PERSIA (ANGLO-IRANIAN OIL COMPANY)

HC Deb 21 June 1951 vol 489 cc746-833

5.17 p.m.

Mr. Eden (Warwick and Leamington)

In the course of our exchanges across the Floor at Question Time yesterday the Leader of the House remarked, with accuracy, about the topic that we are now about to discuss. 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."—[OFFICIAL REPORT, 20th June, 1951; Vol. 489, c. 529.] When I listened to the Home Secretary saying that and pointing out that the Government would grant time, I expected that the Government would also open the debate by giving some guidance to the House as to the present position and also by telling us something of their policy and intentions.

As the Foreign Secretary has now entered the Chamber, I would repeat that, in the light of what the Home Secretary told us yesterday about the overriding importance of this debate, I had expected that the Foreign Secretary himself would have opened it and given us an account of the Government's view of the present situation. I know that a number of statements have been made in the last few days but, after all, this is an international issue of the gravest significance in a setting which may influence the whole future strategic development of the Middle East and far beyond. I really had thought that the Government, having admitted the gravity of the danger and having given us their time for the discussion, would have opened the debate with a statement by a responsible Minister of the Crown, telling us his view of the situation.

The Secretary of State for Foreign Affairs (Mr. Herbert Morrison)

Might I point out that I take the view that I have made not only one statement but a series of statements and have been as informative to the House as I possibly could be. The Opposition are making the criticism, if any, today. The Opposition asked for the facilities and my right hon. Friend the Leader of the House gave them. It seems to me perfectly natural that it is for the Opposition to make their observations and their criticisms, and for me to listen to the House—I am the servant of the House, on both sides—and at the end to reply to the observations which are made. It is not as if I had said nothing already. I have made a series of statements, and it is really upon those statements that the House is proceeding to the debate.

Mr. Eden

It is true that the Foreign Secretary has made a series of statements about the Notes exchanged with the Persian Government, but it is not only those Notes that we have to discuss. There are far, far wider implications about this business than what eventually happens about nationalisation or otherwise in the immediate Persian oil problem.

I repeat, I had hoped that the Foreign Secretary would have led off with general guidance to the House as to how he sees the repercussions of events as they are already, possible events of the future in the Middle East, and what should be the policy and guidance of the Government for the House about it. However, if the Foreign Secretary is not prepared to do that, I must do the best I can.

I began by saying what I considered the international repercussions of this business are likely to be, and that is what I want the House, to start with, to concentrate upon. For we must understand this: that if the supplies of crude oil from Persia and the supplies of refined products from Abadan should, for whatever reason, cease to flow, the consequences upon the economy, the life, and I think the political and strategic future of wide areas throughout the world must be far reaching and may be calamitous. That is the setting—I do not think I have exaggerated any word of that—in which I see these events.

Now let us look at it a little in detail. Take, first of all, the countries that will be most affected merely by the supply of oil, and in giving my survey of how I see these implications, the order in which I put matters has not any significance. Let us take the countries which are likely to be most affected. India and Pakistan and South-East Asia will certainly be immediately affected in their supplies and I think, to a lesser degree, Australia and New Zealand. Then there are the countries of the Mediterranean area who, for the last two years, have been without supplies from the refinery at Haifa. They, I understand, are to a considerable extent dependent upon what they get from Abadan. What is likely to be the effect upon their economy of the stoppage of these supplies, should it take place?

Then, moving nearer home, there are the countries of Western Europe and ourselves. I think I am right in saying that about a quarter of the oil and oil products we use in this country is drawn from Persia or from Abadan. That is quite a high percentage; and I believe in Western Europe about 50 per cent. of the supplies used are drawn from the Middle Eastern area generally, not all of them of course from Persia. That also is a very high figure. No doubt other countries will do what they can to help make up for the loss of further supplies, should it occur, from Abadan and Persia. But what they can do is not by any means certain, and the House will no doubt have observed of late that the United States herself is now a definite importer of oil and that there are not surplus stocks of supplies available.

What will be the effect upon the economy of this country, upon industrial output, upon full employment, upon the balance of payments, upon the re-armament programme—not only ours but the whole of Western Europe—should we have to attempt to fulfil all those various tasks without these essential supplies from the Middle East, from Persia and Abadan? I do not know the answers to those questions, though I am absolutely certain that each one of those countries will be beset with problems of the utmost complexity should these supplies be cut off. What I imagine is that the Government themselves have weighed all these matters and considered them, and that they will have their place in whatever decision the Government may take about it all.

There are, of course, other problems. There is the question of the position of the Royal Navy in relation to these supplies, and also of aviation fuel. I have no secret information to divulge, but I think it is common knowledge that the greater part of our stocks of aviation fuel—and not only ours but the whole of Western Europe—come from Abadan. How are those to be replaced? All these factors have, presumably, been weighed by the Government in considering this very critical situation. I repeat, I had hoped that in the earlier stages the Government would show the House the picture of what arose and how they propose to deal with it.

That is the first chapter. Next is the contribution which, under efficient management, Persian oil could make to the whole economy of Middle and Far Eastern Asia. Today, the output of the Persian oilfields is in the nature of 35 million tons and Abadan in the nature of 25 million tons. But that is not the most important factor because those fields are capable of yet further expansion under efficient management.

What I had hoped to see—the vision that certainly has often been in my mind—was that the output of this vast oil area would be available as the foundation upon which an improvement in the standard of life of Africa, South-East Asia, and other parts of the world could be built. But if we are not going to have this oil how shall we be able to carry out the Colombo plan, or any other of those schemes upon which the Governments of the Commonwealth and others have agreed? Every single one of those factors is affected by this essential consideration.

I have given two great chapters for consideration but there is a third chapter, which is the most serious of all. That is the effect in Persia itself. If, for whatever reason, these refineries close and the Persian Government no longer receives the revenues it has hitherto been drawing from them, then I see no possible future save the economic collapse of Persia and almost certainly of the Persian State. We know how precarious the economy of Persia is today. We know how much she depends upon these revenues. For my part, if they cease, for whatever reason, I believe that it will be to play into the hands of the Tudeh Party, which is quietly waiting to take over control of the country at the first opportunity. Anarchy would ensue.

It is not as if the Government in Teheran today had a writ to run all over a country which was well administered and where conditions were happy, secure, and stable. That, unfortunately, is not the position. There is an insecure, unstable administration, dependent for its revenues upon what the oil company can provide. If those revenues cease, the consequences to internal order and security need not be described by me.

There is one sentence I read in the paper this morning which struck me as a rather typically Persian way of putting the situation. One of the employees of the company is reported to have said this: I shall never believe the business is really nationalised until the firm owe me two months' salary. That is a pithy summing up, in a phrase worthy of Sadi, of the fundamental truths of present day Persian economy—and not only present day either.

So what will happen? If these revenues are not available, Persian economy will inevitably collapse and, with it, the whole political structure of the country. That is precisely what the Tudeh Party is waiting for, and the international repercussions of a Communist control of Persia do not require any exaggeration. They do not even require any very graphic description. The consequences for Persia's neighbours need not be rehearsed. A complete transformation of the whole strategic position throughout the Middle East would inevitably result.

Then there are the effects of all this upon the neighbouring countries producing oil. To put it at the very lowest, it will not make the task of statesmanship much easier in those countries where resistance is being offered to clamour to pursue similar policies to those in Persia. The fanatical extremists will not be the more easily withheld from the same kind of policies as are on the verge of wrecking Persia. I should imagine that whatever else we may disagree about, nobody can nave a doubt that what happens in Persia will have its immediate repercussions throughout the Middle East and beyond. This, indeed, has been very obvious for a long time, and many will feel that once again failure to anticipate the future has bedeviled the present. Much of this is the legacy of Middle Eastern policies—or lack of policy.

Now the company has made an offer, which the Foreign Secretary described to us yesterday. It was an admirable, even a generous, offer. Maybe it or something like it might with advantage have been made rather earlier.

Mr. Harold Davies (Leek)

Hear, hear.

Mr. Eden

But when making that observation, it is only fair to say that the supplemental agreement which the company offered as long ago as the summer of 1949, some two years ago, which was accepted by the Government but not ratified by the Majlis, offered to Persia, if I am right, rates of payment as good as those being received by Saudi-Arabia and Iraq.

Mr. Davies indicated dissent.

Mr. Eden

The hon. Member shakes his head, but I think I am right; the Government will tell us. Whether I am right or not, it was unfortunate that that impression was not successfully got across. The hon. Member for Leek (Mr. Harold Davies), I see, is arguing with his neighbours, some of whom are shaking their heads at him. They are obviously in disagreement between themselves, and I will leave them to it while I continue my speech. It is unfortunate that if that offer was as good as I have said, it was not made clearer to Persian opinion at that time. I think I am stating the view of the Foreign Secretary about that offer of two years ago, because in his own note he says that it offered a more advantageous return per ton of oil than was enjoyed by any other Middle Eastern government. It is worth looking for a moment at the origins of this offer. They are in part connected, hon. Members may be surprised to learn, with dividend limitation. I know a little about this in relation to the Middle Eastern view, because I have heard about it when I was out there. The 1933 agreement gave the Persian Government a number of advantages and payments under a number of heads, but over and above that there was a provision —I am quoting the gist of the agreement —for a payment equal to 20 per cent. of any distribution to the ordinary shareholders in excess of £671,000.

Then it goes on to say that at the expiration of the agreement, 20 per cent. of the difference between the general reserve when the agreement began and the general reserve at the end, would be paid to the Persian Government. In other words, the company not paying an increased dividend but placing it to reserve, the Persians would eventually get an equivalent sum; but they did not get it then.

Let hon. Members put themselves for a moment in the position of the Persian Government and the Persian people about this, because these observations were addressed to me at that time. As they saw it, the company was earning 150 per cent. or thereabouts, but they were still paying 30 per cent. His Majesty's Government were getting a good rake-off, not as a shareholder, but from taxation —Income Tax, Profits Tax and this, that and the other form of tax; and although some of the Persians knew that eventually they would get in reserve, whenever the concession came to an end, an amount equivalent to the extra which the ordinary shareholders would have had, that was not much immediate comfort.

I have no doubt whatever that that was one of the factors which caused this uneasiness. At any rate the company, to try to meet it, then began these discussions, which after delay resulted in the supplemental agreement of 1948. It is, perhaps, worth while—I do not want to attach too much importance to it—to note that situation as we go along. So much for the realities of the situation as I see them.

What should our present action be? In my view, evacuation would be disastrous. It would be an abject surrender to the threat of force. The Government have taken—and, I think, rightly taken —the legal issue to The Hague Court. The issue they have taken is not the question of who owns the oil in Persia—it has never been disputed by us that it is Persian oil; the issue they have taken is whether the Persians have a right unilaterally to take over our installations. They have now asked for what amounts to an interim injunction about this.

Meanwhile, while The Hague Court is considering that, it is clear that the British staff must stay. It is as much a Persian as a British interest that they should do so. But if these men are being asked to stay, then it is the inescapable duty of the Government to take any steps that may be necessary to protect them. [HON. MEMBERS: "Hear, hear."] The Government may be sure that whatever those steps may be, we shall be ready to give them our support. [HON. MEMBERS: "Hear, hear."]

Mr. Harold Davies

There was not such a hearty "Hear, hear" that time.

Mr. Eden

Then let the hon. Gentleman take the action; we will support him in it. If we do not, he can make all the complaints he likes in every constituency in the land.

As things are, we have the impression that our own people have no means of self-defence should disturbances break out again. There have been disturbances recently—not very recently, fortunately, but recently—in which three British lives were lost. That makes all the heavier the Government's responsibility to see to it that the necessary protection is at hand to meet any danger that may suddenly arise. That, as we see it, is their first charge.

I observe in "The Times" of this morning that the Middle East Defence Committee of the Commonwealth meets in London today. I wish it could have met a little earlier than this. I hope that these matters are first on their agenda and will be taken urgently into consideration by them, and that they will devise plans and prepare their execution of those plans, whatever decisions they may arrive at. But it is very late. For fully three years—perhaps longer—there has been a vacuum in our Middle East policy and in our Middle East defence plan. It may be that if these preparations had been made earlier these events would never have developed as they have done.

Mr. George Wigg (Dudley) rose—

Mr. Eden

I will make my point and then the hon. Member may interrupt. Certainly it is true that the manner in which we have been treated by the Egyptian Government has had its repercussions throughout the Middle East and not least in Persia. The stoppage of our tankers for more than two years from going through the Canal, known, of course, in every bazaar in the Middle East, has had its inevitable reactions upon the opinion in which we are held.

Mr. Wigg

I want to ask the right hon. Gentleman this. In 1932 the positions were reversed, he was Foreign Secretary, and a situation arose in Persia in which the possibility of using British troops was mentioned. George Lansbury asked him whether he was prepared to use British troops in exactly the same situation as this and the right hon. Gentleman said that the responsibility for safeguarding British property devolved on the Persian Government. Why does he advance the exact opposite today?

Mr. Eden

I did not think I was putting the exact opposite—

Mr. Wigg

If the right hon. Gentleman reads HANSARD he will find that he is—

Mr. Eden

I think that if the hon. Member studies my speech he will see that I have not put the exact opposite. George Lansbury, to the best of my recollection, offered me support then and I am offering support now and the only difference is that I know what my policy is, but I do not know yet what the Government's policy is.

I will sum up what I have to say. It is impossible to divorce these events from the trend of policies in the Middle East in the last few years. The Government must know and I know that hon. Members think it, although they did not vote on it, that the Egyptian policies and, above all, our weakness in respect of the Canal and the passage of tankers through the Canal have had their reaction on the events, the calamitous events, we are now discussing.

The right hon. Gentleman knows that I have had, and I hope I still have, some friends in Persia. I hope against hope that wiser counsels will still prevail. If my voice can reach any of those who have been my friends in past years in that country I would beg them to believe that in true co-operation between us lies happiness for both our countries and the peace of the world. Surely good sense as well as good will can still prevail, but we shall not avoid trouble for ourselves, or for others, by shirking the realities of the challenge when it confronts us.

5.43 p.m.

Mr. Gunter (Doncaster)

I am sure the whole House appreciated the speech made from the Opposition Front Bench, coming as it did from such an authority on Persian affairs. I am bound to say that I feel we are in danger of overlooking sometimes the far-reaching consequences of any great disaster on the Persian Gulf if the Persian Government disintegrates and that country becomes completely disrupted.

In the bewildering years before the war we saw, amidst our bewilderment, bastions falling one by one, and I am of the opinion that if there is an elimination of British interests on the Persian Gulf, if, as the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) has already indicated, we lose our interests and power and prestige in that part of the world, the consequences for ourselves and for the peace of the world will be very dramatic indeed. It would be almost a tragedy without parallel in history, if it was found in the next decade that that historic land of Persia, Mesopotamia and the Persian Gulf, came under the control of Russia.

I believe that all our efforts through Western Union and all our efforts with the Atlantic Pact would mean practically nothing if not only the resources of oil were withdrawn from us but in addition the important strategic interests were lost. It is a fascinating feature of history that, however much the centres of power change and empires rise and fall, and however different may be the ideological battles which disturb us from time to time, there are certain areas of this globe that still retain their great strategic importance, and this area where the dispute at present rages is one of those areas.

Alexander the Great, no less than Hitler, appreciated the importance of that area. It is a matter of speculation, we know, although we may draw our conclusions, but if the Germans had passed through the Caucasus during the early years of the war and succeeded in reaching the Persian Gulf the position of this country and of the whole world might have been desperate. Therefore, I am one who believes that we should try to sum up and get into proper perspective all the things involved in this present dispute.

It has been said by eminent people, and by less eminent people, that one of the most stupid things to do at present is to look for a Communist under every bed. With that sentiment I am in complete agreement. It is a mark of cowardice when we in industry or anywhere else automatically look for a Communist under the bed, but what concerns me at present about this situation is the fact that the lusty Russian desires to get into the bed. It is not a question of Communism; it is a remarkable thing that the strategy and the aspirations of Czars of Russia find great similarity in the designs and ambitions of the present ruling power of Russia. It is a remarkable thing when we read the history of the events of the past century how those designs and how those manœuvres, not only on the Russian side but on our side as well, have a similarity to the present position.

I submit that we cannot properly understand this position unless we pay great regard to some of the events and some of the manoeuvres being made in Persia. The right hon. Gentleman made reference to the Tudeh Party. The present activities of the Tudeh Party in Persia form a classic for all future revolutions. They are employing tactics in Persia at present dissimilar from those employed in any other Asiatic country. The right hon. Gentleman said they were quietly waiting—they are certainly waiting and they are quiet, but there is vast activity. The right hon. Gentleman knows better than I do that the tribes of Southern Persia are at present in a state of great unrest and have neither faith nor belief in the Persian Government. We all know that propaganda from Azerbaijan Radio Station is having its effect on the Kurds in Northern Persia.

I submit to the House that what the Tudeh Party is waiting for and working for is that as a consequence of the present dispute such confusion will arise in that country that that very small but very well disciplined party will be able to enter and take control of Persia. It is a marshalled and a disciplined party, and let no one under-estimate their power in Persia at present. There can be no doubt that the Tudeh Party await these developments with great joy. Coupled with that is a belief in their own failure as Persians— the well-known incapacity of Persians to keep the vast machines of Abadan going if we get out. That is not a matter of which the Tudeh Party are in ignorance. They know that in the absence of foreign technicians the conclusion to be drawn from the crazy moves of the Persian Government is that they can move in. It means this, and let us have a look at the map of the country, that from the Caucasus to the Gulf, from Afganistan to Turkey, there is the possibility of a great new satellite state being set up.

Let our American friends weigh very very carefully what they say and do in this respect, because I believe that there is still hope of a settlement—I choose my words carefully—if the Americans at the present time will stoutly and robustly come forward in support of our point of view. If they do not, as the right hon. Gentleman indicated, the effect upon all the South Arabian oil supplies will be devastating for the world. If Persia goes it is impossible that the same conditions can prevail in Iraq and Saudi Arabia. Kuwait is not so far away and may undoubtedly be affected if this happens. It could bring about a great disaster, not only so far as essential oil reserves are concerned, but also so far as world strategy is concerned.

