The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory)
The Financial Agreement with Egypt which was initialled on 16th January was signed last Saturday in Cairo by representatives of the two Governments, and came into effect immediately. The main provisions of the agreement are as follows.
First, the United Arab Republic Government will release to the owners, under an agreed procedure, the British properties which they at present hold in sequestration.
Secondly, the United Arab Republic Government are paying to Her Majesty's Government a lump sum of £27½ million in compensation for British private property that has been Egyptianised, that is to say, nationalised or compulsorily acquired. This sum is also on account of that part of the property to be returned which may have suffered injury or damage. On the basis of the claimed values the sequestrated property which is being returned is worth more than twice the property which has been Egyptianised. £3½ million of this sum of £27½ million is being paid today, the balance is due in a year's time, and, meanwhile, Her Majesty Government will hold in London British Government stocks deposited by the Government of the United Arab Republic as collateral security to the value of £25 million.
Thirdly, provision is made for the resumption of full payment and transfer by the United Arab Republic of Egyptian Government pensions to United Kingdom nationals, together with all arrears. In addition, the Government of the United Arab Republic are paying to Her Majesty's Government the sum of £100,000 sterling as an interim payment in respect of compensation due to British officials dismissed in 1951—as hon. Members will be aware, a sum of this order has already been advanced by Her Majesty's Government to the officials concerned—and is reactivating the Commission dealing with the case of these officials to make a final assessment of the compensation due and permit the payment of the balance thereof in sterling.
Fourthly, provision is made for owners not wishing to take up residence in Egypt 34 to have remitted to them in the United Kingdom, subject to the normal requirements of the Egyptian Exchange Control Regulations, at least £E5,000 from any cash or bank balances which are released to them following desequestration, or the proceeds of the sale of any of their property in Egypt.
Fifthly, the balances at present held by Egypt in this country in blocked accounts have been released from Exchange Control restriction.
Sixthly, provision is made for the resumption of normal commercial relationships, including aviation.
In addition, the agreement reached provisionally on 22nd December between the Egyptian authorities and the Anglo-Egyptian Oil Company and the Shell Company of Egypt now comes into force. This will enable the companies to resume business in Egypt on a basis acceptable to them.
The Agreement is not concerned with inter-Government claims the validity of which is not admitted on either side. The two Governments have, however, agreed in a simultaneous exchange of notes to a mutual waiver of such claims.
It is necessary for the proper implementation of the Agreement that we should have a United Kingdom representative in Cairo with adequate staff. The Government of the United Arab Republic have agreed to receive such a representative, who will be accorded diplomatic immunities and facilities.
The office of the United Kingdom representative in Cairo, working in conjunction with the British Properties in Egypt section of the Foreign Office already established in London to register the property of United Kingdom nationals in Egypt, will be ready to help and advise the owners over the resumption of possession of their property and in claiming due compensation. My right hon. and learned Friend the Foreign Secretary is sending today to each owner who has registered his property with the section a letter explaining the procedure to be followed. This letter will be published in the Press, and I understand that copies are available now in the Library. Before making arrangements to return to Egypt to resume possession of their property, owners are advised to consult this section of the Foreign Office in advance.
35 Distribution of the £27½ million will be entrusted to the Foreign Compensation Commission in accordance with the provisions of Orders in Council, the first of which is now being prepared. My right hon. and learned Friend the Foreign Secretary will be laying this Order before the House as soon as possible. The Commission was set up by the Foreign Compensation Act, 1950, to determine claims for compensation and distribute payments received by Her Majesty's Government from foreign Governments. The Chairman of the Commission is Mr. Montgomery White, Q.C.
After the initialing of the Agreement, scrutiny of the detailed lists provided in Cairo by the United Arab Republic Government revealed the possibility of misunderstandings over its interpretation. In the light of the explanation which has now been received and embodied in an exchange of letters the Agreement has been signed.
