§ The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd)I rise to make a statement on Malta.
My discussions with the Governor of Malta have covered a number of problems and I am circulating details in the OFFICIAL REPORT. They have had as their aim the restoration in Malta of the economic and political conditions which would facilitate a resumption of stable and responsible government.
On the economic side, the future of the dockyard has, naturally, taken first place. As the House knows, the use of Malta for naval repair work will decline after 1960. Her Majesty's Government have accordingly decided that the naval dockyard should be converted to a commercial yard and transferred to a commercial ship-repairing firm.
I am very glad to say that preliminary negotiations have been concluded with 1598 Messrs. C. H. Bailey, of South Wales and, subject to the completion of a satisfactory agreement, this firm will form a company registered in Malta to take over the dockyard on long lease. The company will start immediately its preparations for taking over the yard and it is planned that it should assume responsibility some time in 1959.
The cost of converting and re-equipping the yard will be heavy. Her Majesty's Government are prepared to contribute very substantially towards the capital cost of the new enterprise which is estimated at about £5½ million. Messrs. Bailey's, in association with the Colonial Development Corporation and Maltese interests, will provide £¾ million of equity capital.
Her Majesty's Government will make available the balance of £4¾ million partly in the form of a debenture and partly as a special grant. The return on the grant would depend upon the prosperity of the enterprise. The House will be given full information when the negotiations with the firm have been completed.
The people of Malta have already been assured that there will be enough Admiralty work in the dockyard to maintain about the present level of activity until the end of 1960. Naval work will then decline, but there will be some warship repairs for at least a number of years thereafter and the naval base will remain, though on a somewhat reduced scale. Commercial work will, meanwhile, be building up and secondary industries will be established.
Her Majesty's Government are satisfied that in these various ways the prospects of maintaining employment after 1960 are good. The firm's plan is to make such arrangements as will enable the employment to be offered on comparable terms to most of those engaged on naval ship-repair work for the Admiralty.
The Governor is also making plans to push ahead with the diversification of the economy, which Her Majesty's Government regard as of the highest importance as a means of providing further opportunities for productive employment. Details will be given in the OFFICIAL REPORT.
On the constitutional side, I have been discussing with the Governor how a start can be made towards the return of responsible government. This presents difficulties because of the events which led 1599 up to and followed the resignation of Mr. Mintoff's Government, and particularly because of the conflicting positions taken up by the Maltese political parties on whether new elections should be held under the 1947 Constitution.
The Governor and I have agreed that the next step must be to try to reach an agreed solution in discussion with the Maltese political parties and Her Majesty's Government therefore propose to invite the parties to talks in November on Malta's future constitutional arrangements. In the meantime, the Governor is reviewing the state of public order in Malta to see how far the present restrictions can be relaxed or lifted.
§ Mr. CallaghanIt is, of course, a very serious decision that the Government have reached to close the naval dockyard, because that is, in effect, what this means. I think that they have made a most praiseworthy start in getting a well-known and reputable firm like Bailey's to enter into discussions with a view to taking over the yard, but I hope that the Colonial Secretary will not mind my saying that part of this statement sounds a little optimistic. Is there any guarantee of the level of employment that Bailey's may be able to sustain? It depends on commercial enterprise. Has the right hon. Gentleman had any discussion with Bailey's about the expected level of employment? If Bailey's fail, it will be catastrophic to the island's economy. Every effort, therefore, must be made to ensure that it succeeds.
This leads me to my second point. If Bailey's is to succeed, there must be stable political conditions. May I ask the Colonial Secretary why this conference is not taking place until November? We understand the pressure on the Colonial Office, but ought he not to consider bringing the conference forward to September and having at least preliminary discussions then? Will he, before the conference takes place, consider very seriously the possibility of relaxing the emergency regulations under which the island is operating at present?
I assure the right hon Gentleman that everyone appreciates that in the present context the economic future of the island must be dependent upon the success of whatever commercial venture 1600 goes there. May I ask the Government, apart from financial help, what other help in the way of orders and that sort of thing they hope to give to any commercial firm that is to take over and, we trust, will succeed in the Malta dockyard?
