§ The Joint Under-Secretary of State for Foreign Affairs (Mr. Peter Thomas)
No one is more reluctant than I am to take up time which could be devoted to the Welsh debate, but with your permission, Mr. Speaker, and that of the House, I wish to make a statement on our financial discussions with the United Arab Republic Government.
I am glad to inform the House that agreement has been reached with the United Arab Republic Government on all the matters relating to the 1959 Financial Agreement that have been under discussion. The necessary documents have been drawn up. For technical reasons it has not yet been possible to sign them, but signature should take place within a few days.
The main problem has been the transfer of cash and bank balances up to the 809 equivalent of £E5,000 as provided in the Financial Agreement. Arrangements have now been agreed upon to clear up this whole problem within a period which we hope will not exceed three years. The first £E1,000 of approved applications is to be transferred in future through the accounts of Her Majesty's Embassy in Cairo, the local currency being used to meet the Embassy's current expenditure.
As regards amounts in excess of £E1,000 and up to £E5,000, the United Arab Republic will provide approximately £2¼ million which will be available in London on specified dates so as to facilitate the completion of transfers as they are applied for. This includes an immediate payment of £357,500 Which will clear off the balances in excess of £El,000 due to those applicants who have already received the lower figure.
For their part, Her Majesty's Government will provide a credit to the United Arab Republic of £715,000 to be used to finance transfers in the immediate future. The amounts drawn under this credit will be repaid by the United Arab Republic Government over a ten-year period with a three-year period of grace and interest at the current standard rate. Arrangements have also been made to ensure that applications for transfer will be expeditiously handled.
In addition, we have reached agreement on a number of other points in the 1959 Agreement which have given rise to difficulty. Arrangements have been made for expediting and simplifying the release of the remaining British properties sequestrated in 1956. A more exact definition has been made of property to be regarded as "Egyptiandzed" for the purposes of compensation claims. Dividends which fell due for payment after 30th October, 1956, but were not distributed by companies that were "Egyptianized" will rank against the compensation fund. All available records will be furnished to enable claimants to establish claims with the Foreign Compensation Commission.
The United Arab Republic Government will pay Her Majesty's Government the equivalent in sterling of £E80,000 in respect of the balance of compensation for the officials dismissed in 1951. Effective instructions for the release of certain securities will be given. 810 The exact liability of Egyptian Government pensions to Egyptian tax has been settled.
The documents on all these points will be published and laid before the House as soon as possible.
The agreements which we have now reached with the United Arab Republic Government on these matters are a sign of an improvement in our relations, which Her Majesty's Government warmly welcome. It is our hope that this development will continue.
§ Mr. Callaghan
It is a matter for regret that this important statement should be rushed in a half empty House. Does it mean that all persons whose property has been sequestrated or nationalised by the Egyption Government, up to the limit of £E5,000, are now to receive compensation in full? These are the small people who have suffered most.
Secondly, is the amount of £2¼ million in addition to the £27½ million which was agreed in the original settlement, and do I take it that in any case £62¼ million is to be financed very largely by means of a loan from Her Majesty's Government to the Egyptian Government, which sounds a very odd way of conducting this financial transaction?
Thirdly, can the Joint Under-Secretary explain the words, "that agreement has been reached on all matters relating to the 1959 Financial Agreement"? Is it not a fact that the total sum which has been lost by British nationals is now estimated by the Government to be upwards of £80 million? Are we to assume, if this is the final settlement, that British nationals are to lose about £60 million, without any recompense or redress, as a consequence of the folly of Suez?
§ Mr. Thomas
With respect, the hon. Gentleman has not quite understood the situation. One has to differentiate between compensation for British property which was Egyptianised after the Suez events and for which the United Arab Republic Government have already paid £27½ million, and the loss and damage to property which was sequestrated and released, which will be paid out of that fund of £27½ million.
811 As my noble Friend the Foreign Secretary said in another place, Her Majesty's Government intend to top up that fund to see that there is a fair and equitable settlement. The main point arising on the 1959 Agreement was the release—not payment but release— of up to £E5,000 to those people who had property in Egypt. Due to certain difficulties, the Egyptians had been unable to release more than £E1,000 in some cases. As a result of the agreement we have reached, all people who have property in Egypt will, we hope, soon be able to take their £E5,000 in full.
§ Mr. Callaghan
What does the hon. Gentleman mean by "top up"? There is a big difference between £27½ million and £80 million. What I am asking— and it is a simple question—is whether this loss is to be borne by the British subjects who have lost their property as a result of the Suez operation; or does the phrase "topping up" mean that the British Government are to make up the difference between £27½ million and £80 million?
§ Mr. Thomas
In the arrangements which we have been making in Egypt the only matter relevant is loss of and damage to sequestrated property. We have said that we intend to see that there is a fair and equitable settlement of claims for Egyptianised property. If that requires that Her Majesty's Government should add to the £27½ million, it has already been said that we shall do so.
§ Sir M. Lindsay
Does my hon. Friend's statement mean that at last, after eleven and half years, the U.A.R. Government are now ready to meet their obligations to make a settlement for those British officials who were summarily dismissed in 1951? As the statement was a little difficult to follow, will my hon. Friend briefly say how satisfactory the agreement is percentage-wise, or give the global sum which is being found for this settlement?
§ Mr. Thomas
There is a sum of £E80,000 which the U.A.R. Government have given by way of balance in settlement of these claims—I think that that is Article III (f) of the Agreement—but Her Majesty's Government are fully 812 aware of the position of those 1951 officials and are considering exactly what that position is.
§ Mr. Thomas
I hope that all agents will be able to inspect property in Egypt and that we will have a speedy settlement of the problems which have remained long standing.