COLONIAL AND MIDDLE EASTERN SERVICES. (Hansard, 9 March 1945)

§ The Secretary of State for the Colonies (Colonel Oliver Stanley)
I think it would be only courteous to the Committee to give a, brief explanation, at any rate, of the first item—the token sum for Nyasaland. It is a rather complicated matter connected with the Nyasaland Railways, and, although I cannot, I am afraid, imitate the rather limpid legal language which the hon. Member for Bristol South (Mr. Alexander Walkden) so much admires, I thought I ought to explain the position of the Trans-Zambesi, Railway as an important link between Nyasaland and Beira on the coast of Portuguese East Africa. It is a railway which is a separate financial entity, but is run in connection with the Central African and Nyasaland railways. It was started as a development project in the hope that the making of a railway would create the traffic for it, but unfortunately, so far, that has not been so, and, though it is a most efficiently managed concern, the amount of traffic offering has never been enough either to 2399 make a profit or to enable it to pay its prior charges. This arrangement, for which I ask for this token sum, is designed to effect a redemption and a reduction in the rate of interest on some of these prior charges.
These consist of two classes—the six per cent. first mortgage debentures, of which three-quarters are held by the public, and one quarter by the Nyasaland Government. It is guaranteed by the Nyasaland Government, and, under that guarantee, with the help of His Majesty's Government, the Nyasaland Government, has year by year, had to fulfil this guarantee. That guarantee comes to an end this year, and, thereafter, unless the service of the mortgage debentures can be met, the private debenture holders would be entitled to foreclose on the railway, and, in doing so, do infinite damage to the Colony of Nyasaland.
11.45 a.m.
The other prior charge with which this is concerned is £200,000 3½ per cent. Guaranteed Notes, guaranteed by the Nyasaland Government, held entirely by the Crown Agents on behalf of certain colonies and falling due for redemption this year. In the circumstances we have come to an arrangement whereby the Nyasaland Government will provide the money to redeem that portion of the 6 per cent. Debentures £573,000—which are held by the public, will convert the debentures which they themselves hold, and will take up the £200,000 of Guaranteed Notes which fall due for redemption. They will in return for this take an equivalent amount in 3½ per cent. Debentures from the company. As the Nyasaland Government themselves have not the necessary funds, it will be necessary for His Majesty's Government to lend them this sum in order that this transaction may go through. It is not intended that the loan which His Majesty's Government make to the Nyasaland Government should be a burden on their already difficult finances, and the arrangement is that the repayment to the British Government by the Nyasaland Government will be confined to those sums which they themselves receive from the company in the form either of interest or of redemption payment. As a matter of fact, under this new arrangement, which so largely reduces the rate of interest on the prior charges, a sum of £50,000 a year will be 2400 saved in fixed charges and that should in future enable the company to pay the service of this new Debenture without assistance.
The present is an unsatisfactory position. This is, as I say, due in no way to any inefficiency on the part of the railway management. It is clear, if not only the affairs of this railway, but of the other two railways in Nyasaland are to be put on a proper basis, some means will have to be found to provide more traffic for the railways. We are looking at that under two heads. One is the development of the economy of Nyasaland, and there a Development Adviser, who will serve both Nyasaland and Northern Rhodesia, is now at work. The other is an examination into the railway rates structure and the possibility of using motor transport as a feeder of the railway services. There we have had the advantage of Mr. Rooke, who has lately retired from the direction of railways in Nigeria and has been conducting an examination into these possibilities. Although, of course, the future of the railways must to a large extent depend upon the economic future of Nyasaland, we hope by these two means to establish a more satisfactory position in the future. That, I think, is the only item on the rather long list both of increased expenditure and of savings which needs explanation to the Committee, but I would naturally be prepared to answer any questions.

