HC Deb 20 June 1951 vol 489 cc519-26
The Secretary of State for Foreign Affairs (Mr. Herbert Morrison)

With your permission, Mr. Speaker, and that of the House, I desire to make the following statement.

In my statement to the House yesterday I mentioned briefly the demands with which the Anglo-Iranian Oil Company delegation to Teheran had been presented; and I promised to take an early opportunity to inform the House of the subsequent course of events.

When the Company's delegation met the Persian representatives yesterday evening, it made proposals which were designed not only to meet the Persian Government's present and urgent need for funds but also to indicate an arrangement which would maintain the efficiency of the industry and be consistent with the principle of nationalisation. The terms of the aide-mémoire in which these proposals were set out have been published, but it may be as well for me to summarise them here.

Briefly, the content of the aide-mémoire was:

  1. (1) That the Company was prepared to place at the Persian Government's disposal £10 million as an advance against any sum which might become due to the Persian Government as a result of any eventual agreement, on 520 the understanding that the Persian Government would undertake not to interfere with the Company's operations while discussions were proceeding.
  2. (2) That the Company would moreover pay to the Persian Government £3 million a month, from July onwards, during such time as might elapse until an agreement had been reached.
  3. (3) That the Company proposed, as a possible basis for an agreement, that the Persian assets of the Company might be vested in a Persian National Oil Company and, in consideration of such vesting, the National Oil Company should grant the use of those assets to a new company to be established by the Anglo-Iranian Oil Company. The new company would have a number of Persian directors on its board, and would operate on behalf of the Persian National Oil Company. At the same time, the distribution of oil products within Persia itself would be transferred to an entirely Persian-owned and operated company on favourable terms as regards the transfer of existing assets.
  4. (4) As regards the Persian demand, made at the meeting on 14th June, that the Company should hand to the Persian Government the total proceeds, less expenses, from the sales of Persian oil, from which 25 per cent. would be deposited in a mutually agreed bank against any claims which the Company might prefer, this was not acceptable. The point was made that the delegation had gone to Teheran for discussions, and regarded it as unjustifiable that the Persian Government should put forward a demand of this kind before discussions had even started. Moreover, the delegation was confident that, when it had had opportunity to explain in more detail the complicated machinery of the Company's business, it would be plain to the Persian representatives that their demand would be neither commercially possible nor acceptable to any oil company.
It seems hardly necessary for me to expatiate on the Company's offer. Money for present needs is there, acceptance of the principle of nationalisation is there, and an obvious foundation for fruitful partnership is there. His Majesty's Government are convinced that all fair-minded opinion will regard the Company's proposals as eminently reasonable.

Unhappily, however, the Persian delegates required only half an hour in which to arrive at a contrary opinion. They declared that the Company's proposals conflicted with the new Persian Nationalisation Law and expressed surprise that the Company's delegation should have found need to ask for a postponement of the meeting arranged for 17th June in order merely to formulate such proposals. The Persian delegates concluded by saying that they had no authority to deviate from the letter of the Nationalisation Law, and in consequence considered the discussions closed.

The leader of the Company's delegation thereupon replied that, even if the proposals were not consistent with the letter of the Law (which had never been agreed to by the Company) they were consistent with the principle of nationalisation and would undoubtedly fit in with a liberal interpretation of the law; that it was apparent that the Persian representatives were expecting complete capitulation to their demands without discussion; that he noted with regret the Persian decision to break off the talks; and that he was left with no alternative than to communicate that decision to London and ask for instructions.

His Majesty's Government have learnt of this development with concern not only for the future of the Anglo-Iranian Oil Company and the free world's supplies of oil but also for the future of Persia herself. In the area of the Company's concession the natural wealth of the region has been made available to the Persian people. Their labour, combined with the capital expenditure and the technical and organising skill of the Company's engineers and administrators, has built up a vast industry.

