Orders of the Day — Middle East (Technical Co-Operation)

Part of the debate – in the House of Commons at 12:00 am on 16th January 1974.

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Photo of Mr Peter Blaker Mr Peter Blaker , Blackpool South 12:00 am, 16th January 1974

What I am saying to the hon. Member is that Mr. Anderson's visit was not connected with an arms-for-oil deal.

I was saying that one of the main problems is price, and we are very concerned at the recent large increases in the posted price of oil. We are not in favour of any bilateral deal which might accelerate price increases. This question, among many others, makes the recent proposal by Dr. Kissinger for an energy action group most timely. We have warmly welcomed that initiative, which I hope will make a significant contribution to the forging of consumer-producer relations. Co-operation at this level, involving not only the developed but the developing consumer countries, is essential if we are to establish a rational and equitable framework for the supply of oil in the future.

The hon. Gentleman referred to the EEC and I should like to say a word about that. As the House knows, my right hon. Friend the Prime Minister and his Community colleagues agreed at Copenhagen on the importance of entering into negotiations with the oil-producing States on comprehensive arrangements for the economic and industrial development of these countries and for stable energy supplies to the members of the EEC at reasonable prices. Her Majesty's Government entirely endorse this policy.

We have, however, been accused in certain quarters of pursuing solely a policy of national self-interest in discussing bilateral agreements with certain Middle Eastern States. I should like to take this opportunity of rejecting that criticism because it fails to take account of three factors. The first is that the necessary machinery for co-operation of this kind between the EEC and the producers simply does not exist at present. Secondly, we had to respond to the oil producers' initiative if we were not to lose their confidence. Thirdly, we hope by these arrangements to increase oil production and thus the total amount of oil available globally. Bilateral deals are therefore not incompatible with a Community approach to the question.

We are exploring and shall continue to explore the possibility that what the producers have to offer can eventually be developed within a Community as opposed to a national framework. There may indeed be early scope for Community involvement if, for example, certain projects in the Middle East prove too large for any one member to handle.

In short, the world's energy problems are far too serious to be solved by this country alone, or even by Europe alone. We strongly support President Nixon's imaginative proposals for a meeting in Washington, which we see as an opportunity to launch a new pattern of relationships with oil producers from which they will receive the industrial and economic development that they need and the consumers will get oil supplies at reasonable prices. The Community has agreed to accept President Nixon's invitation to take part in a conference on 11th February in Washington. We support the development of a Community energy policy on the lines set forth at Copenhagen. Meanwhile, we are making our own contribution to the evolution of these new relationships by exploring with certain producer countries how in the actual circumstances of each country mutually advantageous arrangements can best be made.

I deal now with another question that the hon. Member raised when he asked what was the purpose of the visit by my noble Friend the Member for Hertford (Lord Balniel) to the Gulf at present. The visit was arranged many months ago, well before the oil crisis and the hostilities in the Middle East last October. No Minister from this Department has visited all the Gulf States since the change in our relationship with them in 1971.

Originally, the main purpose of the visit was to demonstrate the continuing British interest in an area of importance to us, following the termination of our special treaty responsibilities. Recent events clearly gave the visit a rather different slant. Oil matters and related questions of producer-consumer relationships are bound to bulk larger than had been expected earlier. It is not, however, the purpose of the visit to conclude specific deals on oil supplies.

I have said that there is no connection between any of the contacts, to which I have referred and about which the hon. Member asked, with these Middle Eastern countries and the sale of arms to them. I now come to our policy in relation to the sale of arms.

It is well known that Iran is our ally in CENTO and an important purchaser of arms and that there is a significant British defence project for Saudi Arabia. Sales of arms to these countries have been made over a considerable period and are not the result of any particular recent initiative. I think that that answers one of the hon. Member's questions. It is not our policy to reveal details of individual arms sales to other countries, as we consider that such disclosure is primarily a matter for the customer. The hon. Member knows that that is our policy.

He conceded that it had been the policy of successive Governments to encourage the export of defence equipment taking into account in each case the political, strategic and security considerations involved for the United Kingdom. Defence sales make an important contribution to our balance of payments. The total for 1973–74 should reach £405 million.

A defence arms sales organisation in the Ministry of Defence was established by the previous administration in 1966 to assist and advise the arms industry, and the House will recall the statement by the then Minister of Defence, the right hon. Member for Leeds, East (Mr. Healey), on 25th January 1966 when he announced the setting up of this organisation. I respect what the hon. Gentleman said about his views on that matter. But it is right for me to remind the House that that important intiative was taken in 1966 by the previous administration.

When the hostilities broke out in the Middle East in October of last year, the British Government called for an immediate cease-fire and suspended all shipments of arms to the battlefield. We did that because we considered it inconsistent to call for an immediate end to the fighting and yet to continue to send arms to the area of conflict. This policy is kept under study in the light of the developing situation in the Middle East.