§ Sir MERVYN MANNINGHAM-BULLER (by Private Notice)
asked the Prime Minister whether he can communicate to the House the views of the Government on the statement furnished by the Oil Companies with regard to the prices of certain petroleum products?
§ The PRIME MINISTER
The Government have examined the statement furnished by the Oil Companies, and are satisfied that the "United States Gulf" prices quoted for petrol and kerosene on which the companies' statement is based, are correct. The other items of cost have also been examined, and no reason has been found for disputing them. Such comparisons as are possible have been made between retail prices in this country and abroad. In view of these comparisons and of the figures contained in the companies' statements, it appears that the prices now being charged to consumers in this country are not above the parity of world prices, and that the recent increases do not involve any discrimination against this country. In these circumstances, the Government consider that no action is called for on their part at the present time.
It has been suggested that the Government should use their position in relation to the Anglo-Persian Oil Company to force that Company to reduce petrol and kerosene prices in Great Britain. It is necessary, therefore, again to refer to the terms of the arrangement between the Government and the Company as set out in Command Paper 7419 of 1914, paragraph 4 of which states in general terms the nature of the assurance then given that the Government's right of veto will be exercised only in respect of matters of 2262 general policy. The paragraph in question has reference to a letter dated the 20th May, 1914, from the Treasury to the Anglo-Persian Oil Company which has not hitherto been published. I think it is now advisable that the exact terms of this communication should be made public, and I will circulate a copy of the letter in the OFFICIAL REPORT.
§ Mr. J. H. THOMAS
May I ask the Prime Minister whether the Government or the Chancellor of the Exchequer were aware of the facts now indicated in the answer—namely, that oil was being sold at an uneconomic level in this country prior to the Petrol Duty being introduced by the Government?
§ The CHANCELLOR of the EXCHEQUER (Mr. Churchill)
I hesitate to answer on the spur of the moment a question of that complicated character, but the whole principle of the Petrol Duty was that it should be passed on to the consumer, and, from the point of view of the economic level at which it is supplied to the people of this country, the Duty makes no difference at all, and was intended to make no difference at all.
§ Mr. THOMAS
May I ask how that squares with the right hon. Gentleman's statement when he introduced the Duty that one justification for it was the low price of petrol in this country, which is now shown to have been at an uneconomic level.
§ Sir R. THOMAS
May I ask how the Prime Minister has been able to verify the accuracy of these figures? Has he taken the figures of the companies concerned?
§ The PRIME MINISTER
The figures have been examined by a perfectly competent Department, and I stand by them.
§ Sir R. THOMAS
The right hon. Gentleman in answer to a question has given his word that these figures are correct. Am I not entitled to ask him what method he has taken to verify the statements?
§ Mr. HARDIE
Seeing that the Prime Minister's statement indicates that we 2263 are absolutely at the mercy of some outside bodies for our supplies, has he, or the Government, at any time in the last four years considered the extraction of petrol from our own coal?
§ Following is the communication:
§ "Treasury, Whitehall, S.W.
§ 20th May, 1914.
§ With reference to the Financial Agreement which has been duly settled on behalf of His Majesty's Government and sent to your company for signature, I am directed by the Lords Commissioners of His Majesty's Treasury to offer the following observations regarding the provisions of the amendments proposed to your Articles of Association:
§ 1. By the new Article 91 A it is provided that an ex officio director shall have the right to negative any resolution which may be proposed at a board or committee meeting, but that the other directors, or a majority of them, shall have the right to appeal therefrom to His Majesty's Government, which, for the purpose of the Article, is defined as meaning the Treasury and the Admiralty. His Majesty's Government are of opinion that it would not be prudent, or, indeed, practicable, to qualify the generality of the light of veto. On the other hand, it is felt that the ordinary directors (meaning by that expression the directors other than the ex officio directors), and incidentally the members of the company, should have some safeguard in the matter. It is thought that the right which is to be given by the new Article to the ordinary directors of appealing to the two Departments will afford the requisite safeguard. The ordinary directors will, by appealing to the Departments, be in a position to ensure in regard to any particular question that the right of veto is not exercised until the question has been considered and adjudicated upon by the Departments.
§ I am to add that His Majesty's Government do not propose to make use of the right of veto except in regard to matters of general policy, such as—
- (1) The supervision of the activities of the company as they may affect questions of foreign naval or military policy;
- (2) Any proposed sale of the company's undertaking or proposed change of the company's status;
- (3) The control of new exploitation, sites of wells, etc.;
- (4) Sales of crude or fuel oil to foreigners, or such exceptional sales to other persons on long contracts as might endanger the due fulfilment of current Admiralty contracts;
§ While His Majesty's Government are not prepared to enter into any binding agreement in regard to the exercise of the veto, you are at liberty to treat the above as an assurance as to the general lines upon which they will act in the matter, not only in regard to the Anglo-Persian Company, Limited, but also in regard to the subsidiary companies.
§ 2. By the words added to Article 96 it is provided that the ex officio directors shall be members of every committee of the board. His Majesty's Government do not, however, contemplate that both the ex officio directors should always be present at committee meetings. Occasions may arise when it may be desirable that both the ex officio directors should be present, but as a general rule the presence of only one of them would be necessary. Indeed, at some meetings it may not be necessary that either of them should be present.
§ 3. You are at liberty to make such use of this letter as you may think fit at the pro-nosed meetings of the shareholders.
§ I am, Gentlemen,
§ Your obedient Servant,
§ (Signed.) JOHN BRADBURY.
§ Messrs. The Anglo-Persian Oil
§ Company, Limited.
§ Winchester House.
§ Old Broad Street.
§ London, B.C."