HC Deb 14 July 1954 vol 530 cc475-81

The following Question stood upon the Order Paper:

91. Mr. ALPORT

To ask the Secretary of State for the Colonies, whether he will make a statement with regard to the outcome of the conversations which he has recently had with the Minister for Finance in the Government of Kenya.

The Secretary of State for the Colonies (Mr. Oliver Lyttelton)

With permission, I will answer Question No. 91.

On 9th December last I announced that, although precise forecasting was difficult, the Kenya Government would need assistance of about £6 million if they were to maintain a reasonable level of liquid resources and continue to meet their obligations until the end of the United Kingdom financial year 1954–55. I also said that if the present rate of emergency expenditure continued, it was possible that more money would be required and Her Majesty's Government would be prepared to review the position in good time.

Unfortunately this has proved to be the case. The rate of expenditure has risen. Moreover, it was well into 1954 before the security forces were fully deployed and a more accurate estimate of their cost was possible. This showed that earlier estimates were below the actual cost. The present rate of expenditure is of the order of £1 million a month of which about one-third represents expenditure on military forces and operations: the rest is the cost of closer administration, the increase in the police forces, the cost of detention and rehabilitation camps, and emergency public works. Although direct military expenditure will not rise in proportion, emergency expenditure is expected to rise to about £1¼ million a month over the next six months.

I have again reviewed the financial position with the Minister for Finance and the Commander-in-Chief, East Africa, and I have consulted my right hon. Friend the Chancellor of the Exchequer. A further £5½ million will be required up to the end of March, 1955. This takes into account the extra revenue of £2½ million which the Kenya Government will derive from increases in taxation announced last April. It is expected that arrangements can be made by the Government of Kenya to provide for working balances by other means, and the sums do not therefore include any margin for this purpose. The expenditure during the last quarter of the Kenya financial year, 1st April to 30th June, 1955, which Her Majesty's Government recognise may continue at a similar rate and which will be taken into account during the United Kingdom financial year 1955–56 is also not covered.

In these circumstances, Her Majesty's Government will be prepared, subject to Parliament, to provide a further grant of £4 million and a further interest-free loan of £1½ million in the present United Kingdom financial year as a contribution towards the cost of Kenya's emergency. It is understood that this assistance will only be called on to the extent that it proves to be needed.

This further assistance will cover Kenya's immediate needs, but it is evident that even after it has become possible to reduce the present military commitment, Kenya's financial position will remain difficult. I have made it clear to the Kenya Government that they will be expected to take all practicable steps to increase their own revenues in order to meet their continuing commitments.

The British Government's help is required—and it has been given—to bring the emergency to an end. If that help were not given, not only would the measures against the terrorists have to be reduced, but the social and economic programme, which represents the constructive plan for Kenya's future, would suffer an unacceptable set back.

Mr. Alport

Is my right hon. Friend aware that this further generous response to an appeal for assistance in Kenya will be very warmly welcomed in this country? May I ask him whether he is satisfied that any conditions attached to the making of this loan or the giving of this grant do not place an undue handicap on the future economic development of Kenya by which alone it will be possible for Kenya to achieve self-financial independence, which is clearly essential if it is to progress in the future?

Mr. Lyttelton

The object of the grant and of the loan is to enable Kenya to finance not only the emergency, but the large programme of social and economic development which is planned in the Colony.

Mr. J. Griffiths

Does the right hon. Gentleman propose to carry out the promise he made to us earlier that he would, before the House rises, take the opportunity of giving us a full account of the position in Kenya? It is very difficult to judge the statement that he has made, unless we judge it against the background of the position. Will he consult with the Leader of the House, so that time may be set apart in which he can make a statement on all aspects of the situation in Kenya which the House may discuss afterwards? In the meantime, may I ask him, in anticipation of such an opportunity, whether he will have prepared and circulated in the OFFICIAL REPORT an account of all the help that we have given to Kenya and the amount raised in Kenya itself so that hon. Members may be enabled to judge the situation? Finally, may I ask whether, in this new allocation made, any proportion or what proportion of it is to be devoted to the plans announced by the new Government for rehabilitation and reconstruction in Kenya?

