HC Deb 24 January 1967 vol 739 cc1274-84
The Secretary of State for Commonwealth Affairs (Mr. Herbert Bowden)

With permission, Mr. Speaker, I wish to make a statement on my recent visit to Malta in connection with the proposed reductions of our forces there.

It was stated in last year's Defence White Paper (Command 2901) that we proposed to enter into consultations with the Government of Malta, in accordance with Article 6 of the Defence Agreement, for a reduction of British forces there in the next few years. My noble Friend Lord Beswick initiated these consultations in Malta last August when he put forward proposals for reducing our forces to Defence Review levels by the end of 1968. In the light of the strong reactions of the Malta Government and of subsequent representations made in London by the Maltese Prime Minister, Her Majesty's Government concluded that the proposals should be modified in order to reduce their impact on the Maltese economy, principally by deferring the withdrawal of British Army units for two years until 1970.

The revised proposals envisage the withdrawal of Her Majesty's ships based on Malta and the disbandment of a second R.A.F. squadron during the current year, the ending of British responsibility for the Royal Malta Artillery during 1968, and the withdrawal of both British infantry battalions in 1970. At the end of the run-down one R.A.F. squadron would remain and a range of defence facilities would be retained. As a consequence of these reductions, British defence expenditure in Malta would by 1970 fall by about a half from its present level of £.12½ million a year. The number of British Servicemen would be reduced from the present level of about 4,300 by about two-thirds by the end of 1970.

I visited Malta from 12th to 17th January to continue our consultations and to present these revised proposals to the Malta Government. I had a series of meetings with the Prime Minister and his advisers and also had discussions with leaders and representatives of many sections of Maltese opinion. I explained that the reduction of our forces in Malta was part of a worldwide redeployment of our defence effort, the object of which was to secure the most efficient use of the resources available to us. It would make a significant contribution to worldwide economies which we are determined to make, without in our view affecting our ability—or our determination—to fulfil our obligation under the Defence Agreement for the defence of Malta itself.

We recognised that the run-down of our forces would create serious problems for Malta, particularly during the early years. It was in order to lessen the impact on the Malta economy and in response to representations made by the Malta Government that we were now proposing to phase the run-down over four years instead of two. These revisions meant, for example, that in 1969–70 the level of employment would be more than 2,000 higher and service expenditure in Malta more than £3 million higher than under our previous proposals. These changes, which were not justified on purely defence grounds, represented a considerable sacrifice of savings in defence expenditure which we could otherwise have achieved. I also referred to the exceptionally high level of aid, running at about £18 per head a year which, despite cuts elsewhere, we were continuing to provide for Malta. I offered our co-operation in measures to alleviate the consequences of our run-down.

The Government of Malta stressed the serious economic difficulties and heavy unemployment which they contended even our revised proposals would cause for Malta, particularly during the first two years. They also maintained that with our revised force levels we should be unable to honour effectively our obligations to assist in the defence of Malta under the Defence Agreement. They claimed that we were in breach of the Agreement in failing to consult them properly on these matters in advance. Many other expressions of disquiet at the economic effects of the run-down were made to me.

A summary of the views of each side is contained in the joint communiqué, copies of which I have placed in the Library. I undertook to report the reactions of the Malta Government to Her Majesty's Government but discouraged expectations of further changes in our proposals. After considering my report, Her Majesty's Government have con- firmed, with regret, that they cannot offer any further changes in their proposals for the run-down and must now proceed to put these into effect. I have so informed Dr. Borg Olivier in a personal message.

While Her Majesty's Government do not deny that even the revised proposals will cause difficulties for the Maltese economy, we believe that these will be only temporary. In the longer run, Malta's economic prospects are good; industry and tourism are expanding and the dockyard is a valuable asset. I hope that our aid can help Malta to surmount these short-term problems and lay the foundations for future prosperity in the island.

I cannot conclude without a warm personal tribute to the Maltese Prime Minister and his colleagues who received me with unfailing courtesy despite the difficult mission we had come to perform. One cannot visit Malta without being conscious of the great good will which exists there for Britain and I have every hope that this good will, which is born of over 150 years of close association in peace and war, will survive the present difficulties.

Mr. Maudling

These are serious problems both for our defence expenditure and our obligations to the people of Malta. The Opposition would wish to have an opportunity to discuss them in greater depth than can be done in response to a statement after Questions.