The full text of the Agreement and the Exchange of Notes is being published as a White Paper, which is now available at the Vote Office. It is a comprehensive Agreement on a wide range of financial matters that have been in dispute between the two countries, some of them for a long time. Taken as a whole, the Agreement provides a reasonable and practical settlement.
Finally, I should like to record my own thanks and the thanks of Her Majesty's Government to Mr. Eugene Black, President of the International Bank. He agreed, at the request of the two Governments, to use his good offices on a personal and informal basis, and his efforts were the key to the settlement that has now been reached.
Mr. H. Wilson
Is the right hon. Gentleman aware that we on this side of the House, at any rate, welcome the prospect of a resumption of more normal trading and financial relationship with Egypt after all the lunacies of the last two and a half years? I am sure that the whole House will welcome the fact that these somewhat humiliating negotiations have now reached an end.
I should like to ask the Chancellor two specific questions. First, will he not now admit frankly to the House that the mutual waiver of inter-Governmental claims means, in effect, that Her 36 Majesty's Government have abandoned a claim worth £50 million or more for installations and military stores taken over in the Suez base in return for the waiver by the Egyptian Government of their claim for reparations for damage caused by the invasion just over two years ago?
Secondly, is the right hon. Gentleman aware that, on the details so far published, there is very serious concern in many parts of the country about the arrangements being made for compensation in respect of private property? Is he further aware that not only this side of the House, but I am sure the whole House, will want to scrutinise very carefully that provision and ask for further discussion on it at an early date?
The right hon. Gentleman will not expect me to agree with the rather immoderate words that he used, words with which most people in this country would not agree.
Coming to his specific questions, I certainly would not agree that the negotiations had been humiliating. Neither party has secured as much as it desired, but I have no doubt whatever that both parties were losing by the deadlock and that both parties stand to gain by the settlement.
It is not to be assumed that the lump sum payment, if that is what the right hon. Gentleman is referring to, will prove inadequate. In any case, the lump sum payment is by no means the largest gain by the United Kingdom. The largest gains are the return of a very large amount of private property and a resumption of trade.
Would the Chancellor now answer my other question, to which, I think, the whole House would attach importance? Is it a fact that we have given away installations worth £50 million or more in return for a promise by the Egyptians that they will not press their claim for reparations?
If the right hon. Gentleman looks at the Agreement he will see that these two claims—in regard to neither of which was there any chance of settlement between the two countries—have, by mutual agreement, been laid aside. But I would not for a moment agree that a value should be placed on the base of 37 something over £60 million, which was the value given by, I think, my right hon. Friend the Secretary of State for War, some time ago, as the value of the contents of the base at cost or realisable value on an open market. When there is only one possible user, it is quite impossible to set any value on an installation of that kind.
§ Dame Florence Horsbrugh
Can my right hon. Friend say whether, if any claimant wishes to go to Egypt but cannot afford to do so, he will be given financial assistance? And if he cannot go, and has to pay for agents in Egypt to look after his property, will he have financial assistance there?
I think that the Government will wish to give sympathetic consideration to any of the claimants who, for reasons of financial hardship, would find it difficult to meet the expense of paying a necessary visit to Egypt; or in the matter of agents' expenses. The precise question of contributions will, I think, have to await a further stage in the consideration.
§ Mr. Bevan
In view of the recent statement by the Prime Minister, is the Chancellor aware that for some time—in fact, since 1956—we have been aware of the immediacy of the Government's action? Now, we have been told about its effectiveness. Will the right hon. Gentleman tell the House what is the difference between the sum of the claims put in by people who have suffered losses and the sum that is now to be available, so that we shall know what the disparity is, if any, between the two?
Further, following on the question of the right hon. Lady the Member for Moss Side (Dame Florence Horsbrugh), will the Chancellor inform the House of the facilities that are to be made available to small people who have lost property, and who cannot make use of machinery to make the claim?