§ Mr. Lennox-BoydOn the constitutional question, I do not believe that it would be practicable to hold the conference before November. As I think the hon. Member knows, for the latter part of September and a good part of October I shall be heavily engaged in the Nigerian conference and there is a great deal of preliminary work, also, which will have to be done before we can have profitable talks with the Maltese political parties. All our efforts in the last few months have been devoted in trying to get something established on the employment side, and I believe that to be of the first importance. No one, of course, can guarantee future levels of employment, but I believe that I can say with complete truth that the prospects in Malta are good.
Until the end of 1960, the Admiralty work should ensure that there will not be discharges because of redundancy. After 1960, Bailey's intend to keep up employment in Malta by establishing light industries in the dockyards, in addition to commercial shipping repair works and Admiralty work that will come to them. Also, the naval base will remain, although there will be some gradual reduction in numbers. I believe that this development should prevent any serious unemployment resulting from the decline in naval requirements, but success will largely depend on the co-operation of the Maltese during the next few years when the conversion of the dockyard into a competitive commercial ship repairing establishment is being carried out.
This is no question whatever of closing the dockyard. It is a question of stopping that undue and alarming reliance on Admiralty work which has characterised the economic life of Malta for far too long, and by transferring responsibility in the dockyard to commercial firms and guaranteeing them chances in the future which they would not have if they relied exclusively on inevitably declining naval orders.
§ Mr. John HallWas the delegation representing Malta dockyard employees 1601 which was at the Admiralty this week consulted about the plans and, if so, did it endorse them?
§ Mr. Lennox-BoydThe delegation came over and my noble Friend the First Lord of the Admiralty saw it, and I had the pleasure of seeing the members of it as well. The delegation was given, in confidence, a general indication of Her Majesty's Government's plans and there was a very useful discussion of the problems that might arise in connection with employment and labour relations.
Naturally, the delegation could not be given all the information which I have given to the House. Quite apart from the question of Parliamentary Privilege, negotiations with Bailey's had not been completed. The delegation was, therefore, neither asked to, nor could it, endorse the plan which I have outlined. There will be, of course, consultation with representatives of industrial and non-industrial staffs on those matters in which they are affected when the detailed plans for the transfer of the yard are being worked out.
Mr. DugdaleThe right hon. Gentleman said that a private firm was taking over the dockyard. He also said that, at the same time, the Colonial Development Corporation would be associated with it. To what extent? Will the Corporation be in partnership, or will it simply have debenture shares?
§ Mr. Lennox-BoydPart of the equity holding will be held by the Colonial Development Corporation. I am also very glad to say that it looks as if there will be Maltese participation as well. The family of Cassar Tarragani, which is well known on both sides of the House, of the National Bank of Malta, and Messrs. Pace, the banking agents in Malta, have undertaken, subject to the conclusion of a satisfactory agreement, to be associated with the formation of the company in Malta. Arrangements will also be made to enable anybody in Malta who wishes to buy shares in the company to do so from the batch allocated to the people of the island but, of course, much the largest financial stake is represented by the very substantial sum which Her Majesty's Government are providing.
§ Mr. WallIs my right hon. Friend aware that his statement will be received with pleasure by all friends of Malta, 1602 since it provides for the economic future of the island? May I ask him whether, in view of the large amount of money which is being spent on converting the dockyard to civilian use, the project for the civil harbour, which is of great importance to the future of Malta, will also go ahead?
§ Mr. Lennox-BoydYes, Sir. I know that high hopes are built on that project and construction will begin this year. This plan, far from harming that one, ought to facilitate it.
§ Mr. C. R. HobsonCan the right hon. Gentleman say whether any guarantee has been given to Messrs. Bailey, with regard to the dockyard, that British ships registered in Malta, and the increasing numbers that have been registered in Malta under flags of convenience, are to be repaired in the dockyard by Bailey's?