In the meantime, may I ask three questions? First, does not this setback to the economy of Malta come at a critical time in the expansion of Malta's industry and tourism? Secondly, the right hon. Gentleman referred to the revised proposals providing more employment than the original proposals, but can he tell us what is the estimate of what level of unemployment will be reached in Malta at its peak under the revised proposals? Thirdly, can he say what savings these proposals will bring, first, in the total defence budget of the United Kingdom and, secondly, in the balance of payments of the sterling area as a whole?

Mr. Bowden

I accept that this is a serious setback to the Maltese economy, but we should not be unduly pessimistic about it because, as I have said in my statement, Malta is doing extremely well with tourism and extremely well in the construction industry—hotels are going up rapidly—and there is some industrial development. One ought not to assume that because there will be, as there is bound to be, increased unemployment as a result of this rundown, which will be higher during the first two years, that everyone who is displaced will in fact be out of work for a very long period, because many of them will be picked up in the now expanding tourist industry. It will interest the House to know, for instance, that the Maltese have been finding about 1,500 additional jobs a year over the last two years.

As for the unemployment figures; the present position is that the British Services employ about 2,500 locally enlisted Maltese Service men, 400 of whom are in Germany with the R.M.A., and about 7,800 civilians. By the end of the rundown, those figures will be 750 locally enlisted Service men and 3,000 civilians, which is a reduction of about 6,500 at the end of the rundown.

As I have said in my statement, the saving will be from an expenditure of about £12,500,000 at the moment to rather less than half of that at the end of the four-year period. What has to be borne in mind is that while the saving is not as great as it would have been if it had been made outside the sterling area, nevertheless there is a saving in keeping a battalion in this country of about £1 million compared with keeping the same battalion in Malta.

Mr. Maudling

The right hon. Gentleman did not answer my second question. Would he be kind enough to do so, if he can? What do the Government calculate will be the level of unemployment in Malta at the peak as a result of these measures?

Mr. Bowden

I tried to indicate that it is impossible to say. If everyone who is displaced is out of work, then, of course, the level of unemployment in Malta will be the current level plus 6,500.

Mr. Thorpe

Is the right hon. Gentleman aware that while there will be a welcome for the fact that we are reducing what many regard as nineteenth century military commitments, on political and economic grounds it would have been preferable if these had been concentrated in the Far East and not in the European theatre? Secondly, will not the unemploy- ment figure in Malta as a result be about 20 per cent.? Would not the right hon. Gentleman agree that Malta has shown more loyalty and steadfastness to this country in time of war and is it not, therefore, extraordinary that no statement has been made about the amount of aid which will be given by the Ministry of Overseas Development to compensate for what will be a shattering blow to the economy of this very loyal member of the Commonwealth?

Mr. Bowden

I am dealing only with Malta in the present statement, but there will be defence savings in the Far East and many other theatres throughout the world where we have troops. The reply to what the hon. Gentleman said about the percentage of unemployment is that if everyone displaced became unemployed, unemployment, we understand, might reach about 13 per cent. I forget the hon. Gentleman's third question.

Mr. Thorpe

Can the right hon. Gentleman give any indication of the overseas development aid which his right hon. Friend is prepared to give to compensate for the measures now being taken?

Mr. Bowden

The Financial Agreement under the 1964 Defence Agreement will be continued. That Agreement has seven years still to run. Overseas aid for Malta will run at approximately £5 million a year under that Agreement. We are prepared to consider with the Maltese Government during the time that the rundown is taking place what other ways we can help, with technical assistance and anything we can do to assist during this period.

Mr. Driberg

While all of us, on this side of the House anyway, welcome any defence cuts—the most drastic cuts possible in defence costs—is my right hon. Friend none the less aware that we realise that there is a dilemma here, since nobody wants to create massive unemployment in a small island to which we owe a great deal? Can he, therefore, say whether, apart from alternative employment in new industries and tourism, the Maltese Government have developed any adequate social security services yet to provide for the unemployed? Can he also consider modifying a little further the provisions of the Commonwealth Immigrants Act?

