HC Deb 29 May 1951 vol 488 cc40-3
The Secretary of State for Foreign Affairs (Mr. Herbert Morrison)

Sir, with your permission and that of the House, I desire to make the following statement.

In my statement in the House on 1st May, I explained the background of the dispute which had arisen between the Persian Government and the Anglo-Iranian Oil Company, and His Majesty's Government's attitude towards it. The following is a summary of the main developments which have taken place since then.

On 2nd May I sent a personal message to the Persian Prime Minister asking his Government to refrain from unilateral action against the Oil Company and again suggesting that we should negotiate a solution. Dr. Musaddiq's reply, delivered to me on 8th May, contained no response to my suggestion of negotiations and amounted to a reaffirmation of his intention to execute the Persian nationalisation laws. The Anglo-Iranian Oil Company then asked the Persian Government to adopt the arbitration procedure provided for in the Concession Agreement of 1933, and nominated the Company's arbitrator. Lord Radcliffe.

On 19th May, His Majesty's Ambassador at Teheran left with the Persian Government an aide-mémoire which has been published in the Press. Briefly it set out again our view of the legal position, reserved our right to take the case to the International Court if the Persian Government rejected the Company's request for arbitration, reiterated our hope that the problem could be solved by negotiation, and offered to send a Mission to Teheran for that purpose.

The Persian Government have not yet replied to this aide-mémoire. On the other hand, on 20th May the Persian Ministry of Finance wrote to the Company's manager at Teheran rejecting the Company's request for arbitration, claiming that the nationalisation of the Persian petroleum industry was not referable to arbitration and that no international authority had competence to deal with the matter. The letter went on to invite the Company to nominate representatives to meet the Oil Committee "to arrange the execution of the nationalisation laws." On 24th May the Ministry of Finance sent the manager a further letter, in terms which amounted to an ultimatum, giving the Company until 30th May to send representatives to meet the Oil Committee, failing which the Persian Government would themselves proceed to execute the laws.

In the light of these two communications, His Majesty's Government felt obliged to institute proceedings in the International Court of Justice at The Hague, and did so on 26th May. In their application they asked the Court to decide that the Persian Government were under a legal obligation to submit their dispute with the Anglo-Iranian Oil Company to arbitration, or, alternatively, to decide that the Persian Government were not entitled to alter the Concession Agreement, even by legislation, except by agreement with the Company. A copy of the application is being placed in the Library, and summaries of it have already appeared in the Press. I therefore do not think I need refer further to it now.

At the same time, the Company, still following the procedure laid down in the 1933 Agreement, has asked the President of The Hague Court to nominate a sole arbitrator, since the Persian Government have refused to appoint an arbitrator. The Company has also informed the Persian Minister of Finance that, as a measure of respect to the Persian Government, its representative will, as requested, meet the Oil Committee but will be able only to listen to what the Committee have to say and report it to the Company's head office.

So much for recent developments. His Majesty's Government are still anxious to see this dispute settled by negotiation; and their offer to send a special Mission, if that would help, still stands. Moreover, as His Majesty's Ambassador in Teheran has informed the Persian Government, while His Majesty's Government cannot accept the right of the Persian Government to repudiate contracts they are prepared to consider a settlement which would involve some form of nationalisation, provided—a qualification to which they attach importance—it were satisfactory in other respects. Their difficulty has been, and still is, that the Persian Government have hitherto not seen fit to respond in any way to their repeated suggestions of negotiation, but, on the contrary, have indicated merely their intention to proceed unilaterally. His Majesty's Government could not accept such a procedure, and they believe that their attitude in this matter is generally recognised and understood.

In particular, they have noted with satisfaction that the United States Government have spoken publicly against the unilateral cancellation of contractual relationships and actions of a confiscatory nature. His Majesty's Government earnestly hope that wiser counsels, taking full account of the dangerous potentialities of the present situation, will prevail in Teheran, and that negotiations can be initiated in an atmosphere of reason and goodwill.

Mr. Churchill

I do not think that we ought to complain if the statement which the Foreign Secretary has just made is little more than a résumé of what has appeared in the public Press, but I hope that he and His Majesty's Government will take occasion to keep us informed of any significant development which may take place during this week or in the few days afterwards.

Mr. Morrison

I think that is a very reasonable request. We shall certainly watch events and, as the right hon. Gentleman says, if significant developments occur I shall, of course, report to the House.

Mr. M. Philips Price

Would my right hon. Friend consider whether the Government should make a public statement to the effect that we do not contest the Persian Government's right to nationalise its oil, in order that public opinion in Persia may be better informed?

Mr. Morrison

My hon. Friend will have noted that I have made the Government's position clear. What I cannot agree with is the right of any Government unilaterally, by itself, without consultation and without considering ways and means, to sail over everybody's heads and merely pass Acts of Parliament.

Mr. Somerset de Chair

In view of the fact that the Persian Government's ultimatum to the Oil Company to join in the talks for handing over the Company to the Nationalisation Board expires tomorrow, can the Foreign Secretary say whether His Majesty's Government are in a position to protect the lives of the British subjects who are engaged in the Oil Company there and to protect the installations from seizure or from sabotage?

Mr. Morrison

All those matters have been the subject of consideration, and appropriate steps have been taken. I have said before that the Government certainly take the view that we have every right, and indeed the duty, to protect British lives.

Mr. Churchill

May I be permitted to assure the Foreign Secretary that in the steps which he has just indicated he will receive the full support of His Majesty's Opposition?

Mr. Beresford Craddock

May I ask whether it is correct, as reported in "The Times" of 25th May, that His Majesty's Government have asked the Government of India to use their good offices in bringing about a peaceful settlement, and if that is so, has any similar approach been made to the Government of Pakistan?

Mr. Morrison

The first part of the hon. Gentleman's question is not true. In the second place, it is perfectly natural that the Government would hope for support, by way of suitable representation, from Governments whose interests are similarly involved.

Mr. Emrys Hughes

Can my right hon. Friend tell us to what extent there have been consultations with the United States Government, and whether the United States Government have advised us against a policy of military intervention?

Mr. Morrison

Suitable conversations have taken place with the United States Government and, on the whole, we are acting in co-operation.