Friend the Member for Huyton (Mr. H. Wilson), supported by a number of notable speeches by my hon. Friends, that I do not intend in the short time at my disposal before we hear the Colonial Secretary reply for the Government, to range over the same subjects. I desire to ask a number of questions about the position in Trinidad and about the relationship of Trinidad and the Caribbean to this deal, and to the decision which we have to make in the House tonight.
We are discussing this matter, and will shortly declare by our vote our views upon it, at a time when two important constitutional developments are taking place in Trinidad and the Caribbean. A new constitution is to come into operation in Trinidad in the autumn. It will extend the range of self-government, enlarge its Legislature, and increase the power of the democratically elected representatives on the Executive.
Very shortly we shall be discussing a Bill which, curiously enough, has come out upon the very day that we are discussing this deal. It is the British Caribbean Federation Bill. What a send-off to 1493 the new Caribbean Federation, that when we launch one of the most ambitious and exciting ventures in the history of our Commonwealth, when we are bringing together those scattered islands into a Dominion, we should be discussing this deal!
The Chancellor told us that the Government consulted the Government of Trinidad and that the Government of Trinidad have approved the decision of the Government here. I want to ask some questions about this, and I hope that the Colonial Secretary will reply. At present, there is no Legislature in existence in Trinidad. The old Legislature, set up under the Constitution of 1950, has been dissolved. There will be elections in September, and after the elections there will be a new Legislature and a new Government. I put it to the Colonial Secretary and to the House, because it is important to bear it in mind, that at the moment there is no body in Trinidad which can represent the views of the people of Trinidad on this matter.
I ask the right hon. Gentleman this question. Does he think it is right, or wise, for us to make a decision on this matter before the autumn when the new Legislature and new Government of Trinidad will have an opportunity of declaring their views upon it? It is true that, constitutionally, Trinidad being a Colony, the Government and this House can decide, but I put this view, which ought to be seriously considered by every hon. Member of the House and by our country. To take this decision at this time, as we can but when the representatives of the people of Trinidad have no opportunity of doing so, is mistaken, and we ought to postpone a decision until the new constitution comes into operation.
Trinidad will be one of the important partners in the new Federation. It will, with all its resources, become part of this new Dominion. Among the most important of its resources is the oil industry. What happens to the oil industry in Trinidad is of importance not only to Trinidad itself but to the Caribbean. I raised this question earlier with the Chancellor of the Exchequer and I raise it now with the Colonial Secretary. Has he consulted other Governments in the British Caribbean whose territories will 1494 form part of the new Federation, and. if so, what are their views about it?
Does he think that we ought to wait—I believe that we should—until both Trinidad and the Caribbean have an opportunity of deciding upon this matter? It is quite clear that the future prospects both of the island and the Federation will be vitally affected by what happens to the oil industry in Trinidad, whose future in part, and in a very important part, we are deciding today.
The second point concerns the proposal that was made by my right hon. Friend the Member for Huyton when he indicated that in our view the Government should have stepped in and acquired this property for the nation. What a splendid gesture it would be if we vested one-half of the property in the Government of Trinidad and the new Government of the Federation. What a gesture from this country to this very great venture of federation, and what a real security to the people of the Caribbean and of Trinidad that this oil industry should be developed in their interest and that they should have an effective voice in its control and really participate in the wealth that would be derived from it.
In view of their prejudice against nationalisation generally, the Government will no doubt turn down that suggestion. If they do, will the Secretary of State for the Colonies consider another suggestion? At this important stage in the political development of the whole of this area, is it not desirable and essential that the Governments of the territory should have an effective voice in the future control of this industry? Even if Her Majesty's Government reject the proposal to acquire the whole of this property for the nation, has any consideration been given to acquiring an interest in the property?
Has any consultation taken place with the Colonial Development Corporation and has the suggestion been made that that Corporation should have an interest in this industry? As I understand from the present policy of Her Majesty's Government, the Corporation seems to be under an obligation to the Government not to invest in any project in the Colonies unless it is in partnership with private enterprise. Will the Government apply that principle the other way round 1495 and arrange that the Corporation, acting for the Government and the nation, shall acquire an interest in this enterprise, together with the right to nominate members on the board of directors to represent this country, Trinidad and the Caribbean Federation? I believe that that is an important suggestion.
We on this side of the House welcome the assurances required in paragraphs 30 and 31 of the White Paper as far as they go, but I understand from the White Paper and from what the Chancellor of the Exchequer has said today that the precise form in which these undertakings will be embodied in an agreement with the Texas Company are still under consideration. I hope that the Secretary of State for the Colonies will tell us what he has in mind in this respect. If he rejects the proposals that we have put forward, I should like to ask him a question which has already been asked but which has not yet been answered. If, at any time in the future, the new company does not carry out these undertakings, what sanctions and safeguards has the right hon. Gentleman in mind to to ensure that the company can be compelled to carry them out?
The Trinidad enterprise has been a fairly important part of the activities of the Triniday Oil Company. When the company is sold and it becomes a part of a new company, the Trinidad interest will become a very small part of the new company's total interests. It will become a minor subsidiary. I have seen some of these amalgamations in my own industry in my time. It is a kind of historical process that when big companies swallow small ones the whole tendency is for the smaller subsidiary, particularly if it is relatively uneconomic, to be abandoned.
Will the Secretary of State tell us how he proposes to ensure in the agreements which he makes not only that the undertakings are carried out fully, but that there are sanctions which will enable Her Majesty's Government and the Government of Trinidad to take action if the agreements are broken? On the assumption that the right hon. Gentleman accepts the view that we must have sanctions and have some power to intervene if the undertakings are broken, are we to understand that there will be a clause in the 1496 agreements by which the Government will have a right to buy the industry back? Unless that is the case, how are we to ensure that all or any of these undertakings are carried out?