§ Mr. Lennox-BoydNo guarantee has been given, but we have every reason to believe that a lot of work will come along. No less than 40 ships in ballast pass Malta, or within five miles of it, every day. It is on the great Mediterranean sea route. The skill of the workmen is well known, and I believe that with neighbouring yards in the area, as they are, overloaded with work, the prospects are really good for Malta.
§ Sir G. NicholsonIs my right hon. Friend aware that the Malta Dockyard comprises many buildings which are of great historic interest and architectural beauty? As far as possible, will it be ensured that they are preserved, so that the extraordinarily beautiful character of the town is not impaired?
§ Mr. Lennox-BoydI very much agree with what my hon. Friend has said. We will do our best to ensure that any new world projects do not spoil the old.
§ Mr. CallaghanMay I press the Colonial Secretary on the date of the conference? In view of the fact that the island is living under emergency regulations, will he consider whether at least some preliminary steps can be taken early in September for discussions with the Maltese political parties? Even if the right hon. Gentleman himself cannot do that, there are other Ministers at the Colonial Office who could perhaps undertake it. It is very important that Bailey's should get off to a good start. Therefore, we ought to get the political situation right as quickly as we can.
§ Mr. Lennox-BoydYes, Sir, but I still think that the programme we have outlined is the one most likely to get the commercial plans started in a proper atmosphere, and to enable us to have the constitutional talks at the most convenient moment. Needless to say, in the interval I am always glad to correspond with, or to see, any of our many friends of all political parties in Malta.
§ Vice-Admiral Hughes HallettMay I ask for a little more information about the proposed naval base? Are we to understand that it will be a repairing base, or can we take it that in future any naval work that is to be done will be done by contract with the new dockyard and not, as it were, in competition with it?
§ Mr. Lennox-BoydBy contract, Sir.
§ Mr. J. HyndMay I ask the Minister for some further details about the financial aspect of this matter? What is the value of the public assets that are being handed over to this company, if any? What is the company paying for them? What is the rate of interest on the debentures which the Government are taking over and what will be the conditions under which Government work will be done by the firm in the dockyard later?
§ Mr. Lennox-BoydI hope that the hon. Gentleman will read the much fuller statement which will appear in HANSARD tomorrow morning. I will give further information as soon as final agreement with the company has been reached. I would point out that the dockyard, though of value as it is now to the Admiralty, is not in a form that would enable a commercial firm to take full advantage of it. A vast sum of money has to be spent on it and we have undertaken, as I have said, to provide many millions of pounds ourselves. It would be a great mistake, I think, to give the impression that something of great value for commercial operation was being handed over virtually for nothing.
§ Mr. GowerIs my right hon. Friend aware that the progressive, enlightened and go-ahead policies of Messrs. C. H. Bailey Ltd. have been very much appreciated in several of the South Wales ports since the war? Is he further aware that the firm is very well equipped to undertake this work?
§ Mr. Lennox-BoydYes, Sir.
§ Mr. AwberyIs the Minister aware that the struggle of the people of Malta, particularly the 13,000 empoyed in the dockyard, is to prevent the island becoming a distressed area? Is he further aware that a commercial undertaking which considered taking over the dockyard recently stated that it could employ only 4,000 men out of the 13,000 now employed? Will the right hon. Gentleman give an assurance that the men who are not employed by the dockyard will be provided for in some way similar to our unemployment insurance?
§ Mr. Lennox-BoydIf the hon. Gentleman has forgotten about the existence of the naval base and the undertakings in regard to that, and as he has asked about the level of employment, I ask him to read carefully the statement I have made and to read the fuller statement in tomorrow's HANSARD.
§ Mr. Langford-HoltMy right hon. Friend will be aware that an essential part of the dockyard facilities in Malta is a floating dock, which he did not mention. Is it intended to include that in this operation, or is it to remain under Admiralty control?
§ Mr. Lennox-BoydThat is still the subject of negotiation.