Mr. Creech-Jones (Shipley)
I am sure that the Committee is obliged to the Secretary of State for the Colonies for giving us this explanation of this rather intricate matter. I raised the question some years ago in Committee, because the whole business seemed to me to be extremely difficult of understanding, and I confess that, after trying to inform myself, I got very little satisfaction from the explanations which were then offered. I am very glad that the Secretary of State is now able to come forward and put to us an arrangement which is likely to give general satisfaction and propound what is really a step towards straightening out the difficulties in connection with this particular railway. One can only hope that the work which is now going on in Nyasaland to improve the economic position of that Colony will mean that greater prosperity will come to the railway and 2401 that its liabilities will be much more easily met.
I want to make some reference to the grant to Jamaica and Mauritius. I am very glad that the Secretary of State has seen fit to expand the benevolent contribution toward the people afflicted by the havoc of the cyclone being able to recover some of their losses in terms of house property. We can congratulate the Colonial Office on the very expeditious way in which the whole problem was handled and on their generous approach to it. I would like to ask whether it is humanly possible for the Colonial authorities to devise some method of meeting the losses which from time to time overtake our Colonies as the result of what might be called "an act of God." Recently representations have been made to the House for special grants when this Colony or that Colony suffers from catastrophes completely outside its own control, and it has also occurred to me that conceivably, just as in the case of war-time some special provision is made for meeting war damage, there might be a pooling by the Colonies of some kind of insurance fund out of which extraordinary expenditure due to catastrophes might be met. It does seem rather disturbing that Colonies from time to time must come to this House because of the dire need in which they are placed as the result of these happenings. It may happen that at some time or other money may be a little more difficult to obtain than is the case at the present moment. Therefore, in order that, when we are less able to be generous, the difficulty of Colonies may be met, I would like to know whether some proposition along these lines could not be examined.
In regard to the grant to Mauritius for relief of distress, may I ask the Secretary of State whether some relief could be given to poor people because of the cost of bread. I gather that some amelioration is possible there, for prices are unduly high, and certainly the people who have suffered rather a lot from the cyclones would find it a little easier if this very important daily commodity could be distributed at a price less than it is just now. There is also another considerable fund which has accumulated in Mauritius during the war for war contingencies, and as that fund is not likely to be available, would it be possible that some of the money could be diverted to helping for- 2402 ward some of the difficulties which the cyclone has produced?
One last inquiry refers to the Aden Protectorate. It is not very clear from the papers in front of us what are the relief measures which are called for in Aden. I would personally like to know what the Secretary of State has in mind in suggesting that £250,000 should be made available for that purpose.

§ M. Colegate (The Wrekin)
I should like to ask one question with regard to the position of the Nyasaland Railway and other interests there in relation to the Port of Beira. Many of us who have considered that matter feel that the time has come when my right hon. Friend should try to arrange—of course it would have to be done through the Foreign Office—to meet the Portuguese Government to see whether more satisfactory arrangements for co-operation could be made between the Rhodesian, Nyasa and other interests which use the Port of Beira and the Portuguese authorities. The commercial policies followed by the two systems are so different in outlook and in their administrative arrangements that one cannot help feeling that more satisfactory arrangements should be reached with the Portuguese Government as to the commercial and industrial arrangements which prevail in the Port of Beira. I do not know whether my right hon. Friend can say anything about that matter, but it is one of very great concern to those who have any interests which use the Port of Beira.

§ Colonel Stanley
Perhaps I may reply to these inquiries. The hon. Gentleman the Member for Shipley (Mr. Creech Jones) called attention to the fact that Parliament is, from time to time, asked to vote sums to assist Colonies which have been struck by some act of God. I think he will appreciate that the cases in which we have to do it are those cases where the finances of the Colony are so difficult that it has been impossible for them to build up any reserve sum. It would, of course, be the proper, prudent financial thing to do, and many Colonies where the economy is more easy have done it, but if, for instance, one asked Jamaica to put aside a certain sum in order to have a reserve fund to meet a contingency of this kind, it would only mean that year by year, in some other way, we had to make to the people of Jamaica, under the present financial diffi- 2403 culties from which they are suffering, the money they were so putting aside. I will certainly see whether it is possible or necessary to recommend to Colonies that, where it is practicable, they should take steps to form some reserve or other, but I am sure the hon. Member will realise that it is not possible in the case of all Colonies.

Mr. Creech Jones
I was thinking more in terms of an inter-Colonial fund—with the poverty of the separate Colonies, obviously there are difficulties—of a general pool on some insurance basis.

§ Colonel Stanley
That raises very great difficulties, because the incidence of a cyclone is quite different in some Colonies from what it is in others. It would be very difficult to have a general pool to which a Colony had to make a contribution which bore no relation to what is extremely difficult anyhow, finding out the actuarial risk of disaster happening in their Colony. With regard to Mauritius, I will bear in mind the suggestions made by the hon. Gentleman. At the moment, of course, we have only made a contribution intended to deal with immediate distress, but at the time I told the House I proposed to ask their sanction to this payment I also said that I was asking the Governor, when he put up a complete scheme for rehabilitation after these disasters, to say whether any further assistance was needed from His Majesty's Government, and I was sure that the House would entertain any reasonable request favourably. With regard to the Aden Protectorate, we were faced there with conditions of complete famine, and the majority of this money had to be spent on purely relief measures, such as soup kitchens and the importation of food. Some portion of it was spent upon loans to the farmers to try and improve agriculture for the future. The hon. Member for The Wrekin (Mr. Colegate) referred to the position of the Port of Beira and, of course, raised a very important question. I think he will not expect me to go into it now as it involves discussion and agreement with the Portuguese Government, but quite clearly, in any general review of the situation of the Nyasaland Railway, that would have to be taken into account.