It is very hard to be precise, because the only figure we have for the claims is the value that the owners themselves attach to their claims. When it comes to an owner assessing the value of his own property, I think that owners are very often apt to take a somewhat rosy view. I should say that the value of the property to be desequestrated—the claimed value—is well over £100 million; 38 probably about £130 million. The value of the Egyptianised, or nationalised, pro-parties is about £45 million for business property. For land, it is a few millions more, but it is impossible to be precise until we can see how the formula that has been agreed for the treatment of land can be applied to individual claims.
§ Mr. Grimond
As one of the reasons given by Her Majesty's Government for this expedition was the protection of British property in Egypt, may we take it that even if the Government feel that the individual claims are, perhaps, rather more than is justified, the Government themselves will make up the difference between the sum offered by the Egyptians and that which was finally agreed was lost by the individuals?
No. The Government have always made it clear that they cannot accept a commitment for paying compensation in oases of this kind, where damage is suffered to private property in foreign countries.
§ Major Legge-Bourke
In view of what my right hon. Friend has said about the difference in the estimated value of the Egyptianised property and the £27½ million, will he now take steps to see that some compensation is provided by Her Majesty's Government for those people, to make up the deficiency? May I add that I really do not think that that wisecrack about evaluation by owners was worthy of him?
I do not think that my hon. and gallant Friend can have heard the reply I gave a moment or two ago to the hon. Member for Orkney and Shetland (Mr. Grimond), when I said that neither Her Majesty's Government, nor any previous Government of this country, has ever accepted a commitment to pay compensation in such circumstances where losses have been incurred. One point that I should like my hon. and gallant Friend to remember in connection with that lump-sum payment is that claims will be paid out of it in sterling, and not in Egyptian currency, in which their claims would otherwise have had to be met.
§ Mr. Bevan
While it is generally accepted that it is quite impossible for a Government to accept responsibility for payment of compensation for loss of the property of British nationals abroad arising out of military action, is it not a fact 39 that this is a peculiar case? In most instances, there is some kind of warning—some negotiations have taken place, some kind of tension has arisen, some sort of apprehension has been caused—and people can take action to protect themselves. In this case, it was a lunatic action out of the blue. Nobody could have taken any action at all to protect himself. Would it not, therefore, be desirable that as those who support the Government in this country are largely drawn from the propertied classes a capital levy should be levied to compensate those who have suffered from their behaviour?
§ Viscount Hinchingbrooke
Is my right hon. Friend aware that the country will hear with the greatest anxiety that whereas the total of the claims put in by reputable persons in business amount to £45 million, the Government have been able to secure from Egypt only £27½ million? Is that the Government's last word in the matter? Will they not reconsider the possibility, in this particular and special case, of discharging, in part, the difference between those two sums?
I have already said that I think it premature to say, at present, how the substantiated claims will compare with the sum available. It will be for the Foreign Compensation Commission to receive those claims, and to adjudicate upon them.
§ Mr. Chetwynd
Can the Chancellor tell the House the total cost of the campaign—in military expenditure, loss of trade and loss of compensation?
§ Mr. W. Yates
Is my right hon. Friend aware that the majority of fair-minded people, both those who have put in their claims, and businessmen, will accept and thank him for his work in obtaining this Agreement? Is he also aware that the Agreement would be very much better if he would ask his right hon. and learned Friend the Foreign Secretary to consider asking for the immediate release from gaol of Mr. Swinburn and Mr. Zarb?
I have no doubt whatever that, in its totality, this Agreement is of advantage to the United Kingdom, and that it was a good thing to have it signed.
The second part of my hon. Friend's question is a matter more for my right hon. and learned Friend the Foreign Secretary than for me.
§ Mr. Gaitskell
Will the Chancellor, in consultation with the Leader of the House, arrange for an early debate—in Government time—on this Agreement and its implications? In anticipation of that, could he provide us now with the figure for the net total loss of the Suez adventure?
I have no doubt that my right hon. Friend has heard the first part of the right hon. Gentleman's question. The answer to the second part would be quite outside the terms of the financial Agreement that I am explaining to the House today.