§ Mr. CallaghanFurther to the question of my hon. Friend the Member for Bristol, Central (Mr. Awbery), if Bailey's hope to employ 5,000 men, and 6,000 will be employed in the naval base, that will still only bring the total to between 10,000 and 11,000 out of about 13,000. May I therefore ask the Colonial Secretary whether it is his intention to press ahead with diversification of industry in other directions? [HON. MEMBERS: "Oh."] I am most anxious that there should be no misunderstanding in Malta about this point. It would be very unfortunate if it were thought in Malta that everyone was to be employed. Will the Minister make it clear that there may be a surplus over and above the number employed in the base and in the civilian dockyard, for which Her Majesty's Government propose to make other arrangements by way of a diversification of industry?
§ Mr. Lennox-BoydI have already given the assurance that the Government 1605 do not think it will be necessary to see the level of employment in the dockyard fall below 12,000. Indeed, they have said that it will not fall below 12,000 up to 1960. That is a fairly good assurance, as far as it goes. Thereafter, I have given the statement as to the level of employment that Messrs. Bailey hope to provide, and a fuller statement will be found in the OFFICIAL REPORT. It is our intention also to proceed with the diversification of the economy of the island, for which substantial funds are available, largely provided from here, and it is our belief that the future of Malta is as secure as anything can be in this uncertain world.
§ Mr. BrockwayIs the right hon. Gentleman aware that many of us will welcome a large part of his statement today and will particularly wish to congratulate the Governor on the negotiations in which he has been participating for the development of the island?
May I ask the Minister, in view of the fact that the conference of parties is not to take place until November, whether he will very urgently give his attention to the withdrawal of the present restrictions on liberty in Malta; as, for example, the regulation which does not allow 10 people to meet in public? If we are to solve this problem, is it not desirable to remove those regulations at once?
§ Mr. Lennox-BoydYes, Sir. I am sure we all endorse the tribute which the hon. Gentleman has paid to the Governor. The Governor, who will enjoy that tribute, told me that the first thing he would do when he got back to Malta yesterday would be to apply his mind to the emergency regulations.
§ Mr. DraysonWhile the House is, naturally, concerned about the level of employment in Malta, we have a problem of unemployment in Lancashire and Yorkshire, so can my right hon. Friend give an assurance that it is not the intention of the Government, in their diversification plan, to establish textile industries in Malta which will make further difficulties for Lancashire?
§
Following are the details:
The Governor has been in London since early June for discussions on Her Majesty's Government's future policy in Malta. These discussions have had as their aim the restoration in Malta of the economic and political conditions which would facilitate a resumption of stable and responsible government.
Priority has, naturally, been given to Malta's economic problems. In the past, the Maltese economy has depended on Services' expenditure; and Her Majesty's Government have recognised that the long-term changes in United Kingdom defence policy, particularly in so far as these affect the requirements of the Royal Navy in Malta, will necessitate major changes in the traditional pattern of the island's economy.
This is not a new problem. It has been the common object of Governments here and in Malta for some time to diversify the Maltese economy and thereby to reduce dependence on the Services. This was one of the aims of policy in the joint statement issued by Her Majesty's Government and the Maltese party leaders in 1955.
Her Majesty's Government have always held to this aim and when changes in defence policy looked like causing major changes in the pattern of Services employment in Malta they stressed their readiness to work out remedial measures with the late Maltese Government. Earlier this year, Her Majesty's Government also offered the late Maltese Government to set up a working party to devise plans to deal with the problems that might arise if there should be substantial
unemployment after 1960 owing to changes in defence policy. This offer was
turned down by Mr. Mintoff.
The dockyard has for generations been the industrial core of Malta and it is an economic asset which should be used to the full. It will no longer be possible to keep it in being as a naval yard, and it would offer good prospects, if converted, for commercial ship-repairing. Her Majesty's Government have, therefore, decided that the yard should be transferred to a private ship-repairing firm. The continued use of the dockyard in this new rôle will be a major step in the direction of diversifying the Maltese economy.
Preliminary negotiations have been concluded with Messrs. C. H. Bailey, of South Wales, and, subject to the completion of a satisfactory agreement, this firm will form a company to take over the dockyard on lease during 1959. The intention is that the takeover of the dockyard should be in two phases. During the first phase, which may last for about a year, Messrs. Bailey's will finalise their requirements for converting the yard, study the Admiralty management on the spot, and make the necessary preparations for the assumption of full responsibility. In the second phase, which will start some time in 1959, the firm will take over complete responsibility.
