HC Deb 18 May 1976 vol 911 cc1213-8
The Chief Secretary to the Treasury (Mr. Joel Barnett)

A number of my hon. Friends have made clear their concern about the reports in the Press and on television concerning certain payments made by oil companies in Italy. I understand their concern. Both the companies concerned, Shell and BP, have issued statements to the Press explaining the circumstances surrounding the payments, and the Chairman of BP referred to the matter again in his statement to the Company's Annual General Meeting on 29th April. He said that he would be issuing written guidelines restating in formal terms the company's position on political payments, namely that none is to be made, directly or indirectly, unless the making of such payments is lawful in the country concerned and in accordance with a policy approved by the board of the particular subsidiary company.

The Government would be most concerned if any company, British or foreign, were found to have made payments of this kind in the United Kingdom. Under our companies legislation, of course, political payments would have to be recorded in the company's annual report, and secret payments of that kind would therefore be illegal. But in the case of BP, the chairman has made it clear that his company does not and never has made political contributions in the United Kingdom.

I am sure the House will welcome the chairman's statement. I need hardly emphasise the Government's anxiety that all British companies should conduct their overseas business within the laws of their host countries and our readiness to root out bribery and corruption. Nevertheless, the high standards of business practice that we expect from British companies do not apply everywhere, and the main responsibility for deciding what is unacceptable, and for dealing with it, must rest with the host countries themselves.

The House will appreciate that it is not within Her Majesty's Government's power unilaterally to prevent corruption in other countries. What is needed is effective international action, and it is by our efforts to promote concerted action that we can best satisfy the wish of my hon. Friends—a wish which, as I have said, the Government fully share—to act against bribery and corruption wherever it is found. The Government will accordingly be pressing in appropriate international organisations for measures to be taken wherever possible to deal with this evil.

Mr. Nott

It is a little unclear why the Government felt it necessary to make such a statement. The Chief Secretary has not told us anything new. Is the right hon. Gentleman aware that we are naturally happy to have confirmation that the chairmen of our major companies will not condone corruption of any kind? However, we knew that already. Is he aware that we are happy to know that ultimately the resolution of these problems must lie in the host countries themselves? Is he further aware that our major companies are operating in the real world and that we would deplore any humbug in the British Press, or from Labour Members, that damage their interests?

Mr. Barnett

We have no wish to damage anybody's interests in this country. I am surprised that the Opposition did not at least see fit to support the international action that we are proposing to take, because that is the only way one can outlaw this kind of corruption and abuse.

Mr. Pardoe

Will the right hon. Gentleman confirm that the moral to be drawn from this matter is that in this country at least we should not countenance the corrupt bribery of political parties? Will the right hon. Gentleman state what the Government's policy is towards the continuance of financial support by the trade unions, on the one side, and big business on the other, of the two major bastions of the two-party system?

Mr. Barnett

I had a feeling that there was a touch of envy, perhaps, in the hon. Gentleman's statement. I have nothing to add as regards policy in that respect.

Mr. Sedgemore

I accept the Chief Secretary's thesis that bribery and corruption are to be regarded as normal commercial practices the world over, but does he not agree that in the case of publicly-owned companies the British public should be told what is going on so that they can decide which forms of bribery and corruption are acceptable and which are not? In the case of BP, does he agree that the right answer is to scrap the doctrine in the Bradbury and Bridges letters and to make the company accountable to the public and Parliament?

Mr. Barnett

I am glad to know that my hon. Friend understands that it is not for him or me to decide what sort of practices should be adopted in various countries around the world. I must tell him that the Bradbury letter is not the relevant issue. It was not a matter of who controlled BP as regards this issue. The only way to stamp out this sort of practice is by concerted international action, and that is what we shall be pressing for.

Mr. Alexander Fletcher

Is the right hon. Gentleman aware that statements made by Labour Members have brought more discredit on British industry than Press reports of alleged bribery and corruption? Does he realise that the multinational companies would welcome some sort of international agency to which they could appeal when overseas Governments put undue pressure on them? They would not in the least mind a stiff code of regulations.

Mr. Barnett

Surely British industry would have welcomed some support from the Opposition for the Government's counter-inflation policy, which is the best help it can get and the best way in which British industry will be helped—namely, by bringing down the rate of inflation.

As regards international agencies, as I have indicated, it is our policy to press for action for precisely that sort of agency.

Mr. Prescott

Does my right hon. Friend recognise that I consider his statement to be rather shameful and in line with the cover-up that tends to be going on in Europe about the activities of multinationals? It is not doubted that the payments were made. That is clear. Apparently what is doubted is whether this is legal corruption. The very people who decide what is legal and what is illegal are those who are receiving the money. As the Government have made clear their opinions about South African wages and Ceylon tea plantations, for example, should we not take a certain posture in these matters and recommend that companies adopt it? Does my right hon. Friend agree that we should not separate ourselves, as we have done in this statement?

Mr. Barnett

I am surprised by my hon. Friend, but I sympathise with his concern about this matter and, indeed, agree with him when he talks about people receiving money. The people who are receiving the money are in other countries. The way to deal with that is the way that I have outlined in my statement.

Mr. Gordon Wilson

As an independent Scotland would follow realistic policies, and as those policies would undoubtedly upset the large international oil companies, will the right hon. Gentleman give an assurance that contributions to Unionist front organisations such as "Keep Britain United", and others of that sort, will be prohibited in terms of the statement that he has made?

Mr. Barnett

I have little doubt that if the policies of the hon. Gentleman and his hon. Friends were followed, we should get very little in the way of investment in Britain. As far as I am concerned, what the hon. Gentleman and his hon. Friends are doing is causing the maximum possible harm to both Scotland and the United Kingdom as a whole.

Dr. Phipps

I welcome the Chief Secretary's commitment to international agencies. However, which agencies does he have in mind? If these are internal matters of the countries concerned, what sanctions might the agencies be able to apply?

Mr. Barnett

The agencies I would think most valuable are the widest possible agencies, such as the OECD and the United Nations. It is in those organisations that I should have thought that we would be able to get the appropriate action.

Mr. John H. Osborn

This subject was debated in the European Parliament a week ago today. Most politicians and most people in business condemn corruption of this type. The trouble is that corruption is illegal in many countries but the common practice. Does the Minister see this initiative making it any easier for our exporters who are exporting against competitors who have no dislikes such as we have in Britain? Will he genuinely get a response from the United Nations and the OECD?

Mr. Barnett

I have read the debates of the European Parliament. There is nothing that I or the Government wish to do to discriminate against our exporters in foreign markets.

Mrs. Wise

Will my right hon. Friend be surprised to learn that many of us on the Government side of the House regard his statement as feeble, inadequate and unacceptable? Is he aware that we believe that the yardstick he should use is not whether the matter of corruption is lawful or acceptable in Italy but whether it is acceptable here? Further, will he accept that his statement that it would not matter who controlled BP is confirmation to us that the form of public ownership here and in other instances is inadequate and needs to be made democratic and accountable?

Mr. Barnett

No, I am not too surprised by my hon. Friend's statement at all. I can perfectly well understand it. However, when she mentions the point I made about it not mattering who controlled BP, she fails to take account of the fact that it is where BP trades that matters. If BP trades in some 70 countries, it will not be possible for whoever controls BP to control the practices in those 70 countries.