Mr. Lyttelton

I am afraid that I cannot answer the right hon. Gentleman's last question, because that would mean earmarking a specific sum for a specific purpose. These grants have been made in order that the general revenues of Kenya will be available to finance the long-term programme which we had in mind. With regard to the first question, I gave the House two promises. One was that I would make a statement as soon as the financial talks had been concluded, and this statement I have made today. I understand that the matter will go through the usual channels, and if a debate should not take place I will fulfil my promise by making a further statement.

Mr. Griffiths

May I press the right hon. Gentleman on this question of giving a further statement. So far, while we have seen no estimate giving of the cost of the plans, we all welcome the announcement for reconstruction of the new Government. May we be given some estimate of the cost of that, and what proportion of that cost will be covered by this new grant? May I assure the right hon. Gentleman that it is indeed desirable that these new plans should be pushed forward urgently, and we should like to know what is the cost?

Mr. Lyttelton

These grants cover the immediate position. It is nothing more than an estimate of a very general kind that has been made about the future, because that depends on how soon we can end the emergency.

Mr. F. Harris

While welcoming and supporting the decision of Her Majesty's Government on this disturbing matter, may I ask the Colonial Secretary if he will consider requesting the Kenya Government to set up a committee to investigate any possible wasteful expenditure which may be going on during this period of the present emergency, because it is important to conserve our resources and to ease the burden on the taxpayers, both in Kenya and in this country, arising out of the emergency.

Mr. Lyttelton

This is a matter for the Kenya Government. I cannot promise to hold out any hope to the right hon. Gentleman of yet another committee at the moment.

Mr. Bottomley

Is the right hon. Gentleman aware that many propositions contained in the White Paper presented to Parliament as a result of the all-party mission on Kenya earlier this year have not been acted upon? In view of the fact that the United Kingdom taxpayer is called upon to give up substantial amounts to meet this emergency, will the right hon. Gentleman consider telling the Government of Kenya to take speedy action to remove some of the difficulties that give rise to the emergency?

Mr. Lyttelton

I think the right hon. Gentleman would have to be more precise before I could give an answer to that question, and I should like to know what plans he has in mind and whether they have been approved by the Kenya Government or by H.M. Government.

Mr. Beresford Craddock

Is it not a fact that the Governor of Kenya, Sir Philip Mitchell, in 1946 sent a despatch urging many reforms to the then Colonial Secretary and that nothing very much was done about it?

Mr. J. Dugdale

Further to the point mentioned by the hon. Member for Croydon, North (Mr. F. Harris), will the Colonial Secretary also ask the Kenya Government to look into the matter of taxation to see whether the rates of Income Tax and Surtax are anything like comparable with the rates in this country?

Mr. Lyttelton

I have already said in my answer that I made it clear that they would be expected to take all practicable steps to increase their revenue. The right hon. Gentleman would be mistaken if he tried to draw a close analogy between the taxation of a developing country, where there are many risks, and that which applies in this country. Such a comparison, I think, would be unprofitable.

Mr. Baldwin

Will my right hon. Friend avoid the suggestion which has been made that we should transfer to the Kenya Government the penal taxation which we have in this country, in view of the fact that that country wants development and cannot obtain it if taxed to that extent?

Mr. J. Johnson

While welcoming the statement of the Minister, may I ask him if he does not realise that we shall not solve the Kenya emergency merely by outpourings of the United Kingdom taxpayers' money. Will he bear in mind that something more than the shooting war against Mau Mau, more than economic measures, is required to win the hearts of the Kikuyu, and will he please think again about the political advance which is necessary in order to win the loyalty of the African people? Will he again consider direct elections for 1956?

Mr. Lyttelton

The hon. Gentleman is really trying to widen this matter beyond all knowledge. These grants and this loan by Her Majesty's Government release general revenues pro tanto for other objects which he mentioned. I said in my answer that we could not earmark specific parts of these sums for specific purposes.

Mr. Griffiths

Would it not be to the advantage of hon. Members on both sides of the House if the right hon. Gentleman could say what money was given for the development of the Colonies from 1945 and how much was given in any comparable period before the Second World War?

Mr. Lyttelton

This is getting very far away from the Question on the Order Paper.