I believe, as was once intimated by my right hon. Friend the Member for Ebbw Vale (Mr. A. Bevan), that Russia is in some dilemma about oil. The obtaining of vastly increased supplies of oil would be to Russia a prize worth playing for with high stakes. In addition, the control of the Western flank of the sub-Continent of India and Pakistan is an objective which I have little doubt she would play for with all she possibly could.

I would say a word about some statements which have been made regarding the Anglo-Iranian Oil Company, for it is as well that the world should know what the British people have to be proud of—and perhaps to be ashamed of—in this matter. There is a great necessity for us to let world opinion and particularly American opinion know what we have done and what perhaps we have not done, so that the picture may be seen in its proper perspective.

I cannot stand here, and I will not stand here, and defend all that the Anglo-Iranian Oil Company have done. That cannot be done. There have been great blemishes upon their operations and administrations. But, whatever we may think about those blemishes—and I as a good Nonconformist do not believe that infallibility rests on this earth, but is the product of another plane—there are, after all, blemishes on all forms of administration. Having stated that, in my opinion they might have chosen their staff and personnel with some greater regard for the effect of such staff upon native opinion; having said they might have been more generous in past years, I still believe that the Anglo-Iranian Oil Company has for a long time been the most stable and efficient unit in the public life of Persia.

I believe that if the Persian Government had used the revenues that accrued to them from the oil companies for the purposes of social amelioration in the past they could have avoided the appalling misery and poverty which now prevails. But whatever we may say about exploitation, and there has been exploitation, the housing and social conditions of the employees of the oil company is without any comparison in the Persian nation at the present time. There is nothing like it anywhere else in Persia. Therefore, we do ourselves very little service by denigrating, and sometimes making use of slogans, about what the oil company has or has not done.

It may not be entirely relevant, but I would say that had I been in charge of the operations of the oil company there would not have been a very great incentive to me to increase the amount of royalties paid to the Persian Government, for the reason that those which were paid were dissipated quite corruptly. I do not think we serve any great purpose by denigrating the oil company at the present time.

Whatever happens in the next few days in Persia, let no one imagine that the painstaking efforts of the Western world to maintain peace will not have received a devastating blow if the Tudeh Party in Persia step into a vacuum created by the final disruption and disintegration of the Persian Government. From that standpoint I would say again what I have said outside this House, that in my opinion the oil supplies and the strategic position of the Persian Gulf is a far greater danger and menace than Korea is, or ever has been. It is easy to say these things now, but perhaps it will be seen in history that one of the greatest mistakes of the Western world and the United Nations has been to allow so much of our armed strength to be drawn to Korea; whereas the real vital sore spots in the world at the present time may be left unguarded.

I say to the Foreign Secretary with great humility that I do not believe any good will come from evacuation at the present time. I believe that would be interpreted in the Middle East and in world events as a sign of weakness. It may be that the Foreign Secretary can tell me, because he knows far more about it than I do, that that is the only possible step to take. I would have some reluctance in believing it, believing, as I do, that world peace and the values we esteem so much would surely have suffered a devastating blow.

5.58 p.m.

Mr. Duncan Sandys (Streatham)

My right hon. Friend the Member for Warwick and Leamington (Mr. Eden) said what I believe every hon. Member of this House is hoping, and that is that wiser counsels may prevail in Persia. The attitude the Persian Government have taken is unexplainable by any process of logic or reason. I was very glad to hear the hon. Member for Doncaster (Mr. Gunter) make a speech which I believe was appreciated in all parts of the House and which was actuated by thoughts which are in the minds of British men and women throughout this country. It will also be an encouragement to those in Abadan in these difficult times.

The Anglo-Iranian Oil Company have greatly enriched and benefited Persia. They have provided immense revenue for the State and, as has been stated by the International Labour Organisation in its report, they have provided conditions of life for those engaged in the industry such as do not exist in any other part of Persia. If the Persian Government should drive out the Anglo-Iranian Oil Company, or paralyse its activity by turning off the valves, as they are threatening to do, they will be doing, on a vast and tragic scale, what is described colloquially as cutting off one's nose to spite one's face. If the Company were to leave Persia, or cease to operate, there is no doubt the extraction and refinement of oil would come to a stop for a very long time.

There are only two countries, America and Russia, which would be in a position to provide the technical skill required to fill the places of the Anglo-Iranian per- sonnel if they withdrew. The Americans, I am sure, would be unwilling, not only on account of their feelings of solidarity with the Anglo-Iranian Oil Company, but also for other reasons, to accept conditions which the Anglo-Iranian Oil Company had found unacceptable. On the other hand, there is little doubt that the Russians would be ready and glad to provide the technicians needed. But there is one thing they could not provide and that is the fleet of tankers with which to export and sell the oil.

No doubt, as a long-term policy, the Russians might decide to construct pipelines to carry the oil from Abadan up to the Caspian Sea, some 500 miles or more away; but that would certainly take a number of years. I am told that it might take four or five years to carry through a project of that kind. Meanwhile the stoppage of oil production and sales would result in a disastrous decline in the revenue of the Persian State, which, I understand, derives something like 18 per cent. of its total income from oil.

Mr. Harold Davies

Will the right hon. Gentleman permit me to point out that this revenue picture has been over-painted? The World Economic Report said conclusively that in these areas, one-tenth of the national income of Iran was derived from the oil industry royalties and in connection with oil, and that only one-third of that one-tenth is actually related to the oil royalties.

Mr. Sandys

I understood that it was about 18 to 20 per cent. But no one will dispute that the loss of the revenue from oil would have a most serious effect on the capacity of the Government to carry on, and would lead to all the consequences to which my right hon. Friend referred.

However, it is probable that Russia, in order to get control of Persia, would be only too glad to subsidise the Persian Treasury during the interval while the pipelines to the north were being constructed. If the Persians were to accept such an offer they would find that they had sold themselves body and soul to the Soviet Union. That would hardly be a triumphant conclusion to an operation which started as an assertion of national independence. Persia has, in fact, everything to lose and nothing to gain by rejecting the proposals of the Anglo-Iranian Oil Company, which are not only financially advantageous, but which, by recognising the principle of nationalisation, also go a long way towards satisfying national pride.

If conditions in Persia were, even by Persian standards, moderately stable, there would be little difficulty in arriving at some reasonable settlement on the basis purely of Persian self-interest. Unfortunately, we are dealing with a Government whose members are living from day to day in fear of assassination, and with a Prime Minister who, as far as one can gather from the newspapers, conducts his business from his bed in a police-defended Parliament building. In such conditions, we must not be surprised at some of the strange things that have been happening. Moreover, we must also remember that, from one day to another, we may be faced with an entirely new Government, which, in its turn, will repudiate everything which may be agreed with the present Government.

In these circumstances, we should do well to concentrate our attention upon discharging our essential and vital British responsibilities. We have three principal responsibilities. The first is to protect British Nationals. In this connection, I should like to remind the House of a passage in the statement made by the Foreign Secretary yesterday. The right hon. Gentleman said: 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.—[OFFICIAL REPORT, 20th June, 1951; Vol. 489, c. 526–7.] I hope I am right in understanding that statement by the Foreign Secretary as meaning that, if the Persian Government do not protect all within their frontiers from violence, he will regard it as a British responsibility to extend protection to British nationals within the frontiers of Persia so that they may be able to continue to go about their lawful business in Persia. I would not consider it to be protecting British nationals within the frontiers of Persia to send aeroplanes to take them out. I hope we may have that point clarified in the Min- ister's reply. I am not, of course, referring to the question of evacuating women and children. I am sure we should all be in favour of that. But in view of all the rumours we do want to be assured that there is no question of evacuating wholesale the essential technical personnel who carry on this business. If such an assurance were given, I believe it would have a steadying effect upon the situation, and that it might, even at this late hour, have some influence on the attitude of the Persian Government.

The second British responsibility is to preserve our vital strategic and commercial interests in that area. The effect of abandoning our position in Persia would, I submit, be disastrous. In the first place, we should lose about 30 million tons of essential oil each year, which in itself would be very serious. But what is more important is that the example of Persia would undoubtedly whet the nationalistic appetite of neighbouring countries.

If the Anglo-Iranian Oil Company were to be forced to leave Persia through lack of support from the British Government, what grounds would there be for resisting similar demands from all the other oil-producing countries such as Iraq and Saudi Arabia? We should very soon find that our position in this area upon which we and our allies depend so much for our essential strategic resources, would be seriously threatened.

The third and last British responsibility in this area is to deny this essential oil to the Soviet Union. Oil represents one of the greatest of Russia's strategic needs. It is one of the bottlenecks in her defence preparations. Russia at present produces about 45 million tons of oil a year. If she were to be able to lay her hands on another 30 million tons of oil in Persia, she would be increasing her supplies by nothing less than 66 per cent. at one stroke.

Mr. Wigg

Can the right hon. Gentleman tell us what actual steps he proposes we ought to take now to achieve the objects which he has in mind?

Mr. Sandys

Perhaps the hon. Gentleman will allow me to deploy my argument. I will certainly not evade that point.

If through inaction we were prepared to allow the Russians to increase their oil supplies by no less than 66 per cent., then, I submit to the House, we are wasting our time in taking measures to stop up small gaps in Hong Kong and other such places, and are at one stroke going to abandon the immense benefits which the oil represents. Therefore, I ask the Minister to give us some assurance on that point also when he replies.

I shall now deal with the point raised by the hon. Member for Dudley (Mr. Wigg). Without the detailed knowledge of the situation which the Government alone possess—they obviously possess a great deal more knowledge than they have given to the House, and I do not complain about that, because, in a delicate situation of this kind, there are some things that can be said and others that cannot—it is impossible for us to say what precise action should be taken at what precise moment. In particular, it is very difficult for us to say whether the moment has come or is going to come when it will be necessary to send British troops into that area.

Mr. Crossman (Coventry, East) rose—

Mr. Sandys

I am not going to shirk the issue. All action involves risk. But I would submit to the Government that in this present case inaction also has its risks, and that the risks of inaction may be greater than those of action. If we were to send troops into Southern Persia, there is no doubt that the Russians under the treaty would have the right to send troops into Northern Persia and occupy it.

But what is the alternative? Were we to abandon the South, oil production would cease, the revenue would fall and, as I and my right hon. Friend have already said, there would probably be an economic collapse in Persia. This would almost certainly result in the coming to power of the Moscow-inspired Tudeh Party, which would mean in effect that the Russians would become the masters of the whole of Persia.

Therefore, I submit to the House that if we should be faced with the unhappy choice of dividing Persia or of leaving the Russians to dominate the whole of that country, I have no doubt in my mind that the lesser of these two evils is partition. Our policy in the past has rightly been to promote a free and independent Persia. If through the folly of the Persians we are compelled to give up that policy, it will certainly not be Britain's fault.

Mr. Harold Davies

This is a very vital change in British policy vis-à-vis the United States of America. Is the right hon. Gentleman suggesting that we should come to an agreement to divide Persia's sphere of influence between the Russians in the North and the British in the South?

Mr. Sandys

Had the hon. Gentleman listened to me instead of talking all the time he would have heard that I said that if we found ourselves compelled to send troops into the South, the Russians might exercise their treaty rights to send troops into the North. I went on to say that if we had to choose between the alternatives of having either a divided Persia— I am not suggesting that we should necessarily occupy a large area—or of Russia occupying or indirectly controlling the whole of Persia, the first alternative would, in my opinion, be the lesser of the two evils.

I have heard it said that if we were obliged to send troops into the Abadan area we should be giving the Russians an excuse to start a world war. All I can say is that if the Russian Government thought that the opportune moment had come to challenge the Western world in a major conflict, I do not think they would be at a loss for an excuse. They could easily manufacture some pretext which would serve their purpose. I cannot believe for one moment that the planners in the Kremlin would be led by an incident on the Persian Gulf to embark upon such far-reaching action if they regarded it as premature.

In any case, I submit that there is hardly a spot in the whole world which, from the Russian point of view, would be strategically less advantageous as a starting point for a war than Southern Persia. For the Russians to dispatch an expeditionary force to Southern Persia and to maintain it at the far end of interminable lines of communication across mountains and desert would be an act of military madness almost unprecedented in history. Therefore, I suggest that we should not be unduly deterred in discharging our duty by vague anxieties which are quite unsupported by any objective study of the situation.

To sum up, I consider that we have three vital responsibilities in this area. The first is to protect British nationals and to enable them by that protection to carry on the job they are doing in Persia at the moment. The second is to preserve our vital strategic and commercial interests which, if abandoned, would have disastrous repercussions on British prestige and influence throughout the whole of the Middle East. Thirdly, it is our responsibility to deny these important oil supplies to the Soviet Union.

As I have said, without detailed knowledge it is not possible to judge whether the situation today is such that troops should now be sent into the Abandan area. On the other hand, I am perfectly prepared to say that if the only alternative is scuttle, with all the grave consequences which that would have both now and in the future, then I certainly think we should not hesitate to use troops or any other appropriate measures that may be necessary in order to discharge our responsibilities to our own people and to the rest of the free world.

6.19 p.m.

Mr. S. N. Evans (Wednesbury)

I think it would be a mistake to allow fears of Russia to obscure the other very important considerations which we are considering at the moment. I very much wish that in this vitally important matter of Persia we could have a bi-partisan policy, because I am sure that if we had, British influence abroad would be very much stronger. Let me say at once that the interests of the British people do not change with every transference of political power. Whether we have a Conservative, a Labour, a Liberal or even a Communist Government, the problems of the British people remain the same. The problem is how to procure an income which will enable us to import all those things we must have if we are to feed and clothe our people. I make no apology for expressing the hope that even now there will be a bi-partisan British policy in this matter.

It seems to me that there are three important considerations involved here. First, there is British prestige. We are still a great and powerful nation, although we do not always give that impression. The second is the income derived from Anglo-Iranian; and here let me say that if that income were ever lost, our prospects of standing on our own feet would be gone and 10 million of us might well start looking for somewhere else to get a living. Such is the economic importance of the position. But not least is the fact that the Persian question is a test of Anglo-American relations—a test of that Anglo-American amity, collaboration and solidarity which is of such vital importance to world peace and prosperity.

I do not intend to go into the strategic aspects. I do not under-estimate them, but I think it would be a mistake to put undue stress on them. I fear that the present situation in Persia has arisen, or at any rate the present acute position, not least because of the play of oil politics. I am very much afraid that certain American oil interests have been playing around with international dynamite, like a juggler playing around with tennis balls at the London Palladium. If he drops one he catches it on the rebound and the act goes on, but if he drops a stick of international dynamite it does not rebound, it does not bounce—it explodes.

It is important to remind our American friends that over many years they have been able to draw vast quantities of oil from this area—not from Persia itself, but from adjoining areas—without the expenditure of a dollar, without sending one G.I. Joe. That task has been carried out by the British people. Quite obviously, if our largest single asset in the world were filched from us, for whatever reason and by whatever means, we should not be able to afford to play that police role in the Middle East which we have played for so long.

There has been some talk—although not here this afternoon—of an analogy drawn between British nationalisation and the action which has been taken by the Persians, and I should like to spare a moment to deal with it. In the first place, we have conceded the right of the Persians to own their oil. What concerns us is what happens to the oil.

Our position in Persia, if I may use a homely simile, is like that of a man who has been invited to share a large house with another person on the basis of a 21-year lease. Three rooms have been allotted to him and the lease has been drawn up. The man proceeds to modernise the place, to electrify it, to put in new grates, central heating, all sorts of amenities; and he proceeds to furnish it with durable furniture, including refrigerators, washing machines, television and so on. At a certain point, despite the 21-year lease, the owner says, "Out—and leave the furniture where it is." The fact of the matter is that the Persians have not a leg to stand on, either in law or in equity.

My hon. Friend the Member for Attercliffe (Mr. J. Hynd) reminds me that there is a law against it here. I hope The Hague will say that there is an international law in the matter, too. But meanwhile, we have the immediate problem. It should be clearly understood, not least across the Atlantic, that Anglo-Iranian Oil is a gigantic enterprise, solely the product of British brains, sweat and ingenuity, and if our American friends want us to be partners and not pensioners, it is their job to reinforce the British position at the moment.

Personally, I am a little worried about the situation which might arise if we abdicate. I do not intend to try to do the Foreign Secretary's job for him. He has information which is not available to any of us. But I must say that if we voluntarily abdicate the effect on British prestige from the Suez to Shanghai, from Abadan to the Falklands, would be disastrous. That is one consideration. What worries me is that, if we do abdicate, if we withdraw our personnel, and the oil fields and the refineries stand idle for a month, this situation might well arise—and that is what bothers me.

The Persian Government would have no income. Quite obviously, they would be on the verge of bankruptcy. They would have to get someone in to run the oil fields and refineries, and I am afraid that some honest American broker might say to the British, "We must get these oil fields going again, otherwise there will be economic and political chaos in Persia. We do not want the Russians in, nor do the Persian feudal aristocracy. But the Persians do not want you in. We think we had better go in ourselves." I do not think we ought to cast doubt on the motives of those making the suggestion, but I can conceive that we should be told that we should not take a dog-in-the-manger attitude in the matter and that the Americans would be happy to pay us liberal, generous compensation. Indeed. we might be invited to name our own figure.

But again, the consequence would be that sterling oil would have finished and once more we should be dependent on dollar oil. Instead of Abadan being an asset to the British people, contributing to our living standards, the dollar problem would have been aggravated. I fear this because of the antics that preceded the present acute situation. I do not think that there can be any doubt that some interests have acted with considerable irresponsibility. Had it not been for the prompting of the Persians from those same American oil interests, I do not believe that the present situation, in its present acute form, would have arisen. That is why I am worried at the prospect which may present itself if we voluntarily abdicate, leaving the oilfields without personnel of any kind.

