COLONIAL WAR RISKS INSURANCE (GUARANTEES) BILL. (Hansard, 15 July 1941)

§ The Under-Secretary of State for the Colonies (Mr. George Hall)
I beg to move, "That the Bill he now read a Second time."
The purpose of this Measure is fully explained in the explanatory memorandum attached to the Bill. It is to enable the Government to guarantee schemes of insurance of commodities against war risk in Colonial dependencies which do not possess the financial resources to undertake the institution of schemes without such assistance. Happily, few of our Colonies have yet been exposed so much to the destruction brought about by enemy action as this country has. Others might suffer in certain contingencies. Just as in this country, the trading communities in various dependencies have been anxious, in financing their operations, to have the 541 advantage of some kind of insurance cover against the risks of damage to their stock-in-trade by enemy action. The potential liabilities of such an insurance are, however, very considerable, and the resources at the command of some Colonial Governments which are likely to be affected are not sufficient to enable them to undertake those large liabilities, with the result that last autumn the late Secretary of State, Lord Lloyd, approached the Chancellor of the Exchequer and secured agreement to the principle of Colonial schemes being instituted where necessary with the backing of His Majesty's Government. It was agreed that the Treasury would meet any deficits which might arise on the operation of such guaranteed schemes, and, of course, it followed that any profit or surplus on the operations of such a scheme would be disposed of as the Secretary of State, with the approval of the Treasury, may direct. This method of procedure was thought to be preferable to the institution of a single scheme centralised in London and covering all Colonies or all those likely to be affected.
What we contemplate Is that local schemes would be instituted in dependencies or groups of dependencies as and when they appear to be necessary. We hope to have the advantage of local management through the locally-established insurance companies, who will act as agents for the Colonial Governments. In accordance with this intention a scheme has been in operation in Kenya and Uganda since 1st January, 1941, and I announced in reply to a Question in this House on 6th February that if the necessary legislation were passed by Parliament a guarantee then would be given to the scheme by His Majesty's Government. Similar promises have since been given to Palestine and Hong-Kong, but there schemes have not yet actually come into operation. The matter has also been considered in certain other territories, in particular Ceylon and West Africa, but it has not yet seemed sufficiently pressing to necessitate any action. As regards Malta, it has been decided not to proceed with the scheme, since all important trade is now on Government account. In Cyprus the matter is under consideration. In Malaya a scheme has been brought into operation, but I am pleased to say that the financial resources of the local administration are sufficient to enable them to dis- 542 pense with any guarantee from His Majesty's Government.
Hon. Members will see that the Bill is a short one, consisting of two Clauses. Clause 1 provides that Colonial schemes to be covered by the Bill must be on the same general lines as the commodities war risk insurance scheme operating in this country, and based on Parts 2 and 3 of the United Kingdom Act of 1939. The schemes will be compulsory and the rates of premium will be subject to approval here. In the case of the Kenya and Uganda scheme, the rate of premium was originally 7s. 6d. per cent. per month. At present it is 3s. 9d. per cent. per month, and it has now been further reduced to 2s. per cent. per month. Clause 1 also makes necessary provision for the advancement of money from the Exchequer to a Colonial fund to meet temporary deficits in that fund, also for the subsequent repayment of such advances by the fund, so that we safeguard the interests of the taxpayers here.
Clause 2 extends the provisions of this measure to the Sudan, to British protectorates and protected States and territories under British mandates. I am sure that my hon. Friend will agree that it is right that we should extend this measure of assistance to Colonies which, like ourselves, are liable to aggressive attack, and also, like ourselves, are contributing to the best of their ability to the common war effort. As is stated in the Financial Memorandum which accompanies the Bill, we cannot give the House any estimate of the possible liabilities which may be placed on the British Exchequer by this Measure, but I feel sure that hon. Members will accept this uncertain liability as a part of the necessary cost of the war. It is desirable that the Bill should be passed into law without delay, as the Kenya and Uganda scheme is already in operation, and the formal guarantee should become operative as soon as possible.

§ Mr. T. Smith (Normanton)
This Bill is regarded as a necessary Measure, and therefore I should like to assure my hon. Friend that we on this side shall not do anything which would hinder its passing, but there are one or two questions which I should like him to answer. I am told that in Ceylon commercial interests have been asking for a scheme of this character. I should like him to tell us whether 543 he has any information about it. Secondly, in various parts of our Colonial Empire there are stocks of commodities kept there for specific purposes, and we should like to know whether those stocks will be covered by any scheme instituted under this Bill. If my hon. Friend will give me that information, there is no reason why the Bill should not go through very quickly.

§ Sir Granville Gibson (Pudsey and Otley)
I should like a little information on one or two points. I take it that among the British Protectorates and protected States is Palestine. When I send goods to Palestine, say to Jerusalem, the customer sometimes desires that they should go by parcel post. I am able to cover the goods until their arrival at the Palestinian port, say Haifa, but I have no cover at all between their arrival at Haifa and their arrival in Jerusalem. I welcome the Bill because it seems to cover goods immediately they arrive at the shore—taken off the ship, for example, at Haifa and until the time they arrive at Jerusalem. If the goods go by parcel post, does the cover come into operation? I am informed that there is no war damage cover of goods taken to some foreign country—to take a case in point, say from Alexandria to Cairo—by the General Post Office. Will there be any cover to any specific point? At the present time for goods that go by post, there is no cover beyond the port of arrival, in the country to which the goods are sent. In these difficult days, goods destined for a certain country may go to all kinds of ports; for instance, for the Sudan the goods may go to Port Sudan or to Alexandria. Therefore, if goods arrive at Port Said or Alexandria when sent by parcel post, there is no cover between Alexandria and Port Said or Port Sudan, if the goods go that way. What is to happen, if this scheme comes into operation, to goods sent by parcel 544 post as against the ordinary shipping process?

§ Mr. George Hall
I can speak again only by leave of the House. My hon. Friend the Member for Normanton (Mr. T. Smith) raised a point concerning Ceylon. I explained in the course of my remarks that Ceylon is now considering the institution of a scheme, but the local Government have not yet deemed it necessary to take any action. Presumably the latter is still being considered, but I have no doubt that if sufficient pressure is exercised the Government will take action. Fortunately, Ceylon is outside—at least it has not been greatly affected by—the war, so far. If the territory were likely to be affected, the Government would take action in connection with the matter. With regard to the stocks, my hon. Friend is quite right. Considerable stocks have been purchased, particularly in West Africa. West Africa does not come into the scheme yet, for the single reason to which I have referred in connection with Ceylon, but we are in consultation with the Ministries of Food and Supply as to whether they wish stocks in their own ships to be covered. These negotiations and consultations are going on at the present time.
With regard to the point put by the hon. Member for Pudsey and Otley (Sir G. Gibson), it is hardly possible for me to give a reply as to whether the goods are covered in the post or in sea transit. I should say that the scheme applies only to stocks over £1,000 in value, and stocks of goods of less than that value will not come under the scheme. I am not quite sure about goods exceeding that value, but I will make inquiries and let the hon. Gentleman know.