I should like to put another point to the House. I echo what was said by my right hon. Friend the Member for Huyton. Quite frankly, it is shabby treatment of the House, of Trinidad and of the Caribbean, that a matter of this kind has to be decided within about ten days. The offer was made on 5th June and on 6th June it was announced in the House, and here we are today deciding this matter and, it may be, the fate of the island, without a Parliament or an effective Government in Trinidad, on the eve of the advent of the new Federation.
Here is an industry which employs 17,000 workers in Trinidad, half of whom are employed by this Company. The industry is responsible for one-third of the revenue of the Trinidad Government and for 75 per cent. of its exports. Here is the life-blood of the people of Trinidad, and they have no opportunity of deciding this issue. It is their land, their wealth, their future and their prosperity. I urge upon the House, as one of the many reasons for voting against this deal, the reason that we have not the moral right to take this decision without allowing the people in the Caribbean, and particularly in Trinidad, to voice their opinion upon it.
If there were a free vote in the House, the Government would be defeated. Every supporter of the Government who has taken part in the debate has said, "We accept this with reluctance." The feeling is widespread in the House and among the public generally that by what we are doing today we are failing in our responsibilities to Trinidad and to the people in the Caribbean, to the Commonwealth and to this country. I believe that when we vote against the Government this evening we shall be speaking for the vast majority of our people.
§ 6.39 p.m.
§ The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd)
Despite the brotherly tribute which the right hon. Member for Llanelly (Mr. J. Griffiths) paid to his right hon. Friend the Member for Huyton (Mr. H. Wilson), I hope that I shall be forgiven for saying that the speech of the right hon. Member for 1497 Huyton, in opening the debate, was scarcely a serious contribution to this discussion.
The right hon. Member moved from one charge to the other—quite irreconcilable charges with very gay rapidity. At one moment he said that after four and a half years of Conservative rule there was no capital available which could be invested. A quarter of an hour later he said that the money, of course, could quite easily have been found had Shell or B.P. wanted it, or had the Government been serious about it.
The right hon. Gentleman made little effort to relate these proposals to the real problems of the United Kingdom or of Trinidad. I recognise, however, that in his speech the right hon. Gentleman the Member for Llanelly did deal with aspects of this matter which are of close interest to the people of Trinidad.
I must confess that throughout the speech of the right hon. Gentleman the Member for Huyton I found it difficult to regard it as the first speech on what is a Motion of censure on the Government, which was designed to bring together many different elements in the House. Throughout his speech the right hon. Gentleman seemed to forget that this is an offer by a foreign company to buy a whole concern, and that the Government would not be in a position to pick out bits and pieces, to approve or to refuse.
The right hon. Gentleman asked me some questions in the sphere for which I am primarily responsible, which it may be convenient if I deal with now. For instance, he asked me whether it would be possible, and whether any approach had been made, to the Colonial Development Corporation for that Corporation to take a share in this project. The right hon. Gentleman the Member for Llanelly made the same point.
Leaving out of account altogether the argument of my right hon. Friend the Chancellor of the Exchequer about the wisdom of this deal, there are statutory upper limits for the Colonial Development Corporation which cannot be exceeded without new legislation. It would only have been possible—even had it been right, which I do not for a moment accept—for the Colonial Development Corporation to have embarked on an undertaking of this kind if all its other schemes for the 70 million people who 1498 live in the Colonial Territories were either totally abandoned or very heavily slashed. Clearly, it would have been an absurd use of this power to have diverted to this acquisition, all the money of the Corporation for a period of years at a time when, from many quarters of the Commonwealth, we hear constant pleas about the need to attract foreign investments and foreign capital.
Foreign investment and foreign capital are most unlikely to be attracted into the sphere of the Colonial Development Corporation. Indeed, the Corporation was set up to bridge the gap between schemes which were likely to attract outside investment and those which were not. So to have diverted the whole of the funds of the Corporation for this purpose, which would have had to be on a huge scale, and then to hope that other activities within the Colonies would have been financed from outside sources, presumably foreign sources, would have been an ill-planned way to tackle the big problem of colonial development.
I understand the difficulties of the right hon. Gentleman. It must be singularly embarrassing for a speaker from the Opposition to deal in serious vein with the question of oil interests and the sources from which we draw our oil strength. The right hon. Gentleman paid a tribute to my right hon. Friend the Member for Woodford (Sir W. Churchill) for his great investment in Middle Eastern oil. The right hon. Gentleman spoke of Middle Eastern oil as if he had a right to talk about it as one who had added to our strength and authority in that part of the world.
The right hon. Gentleman did his utmost in his speech—and this is my main complaint against him—to try to create prejudice against this arrangement, and to remove the subject from the realm of serious discussion. One of the illustrations he called in aid was an attempt to estimate what each miner would need to have earned, and over how many years, in order to acquire the same amount of net gain as certain people may have made on the Stock Exchange from share movements. What the right hon. Gentleman did not bear in mind, or remind the House of, was not only what faced the miners, and many other men all over this country as well, over the shocking business at Abadan but 1499 what would have happened if there had not been a change of Government[HON. MEMBERS: "Oh."]—here, which certainly had useful results elsewhere.
The right hon. Gentleman said that the Socialist Government were confronted with the demands by a sovereign State which could not have been stopped without bayonets, but we managed, not long afterwards, to get back again into a very strong position in the Persian oilfields. Therefore, when hon. and right hon. Gentlemen opposite talk as if the arrangement made ultimately at Abadan involved a sacrifice of British to American interests, they conveniently leave out of account the fact that the American and other foreign companies paid Anglo-Iranian £214 million for their share in the consortium, in part to be paid by an original lump sum and the rest over a period. So I can most certainly understand that the right hon. Gentleman may have a little hesitation in dealing seriously with the problems of oil.
§ Mr. H. Wilson
The right hon. Gentleman knows perfectly well that, despite all their promises in 1951, the Conservative Government were unable to do anything in Iran until there was a change of Government there. Are the Government now claiming credit for that change of Government in Iran?