Thanks to this fruitful co-operation, the Persian Government have enjoyed a consistent and growing source of income, which the Company itself offered in 1948 greatly to increase. Thanks also to this industry, tens of thousands of Persian workers at present enjoy housing conditions, educational facilities and health and other social services on a scale which the working people of Persia enjoy in no other part of the country. These are facts which are attested in the Report of the International Labour Office entitled "Labour Conditions in the Oil Industry in Iran" published last year in Geneva.

The Company has made, and is making, an immense contribution towards raising the standard of living in Persia. Indeed, the Seven Year Development Plan on which such high hopes had been placed but which, unhappily, appears to have been abandoned, had as an essential factor the receipt by the Persian Government of increased royalties—freely offered by the Company—from the production and sale of oil. It seems that the present Persian Government are blind to the needs of their own country.

Instructions are being sent to the Company's delegation to return to this country. Meanwhile, we propose to follow up the application we have already made to The Hague Court by a further application for an indication of provisional measures to preserve the rights of the United Kingdom pending a decision on the merits of the case. We for our part still desire to see a stable, independent and prosperous Persia. Our feelings in that regard have not changed and will not change.

The difficulties that have arisen in Teheran must not for a moment obscure the difficulties of our people in Abadan and the oilfields. I want them all to know that we at home realise the strain and burden of anxiety under which they have for long enough been working. Riots, abuse, misrepresentation, and uncertainty about the future have made conditions most difficult for them. They, better than we, will know that it needs but slight deviation from their high technical skill to cause a mistake which could lead to irreparable damage and most serious disaster to life and limb, not only within the installations for which they are responsible, but perhaps throughout the neighbouring townships. While our people are there and responsible for operations, I am confident that no such mistake will be made, and that they will continue to do their duty.

As I have repeatedly informed the House, His Majesty's Government are not prepared to stand by idle if the lives of British nationals are in jeopardy. It is the responsibility of the Persian Government to see to it that law and order are maintained and that all within the frontiers of Persia are protected from violence. If, however, that responsibility were not met it would equally be the right and the duty of His Majesty's Government to extend protection to their own nationals.

Mr. Eden

I think the whole House will join with the right hon. Gentleman in the tribute he has paid to our own people, both at Abadan and in the oilfields, who, in the most exacting and anxious conditions, are manfully discharging their responsibilities. I think the House will feel that this is a matter which now will have to be debated at a very early date. We have shown every restraint possible in our anxiety not to complicate the situation, but I would ask the Government whether they can consider making facilities available, I think it should be—indeed, I am sure it should be—before the weekend, so that we may examine and consider this matter and make whatever observations we can.

The second point I would put to the Foreign Secretary, and which arises from his statement, is this. He spoke of the right to protect our people. May I ask him whether His Majesty's Government have already taken any necessary preliminary steps that may be required to protect British lives and property in the threatened area? May I also ask him whether we can be assured that there is no question of the evacuation or of the surrender of these rights under an ultimatum or any other kind of threat?

Mr. Morrison

I will answer one point. We have taken all practicable steps for the protection of British lives in accordance with undertakings I have previously given. It is a matter to which we do attach the utmost importance. If the right hon. Gentleman would not mind, I would sooner not be pressed on the other point, because it is the case that it may be that if we say too much in matters of detail we may precipitate the very thing we wish to avoid.—[Interruption.]—If I may say so to back bench Members opposite, they may engage in these expressions of emotion if they wish, but I speak with the full responsibility of the Foreign Secretary, and I have a very deep responsibility for the lives and security of British people in that part of the world.

Mr. Eden

Perhaps I can put it in this way. Can we be assured that the Government have not taken, and would not take without consultation with this House, any decision of principle in respect of the evacuation or abandonment of our rights?

Mr. Morrison

We have not taken any steps to that end, but it really is not possible to tie oneself as to detail—[HON. MEMBERS: "Oh."]—on what advice one is to give to British personnel in given circumstances, and I do not wish to commit myself in detail on that point.

