HC Deb 16 November 1970 vol 806 cc845-6
15. Mr. Wall

asked the Secretary of State for Foreign and Commonwealth Affairs if he will now make a statement on aid to Malta.

Mr. Wood

The difficulties over the division between gift and loan for the £23 million, remaining available under the 1964 Agreement on Financial Assistance, have now been resolved. The flow of aid to Malta has therefore been resumed.

With permission, I will circulate a fuller statement in the OFFICIAL REPORT.

Mr. Wall

I very much welcome that statement. Has the decision been to give Malta a 75 per cent. grant? How long was aid to Malta held up by the previous Administration to coerce the Maltese Government?

Mr. Wood

Apart from the £3 million for the dockyard and £1 million for the historic buildings, the division between grant and loan is 75 per cent. to 25 per cent., which is the same as the division in the first quinquennium. There has been a delay, but I hope that development in Malta will now be resumed.

Mr. Rose

Will the right hon. Gentleman bear in mind the increased strategic importance of Malta, with Soviet penetration in the Mediterranean, and yet balance that against the distorted effect upon the Maltese economy that purely military work and military aid may have in that area?

Mr. Wood

We should all recognise—not only ourselves, but our partners in the North Atlantic Alliance—the strategic importance of Malta. This is not being discussed now, but it will no doubt be discussed in the next year or two.

Following is the information:

The discussions with the Malta Government, in accordance with Article 5(b) of the 1964 Agreement on Financial Assistance, were reopened at the end of July. Agreement was reached on 6th October on the division between gifts and loans in respect of the period of five years ending on 31st March, 1974.

It has been agreed that the amount of approximately £23 million still available under the 1964 Agreement, the proportion which will be made available by way of gift will consist of £1 million for the restoration of historic buildings in accordance with Article 7 of the Agree-merit, the £3 million available for the dockyard under the settlement of 31st March, 1968, and in addition 75 per cent. (approximately £14.25 million) of the balance. The other 25 per cent. (approximately £4.75 million) of that balance will be by way of loan.

Further discussions at official level on the disbursement of aid to Malta in the current financial year were concluded satisfactorily on 16th October. The flow of aid has been resumed with the payment to the Malta Government on 20th October of £6.5 million of the grant element out of a total sum of £11.2 million available for drawing in the current financial year.