§ Mr. Lennox-Boyd
There were long negotiations in which the firm attitude of Her Majesty's Government, firm and patient diplomacy, yield a very rich reward.
The speech that should have started the debate for the Opposition was the serious contribution made by the hon. Gentleman the Member for Wednesbury (Mr. S. N. Evans). I have considerable sympathy with nearly all that he said. I have much sympathy with his views on the outrageous propaganda against the United Kingdom, the British people and the British Commonwealth in general which is prevalent in certain areas of the Middle East. I share his acute resentment at all who encourage it and, still more, who help to finance it.
In the course of his speech the hon. Gentleman made some comments on Aramco and suggested that the United Kingdom Government should have demanded, as a condition of approving this arrangement, a seat on that board. On 1500 reflection, I do not think that he would regard a single seat on that board, even if it had been possible, as being a really effective control. My right hon. Friend explained how, as the Texas Oil Company had only a one-third interest in Aramco, that would have been virtually impossible without disturbing the balance of their arrangements. I would seriously commend to the hon. Gentleman the view that the real way to influence people in the areas where we have to influence them is to strengthen the solidarity of all oil interests throughout the world, as the hon. Member for Orkney and Shetland (Mr. Grimond) said a short time ago in his most interesting speech.
At the beginning of the debate the hon. Member for Wednesbury also asked me whether it was not a fact that the dollar gain would be greatly reduced if there was a substantial American holding in the company. There is no reason to believe that American citizens have a substantial holding. In any case, the shareholders are being paid for their shares in sterling and, as my right hon. Friend said, the dollars go to the reserves.
As was natural, the debate has ranged over three different interests, all closely linked with this project, and this project itself has, quite rightly, focussed attention on the question of colonial investment. The first interest was the interest of Trinidad. The second was the interest of the United Kingdom. The third was the United Kingdom investment in the Commonwealth as a whole.
I share with the right hon. Gentleman the Member for Llanelly the view that this is a matter of very great concern to Trinidad, and throughout our discussions the Government have been particularly conscious of our duties to its people. I am most grateful for the recognition by the Government, by all my colleagues, of the fact that we have very considerable responsibilities in Trinidad which, though they take a different form constitutionally from those of our own people in the United Kingdom, are none the less important and in effect than our relations with our people in the United Kingdom.
I began my personal examination of this proposal with considerable scepticism, and I was afraid that it might be shown to be to the disadvantage of the people 1501 of Trinidad, but I can assure hon. Members on both sides of the House that I am absolutely convinced that this arrangement is in the best interests of the people of Trinidad and that we ourselves would have been very answerable in the future had we refused permission and taken another line.
The right hon. Gentleman said that there is to be a new constitution in Trinidad in the autumn and that at the moment the Trinidad Legislature has been dissolved. But, as he knows, there is an Executive Council, and the government of Trinidad, like the government of any other country, is carried on during the period of the dissolution of Parliament. On the Executive Council are the Governor, the Colonial Secretary, the Financial Secretary, one nominated member and five elected ministers.
I do not know precisely how they arrive at their conclusions. Like most Governments and Cabinets, they do not, I imagine, take votes. However, when I see that the elected ministers are in a majority on the Executive Council, and when I am assured that the Executive Council of Trinidad is behind the proposal and hopes that Her Majesty's Government will give the proposal their support and recognise the value of it, then I think that I should be in a very difficult position vis-è-vis the people of Trinidad if I did not pay serious attention to what the Executive Council says.
I dare say that the right hon. Gentleman would ask why we do not wait until the General Election which will take place in September this year. Apart from the fact that this is a business arrangement with certain firm dates in the offer, of which note must be taken, however much hon. Gentlemen opposite may dislike the idea of definite offers and definite closing dates, I do not believe that it would have been in the interests of anybody if the deal had become a matter of violent political controversy in September.
Had the Legislature been sitting, there would, of course, have been a discussion on it, but it did not appear to Her Majesty's Government or to the Government of Trinidad, who, after all, are responsible in matters of this kind, to be in any way necessary that a decision, even if it could have been postponed, should be postponed until after next 1502 September. At no point whatever in my discussions with the Government of Trinidad did I ever have the slightest indication that the Executive Council would like a decision postponed until after the General Election.
§ Mr. J. Griffiths
This is an important matter. The last thing that I or any of us would desire would be that a matter of this kind should become a subject of controversy during the September General Election. Would not the best way to prevent that happening be to give a firm undertaking now that the final act in this deal will not take place until the new Legislature has had an opportunity to discuss it?
§ Mr. Lennox-Boyd
No, Sir. I cannot imagine anything which would be less in the interests of the people of Trinidad and more resented by the Executive Council of Trinidad, which has tendered its advice to Her Majesty's Government, and which, not only before Her Majesty's Government made their decision, but since, in communications with me after the decision was made, has said that it absolutely approves of the action which Her Majesty's Government have taken. I am sure that any other action on our part would have been inconsistent with our duties to the people of Trinidad.
The right hon. Gentleman asked me whether there had been any discussion with other Caribbean territories on this matter. The answer is that there have been no other discussions. The other territories have, of course, known of the proposal, and, if they had cared to do so, could have submitted their views. But this is a matter concerning the Government of Trinidad, and I have to be exceedingly careful in matters of this kind not to go round asking the opinion of other territories on a matter which the Government of Trinidad, quite rightly, regard as their concern.
The right hon. Gentleman drew attention to the fact that the Caribbean Federation Bill was formally introduced in the House of Commons yesterday. He said that these proposals, 24 hours later, were a sorry send-off for it. However, I would ask him seriously to consider what a really disastrous send-off it would have been for the Bill, and, later, for the Caribbean Federation, if Her Majesty's Government had completely 1503 disregarded the views of the Executive Council of Trinidad on a matter concerning it mainly, with the United Kingdom, and at a time when the Caribbean Federation, though we see it coming along, is not likely to take proper shape until 1958.