Mr. Bowden

There will, of course, be redundancy payments, the rates of which will be dependent on whether the civil servant concerned is established or non-established. That is provided under legislation already in existence. There will be redundancy payments on discharge from the Royal Malta Artillery. The figures for emigration from Malta have been falling. They were averaging about 7,500 a year over a number of years, but last year they were 4,500, which is a very good augury and a happy indication that Malta is making progress. The quota of vouchers to entitle Maltese to come to this country is, as far as I recollect, about 1,000 a year, and the quota has not been fully taken up.

Sir H. Harrison

Did I understand the right hon. Gentleman to say that all infantry troops are to be withdrawn over four years? Is not that unwise? Infantry troops can do jobs which technical troops cannot do. I would have thought that it would have been better to leave an infantry battalion where it was popular and wanted rather than to bring the men back to this country where, as I understand it, the Army is having to buy houses at very high cost because of the lack of married quarters here.

Mr. Bowden

The hon. and gallant Gentleman is quite correct. It is the intention to withdraw two infantry battalions at the end of the four years and not before. The original proposal was to withdraw them at the end of two years. As I have said, there is a distinct saving if the infantry battalions are brought back to this country, although it is not as high as it would have been if they had been in a non-sterling area. It is, nevertheless, considerable.

Mr. Bellenger

In view of the unique dockyard facilities at Malta and the U.S.A.'s naval responsibilities in the Mediterranean, has there been any suggestion of Malta giving repair and supply facilities to any units of the U.S.A. fleet?

Mr. Bowden

I could not answer that question without notice, but I can tell my right hon. Friend that, while not completely "out of the red", Malta dockyard is now doing extremely well under its present management. It is doing an excellent job, and I would regard it as one of Malta's best assets. I hope that the problem about it can be settled quickly.

Rear-Admiral Morgan Giles

Can the right hon. Gentleman say approximately what order of capital cost was allowed by the Government on taking this decision to rebuild in Britain barracks and married quarters to replace the very modern and recently constructed barracks and married quarters in Malta in which troops are now accommodated? Secondly, what alternative areas do the Government have in mind for the anti-submarine and air-sea warfare training in clear weather which now takes place in Malta?

Mr. Bowden

It will be necessary to provide some additional barrack accommodation in this country as a result of bringing troops home, not only from Malta but from elsewhere. As I have already said twice, there will be a saving. I should like notice of the second question, which is a purely military question, unless the hon. and gallant Gentleman would prefer to address it to my right hon. Friend the Secretary of State for Defence.

Mr. Dalyell

Does my right hon. Friend recollect that both in written form and in interview I put forward some detailed proposals for educational ways in which facilities in Malta could be used both to do with training colleges and with school ships? Was any consideration given to them?

Mr. Bowden

Both these matters are under consideration. Last week I had the opportunity of seeing one of the school ships, which was under repair in the Malta dockyard. The question of teacher-training in Malta is being investigated.

Sir W. Teeling

Is the right hon. Gentleman suggesting that when he went to Malta and talked with the Prime Minister without giving him more notice than, I believe, 24 hours, although there was an arrangement for consultations between the two Governments, he did not discuss the future of quite the most important thing in Malta—the dockyard? Why has not he answered my Question, which was, after all, put down for today, which asks what is being done about the dockyard, and the possibilities for the future there? There is an immense possibility of development in Malta and Her Majesty's Government and the Bailey Company seem to be quite incapable, after four years, of coming to an agreement.

Mr. Bowden

The hon. Gentleman is not quite accurate. In fact, I discussed the Malta dockyard with the Prime Minister, with the Leader of the Opposition and with the trade unions when I was in Malta. In my view, they were all of the same opinion as I am, that the quicker there is a settlement of this problem the better it will be for Malta, because, as I have said, this is the one asset which could do a great deal for that country.

Mr. Mayhew

How far are the Government cutting commitments and how far are they simply cutting resources? Would my right hon. Friend explain what will be the defence rôle for the resources which remain? Will they, for example, have responsibilities under the Anglo-Libyan Treaty and under N.A.T.O. as well as for the defence of Malta?

Mr. Bowden

Concerning the Malta side—and that is what I made the statement about—we are quite happy and confident that our commitment under the 1964 Defence Agreement will be fully met by the residual forces we are leaving there and by the changed method and changed mobility of troops and aircraft which may be necessary to get there in case of need. At present, as far as one can see any foreseeable threat, we are well in a position and determined to carry out the defence side of the 1964 Defence Agreement which can be done without these additional forces. I should perhaps remind the House that after the rundown at the end of four years there will still be about 1,400 British Service men in Malta.

