§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Wilkins.]
§ 7.31 p.m.
§ Colonel Crosthwaite-Eyre (New Forest and Christchurch)In the last few months a number of Questions have been asked in this House about what action the Government are taking to safeguard British assets abroad. Whatever view hon. Members in one quarter or another may take, one thing is quite certain, that these assets have not been safeguarded. One has only to think of the sorry history of how the Government has traded away our assets in the Argentine and have allowed our assets in Roumania and Poland to be taken from us to realise that, instead of fulfilling the prime duty with which any Government is charged—that of looking after the interests of their nationals who may own property abroad—the Government have let one asset after another vanish and disappear.
I want to raise tonight the question of Burma. I have carefully restricted the subject to one country because any debate of a general nature might allow the Government to ride away on general observations. But if we take one country only—and one which is typical of what 475 has happened in others—we shall be entitled to expect a clear answer from the Government as to what they have done and why they have allowed the present situation to arise.
Under Article 7 of the Treaty which recognised Burmese independence, the British Government rightly maintained that all British concessions, contracts and rights of property which had been guaranteed by the previous Government of Burma should be guaranteed equally by the new Burmese Government. And very rightly, since it would not be possible for a commercial treaty to be negotiated before Burmese independence was effected in January of this year, an exchange of letters took place between the Prime Minister and Mr. Thakin Nu, the then Prime Minister-designate of Burma, to emphasise the requirements of Article 7. I draw the attention of the House to those letters, which are published as an annex to the Treaty, and particularly to letters 1 and 2. Paragraph 2 of the first letter, written by the Prime Minister, says:
I have, therefore, to express the hope that the Provisional Government of Burma will not during this interim period take action which would prejudicially affect existing United Kingdom interests in Burma.Mr. Thakin Nu, in replying to the Prime Minister, said that he accepted that that should not be done until the commercial treaty was made. But he went on to say:I have, however, to explain that this undertaking must be read as subject to the provisions of the Constitution of the Union of Burma as now adopted, and in particular to the policy of State Socialism therein contained, to which my Government is committed.It is not for me to argue now what that policy of State Socialism has meant. Mr. Thakin Nu, however, said that if this policy meant the expropriation of British assets, he would see that equitable compensation was paid. It is fair to say that on the day that Burmese independence took place His Majesty's Government, both by Article 7 and by this exchange of letters, had seen that, in addition to written treaty obligations, specific assurances were obtained that British assets would be respected and that the Government of Burma would be fully responsible for seeing that no British right, concession or property should be in any way affected by the transfer of 476 power from this country to the Burmese Government.But what has happened? I think it is reasonable to take the case of the Irrawaddy Flotilla Company as a typical example. Here, apparently, a Bill was introduced into the Burmese Legislature and passed all its stages in one day, 19th April. No opportunity was given to the company to make any representations or to state its case against being taken over. The Bill, which became law, gave no indication of which assets of the company were to be taken over. It made no reference to compensation but said merely that, pending a settlement, the expropriated assets of the Irrawaddy Flotilla Company would be hired by the Burmese Government on terms to be settled at some later date.
After the Bill was passed, a committee of three was established, consisting of a judge of the Rangoon High Court, a representative of the Burmese Government and one from the company. This committee was to try to iron out the method in which this transfer should take place. It was laid down that the transfer should take effect not later than 1st June, giving a matter of some six weeks only for the transfer of this company, with its very varied and very large assets, to take place. On 1st June, however, the committee had reached no solution at all to any of these problems. It had still to find what assets were to be taken over and their value. It had made no arrangements about the method of payment of compensation or the total sum that might be expected to he paid as compensation.
On 1st June the assets of the company were expropriated and it was left completely in the dark as to its future. In July, a month after the expropriation, this committee which was sitting to try to assess compensation was dissolved. A new committee was established, with the same judge as president, but with the secretary of the Planning Department of the Burmese Government and a member of the Burma Corporation as its two further members. I understand the reason for the change was that the first committee was considered to be too prejudiced on both sides. That prejudice is, perhaps, understandable when one realises that the Irrawaddy Flotilla Company has submitted a claim for over £1frac12; million compensation, but that the 477 Burmese Government are willing to pay only £200,000, or something like one-eighth of what is claimed. Although no decision has yet been reached, the only information which the company has got is that payment, if and when it is made, will probably be made in non-negotiable bonds.