I attach the greatest possible importance, of course, to the safeguards which are spelt out in the White Paper. We have every intention of negotiating with the representatives of the Texas Company on these safeguards and the form that they should take. I think it is better that the precise form should await those discussions.
I deprecate the approach of the right hon. Gentleman and the assumption underlying some of his questions that these demands or insistences on our part are likely to be signed by the Texas Company and then broken at some period shortly afterwards. The right hon. Gentleman is entitled to ask what would happen if these conditions are refused. If they are refused before the agreement is completely approved, then, naturally, the agreement will not take place. If the arrangement is broken after the agreement has been signed, then the action to be taken would depend on what undertaking has been breached.
Some action, for example, might be offences against the Trinidad law, such as in regard to industrial relations, and the provisions could be enforced through the courts of law. In the case of other actions, such as not pursuing a sufficiently forthright development policy, the matter can only be resolved by negotiation and cannot be made subject to legal requirement.
However, in matters of this kind I see no reason whatever to anticipate that, as between a company from a great ally like the United States, and the Governments of Trinidad and the United Kingdom, statements of intention solemnly entered into will not be scrupulously fulfilled. Of course, formally, the leases could be withdrawn or the Government of Trinidad could take over, but, as I say, I have no reason to anticipate that any such serious action would be necessary.
With regard to the feelings of the people of Trinidad, other than those of the Executive Council, there have been one or two statements made by trade 1504 union leaders in Trinidad. I do not think that those can seriously be taken as representing the views either of the oil workers or of a very considerable body of people in Trinidad. The comments were not made until the decision had been reached. It was open for those comments [HON. EMBERS: "0h."] The trade union leaders knew about this from the date of the publication of the proposals, and had it been intended seriously to put forward any comments, the proper time to have put them forward would have been then.
I must confess to a feeling that in an Election year in Trinidad certain political considerations enter into comments of this kind, and we should have been much more subject to criticism, possibly from the same source, had we taken a different view.
The next aspect of the matter upon which attention has properly been focussed is the interests of the United Kingdom. I will not deal with this in the same detail because the Chancellor dealt with it very considerably. However, I should like to put to the House one or two general considerations based on my experience as Colonial Secretary and my knowledge of how much colonial development is in the interest of both the Colonies and the United Kingdom.
If we seek to exclude American or other foreign ownership of mineral or oil ventures in the British Commonwealth we must not be surprised if doors are closed against British mining and British oil houses in foreign countries. Mining is a two-way traffic. If we are to continue to develop the mining and oil industries anywhere in the world, we must allow others to do the same in our own territories. If the Trinidad oil deal had been blocked, it would have been a big blow to British mining houses and British mining activities operating in many parts of the world.
Nothing could be more fatal to the interests for which I feel a great personal responsibility than if we were to lay it down that Empire raw materials could be operated only by British companies. If we did that, the mining world itself would be divided into two camps with the consequence that we would either have to rely exclusively on our own financial resources to develop the minerals and oil of the British Empire—which, in my 1505 view, is out of the question—or we might find the British Commonwealth short of certain essential minerals.
If we were excluded from looking for those in foreign countries, we might set up very serious strategic and other deficiencies for our own people. I can see no surer way of discouraging American and other investment in our own mining enterprises than blocking a transaction such as this. I am most deeply conscious of the need to strengthen and increase investment wherever we can.
The right hon. Member for Huyton and the right hon. Member for Llanelly and other hon. Members asked about the attitude of American companies to labour problems in the territories where they operate. I have very carefully looked at that, for I am fully conscious of the very great need to make sure that no hint of racial discrimination or other improper practice is allowed to enter into any British Colonial Territory with our knowledge.
As no doubt many hon. Members know, the Rhodesian Selection Trust has lately been doing a most admirable task in labour relations in Central Africa. The Trust has a large shareholding and a considerable amount of that shareholding was acquired not by a direct and sudden American purchase as is now proposed, but by steady purchases over a number of years. At present, about 65 per cent. of the Trust shares are in American hands. Yet from where is it that the imagination and drive has come in Northern Rhodesia in the policy of giving Africans a chance to undertake jobs which have hitherto been confined exclusively to white miners?
All those who know the work which Sir Ronald Prain has done in Northern Rhodesia, with the Rhodesian Selection Trust, can regard that as a fair indication of what the best American companies can be relied upon to do. I have no fears whatever that the agreements which we intend to negotiate will not be scrupulously fulfilled, and that the personnel and others introduced into Trinidad will not observe them, although, of course, a considerable number of people who will work in Trinidad will be the same as those who have worked for Trinidad Leaseholds.
The last aspect of this problem to which attention has been properly directed is that of United Kingdom invest- 1506 ment in the Commonwealth. No doubt one of the chance consequences of this transaction—and a very good consequence at that—will be to focus attention still more on the need to get more and more money invested in the British Commonwealth and to use our imagination in every way to see that that is brought about.
This transaction is in no sense a retrograde policy, if, as a result, our capacity to reinvest and reinvest more strongly is thereby encouraged. Nothing is more sure than that our first contribution to being able to play our part in Imperial development will come from putting our own house properly in order here. "You cannot invest a deficit" was the constant observation of my predecessor, Lord Chandos, and nothing is more true than that. The Government's policy, which the Chancellor has recently outlined, is designed to enable us so to strengthen ourselves that we can play our proper part.
I recognise the natural anxiety of many hon. Members—like my hon. Friend the Member for Tavistock (Sir H. Studholme) whose almost maiden speech after so many years as a Whip we all heard with the greatest interest—that we should ourselves be able to play an ever-growing part in investment. We have done a considerable amount of investment, and I am at a loss to know how the right hon. Member for Huyton drew some of the figures and some of the inferences in his speech.
In the course of the last few years, we have invested very considerably in our Commonwealth, but I agree that we still have a long way to go. We have done that despite the most considerable difficulties in our balance of payments position, caused by a war which, at its start saw us with £3,500 million surplus and, at its end, a debt of £2,500 million, a swing of more than £6,000 million in six years. Right hon. and hon. Gentlemen should try to draw a moral from that, but this issue is far too serious to attempt to make purely party points.