Quite frankly—and I say this as one who has spoken vehemently in the past for Anglo-American amity and collaboration—in this matter I fear our friends rather than I do the Russians. I do not think the American oil interests have ever reconciled themselves to sterling oil. I do not think they like the competition that sterling oil, drawn from Persia, presents. I think that all the time they are thinking of a restoration of a dollar oil hegemony. Therefore, I do not trust their judgment in this matter. They are playing the traditional oil magnates' game. I understand that, and I am not too reproachful of it. I am not going to accuse of duplicity the people who have largely created this situation. I believe that they are playing the only game they understand, and I fear very much that, if we get out of Persia, eventually we shall see that it is our friends and not our enemies who take our place.

This brings us to the question whether we should take steps to protect by military force our personnel at present in Persia. This is a question which must agitate the minds of us all. My view is that the Foreign Secretary should continue to show great patience, but that, if it does come to a showdown, there should be no reluctance to dispatch those forces able to safeguard British interests at Abadan until a more accommodating spirit is forthcoming from the Persian Government. In this matter I should like to think that we were going to get 100 per cent. American support.

I take the view that Anglo-American relations suffer from a high degree of cant and hypocrisy—a pretence that there is high altruism on one side and self interest on the other, and I believe that until cant ends nothing else can begin. Carlyle said that many years ago. We are the only strong, loyal and dependable friends that the Americans have, and we are entitled to their moral support—their 100 per cent. moral support—without mental or any kind of reservations at this moment. I hope very much that it will be forthcoming.

I do not want to take up any more time, except to say that, if I have spoken rather plainly, I do not seek to indict the State Department or the American people. I think nevertheless that this Persian business is an odd time and connection in which to put on a Nelson act. Certainly I do not seek to level any reproach at the American people. I believe that the American people are a great and generous and fair-minded people, and I think that if they knew precisely what has been happening, what has been done and said to bring about this situation by some of their own nationals, they would rise in their wrath from Maine to the Pacific Coast.

6.36 p.m.

Lord Dunglass (Lanark)

The hon. Member for Wednesbury (Mr. S. N. Evans) made an appeal at the beginning of his speech for a bi-partisan foreign policy in this respect, and for unity in this House; and I should like to assure him straight away that, if we are satisfied, as we hope to be, that the Government are protecting British interests, they will receive support from this side of the House. I would go further and, in this case, agree with the hon. Member that in this matter we can say, without presumption or arrogance or boasting, that the British interest is also the American interest and the interest also of the free world.

My right hon. Friend the Member for Warwick and Leamington (Mr. Eden), the hon. Member for Doncaster (Mr. Gunter), and my right hon. Friend the Member for Streatham (Mr. Sandys) did this House great service, I think, when they put this particular question of the Persian oil crisis into the international setting, and it seems to me that, from their review, two salient facts have emerged.

The first is that the economic welfare of the whole sterling area rests on the orderly development of the oil resources of this area of the Middle East, and that any interference with it must have the widest economic implications. The second fact which surely emerges is that the security of the whole free world would be jeopardised if Persia should become a satellite State of the Soviet Union, with the Soviet Union in effect controlling the production of Persian oil, in effect controlling the Abadan refinery, and possibly, as my right hon. Friend the Member for Streatham said, with the diversion of Persian production to Russia itself.

If those are facts—and I think that they have been established to the satisfaction of the House—then it seems to me, if that is a true estimate of the economic and strategic position, that it must be a cardinal point of British foreign policy to remain in Abadan and to remain in control of the technical processes of the refinery. In this debate today, it seems to me, it is this question of the Abadan refinery and in whose control it remains that is the one which really matters.

The Foreign Secretary, when he has been talking to us lately about the possible use of troops, has talked in terms of the protection of British lives. I understand the delicacy of his position. He can have no complaint that hon. Members have not used restraint, and I shall try to use it, too. However, I want to put to him a most definite question on the Government's foreign policy, and, if possible, to get from him a more positive assurance. Will he say that it is Government policy that there should be no evacuation of technicians from the Abadan refinery, or will he put it more positively, in this way, and say that it is His Majesty's Government's policy to maintain the Abadan refinery under British management, with British technicians in control, and that His Majesty's Government will prevent physical interference with British technicians in the performance of their legitimate functions?

None of us, I think, can shirk the full implications of this. If we insist that there shall be no evacuation, then it follows that we must be ready, if necessary, to protect our people in their legitimate functions in Abadan. I want the right hon. Gentleman when he replies to say that the protection which His Majesty's Government give will not only be if the lives of the British people in Abadan are threatened, but will extend to them if the Persians try to take physical control of the refinery and interfere with them in their legitimate duties.

Mr. Crossman

Does the hon. Gentleman mean that in the event of the Persian Army and police, who are at present protecting the area, giving opposition, we should forcibly bring our troops in against the opposition of the army and police of Persia, because that would be war?

Lord Dunglass

The Foreign Secretary is responsible, and he must take the responsibility of the timing if troops are to be sent in. I am facing the implications of the statement I have made, that we should not evacuate the technicians; and I should be prepared myself, if they were interfered with in their legitimate duties, to send in troops to protect them. I cannot speak for the Foreign Secretary, and I am speaking only for myself in this matter. I do not want to complicate the issue. This, I think, is the central point.

It is not merely a dispute between a company and the Persian Government. It has a much wider significance, and I hope that the right hon. Gentleman will even now take every opportunity to impress upon the Americans the vital importance that the British should remain in Abadan and have American support, and that it really is to their interest. If we stay in Abadan the Persians may in a very short time get tired of this experiment in socialisation, but if we get out of Abadan our chances of getting back are very small, and we shall have surrendered one of the essential bases of power which the free world has at the present time.

6.44 p.m.

Mr. Crossman (Coventry, East)

I am glad to follow the hon. Member for Lanark (Lord Dunglass). I think that in this debate it is an advantage to be a back bencher because we can sometimes speak more openly and frankly than those on the Front Benches, and I think the hon. Gentleman has done the House a service in facing up to the full implications of this problem. We all, on both sides of the House, agree on the importance of Persia and the effect that this matter may have not only on the oil companies there but on the whole of the Middle East, including the possibility of a British base at Suez.

Equally, I think we are agreed that one of the objectives of our policy is to prevent a coup d'etat by the Tudeh Party in Persia. The Tudeh Party is the only efficient politically organised machine in the whole of Persia; there are no other genuine political parties; everything else consists of factions, groups and conspiracies among a rich and corrupt ruling clique. Against that ruling class stands one well organised party, underground, but none the less well organised for that.

When we are facing this problem, it seems to me that we should not make a sharp distinction and say that there is no choice between dangerous—because it will be dangerous—military occupation and abdication. I want to argue that I do not think that these are the only two alternatives. It is not only a choice between diplomatic catastrophe and weakness and what I would call gunboat psychology. It is all very well to talk about putting British troops in to protect British technicians in their work, but that means putting them in against the armed opposition of the Persian police and army.

Lord Dunglass

I said if the Persians interfere with our technicians.

Mr. Crossman

Let us suppose that there are difficulties in continuing the operations of the refinery or the oil company. In that case the hon. Gentleman is suggesting that whether the Persian Government invites us to assist in maintaining law and order or not, we should put troops in. Surely he is not suggesting that the Persian Government are going to ask us to assist in the preservation of law and order. In that case, we should have to make a forcible entry into Persia. We should have to shoot Persian soldiers who would certainly oppose us—[HON. MEMBERS: "No."] Do hon. Gentlemen opposite say that if we send British troops in they will not be opposed? I reply to them that a responsible Government must act on the supposition that they are opposed.

The House should realise that when we talk about sending troops to protect British personnel, what is being suggested is the armed invasion of one province of Persia against the will of the Persian Government. Maybe, in certain circumstances one has to undertake the invasion of another country, but I think that we ought to be clear what we are proposing—the invasion of a country whose independence we have solemnly promised to maintain, and we are to do it against the will of the overwhelming majority of the Persian population. They may be misguided but they happen to be inspired by an intense nationalism which is chiefly directed against ourselves.

Brigadier Rayner (Totnes)

There is all the difference between invading a country and sending in troops to protect our own installations.

Mr. Crossman

There is all the difference from the point of view of the invading country. I will give the hon. and gallant Member an instance. The Chinese, the other day, invaded North Korea to protect their installations near to the Yalu river. [Interruption.] I would seriously suggest to right hon. and hon. Gentlemen opposite that when they are advocating this course in Persia, they are very seriously undermining the whole of our moral case in Korea, which was that countries are not entitled to use violence and force in the protection of their national interest on the territory of other Governments and nations.

Are we going to say that because it is a British interest in Persia, we have the right to shoot our way into Persia, whereas if it is a Chinese interest in Korea they are aggressors? Are we to hold the view that only Communists are aggressors when they defend their national interests by force in countries that do not belong to them? That, in fact, is the argument behind the suggestion from the other side of the House.

Mr. Cuthbert (Arundel and Shoreham)

I think that my hon. Friend was saying that if the Persian Army could not protect our interest there and the lives of our British people, then we must send our troops in.

Mr. Crossman

I would agree with the hon. Gentleman so far as the Foreign Secretary's statement goes. In order to protect British personnel and to enable them to leave the country we are entitled by international law to protect them; but I take exception when the hon. Gentleman extends the protection of personnel to the protection of installation.

Earl Winterton (Horsham)

May I ask the hon. Member a question? I have been listening to his argument with the greatest interest and it seems to me to be completely in a roundabout. He has said that if we send British troops into Abadan they will be fired on. Do I understand that the hon. Member is prepared to face that if they are sent to protect British nationals?

Mr. Crossman

I was replying to the intervention which preceded that of the noble Lord. I would say that a great deal would depend on the timing. If we send in the troops to do the job of maintaining and protecting the oil wells, then I say we are—I will be frank—committing an act of aggression against a friendly Power. We have no right to send our troops into somebody else's country against the wishes of the Government of that country because we have a factory there and are not satisfied with the nationalisation terms on which it is being taken over.

I would, therefore, reply by saying that everything depends on whether it is proposed that we should protect the installations—in which case I can see no right in international law to do so—or whether we say that in the last resort, if our personnel are in danger, we may have to protect them. I see a great distinction: between those two actions and I was, anxious to point it out.

Earl Winterton

Name it.

Mr. Crossman

There is a world of difference between occupying a province of Persia which means running our oil wells under British military government and sending troops in to rescue British people who are in danger of their lives. I am certain that the Persians will understand that distinction even if Members opposite do not; so will anyone else outside this country.

Having dealt with that point of the risk which I thought hon. Members opposite were somewhat under-rating in their advice to the Government, I wish to develop further the point made by my hon. Friend the Member for Wednesbury (Mr. S. N. Evans). I was surprised that the right hon. Member for Warwick and Leamington (Mr. Eden), in discussing the occasion and the development of the dispute, while mentioning taxation in this country as one of the aggravating causes, never mentioned the activities of the American oil companies. It is a pity that the Opposition should imply that everything is always the fault of the Labour Government when they know as well as I do that a series of most unfortunate interventions by our American allies took place in Persia.

It is surely far better, when we are assessing the situation, that we should assess it frankly. What are the causes? Talking a few days ago to someone high up in the oil world who should know, I asked him "Would any of this have happened if it had not been for American oil company intervention?" He said "Of course not. Of course the whole negotiations would have gone through." What was happening? I agree with the right hon. Gentleman the Member for Warwick and Leamington that the Anglo-Iranian Company put forward a supplementary agreement which was as good as the 50–50 basis of the Araneo agreement in Saudi-Arabia, from the Persian point of view. Some ill-disposed people in Teheran were concerned to stop that agreement.

After all, Anglo-Iranian produces sterling oil, which is not very popular with dollar oil magnates next door. They were concerned to make it as difficult as possible for General Razmara to sign the agreement to which he had pledged his honour and in consequence of which he was shot. A deliberate attempt was made to stir up Persian public opinion in Teheran by certain agents of certain oil companies. There is really no doubt on this issue.

Mr. Eden

As the hon. Member has mentioned me, I would say that I did not state that because I did not know about it. It is entirely news to me that American companies tried to stop the signature of the initialled agreement. If I had known of that, I would have said it. I hope that the Foreign Secretary will tell us later whether he has any information on that score or not.

Mr. Crossman

All right, I will go into details to make the charges precise. There is first of all a gentleman about whom I need only repeat the report in the "New York Herald-Tribune." He is Max Thornberg, an ex-Standard Oil man, and he was out there in Teheran as the chief adviser on nationalisation to the Persian Government. He had to be slung out by the State Department after an official protest from us.

Secondly, there was a great deal of whispering by Americans that if the British were got rid of the Persians would find available to them American technicians. I am not saying that this was done formally in Teheran. As we know, the whisper is everything in the Middle East. What is significant is that the Persians were led to believe that if they did not sign the agreement with Anglo-Iranian they could get a better deal from one of the American oil companies.

That was certainly the reason General Razmara found it so difficult to deal with the Majlis. Let us have no illusion about the Majlis. It is a tiny collection of very rich gentlemen who have prevented any social advance in Persia or any advantage from the oilfields coming to the Persian people. Parliamentary democracy is being used in Persia not to help the common people but to obstruct social change and defend the privileges of a decadent minority. The Majlis were alarmed by General Razmara because he intended not only to get more money from the British but to use it for raising the standard of living of the people instead of putting it into the pockets of the wealthy. When they felt that some American company might help them to get a better deal and receive bigger profits, their resistance to General Razmara and the Anglo-Iranian offer was greatly increased.

In the third place, I would add an even more serious charge. Mr. McGhee made a most unfortunate impression in Teheran during his visit. We know that Mr. McGhee, who was primarily an Oklahoman oil tycoon and a millionaire, is a very high official in the State Department who visited the Middle East on a tour of inspection. It is common knowledge that, in American parlance he "shot his mouth" in Teheran about the weaknesses of Anglo-Iranian. Whether he was right or wrong in his criticism of Anglo-Iranian, the impression he made on the Persians was that if the British were kicked out they could rely on somebody else and they might do a little better.

I say that because if we are to succeed in the Middle East we cannot have this sort of division and disloyalty between Britain and America. If we ever behave in the same way in any other part of the world, I hope that it will be exposed in Congress. It is far better to have this out in the open. The crisis that has developed in the last four months—in which the State Department had in the end to make it clear that American technicians would not be available to the Persians—was a crisis created by American oil-parties in Persia. It was not the Russians who stabbed us in the back. As my hon. Friend the Member for Wednesbury said, the fatal thing was the belief among the Persians that they could find some Americans who would help them through their difficulties when they chucked out the British occupier of the house at Abadan.

In the Middle East a whisper grows into a fact within an hour; and people always calculate from a phrase or an expression what is the real policy of a Government. The right hon. Gentleman the Member for Warwick and Leamington knows what I am talking about. Persians see everything in terms of that sort of Philip Oppenheimer diplomacy. So what would they conclude when they hear Mr. McGhee from the State Department saying nationalisation was a good idea? What he said in Teheran and Cairo, where he made it quite clear that in his view it was not necessary for the British to retain their Suez base, was a singularly unfortunate kind of assistance to us in this moment of grave difficulty with the Persian Government.

It is not fair to the British Government for hon. Members to speak as they do and omit the main reason why this position has grown up. The reason is not the Tudeh Party, the Russians or the Communists. It is traditional oil politics, which disregard national interests and think solely in terms of commercial profits, of one company against another of dollar versus sterling. It is that which has let us down in the Middle East.

I turn to the practical problem of what should be done. I have given my reasons why I think that, unless we really get to a much more serious situation than that which we are in at present, we should think twice before advising a military occupation of this area. I doubt whether the Chiefs of Staff would strongly and enthusiastically support such a proposal. We have already got one war on our hands at the end of a terribly long line of communications with the enemy on a short line of communications. If we move troops to protect the refinery there would be a possibility, which the Chiefs of Staff would regret, if hon. Members opposite do not, of a war against the Persians and a possibility of a war against the Russians who, in such a situation, would be entitled to enter Persia and to assist the Persian Government in throwing out the aggressors.

That is what the 1921 Treaty entitles the Russians to do if there is a threat to Persian sovereignty. Who could deny that a British occupation of a province of Persia would be a threat to Persian sovereignty? We should, therefore, be asking the Russians into Persia and giving them absolute legal justification for assisting the Persian Government in throwing us out.

Earl Winterton

That would start a third world war.

Mr. Crossman

"That would start a third world war" the right hon. Gentleman so joyfully said.

Hon. Members

Withdraw.

Earl Winterton

I must really ask the hon. Gentleman, out of a sense of decency to an ex-Service man like myself, not to make such a charge. Nobody in his senses could joyfully wish for a third world war. It is a monstrous charge to make, and I hope that he will withdraw it.

Mr. Crossman

If the hon. Gentleman asks me, I will certainly withdraw: but I did note that this intervention was made with an extraordinary lack of horror. However, if the noble Lord is correct, and that would start a third world war, he has given the final argument against what was said by the hon. Member for Lanark.

Earl Winterton

One of the hon. Gentleman's faults is that he never attempts to understand the arguments of his opponents. What I was intending to convey—and I apologise if I interrupted him—was that, if the Russians did that, they would start the third world war, and I do not believe that they intend to start the third world war in Persia.

Mr. Crossman

I suggest to the noble Lord that he is being a little unrealistic. In that case, we should have taken the initiative. We should have committed the initial act of military invasion and the Russians would be reacting legitimately to a military initiative on our part. They would be acting legitimately under the 1921 Treaty, under which the Persian Government can invite the Russians in to protect Persia against armed aggression.

They could do this. But I suggest that it is likely that the Russians would not do so. They would do something much more clever. They would take the case to the United Nations. They would accuse us of aggression against Persia at U.N.O. They would move a resolution saying, "What is this? Here are the British invading a Province of Persia which does not belong to them." Is it thought that the Moslem bloc would not vote for such a resolution? Is it thought that the Latin-American bloc would not vote for it, as well as the Eastern bloc, and the Indians?