The first question I should like specifically to ask the Economic Secretary to the Treasury is how he manages to square this position with the statement of the Minister of State, who, in answering a Question in this House on 21st June, said:
… we have made it plain from the beginning that the Burmese Government must be able to meet in an acceptable currency the legitimate claims of British subjects …"—[OFFICIAL REPORT, 21st June, 1948; Vol. 452. c. 932.]It does not seem very fair to find, six months after the expropriation of the company, that all it can now expect is non-negotiable bonds.There are many further examples of what has happened to British assets in Burma, but I will quote only two others. The first is of a small private company, Kyautaga Estates, owning something like 40,000 acres of rice land. The Burmese Government decided to take it over and the method they employed was deliberately to encourage banditry and dacoity so that in fact the estate could not be run. Then they informed the estate that it was impossible for it to run its affairs and they proposed to expropriate it. They then did expropriate it and no compensation has even been agreed up to the present. It reminds me very much of what happened in Roumania in regard to the equally valuable assets of the Astra Romana oil undertaking. Then there is the case of Messrs. Foucar and Company, Limited, Teak Estates. At short notice they were told they would be expropriated and negotiations have dragged on, not only during the short period between notice and expropriation, but until now. The company has lost all its assets and it has no idea what compensation it will receive, nor when it will receive it.
In 1941, the then Government of Burma instituted a War Risks Insurance Scheme. Under this scheme it was mandatory for anyone who owned goods to the value of more than 15,000 rupees to insure. In 1941 and 1942, when the 478 Japanese invasion took place, it was the policy of the Government to deny to the Japanese the use of any material or stocks that might be left behind when they retreated. The Irrawaddy Flotilla Company, for instance, lost a large percentage of their shipping; other companies their crops of rubber and other commodities which were destroyed.
So long as the late Government existed, it was agreed that all that would be covered by the War Risks Insurance Scheme, but, quite suddenly, since independence has taken place, the Government of Burma have repudiated all these claims and have said that whatever assets may have been destroyed, that is the funeral of those who owned them and that Burma was not concerned as it was not a war in which Burma took part. I suggest that under Article 7 of the Treaty clear obligations are set out, but here is unilateral repudiation and, as far as I am aware, His Majesty's Government have taken no direct action at all. In fact, the only concrete statement which we have is that made by the Chancellor of the Exchequer on 9th November in which he said:
As far as I am aware there has been no request for us to give any assistance."—[OFFICIAL REPORT, 9th November, 1948; Vol. 457, c. 1378.]I am certain that the Economic Secretary will agree that the Irrawaddy Flotilla Company asked for assistance in April this year and I also believe Messrs. Foucar and other companies have also asked for assistance. I admit the Chancellor did me the courtesy of writing on 12th November and saying:I should perhaps have made it clear that whereas we have not taken part in any detailed discussions between the firms and the Burmese Government and have not identified ourselves with the amounts of claims put forward by the firms, we have continuously pressed the Burmese Government to carry out the undertaking given ….It seems to me very weak if that is all His Majesty's Government have done—to press the Burmese Government. Surely it is their duty to identify themselves with individual claims and to press them to see that no British individual, and no British company, shall suffer because of unilateral action by a foreign power. I hope the Economic Secretary will give an assurance that in future, any British interest or any British company in Burma, or for that matter anywhere else, that 479 feels it is injured can appeal to His Majesty's Government with confidence that if its claim be just, it can have the full weight of His Majesty's Government behind it.I much regret that hon. Members opposite seem to take a rather impish delight in seeing British assets destroyed. They seem to take the view that every time a British interest abroad is expropriated, a little more of wicked capitalism is destroyed.
§ Mr. Tolley (Kidderminster)Will the hon. and gallant Member give some instances?
§ Colonel Crosthwaite-EyreWhen the question of Burma was raised on this side of the House on 9th November, there was a perfect example. Every time a British asset is expropriated without compensation it has a vital effect, not only on our balance of payments, but even on our ability to buy food and raw materials which we need in the immediate future. Every time an asset goes, so does our position become worsened and our resources for gaining foreign currency depreciate. Burma has obviously flouted its agreements and repudiated that to which it set its name only a few months ago. On the other hand, we give Burma the right to acquire £2 million of hard currency against sterling. It is a favour to a country to allow it to trade on our hard currency resources of which we ourselves stand so desperately in need. Surely if Burma has that sterling with which to pay us, it should have been used to pay compensation for companies which have been expropriated, rather than being used, and allowed by His Majesty's Government to be used, for obtaining hard currency at our expense. I hope that we can have a reassuring statement tonight from the Economic Secretary, assuring us not only on the particular cases in one country which I have raised, but also that His Majesty's Government will see that British interests throughout the world receive a square deal.
§ 7.47 p.m.