Despite these difficulties, no less than £600 million have flowed into the Colonies since 1949 and, of that figure, by far the largest part has come from the United Kingdom. Last year, we estimate that about £90 million were provided by the United Kingdom for the Colonies despite 1507 many other difficulties. The figures quoted by the right hon. Member for Huyton give a rather misleading view of the story. Of the figure of £600 million, about £30 million—if we include United States investment in the copper companies in Central Africa—have been provided from United States sources—only about £30 million out of £600 million.
Gross capital formation in the Colonies in 1951 was at the rate of £300 million a year. By last year it had risen to £450 million, an increase of 50 per cent. in money terms and perhaps one-third in real terms. Those of us who are really anxious about colonial investment will, I hope, not give currency to the view that virtually nothing has been done. Quite the contrary is the case, but I recognise that we have still a considerable way to go.
The work we have done has enabled us in the last few years to see the total value of exports from Colonial Territories increase from £615 million in 1948 to £1,360 million last year, and the value of imports over the same period from £660 million to nearly £1,500 million. The result of that transformation in their trading balance has been a steady improvement in their standards of living and social services.
§ Those are facts which we would do well to remember when, as we all do, we see whether it will be possible to find still more capital for our current responsibilities. I am particularly glad that yesterday in Committee on the Finance Bill the Chancellor of the Exchequer was able to give an assurance that if circumstances from the budgetary or balance of payments point of view are such that we cannot next year go the whole way towards meeting the recommendations of the Royal Commission on the Taxation of Profits and Income, he will, nevertheless, bring forward legislation next year to deal with the matter of frustration of pioneer industry reliefs. I know what satisfaction that will give to all classes of people and investors and to the Territories themselves who will stand to gain from this almost more than from any other single act.
§ I commend these proposals to the House and venture to say that if the right hon. Member for Llanelly had, in fact, been Colonial Secretary today, he could not possibly have asked the House to reject these proposals and go into the Lobby against them.
§ Question put, That this House do now adjourn:—
§ The House divided: —Ayes 247, Noes 315.1511
|Division No. 227.]||AYES||[7.10 p.m.|
|Ainsley, J. W.||Champion, A. J.||Gaitskell, Rt. Hon. H. T. N.|
|Albu, A. H.||Chapman, W. D.||Gibson, C. W.|
|Allaun, Frank (Salford, E.)||Chetwynd, G. R.||Gooch, E. G.|
|Allen, Arthur (Bosworth)||Clunie, J.||Greenwood, Anthony|
|Allen, Scholefield (Crewe)||Coldrick, W.||Grenfell, Rt. Hon. D. R.|
|Anderson, Frank||Collick, P. H. (Birkenhead)||Grey, C. F.|
|Awbery, S. S.||Collins, V.J. (Shoreditch & Finsbury)||Griffiths, David (Rother Valley)|
|Bacon, Miss Alice||Corbel, Mrs. Freda||Griffiths, Rt. Hon. James (Llanelly)|
|Baird, J.||Cove, W. G.||Griffiths, William (Exchange)|
|Balfour, A.||Craddock, George (Bradford, S.)||Hale, Leslie|
|Ballenger, Rt. Hon. F. J.||Cronin, J. D.||Hall, Rt. Hn. Glenvil (Colne Valley)|
|Bence, C. R. (Dunbartonshire, E.)||Crossman, R. H. S.||Hamilton, W. W.|
|Benn, Hn. Wedgwood (Bristol, S.E.)||Cullen, Mrs. A.||Hannan, W.|
|Benson, G.||Dalton, Rt. Hon. H.||Harrison, J. (Nottingham, N.)|
|Beswick, F.||Darling, George (Hillsborough)||Hastings, S.|
|Bevan, Rt. Hon. A. (Ebbw Vale)||Davies, Ernest (Enfield, E.)||Hayman, F. H.|
|Blackburn, F.||Davies, Harold (Leek)||Healey, Denis|
|Blenkinsop, A.||Deer, G.||Henderson, Rt. Hn. A. (Rwly Regis)|
|Blyton, W. R.||Delargy, H. J.||Hewitson, Capt. M.|