Mr. M. Philips Price

Is there any circulated evidence as yet of an attempt being made by the Persians to seize the Abadan oil refinery?

Mr. Morrison

Not so far as I know.

Mr. Duncan Sandys

While recognising the supreme importance of protecting British lives, may I ask whether the right hon. Gentleman will assure us that he is not overlooking the importance also of protecting vital British interests in this area; and that, in considering the course to be adopted in this difficult matter, he will bear in mind that any abandonment of these vital British interests would have the effect of further undermining British influence throughout the Middle East, which has already disastrously declined in recent years?

Mr. Morrison

We are certainly not forgetting those considerations, but in contra-distinction, if I may say so, I would put British lives first.

Mr. Churchill

I do not wish to ask any question which has an argumentative character about it. I only wish to know whether we can be informed on a simple point of fact. Have the Government made up their minds that the British personnel are to be evacuated, or have they not made up their minds?

Mr. Morrison

I am not going to say anything about that. It would be most foolish, most unwise, and most risky. I am not going to be drawn.

Mr. Harold Davies

Is my right hon. Friend aware that we on this side of the House appreciate the care with which the Foreign Secretary is approaching this problem and that some of us withheld our right to a debate on this problem to help the country in this delicate situation? Is he further aware that if we precipitate action here, not only may we lose the oil but we may find that Persia is more dangerous than Korea and more lives would be lost than by the action we are now taking to try to find a formula for peace?

Sir Ralph Glyn

I think that the right hon. Gentleman said the delegation were being asked to return from Persia. Can he give the House any information about when this delegation will be back so that the Foreign Office may have full information on the situation out there?

Mr. Morrison

I think we have full information, but of course it will be an advantage when we talk to the folk who have been actually in the conversations. But we have pretty full information. The return of the delegation will be early. There will, however, be sufficient time so that, if circumstances should arise to warrant reconsideration, that reconsideration can be given; but I am rather doubtful whether an opportunity for reconsideration will arise.

Mr. Eden

May I ask the Leader of the House for a reply on the point which I put earlier on the question of a debate on this situation?

The Secretary of State for the Home Department (Mr. Ede)

We recognise the great importance, the over-riding importance, of this issue, and we should be quite willing to provide time for a discussion of this matter. I would suggest tomorrow, and perhaps discussions may take place through the usual channels with regard to some rearrangement of the business for tomorrow. There is one Measure which we very much desire to get tomorrow. I am quite sure that it will probably be better that we should be able to discuss this matter tomorrow at some reasonable length, so that from both sides of the House a reasonably full expression of opinion may be given.

Sir Ian Fraser

Is not this one of those rare cases when the unanimous feeling of our people is expressed sometimes by consultations between the Prime Minister, the Foreign Secretary, and the leaders of the Opposition, and has that been taken into consideration?

Mr. George Wigg

As we are to have a debate tomorrow, would the Foreign Secretary make available to the House the conversations which have taken place between Mr. McGhee and various authorities in the Middle East on oil and related subjects?

Mr. Morrison

I appreciate the point raised by my hon. Friend, but I think that it has a certain delicacy and I had better not make an affirmative answer.

Mr. Somerset de Chair

In further reference to the Foreign Secretary's pledge to protect the lives of the British citizens involved, can he say whether or not the steps so far taken are adequate, in view of the breakdown in the negotiations and the possibility of increased tension in Khuzistan? Is it not possible that there may be some disorders and danger to life, and would it not be better to send British troops there now rather than to wait until something has happened?

Mr. Morrison

I think a little reflection on the part of the hon. Member would be welcome. One could do some things which would endanger British lives, and I think he might have thought of that before he put his supplementary question. I can assure the House that the matter has been in my mind, and in the mind of the Government ever since this trouble began, and that we are leaving nothing undone that can possibly be done to protect British lives. May I add that as we are to have a debate tomorrow, I am not sure that there is a great deal of point in having a detailed examination at this stage?

Mr. Speaker

That is so if we are to have a debate tomorrow.