If we did what the hon. Gentleman wanted and occupied the oilfields to keep them running, we should be branded an aggressor by a great majority in U.N.O. Then we should either have to withdraw or tear up the covenant. It is quite irresponsible of hon. Gentlemen opposite, who have been assuring us that the war in Korea is fought on behalf of the United Nations Charter and against aggression. No hon. Member on this side of the House has suggested a military occupation for the purpose of maintaining the plant. [HON. MEMBERS: "What is the difference?"] They have enough responsibility to know what it would mean.

Lord Dunglass

The hon. Gentleman has often referred to what I said. I think that he is unintentionally misrepresenting me. I limited any intervention specifically to follow interference with our technicians. The hon. Gentleman must face the fact that if he does not want evacuation—and I take it that he does not—and if he wants to stay there, he ought to tell us what he would do about it.

Mr. Crossman

I am willing to answer. To start with, let us deal with the alternative, not of evacuation, but of economic blockade. That is what an evacuation of the personnel would mean. We would say to the Persians, "Right, Feel what it is like for a few months not to have our personnel there producing the oil." That is the purpose of evacuation, and it is thought that, by such a blockade of Persia, they will come to their senses and negotiate.

That, too, is a dangerous policy and for this reason. This was tried long ago by the American and British companies in Mexico. There, in the 1930's, we did evacuate; we took all the technicians away and we let them confiscate the oil. The result was that for nine years no oil came out of Mexico. They merely produced enough for their own home consumption and we refused to tanker any of it. It was only in 1947, nine years later, that any oil came out. Nine years is a bit too long to wait for oil to come again out of Persia.

Mr. Paget (Northampton)

There was no Tudeh Party in Mexico.

Mr. Crossman

I am afraid I have not got much time, but, I will reply to the hon. and learned Member. There was not a Tudeh Party in Mexico; there was a Communist and Trotskyist Party in Mexico. It should not be believed that there was a lack of revolutionaries in Mexico.

I suggest to my right hon. Friend the Foreign Secretary that he should not be bullied, or pushed into neglecting the possibility of further negotiations. In my view, the offer which he made yesterday, if it had been made immediately after Razmara's death and accompanied by a top rank mission to Teheran, might well have saved the position at that time. I think it was a grave error that that was not done, and we shall pay very heavily for failing to do it. We shall retain less in any settlement. But what is important in Persia is not who gets the money for the oil; it is the flow of the oil to the Western world which really matters.

If we are to bicker about 25 per cent., 30 per cent. or 35 per cent., we are bickering about a quite secondary consideration. What we have to ensure is the oil is produced, refined and moved by tanker. To achieve this we have got to pay a far higher price in nationalisation and in loss of profits than most hon. Gentlemen opposite believe. I think that the fault of the Anglo-Iranian Company has been that it has taken too much money out of Persia and put too little back into Persia—schools and houses for the Abadan oilfields and the workers there do not help the rest of the Persian people. It is a grave defect that the Government did not make this offer in 1946 at the time of the Azerbaijan question or, alternatively, immediately on Razmara's death.

But these suggestions for concessions to Persian views are not approved by the Opposition. Without much bigger concessions there can be no further negotiation, and further negotiation is out of the question once we talk of using troops against a country with the nationalist hysteria of Persia. We have either to break the Persians by force of arms, or to treat them as equals and negotiate with them as people who have equal rights with western nations. I believe in the second course. I believe that negotiation is not ruled out, provided we cut our losses in pounds, shillings and pence, and concentrate attention on getting the oil to flow.

6.59 p.m.

Mr. Mott-Radclyffe (Windsor)

When the Leader of the House announced yesterday that we were to have this debate today on the Persian situation as a matter of urgency, I frankly confess that it never occurred to me that we should not have the benefit of a statement from the Foreign Secretary at the start of the debate, a good deal fuller in nature than the statement he made yesterday, in order to facilitate our deliberations. The absence of such a statement puts all hon. Gentlemen, no matter on which side of the House they sit, in considerable difficulty. The speech of the hon. Member for Coventry, East (Mr. Crossman) was a very good example. If I understood him aright, he is prepared to take adequate measures to defend British lives.

Mr. Crossman

I will make it quite clear. I concede under international law full justification for using the Army, Navy and Air Force to protect British personnel who are in danger in a foreign country, in order to bring them out of that country.

Mr. Mott-Radclyffe

The hon. Member would take adequate steps to defend British lives in the process of evacuation.

Mr. Crossman

Evacuation of them.

Mr. Mott-Radclyffe

That is what I understood. He would not be prepared to take any other measures to defend the oil installations themselves.

Mr. Crossman

Only on one condition: that we were invited to do so by the Persian Government. [Interruption.] Certainly. Otherwise it is intervention.

Mr. Mott-Radclyffe

Carrying the hon. Gentleman's argument to its logical conclusion, he would be prepared in extremis to evacuate from the Persian oilfields altogether. He told the House a few moments0 ago that he thought we might be invited back. I think that is a very empty hope. I have no doubt whatever that were we to evacuate it would not be we who would fill the vacuum so created.

I must say that I do not think that any hon. Member should be surprised that the negotiations between the Anglo-Iranian Oil Company and the Persian Government have broken down. It would seem from what I have been able to follow from the Press, and from other scraps of information that have come back to me from those out there, that at no period since this crisis arose has there been prevalent in Teheran an atmosphere in which we could negotiate in the ordinary sense of the word. The atmosphere was so highly charged that it was, as the bankers say, not negotiable. Ever since the assassination of Dr. Razmara for opposing nationalisation it was perfectly clear that the atmosphere was getting more and more highly charged, until it reached the stage when no Persian Prime Minister dared to make any sensible concessions in the hopes of getting an agreement.

Now that situation, difficult enough in any case, has, I think, been further aggravated—as my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) has already said—by the whole story during the last three or four years of general weakness and vacillation, and the absence of any effective policy in the Middle East. The Middle East is one of the places, but by no means the only place, in the world where weakness is despised and where strength is respected. There is not the slightest doubt that the absence of any effective policy in the Middle East by right hon. Gentlemen opposite merely created in the minds of the Persians the impression that, in the end, when it came to getting tough, His Majesty's Government would accede to almost any demand.

There was one further difficulty which I think I ought to mention. The actual issue of nationalisation forced His Majesty's Government to bat on a rather difficult wicket—though the Persians would not use that phrase. After all, for years hon. and right hon. Gentlemen opposite have been preaching nationalisation as the cure of all economic evils, and they can hardly blame the Persians, or indeed anybody else, if from time to time they take a leaf out of their book.

I think that some of the speeches to which we have listened this afternoon, in which the great contribution made by the Anglo-Iranian Oil Company to the general economic life of Persia has been recognised, might well have been made a good deal sooner, and a good deal more often. Unless my memory is at fault, there has been in the past a good deal spoken, written and broadcast, to which the Persians have no doubt paid attention, about companies like the Anglo-Iranian Oil Company which have come in for a lot of criticism from hon. Gentlemen opposite. All sorts of charges of exploitation have been bandied about, and that has not helped the situation at all.

In view of all this, I ask the right hon. Gentleman one question which I think is of supreme importance. When the crisis first arose, and as the difficulties so quickly built up, how soon were any close conversations entered into with the United States authorities, either in Teheran itself or between the Anglo-Iranian Oil Company and the Standard Oil Company? How soon was an attempt made to get a settled policy over this particular issue of nationalisation of the Anglo-Iranian Oil Company installations? As my noble Friend the Member for Lanark (Lord Dunglass) said, in Persia, as in other parts of the world, it is absolutely essential that on these major issues, which are so highly inflammable in every sense of the word, Britain and America should have a joint policy and should march hand in hand.

The Foreign Secretary, having listened to the speech of my right hon. Friend and, indeed, to the other speeches made this afternoon, could not, I think, be in any doubt as to the consequences of withdrawal, and when he winds up this debate I hope that we shall get from him an assurance that any idea of evacuation is not in his mind. The consequences of withdrawal seem to follow one after another as night follows day.

First, a vacuum is created which, as I have already said, does not remain a vacuum for any length of time. Indeed, in the Middle East today I should think that the most dangerous thing we could possibly create would be a vacuum. Secondly, the Persian economy will collapse. Thirdly, the Tudeh Party will exploit the chaos so created, and the inevitable result will be that Persia will sooner or later—and sooner than later—slip into the Soviet sphere of influence without the Soviet Union losing a single soldier. That will be the pattern of conquest—if that is the right word—or the pattern of Soviet domination of the Middle East. That is what happens.

But that is not all. In addition, of course, the whole stability of the sterling bloc will be completely upset, because that depends to a very great extent on oil. And the whole of our strategic position in the Middle East, the whole of our defensive plans in the Middle East—and this involves America just as much as it involves us—would be completely reversed. So I do not think that anybody could possibly be in any doubt of the consequences of complete evacuation from the oil fields and refineries.

I agree that we must all face the alternative. If it is not the policy of His Majesty's Government to evacuate, the policy then must be to stay there. But that, as my noble Friend said, carries certain quite definite implications. If we stay in the oil fields and work the refineries, the Government, as I think the Foreign Secretary recognises, have a definite obligation to protect the lives of those so engaged—I, myself think that they have an equal obligation to protect the installations as well—and this evening we want to hear a little more detail about what plans have been made for giving that protection. Only in this evening's papers it is reported that there have been riots in Abadan. I think one of the offices was entered by the mob. As far as I know, no life was lost, and I do not think that very much damage was done. But this may be only the beginning.

British civilians are there. Have they been organised into any sort of local defence force? Has any plan been made for their own mutual protection? Have they got any small arms or ammunition? Is it the intention of His Majesty's Government to send troops? Can we be assured that sufficient troops are available, and are they in the right place? Are sufficient aircraft available to get them there? These are some of the things we want to know, not merely we in this House but the country. What is more, the relatives of those out there want to know what plans have been made.

We need an assurance that all these difficulties—and no one would deny that they are very great indeed—have been carefully thought out and that there is an effective plan for protecting British lives; and unless His Majesty's Government mean to evacuate, which I sincerely hope they do not, there is need to protect British installations as the only alternative to complete evacuation. We want far more information of a much more re-assuring nature than we have had hitherto.

Finally, I beg the Foreign Secretary to realise that the greatest disservice he can do both to Britain's own position in the Middle East and to the cause of world peace at this very critical time, when everything depends upon a firm decision, is to fail to make perfectly clear tonight what the policy of His Majesty's Government is.

7.21 p.m.

Mr. Harold Davies (Leek)

The points that were raised by the hon. Member for Windsor (Mr. Mott-Radclyffe) have been raised in every debate on foreign policy throughout the last five years. Members opposite are continuously asking: Have we troops? Is our Navy ready? Have we a plan? They would make commitments with a minimum amount of motive force and power, but they are forgetting the social implications of everything that is now running right throughout the Asian world. We cannot bring to that kind of world the gargantuan atavism of militarism to solve that social problem. Our policy should now be one of maintaining the negotiations.

Are the Opposition prepared to say that at all costs we should go into Persia? If they use the argument that there is no effective Government, I reply that the Government in Persia is just as effective, if not more effective, than the Singman Rhee Government was in Korea. What the Opposition would be doing, if they committed this country to that kind of policy, would be committing in reverse an act of aggression because they want control of the oil.

The question is not so much who gets the profits from the oil but whether we can keep the oil flowing for the Western world. With the use of the United Nations organisation, that can be done. Otherwise, if there was a move on the part of Britain into Persia at the present moment, and it was taken to the United Nations, it would result in an adverse vote for us, despite the strength of the United States.

It is only fair to Persia to correct the misinformation that has been given to the House today about the value of these oil royalties. May I quote from the United Nations Economic and Social Council Report publication, the "Review of Economic Conditions in the Middle East"? It refers to the importance of oil in the economy of the Middle East for national income purposes and states: In Iran direct payments by the oil industry to the Government, together with local expenditures such as wages and purchase of materials, do not exceed 10 per cent. of the national income; of this total royalties represent a third. Similar proportions obtain in Iraq. In Bahrein and in Kuwait, on the other hand, the proportion is much bigger, because it is the main income. It would be incorrect, therefore, to assume that the economy of Persia would collapse because in an interim period Persia would not get oil royalties.

Mr. Wakefield (Derbyshire, West)

I understood the hon. Gentleman to say that oil royalties do not exceed 10 per cent. of the national income. Would he say what proportion they are of the revenues of the Persian Government?

Mr. Davies

They represent one-tenth of the national income, but one-third of the one-tenth is actually oil royalties and plays a big part in the balance of payments of Persia in international trade.

Mr. Paget

What about Persia's revenue?

Mr. Davies

I am simply quoting what a United Nations publication says on the proportion of these royalties to the national income, and no further argument will gainsay that fact.

May I therefore, in the brief time that I have left, point to the picture of Persia receiving enormous benefits. Let us take the royalties paid by the Anglo-Iranian Oil Company in 1947. In 1947 the Company paid Persia £5,261,861. They also paid in taxes £765,389, but paid £15 million odd in taxes to the British Government. In 1948 the Company paid £6.7 million in royalties to Persia and £1.3 million in taxes and they paid £28 million in taxes to the British Government. In 1949 Persia had in royalties £10 million and in taxes £2 million, while the British Government had £22 million. The trading profits of the company in this period were as follows: In 1947, £42 million; in 1948, £70 million; in 1949, £65 million; and £10 million worth of shares were given freely as bonus shares to the shareholders of the Anglo-Iranian Oil Company.

This House must face the issue. This is no longer the Victorian world. It is agreed that the Persian people have a right—it has been agreed on both sides of the House from what I have heard today—to own their own oil, and what we are seeking is a formula by means of which the transition of ownership can be peacefully brought about and the Western world and the British people given the right of access to the oil. We have got to get rid of secret clauses in any agreements. The right hon. Gentleman the Member for Woodford (Mr. Churchill) in this House in 1914, speaking on the Anglo-Persian Oil Company, refused to give the House the secret price clause for the sale of oil to the British Navy. In "The World Crisis" he reveals that the British Navy has been enabled to buy oil at £7 million below world prices.

Hon. Gentlemen opposite must realise those days are gone. There must be a formula and co-operation. Therefore, I am delighted to be able to support my right hon. Friend the Foreign Secretary, who refuses to give way to the pressure that is coming from the Opposition for some demonstrative action and some display of force. If we are asking The Hague Court to judge this, it does not help us at the present moment to be talking in terms of battleships, aeroplanes or military forces.

There are three or four points that should be noted. Mr. McGhee, the United States economic adviser of the Middle East, and Mr. Loftus, have repeatedly said that the position in the Middle East has nothing at all to do with the Kremlin. An article in "Fortune" n of March, 1951, points out that the Anglo-Iranian Oil Company had been slow to realise what was taking place in Persia and had simply followed a policy of "business as usual" without realising the social changes that have taken place.

The Arabian-American Oil Company have completed since 1938 its 1,068-mile oil pipeline. It was finished last October. America is now pushing into the Mediterranean Sea 15 million metric tons of oil per year. There has been intense competition in the Middle East between dollar and sterling oil. Much of the trouble has been created by private American oil enterprise following the old policy of "Private enterprise ad lib" which forced Mr. Harold Ickes, petroleum adviser to President Truman, to say: "It is time we looked into matters to see who is governing this country, the oil companies or Congress."

There are three policies at work. The defence departments and the State are taking one line of policy, the home department is taking another, while the private oil men are following a third policy. There has been no co-operation by them with the British Government, or with the Anglo-Iranian Oil Company. The lack of patriotism of the oil industry in the Middle East was shown in April, 1948, when an American independent committee, the Brewster Committee, which investigated its ramifications was forced to the conclusion that the American-Iranian Oil Company had overcharged the American navies from 30 million to 38 million dollars more for oil than was necessary at the height of their deadly war against Nazism. Let us not whitewash this position, which arises from the struggle for oil markets, access to those markets and areas of investment. On both sides of the House we must be prepared to recognise those facts.

I believe that the only course that is now left for us is to use the United Nations as an instrument for securing international law and order to solve these problems. The importance of the oil area is demonstrated by the facts which are found in the statistics of the United Nations organisation. They show that the average production of American oil wells is 12 barrels a day and the average production in the world is 21 barrels per day, while the average production in the Middle East is 3,728 barrels per day.

The richness of this area in the modern world is the factor which must be remembered. I hope that we shall do our utmost to use international instruments rather than those of atavistic militarism. In that way we shall retain the comradeship of the Persians and their friendship. They are a cultured people, and if we retain their friendship we shall also retain leadership in the Middle East.

7.35 p.m.

Mr. Wakefield (Derbyshire, West)

I venture to intervene in this debate because I have spent a good many years of my life in the Persian Gulf and in the countries immediately adjacent to Persia. I am sorry that the hon. Member for Coventry, East (Mr. Crossman) is not in his place as I should have liked to correct him on a number of mis-statements which he made. But I do not wish to engage in any kind of personal reprobation.

Our first duty is to clear our own minds about our major objective. That objective is, I think, to maintain the integrity and independence of Persia and to prevent it from coming under Communist control. That is the thing to keep in mind the whole time. The second thing is to make the Persians understand that their real interests coincide with ours. If that can be done, and if, in all this ocean of disagreement, we can find even some small island of agreement, and can extend it, a great deal will have been achieved.

It is extraordinarily difficult in present circumstances to make the Persians understand where their true interests lie? What is the situation in Persia? At the head of the constitution is the Shah, a young man, reasonable and well-intentioned, but unfortunately a constitutional ruler. It is a hard thing for me, who has tried for so many years in Indian States to substitute constitutional for unconstitutional rule, to have to confess that it is unfortunate that any ruler should be constitutional.

But in present circumstances in Persia it would have been of immense value if there had been a Ruler competent to speak on behalf of the country. That was the position in 1933 when Persia was under the arbitrary rule of Reza Shah Pahlevi. There was one man then who was able to see reason and with whom it was possible to make a bargain. But now that the Shah is a constitutional ruler, he is in the hands of his Prime Minister and the Majlis, a collection of wealthy industrialists and landlords who in no way represent the interests of the ordinary people of Persia.