§ The Economic Secretary to the Treasury (Mr. Douglas Jay)I can assure the hon. and gallant Member for 480 New Forest and Christchurch (Colonel Crosthwaite-Eyre) that we are every bit as insistent as he is that equitable compensation should be provided by the Burmese authorities for British property nationalised in Burma. In fact, as he said, we secured an undertaking from the Burmese Government in the exchange of letters between the two Prime Ministers on 17th October, 1947, that "equitable compensation"—those were the exact words—should be paid; and since then we have repeatedly pressed the Burmese Government to make arrangements for such compensation. I can assure the hon. and gallant Member that we shall continue so to press until that is done. In addition, we have indicated to the Burmese Government that we are ready to discuss the precise interpretation of the undertakings which they gave to grant equitable compensation. I can also tell him that we are not yet satisfied with the response we have had to those recommendations. He said that in one case non-negotiable bonds had been offered as compensation——
§ Colonel Crosthwaite-EyreNo, may 1 correct that? I understood that was to he the general means of compensation.
§ Colonel Crosthwaite-EyreMay I appeal to the hon. Gentleman to go further and say that he will not accept it?
§ Mr. JayWhat I would prefer, since it is not the Government who are accepting the compensation but the companies, is that we should not be satisfied with a general method of compensation which did not provide for payment in convertible currency. We are no less determined than the hon. and gallant Member to insist that equitable compensation is in fact provided. The only question which divides us is how that undertaking can be pressed. The Burmese have given us the undertaking and the issue is really what is the best method and the wisest course for the British Government to adopt to ensure that that pledge is carried out. In our view the adoption of any more extreme measures than we have taken at the moment would not be calculated to accelerate the payment of compensation to the British companies.
481 As the hon. and gallant Member knows, the Burmese Government have been engaged in allaying disorders in their own country and those disorders have as a result affected their rice exports and foreign exchange resources. If compensation is to be paid, and paid in convertible currency, two things are obviously necessary—first the co-operation of the Burmese Government in the whole transaction, and secondly the recovery of Burma's economic fortunes. In our view, the adoption of any sort of drastic measures at this moment would not help to achieve either of these aims and, therefore, would not accelerate the payment of the compensation which we all desire. Burma's present financial position is not strong, and within the next few months she may be well short of sterling. With the present keen world demand for rice, however, the situation might soon improve if settled conditions returned in Burma and if rice exports began to increase again. We must do all that we can to ensure the return of such conditions so that payment of compensation in convertible currency may become possible.
The hon. and gallant Member accused us of having been weak in not going beyond the measures which we have already taken. I think I understood him to suggest or to imply that perhaps we ought to take some step to earmark or even impound some of Burma's sterling balances now in this country. If the hon. and gallant Member did not suggest that, there is no need to argue the point. If he did suggest that, I should have to remind him that the major part of these balances represents the backing of Burma's currency, and that it would be a very drastic step indeed to do anything of that kind.
The hon. and gallant Member also mentioned the £2 million of hard currency which, as he quite correctly said, we agreed to grant the Burmese Government for the second half of the present year. I know that the hon. and gallant Member has his own conception of the sterling area system by which, although most or all of the countries which are members of it contribute hard currency to the central reserves, apparently only the United Kingdom is to be allowed to draw hard currency out of it. That is not a conception which, if it were put into practice, would make the sterling 482 area popular or indeed very enduring. So long as Burma is a member of the area, and, in particular, a member who is able to conserve the resources and economic strength of the area by rice and other exports, she must be allowed reasonable access to the central reserves, like any other member, for essential purposes. In the agreement to grant that hard currency the usual safeguards were inserted.
I do not think that the hon. and gallant Member really made any other practical suggestions by which we could really accelerate the payment of this compensation. As I have said, it is our aim to ensure that compensation is paid for those properties at the earliest possible moment. We are taking all the steps which in the circumstances seem to us best calculated to achieve that aim. I think that on the whole the British Government, with the information they have at their disposal, are probably the best judge of what methods are likely to bring about that result. Nothing that the hon. and gallant Member has said this evening has weakened my belief that any more drastic and extreme measures would do more harm than good.
I should like to assure the House that we do not in any way dissent from the view which the hon. and gallant Member has put forward that the Burmese Government must continue to be pressed to carry out their perfectly clear pledge to grant equitable compensation in all these cases.
§ Mr. Eccles (Chippenham)Will the Economic Secretary say a word about the claims of the British companies for the stocks which they destroyed, on orders from His Majesty's Government, to prevent them falling into the hands of the Japanese? Do the Government take any responsibility for those losses or not?
§ Mr. JayThat comes under the heading of war damage compensation, which is a separate issue from compensation for nationalisation. However, we have not overlooked those claims. Negotiations are going on about them at the present time; but as I say, it is a separate issue.
§ Colonel Crosthwaite-EyreAs this particular scheme was initiated by the late Burmese Government, which was responsible to His Majesty's Government, can it be assumed that in default of any other solution, all these claims will be met by His Majesty's Government?
§ Mr. JayHis Majesty's Government are taking part in the negotiations. We intend to see that these claims are not overlooked. I cannot say any more in detail at the moment because conversations are going on.