Orders of the Day — Glasgow Corporation (Petrol Contract).

Part of the debate – in the House of Commons at on 20 March 1935.

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Photo of Sir Adrian Baillie Sir Adrian Baillie , Linlithgowshire

I apologise for detaining the House for a little while longer; I should not have ventured to do so did I not believe that the matter to which I desire to draw attention is one of very great importance. On the 7th March I asked the Secretary of State for Scotland whether his attention had been drawn to the contract for the supply of 3,000,000 gallons of petrol which was placed with Russian Oil Products, Limited, by the Glasgow Corporation on the 1st instant; and, in view of the unsatisfactory nature of the Secretary of State's reply, I gave notice that I would bring the matter up on the Adjournment at the first possible opportunity. I welcome the opportunity which has been afforded me to-night. If it is too late to invalidate this contract, if it is impossible for the Secretary of State to intervene, then I believe that, if attention is drawn to the facts of the case as they have been reported to me, public indignation will be such that not even a Socialist council would have the hardihood in the future to enter upon negotiations involving the expenditure of public money, negotiations which, in my submission, have been profoundly unethical from the very beginning, which have resulted in bad business for the ratepayers of Glasgow, and, finally, have certainly precluded the Glasgow Corporation from affording work to 4,000 shale miners whose interests I represent in this House, and from affording work to hundreds—nay, thousands—of others in ancillary industries in their area. I desire to ventilate this matter in the House of Commons, because I feel that if, as I say again, the facts are as I know them, this is not merely a matter of local concern, but a matter of national importance.

What are the facts? I will try briefly to state them as far as I know them. The Glasgow Corporation issued contract inquiries for their total requirements of fuel during the year—3,000,000 gallons. They specified in particular Benzol Mixture, Premier, Commercial, and Naphtha, but the overwhelming proportion of the requirements was for Commercial and Naphtha. Nine companies in all submitted sealed tenders, eight of which belonged to what is known as the National Combine, and one out of the nine was Russian Oil Products, Limited—R.O.P. When these tenders were opened they were three in. number, and I will refer to them as (a), (b), and (c). (a) and (b) were alternative tenders from the National Combine, and (c) was the tender from Russian Oil Products, Limited. The first tender, a sealed tender, was an offer from the National Combine to provide 1,250,000 gallons of naphtha and 1,750,000 gallons of spirit at an average price of 11/1.12d. per gallon. Tender (b) from the National Combine was for 3,000,000 gallons of spirit at 11/7.16ths of a penny or an average price of 11.44 d. The offer from Russian Oil Products was for only 1,000,000 gallons of spirit at 11½d.

Obviously, had the sanctity of sealed tenders been observed, the Glasgow Corporation should have taken one of the alternative offers of the National Combine, because both were considerably lower than the offer of Russian Oil Products. The first point, therefore, that I would like to make to the Secretary of State for Scotland is that the sanctity of sealed tenders was not observed on this occasion. It is submitted that the second tender from the National Combine was for 3,000,000 gallons of spirit at 11/7.16ths of a penny, which was cheaper than the original tender of 11½d. from Russian Oil Products. That tender was either wilfully or inadvertently suppressed by the negotiators for the Glasgow Corporation. At least the Glasgow Corporation had not the knowledge of that tender (b) at their disposal when they took their decision to give the whole order to Russian Oil Products.

When the Corporation found that Russian Oil Products had only tendered for 1,000,000 gallons, they went back to Russian Oil Products and said, "Give us a tender for 250,000 gallons," and at the time it was not quite understood why they should have returned at all to Russian Oil Products with this inquiry, but subsequently the reason came to light. I have a cutting from the Glasgow "Forward," containing an article by Councillor William Reid entitled "A reply to the Combine Dictators." It says: It was essential that the Corporation should not be left entirely at the mercy of a combine who could rig the market at any time they thought fit, and to preserve an open market Russian Oil Products was included. So now we know that, while Councillor Reid and his colleagues, with their professed aversion to the capitalist system and private enterprise, did not wish the Corporation to be entirely under the thumb of the National Combine, at the end of the day he had no particular qualms about putting himself and the entire Glasgow Corporation entirely under the thumb of Russian Oil Products, who are only able to compete with private enterprise because their sources of supply were confiscated from the British companies which had invested in the neighbourhood of £70,000,000 in the exploitation of those sources. What was the next step? The negotiators for the Corporation went to the National Combine and said: "Quote us another price. Make us another tender. We want you to supply only 92½ per cent. or eleven-twelfths of our requirements." The Combine came back with a tender, which was naturally slightly higher in price on account of the smaller gallonage required. If this is what Councillor Reid calls rigging the market, all I can say is that Councillor Reid entirely ignores usual commercial practice, that as quantity goes down price goes up.

I have read a few specious arguments—and I am not entirely sure that the Secretary of State has not been swayed by them—to the effect that after all the National Combine should have been satisfied with eleven-twelfths, that they should not have been greedy. The National Combine were satisfied with eleven-twelfths, but at a slightly higher price. It was the negotiators of the Glasgow Corporation who were not satisfied. It is unreasonable that the National Combine should have to sit down under the dictation of the Glasgow Corporation as to what price they should charge for eleven-twelfths of the supply. Again, it has been suggested by Councillor Reid that the National Combine were out for a monopoly. In the same article he says that the eleventh hour attempt at a satisfactory settlement failed because of the anxiety of the Combine to have a complete monopoly for the supply of motor spirit. That is not the case, because I am informed that in a letter which was addressed 60 the negotiators on 14th February it was definitely stated by the Combine: "We will try substantially to meet the point which you raise and instead of 92½ per cent. will offer you 95 per cent. of your requirements at our original price." What could be fairer than that? That, incidentally, would have effected a considerable saving to the ratepayers of Glasgow. Once more—and then I will leave Councillor Reid alone—he goes on to say: It will be observed that at our interview with the Combine we made it quite clear that, although there might be a deadlock regarding the price, we were prepared to pay for petrol; we were prepared to take our whole supply of Scottish naphtha spirit from Scottish Oils and Shell-Mex, Limited. We were politely informed—no petrol, no naphtha. These are the correct facts. Readers of the "Forward" will now be able to draw their own conclusions. The facts are that in the same letter of 14th February, which was, incidentally, suppressed or at least never reported to the Corporation, the National Combine made an offer for the supply of 1,250,000 gallons of naphtha without any relation to spirit. I do hope, without much confidence, that the Editor of the "Forward" will give some space also to the facts of the case as I have put them. These facts may be open to correction, but if they are correct, as I believe them to be, I submit that no amount of explanation, no ingenuity of argument, can possibly justify the negotiators of the Glasgow Corporation in this pandering to their political bias. The negotiations have been unethical at every turn. In the result they have let their countrymen down. They have let down the ratepayers of Glasgow and the 4,000 shale miners whose interests I am here to represent in this House. Those are the people who profess to have an exclusive right of interest in the workers of this country.

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