The administration of Persia is futile, inefficient, and corrupt. Throughout the country there is poverty and frustration. The voice of popular discontent has grown louder and louder in recent months and years. Members of the Majlis, in order to avoid the odium which their own irresponsibility has incurred, have made the foreigner the scapegoat. I know that American oil interests played an unfortunate part in earlier negotiations in Teheran, but I cannot believe that Max Thornberg, whom I used to know personally, took the part which the hon. Member for Coventry, East alleges.

The major factor in the present unfortunate position is the way in which members of the Majlis have evaded their responsibilities and made the Britisher the scapegoat. They have told the people of Persia that it is the foreigner, the Britisher, who is draining away the riches and wealth of the country. That has been the basis of the cry for nationalisation, supported by the mujtahidin (the religious leaders) and by the fanatical organised religious body, the Fidayan Islam, and by other bodies of patriots in Persia; while behind the scenes the Tudeh Party is zealously fanning the flames of fanatical chauvinism. That is the picture in Persia today. It is not surprising, of course, that negotiations against that background of emotion and suspicion, have not succeeded.

The members of the Majlis have become the captives of a movement which they themselves started. They are overwhelmed by an avalanche which was of their own creation; and so Dr. Mossadeq —doctrinaire, xenophobic, incorruptible— has become the instrument of the country's will to rid itself of foreign exploitation, which in Persia is so widely and so stupidly believed to be the real cause of the people's sufferings. The difficulties of conducting negotiations in those circumstances are immense, and I am not surprised that so far negotiations have failed. But in the final resort—I emphasise "in the final resort," because one hopes that matters will not drift to such a position—the choice lies between complete withdrawal from Persia and military intervention for the protection of personnel and property.

Already in the House this afternoon the implications of those two courses of action have received some discussion but I may perhaps be allowed to say what I think from my own knowledge of Persia, of Persians, of the Arabs and of the Arab States, and of various countries in the immediate vicinity of Persia. I will not touch on the economic results of denial to the Western world of the oil from Abadan; but I do say that if a complete and total withdrawal is effected, there are some consequences which will follow with absolute certainty. In this connection I endorse what was said by the hon. Member for Doncaster (Mr. Gunter). I do not know what personal knowledge he has of that area, but I felt that he summed up with great wisdom and clarity the issues with which we are confronted.

One of the certain consequences of withdrawal is the financial and economic collapse of Persia. The hon. Member for Leek (Mr. Harold Davies) has said that the oil royalties and connected payments constitute only 10 per cent. of Persia's national income, but the proportion which they constitute of the revenues of the Persian Government is, of course, very much greater. The Persian Government are already in difficulties for money, and if they are denied any further monetary help from oil they will collapse, and there will ensue throughout Persia a financial and economic collapse, which, as the hon. Member for Coventry, East, said—and I agree with him in this—will certainly result in the Tudeh Party seizing power.

The hon. Member for Coventry, East, said, and I agree with him, that that party is the only well-organised, active and really dynamic political party in Persia. If there is collapse and disturbance, it is that party which will obtain power. And, of course, the moment the Communist-sponsored Tudeh Party obtains power, the whole of Persia will become incorporated in the Communist bloc. Russia will then control Persian oil. She will get the warm water port in the Persian Gulf after which Russian imperialists have been hankering for half a century and more. She will, most important of all, establish herself astride our vital lines of communication to the East. And, finally, she will find herself in a position to infiltrate into the neighbouring Arab countries.

These I regard as the consequences certain to follow withdrawal. But let us also consider the alternative, military intervention, and let us consider its consequences. First, I consider the dangers arising from such a course of action to be very grave and great. If we employ force to protect our personnel and installations, there would undoubtedly be a revolt in Teheran. Dr. Mossadeq would be thrown from power. Again, the Tudeh Party would establish control. The Russians would come into the north of Persia, as they arc entitled to do by treaty, and we should get a situation something like that in Korea in the sense of the north and the south being divided, but something also infinitely more dangerous than Korea because this conflagration would come in a part of the world which is of vital interest and importance both to Russia and to ourselves.

I do not say that Russia would intervene with Russian troops—she would not need to do so. She could use the Uzbeks, the Azerbaijanis, and the Kurds—in fact, half a dozen of those eastern tribes who are already incorporated in the Russian system; and they would have the object of liberating Abadan from the British. There is that danger, and it is no good our blinking our eyes to it.

But if there exists the danger, there is also the hope of some compensating advantages. It is just possible—I will not put it higher than that—that the Majlis would welcome a solution which they themselves cannot propose. In the East, people are sometimes quite relieved to be able to concede to force what they dare not concede to reason. The Persians do not like responsibility, and it may be that they might be glad to feel that fate was bringing something which they would not have the courage to bring for themselves: they might be relieved that the decision was taken out of their hands. I do not say that that is more than a possibility, but it is-—and I say this with some knowledge of the Persian make-up—a psychological possibility.

There is hope in another direction. If we made this stand, it would encourage our friends—and, goodness knows, they need encouragement. We have friends in Iraq, where also we have common interests in oil with America. We have friends in Kuwait—Sheikh Abdullah es Salim is as good a friend as we have in the Middle East. We have friends in Bahrein— Sheikh Salman bin Hamad al Khalifa is the friend of Britain, and has proved it. In Qatar and in Saudi Arabia we have friends, and there again are American interests. All the way down the Trucial coast to Muscat, the Arabs are watching this issue.

It is true to say. I think, that in foreign politics strength acts like a magnet on all the elements around it and draws them to it. If we can show strength in the Middle East we shall find an immense accretion of power to us and confidence in us. Finally, of course, if we were to maintain ourselves in the Persian oilfields and in Abadan, we would protect our immensely important line of communications to Australasia.

If, in the ultimate resort, a decision has to be made between these two extreme courses, I have no doubt at all where the advantage lies and which way the decision should be made. But I also think that the decision should be delayed until the last possible moment. I do not know what the Government's policy is—we have not heard much about it—but if they are frightened of having to take this decision between two terribly grave courses, they have my utmost sympathy. They should delay decision until the last possible moment. Forbearance should be carried to the utmost limit. It should be carried indeed almost to any limit. But there is one point beyond which we must not go. We must not make any concession which would impair our physical power to occupy, if we have to do so, the Persian oilfields and Abadan. Up to that point almost any concession can be justified: beyond it, none.

Mr. Awbery (Bristol, Central)

Before the hon. Gentleman sits down will he tell me if he is of the opinion that the people of this country would go to war with Persia, in order to prevent the Persian Government from nationalising the oilfields?

Mr. Wakefield

I cannot conceive that this country would ever go to war with Persia. I know the Persians far too well to think that Persian soldiers would ever fight against us. I saw them the last time in 1941 when we went into Khurramshahr and Abadan, and I saw the way their soldiers welcomed us although ordered by the Shah to fight against us. We and the Persians are friends, and I differ from the hon. Member for Coventry, East, in some of the assertions he made about the views of the ordinary Persians towards us.

7.51 p.m.

Mr. Emrys Roberts (Merioneth)

I shall begin my short remarks by paying tribute to the hon. Member for Derbyshire, West (Mr. E. Wakefield), for his well-informed speech and for the moderate way in which he expounded his case. While I disagree with some of his conclusions, I do so with diffidence, because I cannot pretend to have the first-hand knowledge that he has of Persia, the Middle East and the East.

The first thing we must do is to try to make plain to ourselves, to make plain to Persia, and to make plain to the world the principles on which we should act in this matter. First of all, it should be made clear that we must concede the right to the Persian Government to nationalise its oil and any property within its national territory. We must concede that right to any sovereign State. The Government have done so, and they were quite right to do so.

When we have made that concession, however, it is important to remember that when the particular nationalisation concerns the subject matter of a treaty between the Persian Government and a British company, we have a right to insist that nationalisation should be carried out on terms to be agreed if possible, between the parties, and that compensation should also be agreed so far as possible.

For that reason, we are right to say that the unilateral method adopted by the Persian Government and the high-handed manner in which they have broken off the negotiations cannot possibly be justified. In my view, the British Government have made a reasonable offer. They offered an immediate payment of £10 million and £3 million a month while negotiations were going on. That was the limit of reasonableness to which we should expect the British Government to go at this stage.

The next question which faces us is— what should now be done? The hon. Member for Derbyshire, West, put two bleak extremes before the House—one was evacuation and the other was the use of force, though not immediately, in order to occupy the oilfield and the installations. For my part, I think that it would be wrong for us to evacuate Persia at the present time. It would be nothing less than a surrender to an act of force on the part of Persia. On the other hand, the opposite extreme is even more to be criticised. The hon. Member for Derbyshire, West, recognised the great dangers of marching into Persia at the present time, and in my view those dangers are so great that we ought not to incur the risk.

Three consequences would follow if we marched into Persia to try to protect the oilfields. First, I cannot believe that there would not be resistance. Resistance is in accordance with the temper of Persia at the present time—apart from what intervention there might be by Russia. If there were resistance and fighting it would be quite impracticable to obtain the oil, since therefore it would be impossible to secure the object of the intervention.

The second consequence was indicated by the hon. Member for Coventry, feast (Mr. Crossman), namely that we should certainly be arraigned as an aggressor before the Security Council by the Soviet Union, if not by Persia herself, which would be an undesirable position for this country to be drawn into. The third consequence is the most grim of all, that we cannot rule out the possibility of world war breaking out as the result of such a move, and we ought not to take such a move in face of this grim possibility.

What then should be done?' Somehow, we must find a way between those two extremes. We must affirm and affirm again our readiness to negotiate". We have strong factors in our favours The position of the British tanker fleet is one of them. The existence of that fleet in our possession will deprive to a large extent the Persian Government of advantages it will obtain from nationalisation. We must go on offering reasonable terms. We are right to go to the International Court, and we should persist with the reference.

We must also do a very important thing which has not been sufficiently referred to in this debate: we must try to win on the widest scale the greatest possible measure of support amongst the public opinion of the world. Nothing would be more disastrous than for this country to be condemned by world public opinion for its actions in Persia as we were condemned in 1899 for entering into the South African War.

Let me say, in passing, that in my view, all this talk of intervention by American oil interests does not get us anywhere in this present dispute. It is clear, at any rate, that the American Government are not a party to it.

Lastly, it would be wrong to conclude a speech on this matter without some reference to British personnel in Persia at present. Our thoughts should be with them in their dangerous position. If they get in danger of their lives we must assist them by all effective means. We are far more likely to succeed in that effort, far more likely to win world public opinion, if we show moderation and wisdom in all our actions.

7.58 p.m.

Mr. George Wigg (Dudley)

I was a little surprised when the right hon. Member for Warwick and Leamington (Mr. Eden) opened his speech by a complaint that the Foreign Secretary had not spoken first in this Debate; because in 1932, when the D'Arcy concessions were cancelled, and the right hon. Gentleman, as Foreign Secretary, came to this House to make the announcement that the dispute had been referred to the Inter' national Court, the Leader of the Labour Party, the late George Lansbury, tried to move the Adjournment of the House and to get a debate but his efforts did not meet with success. So why it should be good on one occasion for the Government of the day not to want to make a statement and bad now, 1 do not understand.

There were other complaints from from the right hon. Gentleman, the chief of which was about the weakness of our policy in the Middle East. In that, of course, he has been supported by many hon. Gentlemen opposite. I do not think there is any truth in that complaint. Indeed, I think that they have done little service to this country in constantly groaning about what they call the weakness of the Government's Middle Eastern policy.

The right hon. Gentleman the Member for Warwick and Leamington mentioned the fact that the Commonwealth defence conference was meeting and he suggested that an opportunity should be taken to get the representatives of the Commonwealth countries who are assembled in London to back us up in a joint policy, the inference being that we cannot do it on our own. What are the facts? There is not one single Commonwealth country other than ours which has compulsory military service. Indeed Australia, which has a representative here, has to come to this country for recruits because it cannot get them in Australia.

I would be so bold as to say that the representatives of the Commonwealth countries are in no position whatever to make a contribution of either men or equipment to help to meet the difficulties in which we may find ourselves in the Middle East. The right hon. Member for Warwick and Leamington knows that, but of course he was batting today on a very sticky wicket.

No one previously in this debate has drawn the attention of the House to the fact that the right hon. Gentleman wrote an article which was published in the "Daily Telegraph" on 25th April. I will read one extract from it. The right hon. Gentleman said: In present circumstances, merely to dispatch British forces would provide no solution. It might even so inflame Persian feeling as to damage the prospects of negotiation. And that is the only way finally to settle the business. I thought that the right hon. Gentleman, aware of what he had written in April, wished to distract the attention of his hon. Friends behind him, who were anxious at the moment that British troops should go into Persia, from the fact that he had himself only a short while ago said that such a step should not be taken. I thought that the right hon. Gentleman's "Daily Telegraph" article was statesmanlike; it was honest and courageous, far more courageous, if I may say so, than his speech today.

I should have thought that every hon. Gentleman opposite would have read it. Clearly they have not done so, otherwise some of them would not have said some of the things that they have said today, because the right hon. Gentleman goes out of his way to say, to quote him again, that the present ferment does not owe its origin to Communism. He is most anxious to point out that there are other causes. Indeed he said, later in the article, that Persia was at present blazing with anti-British feeling. He pointed out, I thought with great courage, why.

He pointed out that in 1907 there had been an attempt by the Russia of the Czars and this country to carve Persia up into spheres of influence. He recalled, in his "Daily Telegraph" article, that in 1919 Lord Curzon had concluded a Treaty with the Persian Government which turned Persia into a protectorate. He says that memories of these things are very long indeed and that the memory of what happened in 1907 and what happened in 1919 is poisoning Anglo-Persian relations at the present time.

I entirely agree. What we have to do is negotiate, and I should have thought that one of the ways of bringing about effective negotiations was not to talk about putting British troops in or to talk about our weaknesses, but to try and associate with ourselves in our negotiations those countries which will be the principal sufferers if the Persians succeed in taking over the Abadan refinery, and oil ceases to flow.

Hon. Gentlemen seem to think that the major part of the oil from Abadan comes to this country. That is not true. Five-sixths of the oil that goes to India and Pakistan goes from Abadan. Indeed, I would go so far as to say that if the Haifa refinery could be got working again the inconvenience to this country would be very little indeed, but it would be a disaster to India, Pakistan, South Africa and East Africa if the oil that comes from Abadan did not flow.

I wish to say a few words to those hon. Gentlemen opposite, particularly the hon. Member for Paddington, South (Mr. de Chair), who at Question time yesterday seemed most anxious to send British troops into Persia—I think he used the words—"in case they were wanted." I do not wish to misquote him but I do not wish to weary the House by quoting from HANSARD; I gathered that to be his intention. He thought that British troops ought to be on their way or should arrive in case the need arose. He seems to forget, and hon. Gentlemen opposite seem to forget, that the Persians have a considerable military force at their disposal, some 130,000 men organised into eight infantry divisions and four brigade groups.

They should note that the Persian army has an American mission; so indeed has their gendarmerie. The Persian army and gendarmerie have been trained and equipped by the Americans and have been supplied with American equipment as a result of the Americans, with great generosity, making them a loan of some millions of dollars. In order that the equipment should be plentiful, they were supplied at reduced prices.

It also seems to be forgotten that American missions still exist in Persia. Indeed, if my advice is not wrong the Persian army is under the direction of a very distinguished American soldier, Colonel Schwartzkopf. What kind of position shall we find ourselves in if we send soldiers into Persia to find themselves faced, not with out-of-date bows and arrows and weapons of that kind, but by a disciplined force supplied with first-rate American equipment, including armoured fighting vehicles? If hon. Gentlemen opposite or on this side of the House think that putting British troops into Abadan is a picnic, I hope they will go and try it before they urge somebody else to do so.

I wish to say a word or two more about the American position in this matter. The hon. Member for Derbyshire, West (Mr. Wakefield), said that he did not think that the influences that were at work in Persia had been associated with the American Government. I wish I could believe that, because I am one of those who think that Anglo-American cooperation is not only desirable but inevitable; it is inevitable because of the facts of history and geography; it is one of those things that happen, and we have to get along together because otherwise, the result will be disastrous.

I have gone to very considerable trouble indeed to try to trace the wanderings of Mr. George C. McGhee, who is not a private citizen; he is Assistant Secretary for Near Eastern, South Asian, and African affairs. Not only is he a high official in the American State Department but, of course, he is an oil man and, if that were not important enough, he is a millionaire. He was a millionaire before he was 30 and, to quote his own statement, he deliberately chose to engage in the oil business because that seemed to be the best way of getting rich in a hurry.

There is another thing about George C. McGhee which the House might be interested to know. He was a Rhodes Scholar and got the best kind of tuition because his tutor at Queen's College, Oxford, was the present British Ambassador in Washington, Sir Oliver Franks. Mr. McGhee is certainly some wanderer. I read the columns of the Press and traced step by step where he has been and what he has been up to. On 28th February, 1951, he turned up in Cairo and had conversations with the Egyptian Foreign Minister, Salah-El-Dine, and a couple of days later "The Times" reports him as being in Colombo.

On 7th March the "Manchester Guardian" said he was in New Delhi seeing Mr. Nehru and the Indian Cabinet. On 15th March he was in Karachi seeing Liaquat Ali Khan. The "Daily Mail" of 17th March said he had gone to Persia to urge Persia to accept the 50–50 profit-sharing offer of Great Britain and got an assurance that Persian oil will continue to go to Western consumers.

The "Manchester Guardian" of 19th March says that he is to advise the State Department whether or not to change their non-intervention policy and the "Daily Worker "—that good old Liberal paper— said he had gone there to act as a mediator. I do not know what he was doing at any of those places. The Foreign Secretary does because on 2nd April "The Times" reported that Mr. McGhee arrived in London late on the afternoon of 1st April, a very appropriate day. He would not comment on Persia, but said he was to have talks at the Foreign Office before leaving for the United States the next day.

