Part of the debate – in the House of Commons at on 20 March 1935.
Mr Godfrey Collins
, Greenock
The hon. Member for Linlithgow (Sir A. Baillie) asked me if it is possible to intervene in this matter. It is quite impossible for the Secretary of State to intervene, but I think it is only right that I should state the facts to the House. Although they are in great detail, I hope that the House will bear with me. The corporation were in the market for 3,000,000 gallons of motor spirit for their municipal transport service. Tenders were received from the following firms: Scottish Oils and Shell-Mex, Limited, Gow and McCulloch, Anglo-American Oil Company, Limited, Redline-Glico, Limited, Clarkson and Co. (Glasgow), Limited, Russian Oil Products, Limited. The first five firms, who are all in the same combine, quoted for 1,250,000 gallons Scottish naphtha at 10 11/16d. per gallon and 1,750,000 gallons motor spirit at 11 7/16d. per gallon. It is estimated that probably two-thirds of the whole suppply would have been Scottish. Russian Oil Products, Limited, quoted for 1,000,000 gallons motor spirit at 11½d. The tenders were received by the Town Clerk and in accordance with the usual practice were opened and initialled by the convener of the Municipal Transport Committee and thereafter sent to the manager for examination and report to the committee. On 16th January the offers received were submitted to a meeting of the Transport Committee with a recommendation by the manager that the whole contracts be placed with the national companies. The Transport Committee, however, decided by a Majority of six to five to recommend that the combine offer be accepted, less 290,000 gallons of motor spirit which was to be placed at a price of 11 7/16d. with the Russian Oil Products. On 24th January the Transport Committee's proposals were approved on a Division at a meeting of the corporation. An Amendment that the whole contracts be placed with the national companies was defeated by 42 votes to 28. No objection was made to the Transport Committee's proposal to give the whole supply of naphtha spirit to Scottish Oils and Shell-Mex, Limited. If effect had been given to the corporation's desire the contracts would have been placed as follows: Scottish Oils and Combine Firms, 1,250,000 gallons Scottish naphtha at 10 11/16d. and 1,460,000 gallons motor spirit at 11 7/16d.; and Russian Oil Products, Limited, 290,000 gallons motor spirit at 11 7/16d.
Following on this decision by the Corporation to place a share of the contract with Russian Oil Products Limited the National Companies intimated, as the hon. Member stated, that their original offers were based on obtaining the contracts for the whole supply, and by letter dated 4th February submitted amended offers, namely, 1,250,000 gallons naphtha spirit at 10¾d. per gallon and 1,500,000 gallons motor spirit at 11½d. per gallon. The Russian Oil Products Limited, by telephone, on 6th February, quoted for the whole supplies as follows: 1,000,000 gallons motor spirit at 11 7/16d. per gallon and 2,000,000 gallons motor spirit at 11½d. per gallon.
This position was considered by the Transport Committee at a meeting on 6th February, and it was agreed by the committee on a division to remit the whole question to the Convener, the Sub- convener and the Manager for consideration and report. On 8th February, the Russian Oil Products Limited wrote to the General Manager offering to supply the whole or any part of the Corporation's requirements at 11 7/16d. per gallon.
On 14th February an offer by the National Companies to supply approximately 1,250,000 gallons naphtha spirit at 10 11/16d. and approximately 1,600,000 gallons motor spirit at 11 7/16d., leaving approximately 150,000 gallons to be placed out-with the National Companies, was received by the General Manager and communicated by him to the Convener and Sub-convener of the committee. This offer was not submitted to the Corporation at its meeting on 21st February, but reference was made to it in a question addressed to the Convener at that meeting. The recommendation by the committee that the whole matter be remitted to the Convener and Sub-convener along with the Manager came before the Corporation at a meeting on the 21st February. The Corporation by 54 votes to 32 decided to re-affirm the decision reached at their previous meeting that the contracts for 1,750,000 gallons motor spirit be divided—that is eleven-twelfths to the National Combine and one-twelfth to Russian Oil Products—between the five National Companies and the Russian Oil Products Limited at the original price of 11 7/16d. per gallon, and that the contract for 1,250,000 gallons naphtha spirit be placed with Scottish Oils and Shell-Mex Limited at the price of 10 11/16d. previously quoted by them. They also resolved that in the event of the Scottish Oils and Shell-Mex Limited and the other Combine firms refusing to abide by the original prices quoted by them and to accept the contracts accordingly, to place the contract for the whole supply of approximately 3,000,000 gallons of motor spirit with Russian Oil Products Limited at the price of 11 7/16d. per gallon. The National Companies did not see their way to accept the first alternative and the contract for the whole supply of motor spirit was placed, in accordance with the other alternative, with Russian Oil Products Limited.
Such are the facts so far as I have been able to ascertain them from the minutes of the Glasgow Corporation. I think that the House will agree, however, that it is to be regretted that before the whole contract was placed by the corporation with the foreign firm further efforts were not made by both parties to reach an agreement which would have enabled over nine-tenths of the contract to be supplied by the national companies.
While it has been the policy of the Government to encourage the placing of contracts in this country wherever practicable, the arrangements made by local authorities and private firms for the letting of contracts are not subject to Government control. Whether the corporation should have placed the whole of the contract when the lowest tender was first received is a matter which does not fall within my control. The negotiations, as far as I can gather, between the combine and the corporation broke down on a small matter of 140,000 gallons. On the general question, Parliament has delegated certain powers to local authorities and it is a principle inherent in popularly elected representative bodies that they should be responsible to those who elected them. The circumstances of the present case would not, I think, justify any diminution of the powers possessed by local authorities in these matters and I trust that the public interest which has been taken in the case will be useful in helping to prevent a similar occurrence in future. The hon. Member who spoke last asked me a specific question. I have made inquiries into this case, and I think that any further inquiry is unnecessary. I have given the House very rapidly the whole story of this contract. I think the facts speak for themselves, and I have endeavoured to state the case as fairly as I can.
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