§ 15. Mr. G. Jeger
asked the Secretary of State for Foreign Affairs what were the considerations that persuaded him to transfer to the Government of Egypt assets in the Suez Canal Base area to a value of £E400,000 in return for permission to use Kensington Village, Fayid, for the accommodation of British technicians.
§ 29. Mr. Janner
asked the Secretary of State for Foreign Affairs the nature of the £E400,000 of assets in the Canal Zone being handed over to the Egyptian Government; and what proportion is war materials.
§ The Secretary of State for Foreign Affairs (Mr. Harold Macmillan)
Under the Anglo-Egyptian Agreement, 1954, Kensington Village was not one of the installations to be maintained either by us or by the Egyptians and it would have fallen for disposal. The Egyptians had intended to buy it for the use of their own service families. The 1954 Agreement also provided for some of the contractors' staff to occupy rented accommodation at Ismailia.
Under the present arrangement the contractors will instead occupy Kensington Village, rent free, for the duration of the Agreement, leaving the Egyptians to build any additional accommodation which they require. In consideration of that, Her Majesty's Government agreed to transfer the ownership of the village to Egypt, together with certain other assets valued at £400,000. These assets 2287 are listed in the Exchange of Notes with Egypt of 5th May, in Cmd. 9600. They include no war material.
This new arrangement was made after detailed reconnaissance to enable the contractors to operate the installations more efficiently. It is undoubtedly an improvement.
§ Mr. Jeger
Is the Minister now saying that, when the original agreement was made with Egypt, this village was completely forgotten, and that now this village, which was built by British capital and British labour, is being rented from, or paid for to, the Egyptians at a rate of £400,000 in order that our technicians may be allowed to live there for a little while? Is not that an admission of complete muddle in the original Treaty arrangements with Egypt?
§ Mr. Macmillan
No, I think the hon. Gentleman has unwittingly given a very false picture of this transaction.
§ Mr. Janner
The right hon. Gentleman says that there is no war material in this £400,000 of assets. Does that mean that there is no material which would normally be usable for the purpose of erecting buildings for war purposes or for any war purpose at all? Or does the right hon. Gentleman mean that it can be used either for civil or for war purposes?
§ Mr. Macmillan
When I say there is no war material, I mean no material which can be used usefully for war.