Yesterday afternoon when I heard there was to be a debate today I thought it was a pity. Perhaps I am wrong, but I think this debate is charged with infinite possibilities for trouble. A wrong move, a mistake and the most dreadful consequences may flow. But, if a debate has to take place, I think it essential for the democracies of this country and the United States that we should be told the truth.

I do not believe this debate can take place in a realistic atmosphere unless we know what Mr. McGhee said to Salah-El-Dine and what he is saying now. We must know what he said to the Egyptian Government and we must know what he said to the Persian Government, and it would also be interesting to know what he said to the Indian Government. I should like also to know what the Foreign Secretary said to him—[An HON. MEMBER: "Ask the Foreign Secretary."]—I asked the Foreign Secretary yesterday afternoon if he would make available particulars of the talks Mr. McGhee had on his travels. I know my right hon. Friend had not been briefed; perhaps I got him on the wrong foot, but he said it was a matter of great delicacy. I quite agree, it is a matter of great delicacy.

What I think Mr. McGhee did was that in Persia he gave the Persians the impression that if we got out American technicians would go in. That is the first thing. The second thing is that I am sure that he gave the Persians the impression that, as far as American policy was concerned, they could go ahead with nationalisation. I have some slight evidence to support that because, when the Washington Talks on Persian oil began, in which there were two parties—on the one hand, Sir Oliver Franks and on the other Mr. McGhee—statements came to this country.

I looked up "The Times" and the "Financial Times." The "Financial Times" started its article by saying that American policy is that nationalisation is the irrevocable policy of Persia and that we have just to make the best of it: "The Times" correspondent, of course, let the little pussy-cat out of the bag because he talked of the "tendentious lectures" given to the British Government by the State Department, and I thought that the phrase "tendentious lectures" probably covered a multitude of words, if not a multitude of sins.

Certainly it is time the people of this country knew for a certainty that, while it is clear that the Soviet Union is waiting on the sidelines watching the fun and waiting to take advantage of anything that happens, simple creatures inside and outside the House—perhaps I should not refer to hon. Members as "creatures"— are very simple indeed if they believe that behind the trouble in Persia is a Red plot. I do not think there is anything of the kind. If any hon. Member thinks that, he should have a look at Mr. McGhee's timetable, his travel itinerary. He should go to the Library and get one of those admirable documents got out by the Library staff on Persia which contain a chronological table of happenings, and look up Persian events, and he will find that things only began to "hot up" with the arrival of Mr. McGhee.

I am sure that Mr. McGhee, being an oilman, has gone to the heart of the trouble. The trouble about oil according to every informed document I have read, is in terms of one word, price. The Americans have about one-third of the world's oil resources but, unfortunately for them, they get their oil as we used to get our coal before we nationalised the industry, by letting inefficient numerous high-cost producers obtain it. The daily average output of American oil wells is, I believe, 11 tons as compared with the Middle Eastern oil output of about 4,000 tons a day. That gives in a simple way the significance of the high-cost American production and the low-cost Middle East production.

The fact is that there is the Gulf Agreement by which the price of oil all over the world is determined by the price in New Orleans. Therefore, if that Middle Eastern oil, which is sterling oil within the control of this country, has access to world markets, it produces for us a great number of dollars and, because our oil technology is very efficient and the Persian oilfields are low-cost producers, it puts the Americans in a very difficult position. Public Affairs Paper 98, produced by the Library of Congress, will give hon. Members ample information on this point.

I now turn to another point and my own suggestions for the future. I remember very well that when I was Parliamentary Private Secretary to the Minister of Defence, when he was Minister of Fuel and Power, in September, 1945, he set about negotiating an oil agreement with Mr. Ickes of the United States. That agreement was published in a White Paper, Command 6683, and signed on 24th September, 1945. This agreement provided for the establishment of an international agreement and it set out, between the United States and ourselves, machinery whereby the oil of the world could be used for the benefit of the whole of the world. Unfortunately that agreement was never ratified, not I believe, because of any failure to act by our Government, but because the oil interests in the United States prevented it from coming about.

The right hon. Member for Warwick and Leamington is quite right when he says it is no good putting troops into Abadan, quite apart from the terrible consequences which must flow. What we have to do is to find some small point on which we can begin to talk, because ultimately the solution can be found only by negotiations on the lines set out in that White Paper. I have made this point before but I wish to make it again, because I consider it is most important. The first step to be taken in those negotiations is to ask India, Pakistan and representatives from East Africa and South Africa to sit round the table; because whether we or the Persians work the oil, or whoever works the oil, the natural place for that oil to flow is into India, Pakistan and Africa.

I have heard nonsensical talk about the possibility of the Russians working the oil of South Persia. I have never heard such rubbish. I spent many years in those parts of the world, which accounts for my interest in this matter. I knew successive British Governments; Lord Curzon was one of the villains. He tried to do the Russians down over North Persian oil. There was established a North Persian Oil Co. It "went west" and did not work the oil. Then the Americans had a go with the Sinclair Oil Corporation and they turned it in. Later on the Americans had another go, in 1937, but they made no progress. The reason is that the only place for the North Persian oil to go is to the Soviet Union.

What hon. Members do not seem to realise is that the Soviet does not need to go into Persia because the northern oil is part of the Baku sedimentary basin. Likewise the oil of South Persia could not be taken to North Persia. It is nonsense to think about it because the difficulties of the terrain are so enormous. The oil of North Persia will go underground and be pumped from Baku and the oil from South Persia will be taken by pipe or sea to the countries I have mentioned.

I will say to the Foreign Secretary that I hope the whole House will be behind him in saying quite frankly to the Persians that the responsibility for the protection of British lives and property in Persia is that of the Persian Government. In doing that we are in line with what was said by the right hon. Member for Warwick and Leamington when he stood at that Box as Foreign Secretary, and so there should be common agreement between us on that point. Then we should say to the Persians that, so far as this country is concerned, when we went into the United Nations we put on one side for ever the right to use British Forces to go into the country of another nation. If we go into Persia or into any other country it can only be as a result of a United Nations decision, otherwise we lose the moral basis of all our actions.

I hope that the Persians will accept the good will implicit in the action of the Foreign Secretary in going to the International Court. I hope that within the next few hours he will ask Mr. Nehru and Mr. Liaquat Ali Khan to join with him in going to the Persians and getting them to accept the simple fact that sooner or later negotiations have to come about. If he does that, once again he is in line with the right hon. Member for Warwick and Leamington, because that is what he meant on 25th April when he wrote that negotiation is the only way.

8.25 p.m.

Lieut.-Commander R. H. Thompson (Croydon, West)

It behoves everyone of us on an occasion of such historic importance as this to pick his words very carefully. Whatever may be the result, there is no doubt that at this time the Government are faced with a very cruel dilemma; and the consequences of almost any course of action which they may pursue may be disastrous. I shall try to weigh my words very carefully, and I Will try also to be brief.

We have heard two possible alternative courses of action open to us summarised pretty well by hon. Members on both sides of the House. We realise, at least I hope we realise, that the simple evacuation of Persia, with all the loss of strategy, military and economic, which it entails not only for us but for those who think like us in the Western world, our friends and allies, would be disastrous. I believe that the Government are anxious to avoid that if they possibly can.

We have also heard a very obvious and glaring risk which must face us if we take the other alternative, that of putting our troops in to defend—I will not split hairs about what we should be defending, our people or installations, because that would be difficult to distinguish if we ever took that step. We have also heard from several speakers hopes expressed that there might be a third way, that of negotiation.

It seems to me that we have to examine every possible means of negotiation before we reject it; but I have not heard very many constructive suggestions as to the precise lines on which o negotiations should be conducted. People who advocate negotiation do so, I think, because it resolves for them the awkward choice between evacuation and armed intervention, though they may not have any very clear 'idea of where we go from there.

I do not believe that this situation is of the choosing of the Persian Government. For some time, in my opinion, they have not been masters in their own house. The cooler and wiser heads view with something like horror the situation which has now arisen, which is frankly beyond their control. If that is so, what is our best approach to the Persian Government? First we have to find somebody with whom to negotiate. I do not believe that we can negotiate fruitfully with Dr. Mossadeq, or the party which he is supposed to represent, because I do not believe they are free agents. I believe that they are men with pistols almost literally pointing at their backs. I do not believe they can follow any course of reasoned negotiation and compromise except at the risk of losing their own lives. That is why I do not think we should get very much further with Dr. Mossadeq.

With whom, then, shall we negotiate? I should like to make a suggestion. The Shah is a constitutional monarch, and, for constitutional reasons, is perhaps not supposed to interfere in these matters, but I believe that a time comes when a country which has got itself into a state of chaos and is quite obviously getting nowhere requires somebody who is supposed to be sufficiently big to be above petty factions and strife, and who may step in and help with an arrangement to work out the situation. I suggest that it might be possible to make a direct approach to the Shah to see if a settlement, which I am sure is desired as much by the Persians as ourselves, cannot be arranged.

As for the position of Russia, I think the Persians are really much more worried at the prospect of the Russians taking over the oil installations or achieving some measure of control and authority over the whole country than about anything we might do, and I think that this provides a limited field where we see eye-to-eye and where, possibly, we might get together.

The next thing is that I do not believe we have sufficiently exploited the value of the cards which we and the Americans really hold in our hands. One of the tragedies of this whole business has been that it has gone on rapidly worsening, while the Americans and ourselves, apparently, have had no cohesive and joint policy in the matter at all. It was perfectly obvious, I think, since Boxing Day of last year, when the Majlis refused to ratify the new oil agreement, that trouble was brewing, and it became painfully obvious when Ali Razmara was assassinated, yet British and American policy in the Persian dispute does not seem to have existed up to now. I think there have been well-intentioned, but very misguided, interventions by the American Ambassador. He may have meant well, but I do not think he has helped the matter at all.

If we can tackle this matter together, it seems to me that we can arrive at an accommodation with Persia, because I think that what really started the matter was that the Persian Government were completely "broke" and had to get some money from somewhere. With our tankers and our technical know-how, with the Americans' very comprehensive and elaborate plan of economic aid to Persia, with all these assets on our side, it does seem to me that if we can find somebody with whom to negotiate—and I have made my suggestion in that respect we ought to be able to say to the Persians, "If you simply turn down everything, the only possible prospect is that you will get somebody else to take over who will be a very much harder master than ever we have been."

Therefore, I feel that we should pursue this path of pointing out to the Persians what they stand to lose in the way of American credits, technical assistance, arms and the rest, while, on the other hand, they lack a tanker fleet and all those things necessary in running this business. If so, there might yet be a chance in a reasonable way of saving the situation, but we must act quickly. So often, the path of negotiation seems to mean doing nothing in particular while continuing to hope that tomorrow the Persians will be a little more accommodating than they are today.

The situation is worsening very rapidly, and I hope we shall hear from the Government later on this evening that, while they are still willing to negotiate and will protect British lives, when it comes to the point, they will go on quite frankly to say that they are sending a Commission, or an individual, with full authority and power to Persia to negotiate, if possible with the Shah.

I should like to have an assurance that the Americans and ourselves, whatever differences we may have had in the past on this matter of oil politics and so forth, are really pooling our knowledge and resources in this matter, because, together, we are a very formidable combination, and I think that the Persians, now that they have got over the first flush of whatever we may like to call it, are beginning to have second thoughts. I hope particularly that this evening we shall receive an assurance that something along those lines will be done.

The other two alternatives I do not honestly like to contemplate. It seems to me to be useless to talk of building up a defence system, based in part on Persian oil supplies. Equally, it seems to me that if we put in British troops it will be very difficult to represent what we do as a protective action, at the same time saying that what others do is aggression. That may be legal hairsplitting, but I think it would have to be 3 case of the absolute last ditch before we take that stand. I have indicated the possible alternatives, and I hope that the suggestions which I have made will find some acceptance by the Government.

8.36 p.m.

Mr. M. Philips Price (Gloucestershire, West)

This is the most serious debate which this House has had for a very long time, and what we say today may perhaps have some influence on the Government's thinking, while the Government themselves may be faced at any moment with the need for action which may have very serious consequences.

I entirely agree with the hon. and gallant Member for Croydon, West (Lieut.-Commander Thompson), that we must try to find a possible peaceful way out wherever we can, but I am very much afraid that we may be suddenly faced with some critical situation resulting from some action by the Persian authorities in Abadan which might make necessary much more forceful action than that which the hon. and gallant Gentleman contemplated.

The debate today has shown that some hon. Members on this side of the House are not prepared to go as far as other hon. Members on both sides of the House in taking military action in Persia in certain eventualities. My hon. Friend the Member for Coventry, East (Mr. Crossman), apparently would not go beyond the position of protecting British lives for the evacuation of the personnel in the Abadan refineries and oilfields. He said we would become an aggressor if we did so, and would appear before the United Nations, on which there is a majority against it. I feel that I should be quite prepared to go with our case before the United Nations, and I have very little fear of what the result would be.

What are the facts? The first aggressor in this matter was the Persian Government. It has torn up the Anglo-Iranian Oil Company's agreement of 1933, in spite of the fact that we have offered negotiations and very much better conditions than ever before, and are prepared to go on negotiating if they are not satisfied with the terms. I think that was an act of gross aggression. Are we worried in case we may get some South American republic voting against us in the United Nations, or Mr. Nehru saying things about us? I say that I snap my fingers if that is the line they take. It would, indeed, be a policy of scuttle if we ran away on this matter.

Some of my hon. Friends do not agree that we should protect the installations, but one cannot draw a line between lives and installations. Some hon. Members do not know what the position is out there. I know. I have been over the refineries and the oilfields. Do they realise that the Persian authorities are now threatening to jam the pipelines? This may cause explosions and fire. The protection of the installations means the protection of lives as well. If we do not protect the installations, we cannot protect the lives. That is a point which some of my hon. Friends do not seem to understand.

Mr. John Hynd (Sheffield, Attercliffe)

I do not think my hon. Friend should be allowed to get away with that. What has been said by some on this side is that we should protect lives from explosion and other acts of sabotage, but that we should not send troops into Persia for the purpose of maintaining our control of the oilfields?

Mr. Price

If the Persian authorities jam the pipelines and there are explosions and fire, the lives of the people there will be endangered. Are we to run that risk just because they take indirect action against lives by interference with the installations? That is the point. Will my hon. Friend answer that?

Mr. Hynd

Certainly. That is not the point at all. The point at issue is whether we should send troops, not to protect lives, but to maintain our control of the installations and the oil wells.

Mr. Price

Of course, I am quite prepared to admit that we do not want to take any provocative action immediately. The situation is a very dangerous one. If we were to take any action at the moment, the Persians might do something which, in turn, might force us to take further action. We do not want to go in first as a preventive measure if that can be avoided. On the other hand, if we do not watch the situation very closely, we may find ourselves in the position I have mentioned.

During the course of this debate a number of points have been raised in connection with American oil magnates and a sinister individual whom I met in Teheran last October and who has, I agree, been no help in this whole situation. But I think it is an oversimplification to say that the intervention of certain Amercian oil magnates is really at the bottom of this trouble or has even played a very important role. It has undoubtedly played a role, and has encouraged the Persians. I have had over 40 years' experience of Persia; I went there first in 1912. To my mind, the matter is much deeper than that. I feel that it is political movements that are governing the situation which we have to consider. Therefore, I will put before the House certain propositions which I think govern the situation as regards the internal position of Persia.

My first proposition is that the Persian nationalist movement is directed against all foreigners, as much against the Russians as against us. That is the impression I got when I discussed the matter, not with Mr. Mossadeq—I could not see that gentleman; perhaps he was in hiding at the time—but with some of his supporters in Teheran. It must be remembered that they and people with a similar mentality tore up the Russo-Persian Oil Agreement in 1947 when Qavam-es-Sultaneh was Prime Minister, and right away through these last few years there has been a strong rising of nationalist feeling in Persia. Naturally, the Russians are going to make very good use of it. Part of the Communist thesis, as laid down quite early on in the days of the October Revolution, was that the nationalist movements in Asia should be used to strike at the Western Powers. But do not let us think it is just a Communist plot. It is something much deeper.

My second proposition is that this Persian Nationalist movement is a Persian variant of the general anti-European movement which runs from Suez to Singapore, right through the Arab world to India. Only the Republic of Turkey is immune from this. That is why they are so anxious to make their contacts with the West. It is not a movement which can be ignored. There are some hon. Members on this side of the House who think we must do all we can to work with the Persians and to meet their demands as far as possible. I am completely with them in that. But I must point out that these Persians are very irrational and almost uncontrollable on political issues. The nationalisation of oil is only one issue in this matter, and perhaps not a very important one. Even if we agreed to nationalisation—indeed, we cannot do otherwise—I doubt very much whether that line would do now. I do not think it would have done even some time ago.

The Persian mind today has got into such a state that it is almost impossible to deal with it unless one is very firm. Only the other day, I asked a Persian well up in the oil world what the Persians would do if they tried to run the great Anglo-Iranian oilfields, how they would get on in the world market. They are so naive that his reply was, "Oh, you would lend us the money to do it." It is just as if the fourth form of a public school had put itself in the position of the headmaster.

My third proposition is that there are various elements behind this Persian nationalist movement. There is a very sincere element with which I tried to get in touch in Teheran and Tabriz when I was there last autumn. It consists of university students, young intellectuals, teachers, journalists and civil servants, all of whom are growing up in the towns of Persia as industry grows. It is true that there have been no real reforms in Persia, but nevertheless these industrial developments have brought with them this type of intellectual who are fervent nationalists, and we have to recognise that fact.

Then there is something else. There are the old corrupt territorial magnates and merchant princes. There are the hundreds of families who have ruled, or, rather, I should say, misruled Persia for generations. These people have joined the anti-foreign movement in order to divert attention from the need for internal reform in Persia itself. The intellectual dishonesty of men like Mr. Mossadeq, the Prime Minister, knows almost no bounds. He said the other day that the poverty of the Persian peasant is due to the Anglo-Persian Company. Everybody knows that Mr. Mossadeq and his class are responsible for the poverty of the Persian peasant. If Mr. Mossadeq must be a parasite, he need not also be a hypocrite.

