HC Deb 23 January 1957 vol 563 cc177-8
30. Mr. Awbery

asked the Secretary of State for the Colonies the amount of the financial loan to be made to the Federation of Malaya; and the proportion of it which will be allocated to military defence expenditure and the proportion to be allocated to the economic and social development of the Federation.

Mr. Maclay

As the reply is rather long and necessarily complicated, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Awbery

Are British forces to be retained in the Federation after the declaration of independence and the end of colonialism this year? If so, who will pay for defence? Will it be paid for by the Exchequer or by the Federation Government?

Mr. Maclay

I hate to be uncooperative towards the hon. Member, but that question is completely different from his Question on the Order Paper, and I should not like to go into detail about future arrangements in respect of Her Majesty's Forces without due notice and warning.

Following is the reply: Subject to Parliamentary approval. Her Majesty's Government will provide the following assistance to the Federation of Malaya:
  1. (a) up to £20 million in the period 1957–61 towards the cost of the emergency. Of this £9 million is an outright grant payable in three equal instalments in the years 1957–59; a review in 1960 will determine how much of the balance of £11 million the Federation will need in the two years 1960–61 and whether all or any part of the sum then found to be needed shall be in the form of an interest-free loan;
  2. (b) a cash grant of £7.8 million in the period 1956–61 towards the costs of the expansion of the Federation's armed forces, together with grants in kind of equipment to a value of approximately £5.5 million and the free transfer of certain surplus installations of Her Majesty's Forces in the Federation, the details of which have still to be negotiated;
  3. (c) a cash grant for development purposes equivalent to the unspent balance at the date of independence of the Federation's colonial development and welfare allocations; this balance stood at £4.4 million at 1st January, 1956, the beginning of the Federation's development programme.