Page 11 directly relevant to the protection of our oil interests. The same is true of our contribution of £2,500,000 to U.N.W.R.A. for relief of Palestine refugees.
10. The remainder is spent as follows:-
£
(a) Her Majesty's Missions (Diplomatic and Commercial)... (b) British Council
1,210,000
330,000
(c) Technical Assistance (including Development Division
and various subventions)
120,000
(d) Information work ...
150,000
(e) Various (largely Security Forces in Persian Gulf)
310,000
Total
2,120,000
Her Majesty's Government receives some £8 millions in direct taxation on the profits of our oil companies' operations in the Middle East and a further £8 millions in British Petroleum dividends.
11. Further action by Her Majesty's Government might include the following:-
(a) The British Council is perhaps the most effective instrument for spreading our influence. It is not able to meet the active demand for the facilities which it offers, still less to go out and make converts. It has only this year been possible to open British Council offices in Tehran and Kuwait and these are under-staffed. An extra £250,000 would more than double the impact upon the educated and half-educated population of the area and go far to counter Russian and Egyptian influence in the cultural field.
(b) A similar increase in our information effort should help to increase our influence, though its results are more limited by the general political atmosphere than are those of the British Council. There is the new opportunity offered by television. The Iraq Government have bought a station, perhaps prematurely. But it would be highly desirable to help them to operate it. We could also provide the means for the B.B.C. to increase its transmissions to the Middle East and its help to local stations in the form of material for their own use. The number of visits to this country by important people might usefully be stepped up; and the range of visitors increased beyond the scope of those normally handled by the information departments. Finally, our supply of films to the area could usefully be increased.
(c) Technical Assistance in the mass form in which the Americans have used it, is largely discredited in the Middle East. But a discreet increase in the activities of the Middle East Development Division, and establishment of a fund to enable Her Majesty's Government to provide or subsidise experts in fields where local governments are unwilling to pay adequately for them, would not only increase cur influence but help the economic development of the area. Not more than £25,000 a year is required for this.
The
(d) In education, the provision of teachers and if necessary the subsidising of their salaries would enable the Middle East Governments to recruit the British teachers whom they are already willing to employ, although in technical subjects the demand will still exceed the supply. establishment of British schools, particularly that projected in the Lebanon, for the training of the future leaders of the Northern Arab States, could not fail to have an important influence within 10 or 15 years.
The initial cost of the Lebanon school to Her Majesty's Government would be £100,000 and there might be a further contribution of £10,000 a year towards running expenses.
(e) The possibility of supplying arms on credit should be further examined in
the light of the latest Soviet moves;
(f) In order to maintain the standard of staff in Her Majesty's Missions in the area, steps should be taken to make service there more attractive. At
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Pagepresent members of Her Majesty's Foreign Service serving iRage Middfe321
East enjoy no advantages over their colleagues in other pleasanter areas, although it is intended that there should be some advantage for Arabists from the point of view of early promotion. There are other ways in which their conditions of service could be improved.
Conclusion
12. Middle East oil is vital to our economy. This is not a matter of priorities as between one area of the world and another in the cold war, but an essential need. We are vulnerable in this area, which is at present slipping away from us because of the indigenous forces of nationalism, and because our enemies are making a greater effort than we are.
Recommendation
13. Ministers are therefore recommended to endorse the principle that our position in the Middle East, and in particular in the oil bearing states of Iraq and the Persian Gulf, is vital to the economy of the United Kingdom; and that Her Majesty's Government should be prepared to spend in the area, in furtherance of their objectives, on a scale more closely related to our essential interests there.
It is therefore recommended that Ministers should authorise the establishment of a Working Party under Foreign Office chairmanship consisting of representatives of the Foreign Office, Treasury, Board of Trade and Ministry of Fuel and Power, with the following terms of reference.
With a view to safeguarding the free flow of oil supplies from the Middle East, to consider urgently—
(a) what further action Her Majesty's Government should take; including
action which involves increased expenditure:
(b) what action the oil companies concerned should be urged to take:
and to make early recommendations if necessary in the form of interim reports."