The fourth proposition I make is that the extreme Persian nationalist movement may not last, and probably will not last. If these Persians show any signs of wavering and of being ready to negotiate or talk with us there is a religious murder society in Persia known as Fidayan Islam. They will lay them low just as they laid low the late Prime Minister, Mr. Razmara. If that should happen, and if chaos further develops in Persia, there is only one party which will benefit—the Tudeh or Communist Party, and that means that Russian influence will become supreme in Persia.

We may think that if the Tudeh or Communist Party come into power, if we walk out of Abadan, and if they call in Russian experts they will not be able to run the machinery. I do not know. I am not too sure. In 1945 I happened to be in Baku; I think I am the last Englishman to have been there. I went over the installations in the oilfields there and I also saw the technical college which the Russian Government have there. They have a very fine college, so far as I can see—although I am not a technician. There were a lot of young people there— Tartars, and Mohammedans from Eastern Russia who were being trained in this very job. I see no reason why Russia should not be able to run the oil installations of South Persia.

I quite agree with some of my hon. Friends who argue that the oil cannot be used for Russia itself, That is quite right. There are two ranges of mountains and high plateaux for 800 miles in the way, and they cannot get the oil across. The oil must go outside, but I should not like to be sure that the Russians would not use any position they can get far down south if they are given the opportunity.

It is no use wringing our hands now and saying that things might have been different. I am quite prepared to admit that the Anglo-Iranian Company might have been a little less superior and a little less patronising in their attitude towards Persian public opinion. But they have done the right thing now in making their recent offers. The installations out there are marvellous and the Persian workers in the oilfields and in the refineries are looked after far better than are the workers in any other part of Persia. That is perfectly true, as my right hon. Friend the Foreign Secretary has said in his various statements.

Nevertheless, the fact remains that because the company were so successful these sensitive Persian nationalists see it as an affront that a foreign concern, with a 60-year agreement, should work the great oil reserves on which so much of Persian prosperity depends. We must take that into consideration. It does not, of course, justify the Persians in tearing up the treaty and in refusing all attempts to negotiate or talk with them. On the other hand, no matter how good their intentions, we must not allow the company to ride the high horse in a delicate and dangerous situation of this kind.

Will it be necessary to intervene by force? Like everybody else, I hope not. One of my hon. Friends talked about American officers and said if we met any trouble in Persia and there was a clash, we should meet American officers. I do not think we should. According to my information when I was there, it seems that American officers are advising the gendarmerie, and there are one or two American officers attending to transport matters, but apart from that we should meet no American military commanders if there were trouble. I hope we shall not have to take this action. If we did, it would indeed send a shudder right through the East. On the other hand, I am not at all sure that a little healthy growl from the lion would be a bad thing.

What I am more concerned about, however, is the morning after the night before—not so much the action we take now, but the action we may have to take following present action. You can do anything with bayonets, it was said, Sir, except sit on them. We may have to use armed force to protect the installations as well as lives. But that is a military matter, and I do not think that there are many of us in this House who can really say whether that is possible or not. It is for the Government to say. They know. All I can say is that I think the House ought to say to the Government that, if they can do it, and they are faced with a position in which there is no other way, then they must do it. It even may mean occupying a position which will protect the oil field, which lies 120 miles up in the foot hills of the mountains, and where the pipe line comes down to the coast, where the great refinery is, and the harbour.

But it is still a possibility that we may yet find friends in Persia. We have plenty; but they are terrified by the murder gang, Fidayan Islam—terrified that they will go the same way as Razmara. We must do everything we can to encourage those people, remembering always that if we do come out of Abadan the Power of the North may go in.

I hope very much that we shall have unity with the United States over this. I believe that the State Department understands and is with us. There are these people, certain former oil magnates, whose importance, I think, has been over-estimated, but who may still be capable of mischief. We must watch them, and rely on the State Department. Whatever happens there will be difficult times ahead, in which we must show courage, courage and yet more courage. Finally, I would quote the Persian poet, Omar Khayyam, about our troubles which may not be so dangerous as they appear: As like snow upon the desert's dusty face, Biding a little hour or two, is gone.

8.58 p.m.

Brigadier Head (Carshalton)

I think the whole House will agree with me that we have listened to a most interesting speech by the hon. Member for Gloucestershire, West (Mr. Philips Price). I can assure him that I listened much more closely to the speech he has just made than the one he made some six years ago when I was sitting in exactly the same place waiting to make my maiden speech. To be quite frank, I then hardly listened to a word he said. We know very well that the hon. Gentleman has a particular knowledge of this matter and that country, and he has given a very helpful and a very well-founded contribution to our debate here.

I came down to the House earlier today without any very preconceived ideas, or for that matter, a preconceived speech, because I was hoping that we should hear something from the Foreign Secretary on which we could base arguments and criticisms. That was not to be, and what few thoughts I had in my head concerning the situation have, in my opinion, been more cogently expressed than I could have expressed them by the hon. Member for Doncaster (Mr. Gunter). If I may say so, without appearing patronising, I have not heard a more logical or sensible appreciation of the Persian situation than that which he made.

The House may therefore wonder why I have risen to my feet at this moment. It has seemed to me that, by and large, this has been one of those pleasant occasions when the House of Commons has got together, and very much closer together, over a matter of common difficulty. From both sides of the House there have been expressions of opinion which have been directed entirely to the good of this country. I cannot, in any respect, say the same of the speech of the hon. Member for Coventry, East (Mr. Cross-man).

Some of my opinions will hang on my comments on the hon. Member's speech, and in case hon. Members think I am taking advantage of him, I would say that I did send him a special note to say that it was my intention to deal, perhaps not altogether in rosy terms, with the remarks that he made. However, his presence or not is entirely his matter, but I think it only fair to myself to say that I did say that I would make some critical remarks upon his observations.

I do not know the motives which underlie the remarks of the hon. Member for Coventry, East. The most charitable explanation, I think is that he, a very brilliant and intellectual political debutante, has never yet been given that most attractive request to come and snuggle on the Government Front Bench. Whether that is so or not, that is the best reason I can think of. I personally think that his speech was damaging, not because it was so important in our assembly, but because the hon. Gentleman has a very wide circulation for his opinions. I would like to go through one or two of the things he said, because I think they could have an unfortunate effect among what is not unimportant in this matter, the very large majority of people in this country and elsewhere who are really uninformed on this subject.

It would appear to me that the two qualities most required at the present time regarding the Persian situation are, firstly, clear thinking and, secondly, determination in action. The hon. Member for Coventry, East, so far as clear thinking is concerned, was about as much good as a dust storm at a picnic. So far as determination and policy are concerned, I can assure the hon. Gentleman that his backbone was entirely indiscernible to most of us.

The one cardinal quality in this dispute, it seems to me—and perhaps one could criticise the fact that there has not been enough of it—is Anglo-American solidarity. It is only thus, with the cold war going on from Korea to Scandinavia, that we can surmount all our difficulties. Every single remark made by the hon. Member for Coventry, East, was calculated—I will not say deliberately—to do everything to disrupt Anglo-American solidarity.

There is a column which I read sometimes, not every day, in the "Daily Worker" which has gossip about how beastly the Americans are and how they are doing horrible things in this country. All I can say is that the hon. Gentleman's remarks about America were worthy of the gossip column of the "Daily Worker."

Mr. Crossman

I am sorry that I came in too late to hear the first part of the hon. and gallant Gentleman's accusations. If he is challenging any of the facts, that is one thing, but if he is suggesting that we should suppress the truth, which has received grave damage as the result of irresponsible action by American oil companies and by an American diplomatic official I do not think we shall get partnership by suppressing the truth.

Brigadier Head

I have never been in favour of suppressing the truth.

Mr. Crossman

The hon. and gallant Gentleman is.

Brigadier Head

Perhaps the hon. Gentleman would have the courtesy to wait for me to finish my sentence. What I am saying is that the hon. Gentleman did not support his remarks with actual details. Only one individual was specified. All I would say to the hon. Gentleman is that if one goes muck-raking there are always horrible facts about persons— if one is an expert muck-raking. I suggest to the hon. Gentleman that this is a national cause and that even the most abject and determined muck-raker should consider abstention at this time. Implicit throughout the hon. Gentleman's speech is the fact that his policy is to leave Abadan.

Mr. Crossman

No.

Brigadier Head

The hon. Gentleman says "No." The hon. Gentleman stated quite clearly in his speech, "If you want to bring in troops to evacuate, I think it is tolerable; but if you want to bring in troops to maintain your position in the oilfields, then I look upon it as aggression."

Mr. Crossman indicated assent.

Brigadier Head

I am glad to have established that. I will go further, though the hon. Gentleman did not. May I, for the moment, turn into Mr. Mossadeq or any other person who is running this business in Persia at present? There are about 5,000 unarmed employees of the Anglo-Iranian Oil Company there. The Persians do not know whether to go ahead, cause riots and push them out, or to go easy. The hon. Gentleman's policy has only one logical conclusion for them, and that is to stir up malice, cause a row and then the British will send their aeroplanes and evacuate.

Mr. Crossman

I did not say that we should evacuate. What I said was that we should stay in Abadan. The technicians should stay there. We should attempt to seek—[HON. MEMBERS: "How?"] How? They should stay there, and it does not help the cause of Anglo-Persian relations to assume that the Persian Government are determined to stir up riots and kill our people. That is exactly what the hon. and gallant Gentleman is now asserting about the Persian Government. I believe that the Persian Government, who have got soldiers and policemen in that area, are seeking to keep the peace. It does not enable them to keep the peace if hon. Members make assertions that they are deliberately causing riots.

Brigadier Head

I am only attributing to the hon. Gentleman his own remarks— not mine. What, in effect, he is saying is that the Persian Government are going to keep order and, therefore, we should not suggest that such a thing might happen because it will make it harder for them.

Mr. Crossman

That is right.

Brigadier Head

If the hon. Gentleman had not such a tortuous mind, it would occur to him that the Persian Government have stated that they intend to take over the oilfields. I only ask the hon. Gentle- man—and I hope that he will be fair in this—if it is the policy to take over the oilfields, and there are 5,000 unarmed civilians there, how would he set about it? I suggest to the hon. Gentleman that one would follow one of two alternatives, either to inspire riots or, perfectly peacefully, to march some of the Persian platoons into Abadan, halt at the front door of an essential part of the refinery and say, "I have instructions here to take over this building."

I ask the hon. Gentleman to say what he, or the employees of the Anglo-Iranian Oil Company, would do in those circumstances. That is not a thought which he has pursued. If he thinks that, when a Government have said that the oilfields belong to them, one can remain there indefinitely with 5,000 unarmed employees, he is digging his head into the sand even further than he has ever before.

Mr. Crossman rose—

Brigadier Head

I cannot give way again. The hon. Gentleman and I once had a very good debate in a girls' school. What it boils down to, and the issue which the hon. Member for Coventry, East, shirked—and he really did shirk it—is this. What value do we put on the retention of our position in Persia, and how determined are we to stay? That is the real crux of the matter. I rather stick to the speech of the hon. Member for Coventry, East, because I must confess, it sent my temperature up a little.

What he hardly mentioned—and it was mentioned by the hon. Member for Doncaster much more skilfully than I could do it—was the strategic implications of evacuation from Abadan and thus Persia. This is important for oil and revenue, but it is my belief— hon. Members opposite may think I am prejudiced—that the primary and most far-reaching implications are the strategic implications. There has been great unanimity in the House, in that hon. Members have said, "If we go the oil collapses; the economy of Persia collapses; and the Tudeh Party take over" and if that happens it is my conviction that within a year or 18 months Persia will be a Russian-dominated State.

Now, on the first to the left, so to speak, is Turkey, with Kurdistan; next comes Iraq with the Mosul oilfields, and it will not do them any good; then comes the head of the Persian Gulf with the Abadan airfield, which will be available for Russia—a very advanced air base with a very good airfield; and Kuwait is just round the corner. Does any hon. Member really believe that if there was tension or trouble with Russia we could use the Kuwait oilfield in those circumstances? Then there is a contiguous frontier with India. The strategic implications are very great. Bearing in mind those factors, which the hon. Gentleman did not mention, thinking of the strategic implications and not of the Anglo-Iranian Oil Company, would we in any circumstances voluntarily secede in the Middle East important strategic assets of that nature?

I say to hon. Members in all parts of the House that, in those circumstances, we must make up our minds whether or not we are going to give that away. My feeling, quite frankly, is that we hope we shall not have to give it away, but we may have to. As many hon. Members have said, we are ignorant of the military situation locally, as far as both Persia is concerned, and our own. We do not know. We do know the importance of this position, however, and I suggest that if the position is left as it is we can never be certain that it will not so deteriorate that the Abadan oilfields will be taken over before we can take any steps to prevent it, because at the present moment they are occupied by 5,000 unarmed civilians.

Not one of the least important aspects of the hon. Gentleman's speech was the way in which he trailed his coat in order to make hon. Members on this side of the House make remarks which next week could be interpreted into "Gunboat, warmongering bloodsuckers."

Mr. Crossman indicated dissent.

Brigadier Head

If the hon. Gentleman did not, he can contradict it in next week's "Sunday Pictorial." What I say to the hon. Gentleman is that if we are to have a realistic view about this it is no good saying, "Let us leave the oil personnel there and hope for the best, and then if there are rows we will evacuate them." That is tantamount to saying that we are giving up all these strategic assets.

My belief is that the most important single factor tonight in the Foreign Secretary's speech, which is to follow, is whether or not he includes a resolute determination that we are going to stay in Abadan. I do not say that as a gunboat, blood sucking warmonger. If one has experienced real war once or twice one dislikes it a great deal more than when one started.

Mr. Wigg rose—

Mr. Deputy-Speaker

The hon. Member for Dudley (Mr. Wigg) must resume his seat if the hon. and gallant Member does not give way.

Mr. Wigg rose—

Mr. Deputy-Speaker

The hon. Member for Dudley does not seem to have heard what I said. If the hon. and gallant Member does not give way the hon. Member must resume his seat.

Brigadier Head

I would be quite willing to give way, but I do not know if the Foreign Secretary wants to get up as it is nearly time for him to do so.

Mr. Wigg

The hon. and gallant Member has often thrown that taunt about war service to the detriment of my hon. Friends on this side of the House. Would he tell us whether his own active service was 10 days or a fortnight?

Brigadier Head

I can assure the hon. Member that it is a great deal more than that. What I am saying is that our party are always accused of being warmongers. Part of this House is covered with shields which commemorate those of our party who died in two wars. Why should such a party be called warmongers. I do not see why I should not say it. I hope I am not delaying the Foreign Secretary, but these interjections are prolonging my speech.

We must be realistic about how we are going to deal with this situation. The Foreign Secretary has not yet told us clearly whether or not we mean to stay. I will be frank. I may be wrong, but reading between the lines of his last statement, I gained the impression that we were going to stay as long as we could until things got so bad that there was serious danger of loss of life, when we would evacuate, and if necessary use troops to evacuate. If that be right, this House should think very hard and long of the implications from such a course in the long term.

We are here tonight not to talk about oil, but to consider—and this is very serious—what the situation will be in a year or 18 months from now if the Anglo-Iranian employees go out, if the Tudeh Party take power and if gradually we get Russian domination of Persia. That is the situation—although it is a long way off, and I hope it will never come—that we should have at the back of our minds when we are considering the necessity for great determination at this present time. Has that possibility been fully envisaged by the Cabinet and by the Chiefs of Staff? I feel myself that the long-term implications of that are immense, as the hon. Member for Don-caster brought out very clearly indeed.

It is all very well for hon. Members to call us warmongers and so forth. We are not warmongers. The majority of hon. Members on this side of the House have only one object, and that is the avoidance of a war, in which everything we like and for which we have striven would go for six. If we give away this area to Soviet domination the long-term effect in the Middle East will be disastrous. In this cold war, in which we are now engaged, we shall find ourselves with an immense handicap in that area. It is for that reason that I particularly hope that in his reply tonight the Foreign Secretary will give us a strong affirmative that he intends to stay.

My concluding remark is that if the Foreign Secretary gives us what I might call the diplomatic answer, which can be read either way, not only will I be disappointed, but it will make it less likely that we shall be able to stay, because determination or otherwise on his part is exactly what the Persian people are watching closely. I do not believe that determination will be disastrous. I do not believe that the Russians will have a war unless they wish to. I believe that a show of real determination by this House of Commons, led by the Foreign Secretary at the present time, is the best chance this nation has of preventing a disastrous situation in the Middle East.

9.21 p.m.

The Secretary of State for Foreign Affairs (Mr. Herbert Morrison)

The debate, by the way it has gone, has justified my view that it was best I should wait till the end in order that I could absorb the various contributions that have been made and points of view which have been expressed. I have been pleased to listen to the many speeches from more than one angle—indeed, from more than two angles—and there have been a number of able contributions.

The right hon. Member for Warwick and Leamington (Mr. Eden), who opened the discussion, made a speech of moderation in which he put before us all the serious considerations that are involved in this matter. Other hon. Members have done the same. He made his contribution for the Conservative Party while the hon. Member for Merioneth (Mr. Emrys Roberts) did so for the Liberal Party. It was a useful contribution. Hon. Members on this side of the House have put their points of view. I think that we have had a very useful discussion, including speeches from people who have had first-hand experience of the matter.

Throughout the debate there has been a complaint from hon. Members opposite —not so much a complaint as a declaration—as to the seriousness of the situation, and that something big and strong ought to be done about it. I must say that they have not been too detailed or particular about what that something is. It would be desirable, if hon. Members take that line, that they should say what it is that they want to be done, but there has not been a great degree of forthcomingness in that respect.

