PERSIA (Hansard, 20 June 1951)

§ THE LORD CHANCELLOR
My Lords, may I take this opportunity of repeating to the House the Statement which has just been made in another place by my right honourable friend the Secretary of State for Foreign Affairs? It is as follows:
"In my statement to the House yesterday I mentioned briefly the demands with which the Anglo-Iranian Oil Company delegation to Teheran had been presented, and I promised to take an early opportunity to inform the House of the subsequent course of events.
"When the Company's delegation met the Persian representatives yesterday evening, it made proposals which were designed not only to meet the Persian Government's present and urgent need for funds, but also to indicate an arrangement which would maintain the efficiency of the industry and be consistent with the principle of nationalisation. The terms of the aide-mémoire in which these proposals were set out have been published, but it may be as well for me to summarise them here. Briefly, the content of the aide-mémoire was:

(1) That the Company was prepared to place at the Persian Govment's disposal £10,000,000 as an advance against any sum which might become due to the Persian Government as a result of any eventual agreement, on the understanding that the Persian Government would undertake not to interfere 220 with the Company's operations while discussions were proceeding;

(2) That the Company would, moreover, pay to the Persian Government £3,000,000 a month, from July onwards, during such time as might elapse until an agreement had been reached;

(3) That the Company proposes, as a possible basis for an agreement, that the Persian assets of the Company might be vested in a Persian National Oil Company and, in consideration of such vesting, the National Oil Company should grant the use of those assets to a new company to be established by the AngloIranian Oil Company. The new company would have a number of Persian directors on its board, and would operate on behalf of the Persian National Oil Company. At the same time, the distribution of oil products within Persia itself would be transferred to an entirely Persian-owned and operated company on favourable terms as regards the transfer of existing assets.

(4) As regards the Persian demand, made at the meeting on June 14, that the Company should hand to the Persian Government the total proceeds, less expenses, from the sales of Persian oil, from which 25 per cent. would be deposited in a mutually agreed bank against any claims which the Company might prefer, this was not acceptable. The point was made that the delegation had gone to Teheran for discussions, and regarded it as unjustifiable that the Persian Government should put forward a demand of this kind before discussions had even started. Moreover, the delegation was confident that when it had had opportunity to explain in more detail the complicated machinery of the Company's business, it would be plain to the Persian representatives that their demand would be neither commercially possible nor acceptable to any company.
"It seems hardly necessary for me to expatiate on that offer. Money for present needs is there, acceptance of the principle of nationalisation is there, and an obvious foundation for fruitful 221 partnership is there. His Majesty's Government are convinced that all fair-minded opinion will regard the Company's proposals as eminently reasonable.
"Unhappily, however, the Persian delegates required only half an hour in which to arrive at a contrary opinion. They declared that the Company's proposals conflicted with the new Persian nationalisation law and expressed stir-prise that the Company's delegation should have found need to ask for a postponement of the meeting arranged for June 17 in order merely to formulate such proposals. The Persian delegates concluded by saying that they had no authority to deviate from the letter of the nationalisation law, and in consequence considered discussions closed.
"The leader of the Company's delegation thereupon replied that, even if the proposals were not consistent with the letter of the law (which had never been agreed to by the Company), they were consistent with the principle of nationalisation and would undoubtedly fit in with the liberal interpretation of the law; that it was apparent that the Persian representatives were expecting complete capitulation to their demands without discussion; that he noted with regret the Persian decision to break off the talks; and that he was left with no alternative than to communicate that decision to London and ask for instructions.
"His Majesty's Government have learned of this development with concern, not only for the future of the Anglo-lranian Oil Company and the free world supplies of oil but also for the future of Persia itself. In the area of the Company's concession the natural wealth of the region has been made available to the Persian people. Their labour, combined with the capital expenditure and the technical and organising skill of the Company's engineers and administrators, has built up a vast industry. Thanks to this fruitful co-operation, the Persian Government have enjoyed a consistent and growing source of income, which the Company itself offered in 1948 greatly to increase. Thanks also to this industry, tens of thousands of Persian 222 workers at present enjoy housing conditions, educational facilities and health and other social services on a scale which the working people of Persia enjoy in no other part of the country. These are facts which are attested in the Report of the International Labour Office entitled Labour Conditions in the Oil Industry in Iran, published last year in Geneva. The Company has made, and is making, an immense contribution towards raising the standard of living in Persia. Indeed, the seven-year development plan on which such high hopes had been;placed, but which, unhappily, appears to have been abandoned, had as an essential factor the receipt by the Persian Government of increased royaltie— freely offered by the Company—from the production and sale of oil. It seems that the present Persian Government are blind to the needs of their country.
"Instructions are being sent to the Company's delegation to return to this country. Meanwhile, we propose to follow up the application we have already made to the Hague Court by a further application for an indication of provisional measures to preserve the rights of the United Kingdom, pending a decision on the merits of the case. We for our part still desire to see a stable, independent and prosperous Persia. Our feelings in that regard have not changed and will not change.
"The difficulties that have arisen in Teheran must not for a moment obscure the difficulties of our people in Abadan and the oilfields. I want them all to know that we at home realise the strain and burden of anxiety under which they have for long enough been working. Riots, abuse, misrepresentations, and uncertainty about the future have made conditions most difficult for them. They, better than we, will know that it needs but slight deviation from their high technical skill to cause a mistake which could lead to irreparable damage and most serious disaster to life and not only within the installations for which they are responsible, but perhaps throughout the neighbouring townships. While our people are there and responsible for operations, I am confident that no such mistake will be made, and that they will continue to do their duty.
223 "As I have repeatedly informed the House, His Majesty's Government are not prepared to stand by idle if the lives of British nationals are in jeopardy. It is the responsibility of the Persian Government to see to it that law and order are maintained, and that all within the frontiers of Persia are protected from violence. If, however, that responsibility were not met, it would equally be the right and the duty of His Majesty's Government to extend protection to their own nationals."

§ VISCOUNT SWINTON
My Lords, I am sure the whole House will be grateful to the Lord Chancellor for that full Statement. We should all agree, from what we have read to-day, and from what we have now heard, that the offer made by the Company's delegation was very beneficial to Persia and should have been treated as a fruitful basis for further discussion. We should all wish to be associated with the message of sympathy and good will which formed part of the Statement, and which will go out from both Houses of Parliament, and from the whole country, to our fellow countrymen in Persia who are doing, and will continue to do, their duty, however difficult and onerous their task may be. All noble Lords on these Benches—and I am sure I speak also for noble Lords in all quarters of the House—wish to associate ourselves, without any qualifications whatsoever, in the firm declaration with which the noble and learned Viscount's Statement closed: that we are not prepared to stand by idle if the lives of British nationals are in jeopardy. It is the responsibility of the Persian Government to see to it that law and order are maintained, and that all within the frontiers of Persia are protected from violence. If, however, that responsibility were not met, it would equally be the right and the duty of His Majesty's Government to extend protection to their own nationals. I should like, on behalf of all those who sit with me, to assure the Government that in that firm, wise and right Statement they have our fullest support.

§ VISCOUNT SAMUEL
My Lords, your Lordships' House will be grateful to His Majesty's Government for the steps they have taken to keep Parliament and the country fully informed of the course 224 of events in Persia. The Statement which we have just heard, and especially the concluding sentences in it, leave no doubt as to the gravity of the position. We earnestly hope that the Persian Government will keep under control a situation which they themselves, and they alone, have created. If, unhappily, it should prove to be otherwise, then the course which His Majesty's Government have announced that they will take is the only one possible, and will therefore have the approval and support of the nation, and, we trust, of the whole Commonwealth.