The dockyard is not suitable for commercial work as it stands. It will have to be converted and re-equipped. The total capital cost involved is estimated at about £5½ million. Messrs. Bailey's, in association with the
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Colonial Development Corporation and certain Maltese interests—subject to the negotiation of satisfactory agreements—will provide £¾ million. Her Majesty's Government will make available the balance of £4¾ million, partly in the form of a debenture and partly as a special grant on which the Government would look for a return as the enterprise grew in prosperity. It is hoped to arrange for a batch of shares in the new company to be allocated for sale to Maltese people, including dockyard employees, who wish to become shareholders. Further information will be given to the House on these arrangements when detailed negotiations with the firm have been completed.
Her Majesty's Government recognise the special difficulties of launching this new enterprise, and the need for the most careful planning during the transition period. They have, therefore, welcomed an approach which Messrs. Bailey's have made to Vice-Admiral Sir Gordon Hubback to become the Managing Director of the company which is being formed to take over the dockyard.
Admiral Hubback was Commodore Superintendent at Malta, and is now the member of the Board of Admiralty who deals with the naval dockyard. He has unrivalled knowledge and experience in this field. The Admiralty is, naturally, most reluctant to let Admiral Hubback go, but fully appreciate the importance of the Malta task, and I am, therefore, deeply grateful to my noble Friend the First Lord of the Admiralty for having agreed to release Admiral Hubback from his present duties for this purpose in a few months' time.
There will be enough work to keep the dockyard going at about the present level of activity until the end of 1960. Over this period commercial work including secondary industries will be built up. Thereafter, naval work will decline. The naval base will remain, though there will be some gradual reduction in its size. Her Majesty's Government are satisfied that this transition will not lead to widespread unemployment and distress in Malta. The plan is to make such arrangements as will enable employment to be offered in comparable conditions to most of those engaged on naval ship-repair work for the Admiralty, and every effort will be made to mitigate individual hardship and to ensure that the transfer is carried out as smoothly as possible.
The conversion of the dockyard alone is, however, not enough. The whole Maltese economy must be developed, and to that end
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a number of other steps are being taken now to attract industry to Malta and to develop its natural attractions. The construction of a new civil harbour, which should be of immense commercial benefit to the island, will be begun this year. The industrial estate begun by the late Maltese Government will be further developed and as a third major step an Aids to Industry Bill will shortly be enacted. Her Majesty's Government have also approved the Governor's new plans for expanding the island's tourist industry, which could become one of Malta's major assets.
Hitherto, there has been no overall development plan for Malta. This is now being remedied. Her Majesty's Government have already made known their readiness to assist Malta by substantial capital grants towards an agreed plan which, among other things, aims at improving the standards of living of the Maltese people. They will also assist in balancing the budget on recurrent account so as to maintain and raise the standard of educacation and other social services. The ways in which practical effect can best be given to this undertaking can be decided when there is an agreed development plan.
With all these prospects, Malta's economic course promises to set fair. The Maltese people will have to face competition from industry in neighbouring countries, but, provided the commercial work done in the dock-yard and the products of Maltese industry remain competitive, the Maltese people need not fear for their future.
The discussions with the Governor have also covered constitutional matters. Since the disturbances at the end of April the situation has become sufficiently tranquil to justify an early review by the Governor of the present restrictions on political activity. This he proposes to undertake as soon as he returns. The return to normal parliamentary government is, however, more difficult because of the conflicting views held by the political parties in Malta on the 1947 Constitution. Furthermore, Her Majesty's Government have an obligation to protect individual members of the public service against victimisation for their loyalty and devotion to duty. Her Majesty's Government have, therefore, decided that the best step would be to try and reach an agreed solution to the constitutional problem in discussion with the Maltese political parties. They therefore propose to invite the parties to join them in November in discussions on Malta's future constitutional arrangements.