|Boardman, H.||Dodds, N. N.||Hobson, C. R.|
|Bottomley, Rt. Hon. A. G.||Dugdale, Rt. Hn. John (W. Brmwch)||Holman, P.|
|Bowles, F. G.||Dye, S.||Holmes, Horace|
|Boyd, T. C.||Ede, Rt. Hon. J. C.||Howell, Charles (Perry Barr)|
|Braddock, Mrs. Elizabeth||Edwards, Rt. Hon. John (Brighouse)||Howell, Denis (All Saints)|
|Brockway, A. F.||Edwards, W. J. (Stepney)||Hoy, J. H.|
|Broughton, Dr. A. D. D.||Evans, Albert (Islington, S.W.)||Hubbard, T. F.|
|Brown, Rt. Hon. George (Belper)||Evans, Edward (Lowestoft)||Hughes, Cledwyn (Anglesey)|
|Brown, Thomas (Ince)||Evans, Stanley (Wednesbury)||Hughes, Emrys (S. Ayrshire)|
|Burke, W. A.||Fernyhough, E.||Hughes, Hector (Aberdeen, N.)|
|Burton, Miss F. E.||Fienburgh, W.||Hunter, A. E.|
|Butler, Herbert (Hackney, C.)||Fletcher, Eric||Irvine, A. J. (Edge Hill)|
|Butler, Mrs. Joyce (Wood Green)||Forman, J. C.||Irving, S. (Dartford)|
|Callaghan, L. J.||Fraser, Thomas (Hamilton)||Isaacs, Rt. Hon. G. A.|
|Castle, Mrs. B. A.|
|Janner, B.||Moyle, A.||Sparks, J. A.|
|Jay, Rt. Hon. D. P. T.||Mulley, F. W.||Steele, T.|
|Jeger, George (Goole)||Neal, Harold (Bolsover)||Stewart, Michael (Fulham)|
|Jeger, Mrs. Lena(Holbn & St.Pncs.S.)||Noel-Baker, Francis (Swindon)||Stokes, Rt. Hon. R. R. (Ipswich)|
|Jenkins, Roy (Stechford)||Noel-Baker, Rt. Hon. P. (Derby, S.)||Stones, W. (Consett)|
|Johnson, James (Rugby)||O'Brien, Sir Thomas||Strachey, Rt. Hon. J.|
|Jones, Fit. Hon. A. Creech(Wakefield)||Oliver, G. H.||Strauss, Rt. Hon. George (Vauxhall)|
|Jones, David (The Hartlepools)||Oram, A. E.||Stross, Dr.Barnett(Stoke-on-Trent,C.)|
|Jones, Elwyn (W. Ham, S.)||Orbach, M.||Summerskill, Rt. Hon. E.|
|Jones, Jack (Rotherham)||Oswald, T.||Swingler, S. T.|
|Jones, J. Idwal (Wrexham)||Owen, W. J.||Sylvester, G. O.|
|Jones, T. W. (Merioneth)||Padley, W. E.||Taylor, Bernard (Mansfield)|
|Kenyon, C.||Paling, Rt. Hon. W. (Dearne Valley)||Taylor, John (West Lothian)|
|Key, Rt. Hon. C. W.||Paling, Will T. (Dewsbury)||Thomas, George (Cardiff)|
|King, Dr. H. M.||Palmer, A. M. F.||Thomas, Iorwerth (Rhondda, W.)|
|Lawson, G. M.||Pargiter, G. A.||Thomson, George (Dundee, E.)|
|Ledger, R. J.||Parker, J.||Thornton, E.|
|Lee, Frederick (Newton)||Parkin, B. T.||Timmons, J.|
|Lee, Miss Jennie (Cannock)||Paton, John||Tomney, F.|
|Lever, Harold (Cheetham)||Pearson, A.||Turner Samuels, M.|
|Lever, Leslie (Ardwick)||Peart, T. F.||Ungoed-Thornas, Sir Lynn|
|Lewis, Arthur||Plummer, Sir Leslie||Usborne, H. C.|
|Lindgren, G. S.||Popplewell, E.||Viant, S. P.|
|Lipton, Lt.-Col. M.||Price, Philips (Gloucestershire, W.)||Warbey, W. N.|
|Logan, D. G.||Probert, A, R.||Weitzman, D.|
|Mabon, Dr. J. Dickson||Proctor, W. T.||Wells, William (Walsall, N.)|
|MacColl, J. E.||Pryde, D. J.||West, D. G.|
|McGhee, H. G.||Pursey, Cmdr. H.||Wheeldon, W. E.|
|McGovern, J.||Randall, H. E.||White, Mrs. Eirene (E. Flint)|
|McInnes, J.||Rankin, John||White, Henry (Derbyshire, N.E.)|
|McKay, John (Wallsend)||Redhead, E. C.||Wigg, George|
|McLeavy, Frank||Reid, William||Wilcock, Group Capt. C. A. B.|
|MacPherson, Malcolm (Stirling)||Robens, Rt. Hon. A.||Wilkins, W. A.|
|Mahon, Simon||Roberts, Albert (Normanton)||Willey, Frederick|
|Mainwaring, W. H.||Roberts, Goronwy (Caernarvon)||Williams, David (Neath)|
|Mallalieu, E. L. (Brigg)||Robinson, Kenneth (St. Pancras, N.)||Williams, Rev. Llywelyn (Ab'tillery)|
|Mallalieu, J. P. W. (Huddersfd, E.)||Rogers, George (Kensington, N.)||Williams, Rt. Hon. T. (Don Valley)|
|Mann, Mrs. Jean||Ross, William||Williams, W. R. (Openshaw)|
|Marquand, Rt. Hon. H. A.||Shawcross, Rt. Hon. Sir Hartley||Williams, W. T. (Barons Court)|
|Mason, Roy||Shinwell, Rt. Hon. E.||Willis, Eustace (Edinburgh, E.)|
|Mayhew, C. P.||Short, E. W.||Wilson, Rt. Hon. Harold (Huyton)|
|Messer, Sir F.||Silverman, Julius (Aston)||Winterbottom, Richard|
|Mikardo, Ian||Silverman, Sydney (Nelson)||Woodburn, Rt. Hon. A.|
|Mitchison, G. R.||Simmons, C. J. (Brierley Hill)||Woof, R. E.|
|Monslow, W.||Skeffington, A. M.||Yates, V. (Ladywood)|