Mr. Costain

Does the right hon. Gentleman realise that many of us on this side of the House think it somewhat ironical that 25 years after giving Malta the George Cross we are stabbing its economy in the back in this way? Would he give consideration to the point made by my hon. and gallant Friend the Member for Winchester (Rear-Admiral Morgan Giles)? Is there not something rather stupid about taking troops from good barracks and bring them back to England where the barracks are bad and increasing the housing shortage? Should not the right hon. Gentleman look at this matte- again? Does not he consider tourism to be necessary in Malta and would not a steady economy there help tourism?

Mr. Bowden

I am sure that the hon. Gentleman would not wish to think that on only one side of the House was there deep feeling and real affection for the people of Malta. There certainly is on this side of the House, and I share it. But wherever it is necessary to make defence cuts and savings, which in the aggregate will amount to a considerable sum, there is bound to be some disruption of the economy. We hope that the steps which we have suggested will help—that is, phasing this over a longer period, the advice which we think we can give, the setting up of a steering committee, the additional work which can be provided if the dockyard goes ahead, as it is doing. Tourism is booming. This is a gem in the Mediterranean to which people are going in many thousands for their holidays, which I hope they will continue to do. We have all these things in mind. We have no desire, and I am sure that no one in the House has any desire, to damage the Maltese economy more than is absolutely necessary.

Sir A. V. Harvey

Would the right hon. Gentleman appreciate that Malta is one of the few remaining independent Powers which welcomes the presence of British troops? With about 50,000 British troops in the Far East, does it make sense to "knock" the economy of this small island, which has defended us, when the return of these troops to this country could be phased over a longer period to alleviate our problems instead of buying thousands of houses when there is a desperate housing shortage in Britain? Secondly, what will be done about the Royal Malta Artillery? These officers and men have had a raw deal at the hands of successive British Governments both in pensions and pay.

Mr. Bowden

I have answered the first question on barrack accommodation. On the second question, we hope that there will be facilities for those members of the Royal Malta Artillery who wish to do so to join British forces where there are vacancies. Others may prefer to accept their payments and gratuities and be demobilised. What I am sure it would be a mistake for us to do would be to endeavour to keep the R.M.A. in existence simply for the sake of keeping it in existence.

Mr. Heath

Would the right hon. Gentleman and the Leader of the House note that we shall want to go into this matter in greater detail, particularly concerning the timing and phasing of this operation so that any difficulties for the economy of Malta can be kept to a minimum? We shall also want details of the savings which the Commonwealth Secretary says will take place so that we can assure ourselves that these are not just paper savings but genuine savings on the whole defence budget.

Mr. Bowden

I recognise that the House may want an opportunity to discuss this matter, having given a little more time to considering the figures which I have presented to it. My right hon. Friend the Leader of the House will no doubt, through the usual channels, consider how this can be done.

Mr. Wingfield Digby

Does not the right hon. Gentleman recognise that Great Britain has a special responsibility to the 6,500 Maltese whom he is to sack and that the ordinary redundancy payments will be quite inadequate as many of these people have given a lifetime of service to the British Services?

Mr. Bowden

I cannot add to what I have said. The question of redundancy payments is under discussion and will be discussed with the Maltese Government. The rate of redundancy payments will depend on years of service, which is usual.

Several Hon. Members

rose—

Mr. Speaker

We must move on.

Sir W. Teeling

On a point of order. May I seek your guidance, Mr. Speaker? As far as I can remember, over the last twenty years, if a Member tables a Question—in fact, there were two in this case, one by my hon. Friend the Member for Surbiton (Mr. Fisher) and one by myself—no Minister has ever made a statement on it. My Question has not been answered at all.

Mr. Fisher

Nor has mine. I was not allowed to put my Question.

Mr. Bowden

I could have made a statement at the end of Questions in reply to the hon. Gentleman's Question, but I thought that, because of the practice of the House, which the hon. Gentleman probably understands, namely, that the Opposition spokesmen are not given a copy of the statement in reply to a Question, it would be very much better to make a statement and to give the Opposition a copy of it.

Sir W. Teeling

I should like to raise this matter on the Adjournment.

Mr. Speaker

The hon. Gentleman has indicated dissatisfaction with the statement as an answer and wishes to raise the matter on the Adjournment.