HC Deb 08 December 1971 vol 827 cc1299-302
Mr. Hattersley

(by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement concerning the Libyan Government's announced intention to nationalise the assets of the British Petroleum Company and withdraw Libyan deposits.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Joseph Goner)

We have so far received no official notification of the Libyan Government's action or of their motives. This is in itself deplorable. But our first task must be to get clear exactly what action has been taken and to find out what arrangements for compensation are proposed. I have therefore summoned the Libyan Ambassador in order to seek a full explanation of his Government's action. Her Majesty's Chargé d'Affaires in Tripoli has been instructed to take similar action with the Libyan authorities there.

Mr. Hattersley

Whilst I understand the difficulty of the Minister of State in explaining in detail the Libyan Government's attitude, which I understand has only been broadcast by the Libyan radio and is perhaps not easily understandable in terms of rational policy, may I pursue three points about which today, or on some other occasion, the House will want to know?

Will the Minister of State say whether it is simply the single company or other British oil assets which are likely to be affected by the Libyan Government's intention, and is he making the strongest representations about what the Libyan Government have announced over the radio about compensation, namely, that it will be a unilateral decision of the Minister for Oils in Libya?

Secondly, will the Minister confirm, if the worst were to happen and nationalisation resulted in a breakdown of oil supplies, that in the present state of the market this would mean only a marginal alteration to the availability of oil in Western Europe?

Thirdly, will the Minister tell the House about Libya's attitude towards sterling balances, which I understand was not made very clear in the statement on the Libyan radio?

Mr. Godber

On the first question, my understanding—and in each case I can only give him my understanding because we have no official information—is that this affects B.P. only, and there is no question of any other company being involved.

Certainly I shall be prepared to make strong representations, but I must know the facts before I do so. This is essential. I have no reason to believe that the flow of oil supplies will be affected. Even if it were, I am sure there are ways in which we can meet any requirements.

On the last point about sterling balances, again I have no direct information, but I see no reason to have any particular qualms about this.

Mr. Kenneth Baker

When he sees the Libyan Ambassador, will the Minister adopt a robust attitude? Our country has suffered much in the past from the unilateral seizure of assets, and we know very well that when compensation is paid it does not equal the value of the assets. Will my right hon. Friend look again at the question of Libyan deposits in this country and consider blocking a proportion of them equivalent to the assets of B.P. which are under risk? Many people in our country expect, when British property is seized overseas in this way, that we should take the necessary defensive action.

Mr. Godber

Obviously, I shall wish to protest in the strongest terms when I know precisely what to protest about. I have to ascertain the facts first. The important thing is to get the facts and then to decide on action in relation to them. At present we have only hearsay evidence but, in so far as any question of nationalisation or expropriation is concerned, we have never said that it is our view that countries are not entitled to nationalise—of course they can nationalise—but we do expect prompt and adequate compensation when that occurs. This will be a matter which we shall certainly want to have in the forefront of our minds.

Mr. Dalyell

Might not a robust summoning of the Ambassador be counterproductive?

Mr. Godber

When some action has been taken against British interests, we are entitled to summon an Ambassador and to take whatever attitude we think appropriate. I will adjust my robustness to the requirements of the situation.

Mr. Edward Taylor

There have been in the past many cases of British assets being seized, as my hon. Friend has said. Despite assurances that adequate compensation will be given, will the Minister make it his policy to ensure that such assets as are available to this country will be retained until such time as adequate compensation has been agreed?

Mr. Godber

Obviously, we shall require to look at any arrangements that are proposed, and we hope to see honourable arrangements. Until I have satisfied myself that they are not so, I do not think we should assume that there will be unreasonable expropriation.

Mr. Douglas

Does the right hon. Gentleman accept that we would not wish to hold up the flow of cash for B.P. investment in this country? Will he consult his right hon. Friend the Secretary of State for Trade and Industry to ensure that B.P.'s investment, particularly in North Sea oil, will not be held up in the United Kingdom?

Mr. Godber

I will convey to my right hon. Friend the hon. Gentleman's views. I should have thought that this would certainly not lead to any reduction in our investment in our own resources in oil, and I am sure my right hon. Friend will have this very much in mind.

Mr. Tom King

In making his representations, will my right hon. Friend not fail to make the point that, while Libya may not be in desperate need of foreign investment, such action on her part is a major disservice to other Arab countries who may anxiously want it but whose chances of getting it from foreign investors are seriously impaired by action of this kind?

Mr. Godber

I think that my hon. Friend is making the very fair point that any action of this kind in any country has an effect in this country, especially on businesses considering foreign investment, since the security of its investment is involved directly. Therefore, it is inadvisable for Libya or any other country to try to take unreasonable action of this kind. I shall make that point to the Libyan Ambassador when I see him.

Mr. Ginsburg

Is the right hon. Gentleman aware that this is not the first incident involving the Libyan Government and that, recently, there was the case of the two personages kidnapped from a B.O.A.C. aircraft? What has happened to Her Majesty's Government's representations in that regard? If one moral can be drawn from this unfortunate affair, is not it that the right hon. Gentleman should draw the attention of his right hon. Friend the Secretary of State for Trade and Industry to the need to have an adequate reserve of coal-producing capacity in this country?

Mr. Godber

I agree that there was this other matter, which I raised strongly at the time and for which we got a certain measure of satisfaction, though not as much as we should have wished. On the hon. Gentleman's latter point, I cannot add anything to what I said in other replies with regard to reserve capacity of oil supplies.

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