|Moody, A. S.||Slater, Mrs. H. (Stoke, N.)||Younger, Rt. Hon. K.|
|Morrison,Rt.Hn.Herbert(Lewis'm,S.)||Slater, J. (Sedgefield)||Zilliacus, K.|
|Mort, D. L.||Smith, Ellis (Stoke, S.)|
|Moss, R.||Snow, J. W.||TELLERS FOR THE AYES:|
|Sorensen, R. W.||Mr. Bowden and Mr. J. T. Price.|
|Agnew, Cmdr. P. G.||Bowen, E. R. (Cardigan)||Davidson, Viscountess|
|Aitken, W. T.||Boyd-Carpenter, Rt. Hon. J. A.||Davies,Rt.Hon.Clement(Montgomery)|
|Allan, R. A. (Paddington, S.)||Boyle, Sir Edward||D'Avigdor-Goldsmid, Sir Henry|
|Alport, C. J. M.||Braine, B. R.||Deedes, W. F.|
|Amery, Julian (Preston, N.)||Braithwaite, Sir Albert (Harrow, W.)||Digby, Simon Wingfield|
|Anstruther-Gray, Major Sir William||Bromley-Davenport, Lt.-Col. W. H.||Dodds-Parker, A. D.|
|Arbuthnot, John||Brooke, Rt. Hon. Henry||Donaldson, Cmdr. C. E. McA.|
|Armstrong, C. W.||Brooman-White, R. C.||Doughty, C. J. A.|
|Ashton, H.||Browne, J. Nixon (Craigton)||Drayson, G. B.|
|Astor, Hon. J. J.||Buchan-Hepburn, Rt. Hon. P. G. T.||du Cann, E. D. L.|
|Atkins, H. E.||Bullus, Wing Commander E. E.||Dugdale, Rt. Hn. Sir T. (Richmond)|
|Baldock, Lt.-Cmdr. J. M.||Burden, F. F. A.||Duncan, Capt. J. A. L.|
|Baldwin, A. E.||Butcher, Sir Herbert||Eccles, Rt. Hon. Sir David|
|Balniel, Lord||Butler,Rt.Hn.R.A.(SaffronWalden)||Eden,Rt.Hn. SirA.(Warwick & L'm'tn)|
|Banks, Col. C.||Campbell, Sir David||Eden, J. B. (Bournemouth, West)|
|Barber, Anthony||Carr, Robert||Elliot, Rt. Hon. W. E.|
|Barlow, Sir John||Cary, Sir Robert||Emmet, Hon. Mrs. Evelyn|
|Barter, John||Channon, H.||Errington, Sir Eric|
|Baxter, Sir Beverley||Chichester-Clarke, R.||Erroll, F. J.|
|Beamish, Maj. Tufton||Churchill, Rt. Hon. Sir Winston||Farey-Jones, F. W.|
|Bell, Philip (Bolton, E.)||Cole, Norman||Fell, A.|
|Bell, Ronald (Bucks, S.)||Conant, MaJ. Sir Roger||Finlay, Graeme|
|Bennett, F. M. (Torquay)||Cooper, Sqn. Ldr. Albert||Fisher, Nigel|
|Bennett, Dr. Reginald||Cooper-Key, E. M.||Fleetwood-Hesketh, R. F.|
|Bevins, J. R. (Toxteth)||Cordeaux, Lt.-Col. J. K.||Fletcher-Cooke, C.|
|Bidgood, J. C.||Corfield, Capt. F. V.||Fort, R.|
|Birch, Rt. Hon. Nigel||Craddock, Beresford (Spelthorne)||Foster, John|
|Bishop, F. P.||Crowder, Sir John (Finchley)||Fraser, Sir Ian (M'cmhe & Lonsdale)|
|Black, C. W.||Crowder, Petre (Ruislip—Northwood)||Freeth, D. K.|
|Body, R. F.||Cunningham, Knox||Garner-Evans, E. H.|
|Boothby, Sir Robert||Currie, G. B. H.||George, J. C. (Pollok)|
|Bossom, Sir A. C.||Dance, J. C. G.|
|Gibson-Watt, D.||Leavey, J. A.||Raikes, Sir Victor|
|Glover, D.||Leburn, W. G.||Ramsden, J. E.|
|Godber, J. B.||Legge-Bourke, Maj. E. A. H.||Rawlinson, Peter|
|Gomme-Duncan, Col. Sir Alan||Legh, Hon. Peter (Petersfield)||Redmayne, M.|
|Gough, C. F. H.||Lennox-Boyd, Rt. Hon. A. T.||Rees-Davies, W. R.|
|Gower, H. R.||Lindsay, Hon. James (Devon, N.)||Remnant, Hon. P.|
|Graham, Sir Fergus||Lindsay, Martin (Solihull)||Renton, D. L. M.|
|Grant, W. (Woodside)||Linstcad, Sir H. N.||Ridsdale, J. E.|
|Grant-Ferris, Wg Cdr. R. (Nantwich)||Llewellyn, D. T.||Rippon, A. G. F.|
|Green, A.||Lloyd, Rt. Hon. G. (Sutton Goldfield)||Roberts, Sir Peter (Heeley)|
|Gresham Cooke, R.||Lloyd, Maj. Sir Guy (Renfrew, E.)||Robertson, Sir David|
|Grimond, J.||Lloyd, Rt. Hon. Selwyn (Wirral)||Robinson, Sir Roland (Blackpool, S.)|
|Grimston, Hon. John (St. Albans)||Lloyd-George, Maj. Rt. Hon. G.||Robson-Brown, W.|
|Grimston, Sir Robert (Westbury)||Longden, Gilbert||Rodgers, John (Sevenoaks)|
|Hall, John (Wycombe)||Low, Rt. Hon. A. R. W.||Roper, Sir Harold|
|Hare, Rt. Hon. J. H.||Lucas, Sir Jocelyn (Portsmouth, S.)||Russell, R. S.|
|Harris, Frederic (Croydon, N.W.)||Lucas, P. B. (Brantford & Chiswick)||Schofield, Lt.-Col. W.|
|Harris, Reader (Heston)||Lucas-Tooth, Sir Hugh||Scott-Miller, Comdr. R.|
|Harrison, A. B. C. (Maldon)||McAdden, S. J.||Sharpies, R. C.|
|Harrison, Col. J. H. (Eye)||McCallum, Major Sir Duncan||Shepherd, William|
|Harvey, Air Cdre. A. V. (Macclesfd)||Macdonald, Sir Peter||Simon, J. E. S. (Middlesbrough, W.)|
