HC Deb 28 June 1928 vol 219 cc692-5
38. Lieut.-Commander KENWORTHY

asked the Chancellor of the Exchequer what are the duties of the Government directors on the board of the Anglo-Persian Oil Company; and, seeing that the participation of the Anglo-Persian Oil Company in a price-fixing ring is a matter of policy affecting the interests of the taxpayer and is distinct from the ordinary questions of management, what instructions have been given to the Government directors.


The duties of the Government Directors do not differ from those of the other Directors on the Board of the Company, save that, in any matter of a financial or general character on which, in their opinion, the directions of the Government should be sought, or on which their advice is desired by the Government, it is their duty to consult, or to report to, the Government as the case may be, and generally to act in accordance with any instructions which may be given to them by the Government in such matters. As regards the latter part of the question, I have nothing to add to the answer which I gave to the hon. and gallant Member on 26th June. In accordance with an undertaking given by the Treasury to the Company in 1914, referred to in Command Paper No. 7419 of 1914, the Government are under obligation not to interfere in the commercial management of the Company.

Lieut-Commander KENWORTHY

Do not the matters which the right hon. Gentleman describes as of a financial or general character include amalgamation, for price-fixing purposes, with the other two great foreign oil combines, and have the directors accordingly consulted his advisers, and what directions have they been given?


Of course, I have to answer with care in these matters, because they might become the subject of litigation, but, speaking under all reserve, I have very little doubt that the marketing of oil is not a matter within the scope of interference legitimate to the Government representatives.

Lieut.-Commander KENWORTHY

Does not the marketing of oil mean an alliance for marketing purposes with these great foreign combines? Was not the original object of the Government holding to safeguard the Government's position with regard to the Navy's fuel supplies, and is not this much larger question quite outside management—surely the right hon. Gentleman has seen the categorical statement in the Press to-day—and what assurance can he give?


When did the Government last interview their directors on this Oil Company, and, further, have any instructions ever been given them with regard to joining forces with other companies for the purpose of price fixing?


The view of the Government—not only this, but preceding Governments—has been that the marketing of oil is not a matter in which we should interfere. Of course, if a situation arose where this country was being held to ransom in regard to its oil supplies, that would be a matter for Parliament, like every other situation, but it would be for Parliament to deal with it on general grounds and not, in my opinion, through its position as partner in the Anglo-Persian Oil Company. It is, as I say, safeguarded by the declarations which have been made in the past. But there is no such situation at present, and there is no such situation in view, according to any opinion that I can form.


Do not the Government deem it part of their duty to control this matter of price fixing? Does it not mean that the British public fails to get the advantage it might get from reduced prices, and is not therefore the whole purpose of our having directors on the Board vitiated?


No, the entry of the Government into the matter was dictated by the importance of securing a naval supply of oil, and that has been the governing principle throughout. A definite undertaking was given by the Government in 1914, that they would not interfere with the commercial management of the Company. That undertaking could not be departed from without infringing the rights of the non-official shareholders in the Company, and would have other reactions.


In view of the public uneasiness—



Lieut.-Commander KENWORTHY

Among all the motorists.


In view of the public uneasiness at the situation that the Government is a majority shareholder in a company which is a price-fixing combine, will the right hon. Gentleman have the matter debated by Parliament with a view to having it settled?


I do not control the business of the House. There is opportunity of raising any matter that comes before Parliament, especially during the course of the Finance Bill. But I do not think there is the slightest ground for public uneasiness in anything that has occurred up to the present. The broad feature in recent years has been the marked fall in oil prices and the abundance of supplies. Whether that will be altered in the future I make no prediction at all. We must deal with new situations as they arise. Up to the present there is not the slightest ground for the suggestion that there is any reason for Government intervention.


We cannot spend all the afternoon on one question.

Lieut.-Commander KENWORTHY

I give notice that I will raise the matter on the Adjournment on Monday.