HC Deb 23 January 1940 vol 356 cc437-40

Order for Second Reading read.

4 7 p.m.

The Financial Secretary to the Treasury (Captain Crookshank)

I beg to move, "That the Bill be now read a Second time."

There is a very long Preamble to this Bill, but it is not by any stretch of the imagination what one would call pellucid. The story dates back to two Acts which this House has already passed, and the story that I want to put before the House begins with the Act of last year entitled the Czecho-Slovakia (Financial Assistance) Act. Hon. Members will recollect that that Bill ratified two agreements which had been concluded between His Majesty's Government and the Government of Czecho-Slovakia, to one of which the French Government was a party. As was announced in the House at the time, it was proposed that there should be a free gift from this country to Czecho-Slovakia of £4,000,00o which was to assist them, after the time of Munich, in dealing with their very difficult problem of refugees. There was a second sum involved, which was a loan of £6,000,000, which it was intended to use for various works of internal reconstruction in that country, and so the position was that when we passed the first Act of last year we had already given a free gift of £4,000,000 to the Czecho-Slovak Government and we had lent them £6,000,000 for the purposes of internal reconstruction. Those two separate sums were placed to the credit of the National Bank of Czecho-Slovakia at the Bank of England and were drawn upon from time to time up to 15th March last year, that date being, of course, the date when Czecho-Slovakia was overrun. If hon. Members want to know what the state of those accounts is at the moment, the loan account of £6,000,000 now stands at just over £3,500,000 and the gift account of £4,000,000 stands at just over £3,000,000.

But there is a further complication, in that the Czecho-Slovak Government decided to earmark part of this gift of L4,000,000, namely, £500,000 to assist the emigration of refugees to Palestine, and started for that purpose another account, the Lloyds Bank Gift Account; that will explain why there are references in the first Clause, Sub-section (1), to the Bank of England Gift Account and in Sub-section (2) to the Lloyds Bank Gift Account. The sum originally paid in was £500,000, and the sum now standing under that account is just over £400,000. That is the first part of the story—the loan of £6,000,000, the gift of L4,000,000, and the gift itself sub-divided by putting £500,000 to a special account.

Then came the overrunning of Czecho-Slovakia, and with the consent of the House the Government took immediate action then to secure that the German authorities should not be able to obtain all the Czecho-Slovak assets in this country, while failing to make provision for the transfer of financial debts to British creditors. The Act which was passed by this House in March last year, the Czecho-Slovakia (Restrictions on Banking Accounts, Etc.) Act, therefore, blocked all the Czecho-Slovak bank balances, gold and securities, at the time of the invasion. That, of course, included these amounts to which I have referred, the loan account, the gift account, and the Lloyds Bank account, and so the result was that the National Bank of Czecho-Slovakia could not operate those accounts for the purposes for which they were intended by this House, nor could anybody else; in effect there was a legislative standstill in regard to the operation of the refugee funds. But at the time, during the Debates on that Bill, my right hon. Friend said that by one means or another it was the intention of the Government that the amount of these gift accounts should be made available for their original purpose, which was the assistance of the refugees. In order to make that possible and in anticipation of legislation of the kind which I am now attempting to describe to the House, this House voted in July last a sum of £2,500,000 which could be issued as necessary to the trustees of the CzechoSlovak Refugee Fund, so that they could be put in funds for the purpose which we all had a very sincere wish to see carried out.

That is the background of the story. The Bill, therefore, comes along to regularise the position. Clauses 1 and 3 finish the story so far as the refugee account is concerned. What is to happen is that the sums that now stand to the credit of these two gift accounts—what is left of the original £4,000,000—will be paid to the Treasury, and the Treasury will pay into the Exchequer a sum equal to the amount which has been advanced to the trustees under the Votes last July, thus repaying that advance. When that has been done the balance will be paid into the fund known as the Czecho-Slovak Refugee Fund, as described in Clause 3 of the Bill. That fund will be, as Clause 3 says, under the control of the Treasury, and they will pay out to the trustees such sums as may be shown to be necessary from time to time for the purposes of carrying out the trust. I hope that that is clear so far as the refugees are concerned. I should say, because it is now not quite accurate, that on the Financial Memorandum to the Bill the last sentence but one points out that up to the 15th July £500,000 had been so advanced, that is advanced out of the £2,500,000 estimate which we voted in July. In point of fact that was accurate at that date, but a further £100,000 has since been issued and, therefore, what will be eventually available to the trustees for this purpose is a sum which I cannot exactly give to the House; but I can give the factors which will in due course lead to its exact estimation. It will be this, the balance now standing in the two gift accounts, less £600,000 which has been advanced out of the £2,500,000, plus any additional interest which may have been earned on that money since the middle of January, and less any further advances the Home Office may have made over the £600,000 before this Bill becomes law.

Mr. MacLaren

In round figures what is that?

Captain Crookshank

I suppose at present somewhere about £2,500,000. I do not know whether they will not want a further advance before the Bill is passed. So much for the gift account to refugees. The other account is the loan account referred to in Clauses r and 2. It was always the intention that the assets which were blocked under the Czecho-Slovakia (Restriction of Banking Accounts, etc.) Act, that is the second Act last year, should be used in such a way to give protection to British creditors with financial claims on Czecho-Slovakia. The assets in this country broadly speaking are divided into four classes. There is first of all this loan account, secondly the gift accounts, thirdly the assets of persons who have left Czecho-Slovakia, and fourthly, the assets of persons, including the Bank of Czecho-Slovakia, who are still in that country. Now, if we look to the source of money for the purposes which I have mentioned, obviously the gift account cannot be considered, and obviously the balances of persons who have left CzechoSlovakia, and, therefore, are themselves at present in the position of a refugee cannot be looked to. We have already under the powers of the Act made certain releases to such persons of their own assets in this country and I think everybody would agree that that is right. It would not either be suitable to look to the assets of the persons who are still in CzechoSlovakia, because these balances can hardly be used in time of war and must remain blocked until the end of the war. So the only source from which assistance can be given for the purpose of dealing with these financial claims—

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