|Harvey, Ian (Harrow, E.)||McKibbin, A.||Smithers, Peter (Winchester)|
|Harvey, John (Walthamstow, E.)||Mackie, J. H. (Galloway)||Smyth, Brig. Sir John (Norwood)|
|Harvie-Watt, Sir George||McLaughlin, Mrs. P.||Soames, Capt. C.|
|Hay, John||Maclay, Rt. Hon. John||Spearman, Sir Alexander|
|Head, Rt. Hon. A. H.||Maclean, Fitzroy (Lancaster)||Spence, H. R. (Aberdeen, W.)|
|Heald, Rt. Hon. Sir Lionel||Macmillan,Rt.Hn.Harold(Bromley)||Spells, Rt. Hn. Sir P. (Kens'gt'n, S.)|
|Henderson, John (Cathcart)||Maddan, Martin||Stanley, Capt. Hon. Richard|
|Hicks-Beach, Maj. W, W.||Maitland, Cdr. J. F. W. (Horncastle)||Stevens, Geoffrey|
|Hill, Rt. Hon. Charles (Luton)||Maitland, Hon. Patrick (Lanark)||Steward, Harold (Stockport, S.)|
|Hill, Mrs. E. (Wythenshawe)||Manningham-Buller, Rt. Hn. Sir R.||Steward, Sir William (Woolwich, W.)|
|Hill, John (S. Norfolk)||Markham, Major Sir Frank||Stewart, Henderson (Fife, E.)|
|Hinchingbrooke, Viscount||Marlowe, A. A. H.||Stoddart-Scott, Col. M.|
|Hirst, Geoffrey||Marples, A. E.||Stuart, Rt. Hon. James (Moray)|
|Holland-Martin, C. J.||Marshall, Douglas||Studholme, Sir Henry|
|Holt, A. F.||Mathew, R.||Summers, Sir Spencer (Aylesbury)|
|Hope, Lord John||Maude, Angus||Sumner, W. D. M. (Orpington)|
|Hornby, R. P.||Maudling, Rt. Hon. R.||Taylor, Sir Charles (Eastbourne)|
|Hornsby-Smith, Miss M. P.||Mawhy, R. L.||Taylor, William (Bradford, N.)|
|Horobin, Sir Ian||Maydon, Lt.-Comdr. S. L. C.||Teeling, W.|
|Horsbrugh, Rt. Hon. Dame Florence||Medlicott, Sir Frank||Thomas, Leslie (Canterbury)|
|Howard, Gerald (Cambridgeshire)||Molson, Rt. Hon. Hugh||Thomas, P. J. M. (Conway)|
|Howard, Hon. Greville (St. Ives)||Monckton, Rt. Hon. Sir Walter||Thompson, Kenneth (Walton)|
|Howard, John (Test)||Moore, Sir Thomas||Thompson. Lt.-Cdr.R.(Croydon, S.)|
|Hudson, Sir Austin (Lewisham, N.)||Morrison, John (Salisbury)||Thorneycroft, Rt. Hon. P.|
|Hughes Hallett, Vice-Admiral J.||Mott-Radclyffe, C. E.||Thornton-Kemsley, C. N.|
|Hughes-Young, M. H. C.||Nabarro, G. D. N.||Tiley, A. (Bradford, W.)|
|Hulbert, Sir Norman||Nairn, D. L. S.||Tilney, John (Wavertree)|
|Hurd, A. R.||Neave, Airey||Touche, Sir Gordon|
|Hutchison, Sir Ian Clark (E'b'gh, W.)||Nicholls, Harmar||Tweedsmuir, Lady|
|Hutchison, Sir James (Scotstoun)||Nicholson, Godfrey (Farnham)||Vane, W. M. F.|
|Hyde, Montgomery||Nicolson, N. (B'n'm'th, E. & Chr'ch)||Vaughan-Morgan, J. K.|
|Hylton-Foster, Sir H. B. H.||Nield, Basil (Chester)||Vickers, Miss J. H.|
|Iremonger, T. L.||Noble, Comdr. A. H. P.||Vosper, D. F.|
|Irvine, Bryant Godman (Rye)||Nutting, Rt. Hon. Anthony||Wade, D. W.|
|Jenkins, Robert (Dulwich)||Oakshott, H. D.||Wakefield, Edward (Derbyshire, W.)|
|Jennings, J. C. (Burton)||O'Neill, Hn. Phelim (Co. Antrim, N.)||Wakefield, Sir Wavell (St. M'lebone)|
|Jennings, Sir Roland (Hallam)||Ormsby-Gore, Hon. W. D.||Walker-Smith, D. C.|
|Johnson, Dr. Donald (Carlisle)||Orr, Capt. L. P. S.||Wall, Major Patrick|
|Johnson, Eric (Blackley)||Orr-Ewing, Charles Ian (Hendon, N.)||Ward, Hon. George (Worcester)|
|Johnson, Howard (Kemptown)||Orr-Ewing, Sir Ian (Weston-S-Mare)||Ward, Dame Irene (Tynemouth)|
|Joseph, Sir Keith||Osborne, C.||Waterhouse, Capt. Rt. Hon. C.|
|Joynson-Hicks, Hon. Sir Lancelot||Page, R. G.||Watkinson, Rt. Hon. Harold|
|Kaberry, D.||Pannell, N. A. (Kirkdale)||Webbe, Sir H.|
|Keegan, D.||Partridge, E.||Whitelaw, W.S.I.(Penrith & Border)|
|Kerr, H. W.||Pickthorn, K. W. M.||Williams, Paul (Sunderland, S.)|
|Kershaw, J. A.||Pilkington, Capt. R. A.||Williams, R. Dudley (Exeter)|
|Kimball, M.||Pitman, I. J.||Wills, G. (Bridgwater)|
|Kirk, P. M.||Pitt, Miss E. M.||Wilson, Geoffrey (Truro)|
|Lagden, G. W.||Pott, H. P.||Wood, Hon. R.|
|Lambert, Hon. G.||Powell, J. Enoch||Woollam, John Victor|
|Lambton, Viscount||Price, Henry (Lewisham, W.)||Yates, William (The Wrekin)|
|Lancaster, Col. C. G.||Prior-Palmer, Brig. O. L.|
|Langford-Holt, J. A.||Profumo, J. D.||TELLERS FOR THE NOES:|
|Mr. Heath and|
|Mr. T. G. D. Galbraith.|
Question put and agreed to.