I should like in the first instance, for the sake of the record and for the sake of other countries needing a concise statement of the case, to put the British case in respect of this difficulty and dispute as clearly as I can. I have reported from time to time to the House on the developments and have kept the House as fully informed as I possibly could. I think it would be true to say that the only development of any significance or substance which has been reported to me since I made my statement yesterday is that the Persian Prime Minister has obtained a unanimous vote of confidence in the lower House, when about 91 out of 126 Deputies were present.

There has been what I am informed is a minor demonstration against the company's offices in Teheran, and the Persian Government have now published a decree dissolving the company's information department. That probably will be received with a certain amount of sympathy by certain sections of the British Press, who are much against information departments. [HON. MEMBERS: "Cheap from a Foreign Secretary."] I did not think, so early in my reply, that back benchers would completely lose their sense of humour. The right hon. Member for Bournemouth, East and Christchurch (Mr. Bracken), who is a steady opponent of information departments, thoroughly enjoyed the joke.

I should like to take the opportunity, as I have said, to outline the fundamentals of our case in this dispute. The facts at issue are known to the House, but they need, in my opinion, to be re-stated for the benefit of countries abroad. The term "nationalisation" appears to us to have been consistently misused by Persian spokesmen. Incidentally, when it became known that we ourselves were prepared to accept the principle of nationalisation, there was a great deal of denunciation in quarters opposed politically to: he Government that we should have done any such thing. But I notice today that nobody, as far as I know, has criticised the acceptance by us of the principle of nationalisation if it were so pursued by the Persian Government. I may say that the acceptance of the principle of nationalisation was also urged by the Government of the United States of America in this case.

It is the case, of course, as the right hon. Gentleman has said, that Persian oil is already in the ownership of the Persian people.

Mr. Eden

That is more or less what I said.

Mr. Morrison

I said that that is what the right hon. Gentleman said. The Anglo-Iranian Oil Company has been extracting, refining and selling that oil under the security of a regularly negotiated agreement, valid until the year 1993. Relying upon that agreement, the company has invested greater sums than have ever before been invested in a foreign country by a single company.

We neither desire nor intend to question the exercise by Persia of any sovereign rights which she may legitimately exercise. We maintain, however, that the action which it seems the Persian Prime Minister is set on taking against the company is not a legitimate exercise of those rights. It is not nationalisation—it is dispossession.

The 1933 Agreement is a contract between the Persian Government and a foreign company. It was freely concluded under the auspices of the League of Nations and it was ratified by the Persian Majlis. It laid down that the position of the company should never be altered by action of the Persian Government, or even by legislation, except as a result of agreement between the company and the Persian Government, and that if the Persian Government had any complaint against the company or vice versa, if the dispute could not be settled otherwise it was to be referred to arbitration.

The essential point at issue, as I must again make clear, is not the right of a sovereign Power to pass legislation nationalising commercial enterprises carried on within its borders, nor is it the measure of compensation that the Government concerned should pay for doing so. The point is that the Persian Government in effect undertook not to exercise this right, and the real issue is, therefore, the wrong done if a sovereign State breaks a contract which it has deliberately made. If the Persian Government had any grievance against the company, it should have sought arbitration, as the company has done. It is the Persian Government's failure to accept the company's request for arbitration that has compelled His Majesty's Government themselves to make application to the International Court for the dispute to be heard by the Court.

I do not wish, however, to be over-emphatic as to the legal aspects of the matter. Indeed, it was precisely because we hoped that the dispute might be settled in amicable discussions that the company, in full consultation with His Majesty's Government, decided to send its delegation to Teheran, with what result the House knows. We remain ready to discuss all outstanding points fully and frankly, and the proposals which the company has put forward offer, as impartial observers will agree, a basis on which a solution satisfactory to all concerned can be found. But unhappily there is as yet no indication that the Persian Prime Minister is prepared to alter his course, and whether the threats of physical dispossession that have been uttered against the Anglo-Iranian Oil Company will be implemented remains to be seen.

Apparently the Persian Prime Minister is in no mood to accept the co-operation which is so freely offered. He, it seems, would prefer to do without oil than to have any dealings with the company. I wonder if he recognises the danger that may well confront his country if he continues on that course. The dislocation of the Persian economy which would inevitably follow the interruption in revenue from oil could not fail to create conditions in which the Tudeh Party would flourish and attract to its ranks the many in Persia who have long been dissatisfied with the standard of life of their country.

Let me say this, that we have sought— our late colleague, Mr. Bevin, earnestly sought—throughout the Middle East to lift up the standard of life of the poor people of those countries. It must be faced that the Prime Minister of Persia is not a left-wing Socialist or anything like that; he is a reactionary.

Mr. Eden

We do not know what he is.

Mr. Morrison

It is important to know what he is. I listened to the right hon. Gentleman, I think he might listen to me. I am entitled to put my argument in my own way. I want to make this point because there are certain historical comparisons with it.

The Prime Minister of Persia belongs to a well-to-do class which is being kept going by the working people of that country. And that Government, which could, out of the revenues of the oil company —and they were supposed to do it—have spent money for the social development of the country under the Seven Year Plan, have largely not done so, but have diverted the money. It is not the first time in history that members of the upper classes and of extreme reactionary views have diverted, or sought to divert, the attention of their working classes by preaching to them to hate the foreigner instead of having a dispute with their own ruling classes. And that, it seems to me, is what they are doing. There were plenty of precedents for it in western coun- tries in the 19th century. It may be that Dr. Moussadeq has sown the wind and will reap a Communist whirlwind.

It will perhaps be said that it is for the Persian Government themselves to choose, and that our advice is not sought. Nevertheless, we should be poor friends of Persia if we kept silent. The Persian people themselves, I am convinced, desperately need an improvement in their standard of living. That improvement can come about only if the natural resources of their country are developed, and oil is one of the chief of these resources; indeed, probably it is the chief of the resources.

The many years of experience of work in Persia, the high technical skill, the capital, the transport, and the world-wide selling organisation that together are required to bring Persian oil to its most lucrative development can be provided only by the company. Without its aid the flow of oil and the money that comes from it will dwindle and perhaps cease. It cannot be that the Persian people desire this. Nor can it be in their interests that this catastrophe should come to pass. It is for that reason that we, from our friendship towards Persia, have every right to speak our minds, and it is for that reason that we offer co-operation which would be fruitful for both Persia and ourselves.

It is, moreover, the case that of all the employers in Persia and probably in the Middle East, the Anglo-Iranian Oil Company, while it may have been open to criticism in some respects, is easily and far away the best employer in Persia or in that part of the world—it is possible, of course, that that is one of its offences— and has spent much money out of its revenues for the provision of schools, health centres and in other ways. To describe that as a mere piece of imperialist exploitation seems to me to be quite wrong. It is the case that the company have paid to the Persian Government large sums of money, and I have indicated that unhappily it has not all gone in the right way.

The House must recognise that Persia has a long record of international interference behind it—foreign interference. One of the first books I read was a book about the spheres of influence of Russia under the Czars and the spheres of influence under the British. I thought that in some of the speeches to which we have listened hon. Members have been casting their minds back to the days of imperialism, and are perhaps thinking that it is possible to do in this modern period what could have been done years ago in the period of imperialist practices. We are not in a period now when we can colonise countries which have reached the stage of self-government. We cannot do in the 20th century what was not uncommonly done in the 19th century.

Moreover, we are part of the United Nations, and hon. Members opposite have to face the fact that the imperialism upon which they were brought up is dead.

Mr. Eden

I do not wish to interrupt the Foreign Secretary, but I have not heard one single speech in any part of the House which suggested colonising any part of Persia. Most of us know that Persia was a State even before Britain.

Mr. Morrison

All I say is that I discerned in part of the philosophy of some of the speeches that have been made, and certainly in many of the arguments that have been employed by Conservative newspapers outside—

Earl Winterton

A monstrous charge.

Mr. Morrison

I wish that the noble Lord, who is most touchy if anyone says anything about him, and is very quick to raise points of order, could really take things without making persistent interjections. [Interruption.] We have had from the popular Tory Press militaristic and the old imperialist kind of declarations, and even the "Daily Telegraph," which is so close to hon. Gentlemen opposite, the day before yesterday, or yesterday, I think, was pretty well demanding the starting up of two wars, one in Egypt and one in Persia. [Interruption.]

Mr. Manuel (Ayrshire, Central)

On a point of order—

Mr. Speaker

Did a Member throw something across the Floor of the House? [HON. MEMBERS: "Yes."] Is that so?

Major Legge-Bourke (Isle of Ely) rose—

Mr. Speaker

Will the hon. and gallant Member say if he threw something across the Floor of the House?

Major Legge-Bourke

What I did was to throw a penny at the right hon. Gentleman and suggest that he put on another record.

Mr. Speaker

That is quite out of order,, and I now direct the hon. and gallant Member, because of that act, to leave this House.

The hon. and gallant Member withdrew accordingly.

Mr. Morrison

As far as His Majesty's Government are concerned, we do not wish to pursue the matter in that kind of temper and that kind of spirit. We are most anxious to negotiate a settlement based upon mutual respect and mutual understanding of interests—[Interruption.] I wish hon. Members opposite would be a little less capable of demonstrating their hatred merely because a Minister— [Interruption.]

Mr. Braine (Billericay)

Why not speak as Foreign Secretary?

Mr. Morrison

After all, I and the Government—[Interruption.] I do not know what all this is about; I was only going to say, "I and the Government as a whole." I hope this persistent misbehaviour, this persistent ill-conduct on a serious occasion will be noted in the country. We have been subjected to a great deal of day-to-day abuse inside and outside the House and we are entitled to put our point of view and even to make some counter criticisms.

The point has been raised, as is perfectly natural and understandable, as to evacuation. Let me say quite clearly that this Government does not wish evacuation to take place. We are certainly not seeking to evacuate the oilfields. It is our wish, as I said yesterday, that the officers and technicians of the Anglo-Iranian Oil Company should stay there and should do their work and continue to serve the well-being of these undertakings. That is our wish and we shall pursue that with the greatest energy of which we are capable —[Laughter.]—and I am sure that the men concerned will do so. Despite the laughter, I will once more pay my tribute to these men for the faithfulness they have shown.

One or two considerations have, however, to be kept in mind. There have been demands from hon. Members opposite that I should give absolute guarantees and undertakings that in no circumstances will anybody be moved— nobody; they should all stay. Now, Sir, some of these officers and technicians are scattered about the oilfields, not at Abadan but round the oilfields, some isolated from the possibilities of protection. Supposing they are in trouble; supposing there are efforts to seize the oilfields and supposing they are in difficulties; would it necessarily be wrong to evacuate them to Abadan, or have they to stay there and run a serious risk of possible riot and murder? [An HON. MEMBER: "Do not be silly."] I am not being silly.

Repeatedly it is said that everybody should stay and I am putting it in this first instance to the test. I gather that hon. Gentlemen opposite, on reflection, are disposed to agree that in those circumstances it would be legitimate and right to evacuate them to Abadan— [HON. MEMBERS: "Of course."]—all right, but it has not been said so until now.

Mr. Eden

We tried desperately hard not to be partisan in our statements, but the right hon. Gentleman has just put a question which has not been put across the Floor of the House before, and he cannot complain about not having an answer to a question which nobody put.

Mr. Morrison

I like the right hon. Gentleman very much but he really is a little bit cool sometimes. When the Government have been attacked—

Mr. Eden

I did not attack the Government.

Mr. Morrison

I did not say the right hon. Gentleman had, but the Government have been attacked inside this House and outside and then the right hon. Gentleman gets up, as innocent as he can so well be —[HON. MEMBERS: "Cheap!"]—and asks about making partisan observations. At any rate, we are agreed on this point, that so far as the outlying places are concerned, it would be legitimate to move those people and evacuate them to Abadan.

On the other point, as to the bigger issue and as to military intervention and military operations, I have said that we are prepared, and we have given an undertaking that we would do every- thing we can to protect British lives. To that I adhere, but it really would be most unwise for me to be involved in any details of possible military movements.

Mr. Brendan Bracken (Bournemouth. East, and Christchurch)

Hear, hear.

Mr. Morrison

But I have been asked to say so by the hon. Member for Windsor (Mr. Mott-Radclyffe) —

Mr. Bracken

No, the hon. Member for Doncaster (Mr. Gunter).

Mr. Morrison

No, the hon. Member for Windsor; I do know what I am talking about. The general purport of the debate has been that the Government should give guarantees which must involve military movements of one son and another. I would call—

Mr. Mott-Radclyffe

I am grateful to the right hon. Gentleman for giving way. As he has referred to me, I would say that all I asked for was an assurance that, should it be necessary to afford protection, adequate troops were available at the right place and at the right time.

Mr. Morrison

The record which I have of what the right hon. Gentleman said was that he asked for more details of the plans which have been made to give protection—that those details should be given to the House. It is that point that I am answering. I wish to quote the right hon. Member for Warwick and Leamington, if he does not mind my doing so, because in 1932 he took precisely the same line as I have—in this House on 8th December, 1932, when this same issue arose, curiously enough, on the Persian oil business. At that time he was the Under-Secretary of State at the Foreign Office. Mr. Lansbury said: … may I ask whether it means that if certain contingencies arise, the Government propose to take measures, armed measures, against Persia? I am asking what the Under-Secretary of State means by his statement. MR. EDEN: I should have thought that the position is quite clear. We hold the Persian Government responsible for protecting the rights of this British company. There was another Question by Mr. Lansbury and then it is reported: MR. EDEN: The right hon. Gentleman will appreciate that, if he puts a hypothetical question, all I can say is that His Majesty's Government can only be guided by circumstances as they arise. If I say the same today, I am sure that the right hon. Gentleman, notwithstanding the anticipation of criticism from various quarters for taking this line, is bound to say I am absolutely right in taking the line; and I think some of his hon. Friends are wrong. Mr. Lansbury then put a Question to the Lord President of the Council asking whether, before any measures were taken, although the matter was referred to arbitration, the House would have an opportunity of discussing them. The Lord President, Mr. Baldwin, said: The right hon. Gentleman must know that it is perfectly impossible to answer hypothetical questions."—[OFFICIAL REPORT, 8th December, 1932; Vol. 272; c. 1793.] That was the position of the Government of that day, and if I adopt the same position, I am sure there can be no criticism from the right hon. Gentleman for Warwick and Leamington. We are watching the position day by day. We shall do everything we can to protect British lives and we are most anxious also that the undertaking shall continue its valuable existence on behalf of the world as a whole.

There has been great anxiety expressed whether there will be such oil shortages as will give rise to a very serious situation. Undoubtedly, not only will inconvenience, but economic loss and difficulty, be caused if anything untoward should happen to these undertakings. I do not think we should under-estimate it, and other countries must not under-estimate it, because they might be in great difficulties as a consequence of such developments. Nevertheless, it would not be wise to over-play them, because I do not think it will be absolutely devastating, though undoubtedly it will be serious. The question has been raised about petrol rationing in the United Kingdom as a consequence of this situation. I would only say that I am advised by my right hon. Friend the Minister of Fuel and Power that that is exceedingly unlikely.

Questions have also been raised about the attitude of the United States. I have been asked what is the general attitude of the United States Government, and whether they support His Majesty's Government in the line we have taken. I would say that the United States Government have in general supported the line which His Majesty's Government have taken. There are two things I can be clear about, and I am sure that the United States Government will in no way mind me saying them; indeed, they are pretty well public knowledge.

One is that they were in favour of our accepting the principle of nationalisation. That was made quite clear early on. Secondly, they were most anxious that every avenue should be explored, so far as peaceful negotiations were concerned, and that there should be no precipitate manifestation of military force. That is perfectly clear, and let there be no mistake about the line of the United States Government in this matter. Therefore, I think it would be fair to say that they are in general accord with the policy of His Majesty's Government. They accept the view that we have a perfect right to take steps for the protection of British lives. [Interruption.] Well, I have been asked about these things, and I thought it right to give the House the information.

Some other things have been said as to the attitude of the United States oil companies, and the right hon. Gentleman the Deputy Leader of the Opposition asked that I should deal with the point made from this side of the House. I think it would be fair to say that there have been some people, not of outstanding importance, who were associated or have been associated with the American oil industry, who have said some foolish, unwise and perhaps dangerous things in the course of their travels through the Middle East. I am dealing with people who have been or are associated with the American oil industry.

I think it would not be fair to hold the American oil companies responsible for their activities in this respect. It is only fair to say that we have had a good deal of help and co-operation from the State Department. I am saying "as a whole," because I know the point to which my hon. Friend referred about one gentleman, and I do not wish to pursue it, but, as a whole, we have had considerable help and co-operation from the American State Department, and my right hon. Friend the Minister of Fuel and Power assures me that, as far as the American oil companies are concerned, as companies in their corporate capacity, there is no evidence whatever that they have been conspiring against us; on the contrary they have given a good deal of help and assistance.

I thought it fail and right that I should make those observations. Those are the considerations which the Government have in mind. I can assure the House that we do not take a light view of this at all; we do not think that this is a situation which calls for anything but the gravest consideration, and we are determined to do everything we can in order that the situation shall be dealt with, and that we shall get it right.

But we are dealing with an extraordinary Government. [HON. MEMBERS: "Hear hear."] The right hon. Gentleman will notice those partisan cheers from his non-party friends. In the Persian Government, we are dealing with an extraordinary Government, and it is somewhat difficult to follow them from day to day. There is the hope that they, having moved about so unexpectedly from day to day, may possibly one of these days move in the right direction. At any rate, let us sincerely hope so.

We hope very much that they will see the need and the properness of co-operation with us, and we shall be only too pleased to co-operate with them in order to arrive at an amicable settlement. I am perfectly sure that an amicable settlement can be reached on the basis of the principle of nationalisation. It cannot be reached on the letter of the law of the Majlis, which, indeed, is little more than a series of resolutions. I am sure that on the basis of the principle of nationalisation and of a working agreement with the Persian nation, the Persian Government and the company, we can work out a solution which will be to the common advantage of Persia, of ourselves and of the world as a whole.

The Parliamentary Secretary to the Treasury (Mr. William Whiteley)

I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.