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Oil Companies (Leases)

Volume 649: debated on Monday 20 November 1961

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asked the Minister of Aviation if he has studied the Report of the Select Committee of Public Accounts for Session 1960–61 with particular reference to the criticism in paragraph 96 of his Department's action in granting to oil companies, without going to tender, fixed price leases guaranteed to 1991, irrespective of the amount of fuel sold or profit made; and what action he proposes to take in the matter.

Yes, Sir. The criticism relates to leases, negotiated some,, ears ago which provided for predetermined increases in rent at intervals during the earlier part of the term. Agreements already made cannot be altered unilaterally, but my Department will seek to relate rents of new leases directly to the growth of business.

Is the right hon. Gentleman aware that these agreements were very strongly criticised by two Select Committees of the House in the last Session? While we welcome his belated statement that agreements entered into by the Government cannot be broken unilaterally, does he not think that there is a rather extraordinary contrast between agreements with these rich oil companies, who are able to carry on for 35 years without any revision of the agreements, and an agreement with £9-a-week airport employees, which is broken unilaterally by the Government without any further thought?

If the right hon. Gentleman will take the trouble to inform himself, he will find that no agreement was broken in the case of the airport workers.

How came it that the right hon. Gentleman, or one of his predecessors, was so daft as to enter into these agreements? Can they really not be revised when by implication he admits that they ought now to be revised?

I would not suggest that a lease entered into by the Government ought to be torn up just because we think that we, or somebody else, might have arrived at a better agreement. There is substance in the suggestion that new agreements should be related to the volume of sales, and our agents are discussing that in the case of Prestwick.

The right hon. Gentleman advised me to inform myself before putting a question, but is he aware that I have fully informed myself on both the Public Accounts and the other Select Committee? Is he saying that there are no M-class employees at the airport when he says that no agreement has been broken? If there are any M-class employees at the airport, had he not better admit that an agreement has been broken?

The right hon. Gentleman is rather drawing this one in, but I assure him that no agreement was broken at London Airport, and I took the trouble to inform myself in detail.