HC Deb 09 February 1982 vol 17 cc947-54

Motion made, and question proposed, That this House do now adjourn.—[Mr. Lang.]

10.14 pm
Mr. Michael McNair-Wilson (Newbury)

I am grateful for the opportunity to raise the vexed question of what happened to the residue of the pay deducted from British officer prisoners of war who were held in prisoner of war camps in Germany and Italy during the last war. Those deductions conformed with the principles laid down in the 1929 Geneva convention. This subject has already been debated in another place, on 20 January, at the instigation of Lord Kimberley. The matter has also been extensively covered in the press and by the BBC.

I raise the matter again tonight because I am not convinced that successive Governments since 1945 have done as much as they could to reimburse officer prisoners of war for the losses of pay that they suffered as prisoners of the Germans and Italians, or to explain why, when they failed to agree a settlement with the West German Government in 1950 about compensation paid to that Government for moneys paid to our prisoners of war, they then paid that money into the Treasury. I shall seek to elaborate those two points.

In an article in The Daily Telegraph in 1980, accusations were made that our officer prisoners of war had been done out of pay belonging to them at the end of the war, to the tune of at least £1 million. As a result of that article and of pressure in Parliament, a working group was set up in the Ministry of Defence to look into the matter. It was chaired by my hon. Friend the Member for Chertsey and Walton (Mr. Pattie). It sought to investigate all the complaints that had come to light. The report of the working study group was published at the end of 1980.

Alas, far from stifling the debate, the report has been a continuing source of controversy. One reason is that those who had been in prisoner of war camps challenged many of its assertions. Another reason is that a committee of former prisoners of war decided to check its facts and figures against such evidence and records as they could research. Subsequently, they produced a seven-page document headed "Errors and Omissions in the Working Group's report". By anyone's standards, it is a damning indictment of the working group report. That they were more right than wrong in what they wrote was accepted by the Minister of State in the debate on 20 January in another place, when he said that it may well alter or amplify some of the more detailed points made in the working group's report.—[Official Report, House of Lords, 20 January 1982; Vol. 426, c. 680.] It does that and it does more, for it casts doubts on whether the working group's report is an accurate account of the way that officer prisoners of war were refunded for issues of often worthless camp money on German and Italian prisoner of war camps—that is, when such issues were made at all.

I do not propose to go into details of how these payments were made, except to say that a portion of the report claims that during the war the senior British officers in each prisoner of war camp informed the Red Cross when camp money was not being issued or was valueless because there was nothing to spend it on. It adds that this information was apparently sent back to the United Kingdom and each individial account was re-credited with the deductions previously made if the officer was not receiving camp money as he should.

From that reassuring sentence it might be assumed that no officer prisoner of war could possibly have any sense of grievance at the end of the war. However, as the Comptroller and Auditor General stated in 1946: When Germany collapsed and the bulk of prisoners returned it was impossible generally to obtain reliable information as to the prisoners' accounts, and settlements have been made largely on the basis of prisoners' declarations. That assumes that the returning prisoners of war knew how to claim for refunds, for it is readily admitted that the booklet "To All British Commonwealth Ex-Prisoners of War" dated February 1945, which all prisoners of war were meant to receive before repatriation, was in fact received by only a tiny minority of them. Added to that, a person suddenly freed after years in a prisoner of war camp does not think rationally or with the calculation that the Minister of State suggested.

In a letter sent to Lord Kimberley, one such former prisoner of war wrote: I would respectfully say to Viscount Trenchard, that his understanding of why Prisoners of War would not have made earlier representation, is at fault. The fact is that the state of mind of almost anyone in that situation, was one of bewilderment, euphoria, or even in some cases, melancholy, certainly not quite normal. In my own case, I was a Prisoner of War for five years to the day. During that time I, like others, went through times that mentally were difficult to bridge. When I was in fact released my state of mind was such, that I did not go home for a fortnight, because the sense of change was too acute. When I did arrive home, I was not yet 25 years of age. Perhaps that letter says all that needs to be said about a prisoner of war's attitude of mind on returning immediately after the end of hostilities in 1945. Perhaps it explains why the Ministry of Defence received about 2,000 letters from former prisoners of war after the article appeared in The Daily Telegraph in 1980 and why five former prisoners of war who are known to me—two of whom live in my constituency—tell me that they received nothing except worthless "laager marks" when they were in prisoner of war camps. They told me that they received no refunds on return to Britain.

So much for whether prisoners of war received proper refunds. I hope that my hon. Friend the Minister will forgive me if I quote from the letter that he sent me on 10 November 1981 in order to sum up so far. He wrote: Arrangements were made for adjusting officers' accounts on repatriation. There is evidence that arrangements on these lines were put into effect though whether every individual got his due is not impossible to say". At the beginning, I said that the deductions of pay from officer prisoners of war were made so that at the end of the war, Italy and Germany could be compensated for the camp money issued to our men. During hostilities and at the end of May 1945, 4,500 Army officers had been prisoners of war. In addition, 2,600 RAF officers and 400 Royal Navy and Royal Marine officers had been prisoners of war.

As it happens, I have a photostat of one of the pay slips given to an officer who fortunately did not spend all his time as a prisoner of war in a German prisoner of war camp, although he was placed in Colditz for part of his imprisonment. The pay slip belonged to the late Airey Neave and is for May 1941. It shows that in May 1941 his total pay for the month, as a Lieutenant in the Royal Artillery was £21 3s. 8d. of which he paid £3 2s. Od. as income duty. He was deducted £5 8s. Od., as the pay slip states, for an advance made by enemy government". Approximately 30 per cent. of his pay after tax was theoretically made over to a fund that would be made payable to the German Government at the end of the war, to compensate for the money that he was said to have received. In all, the 7,500 British officers who were prisoners of war had £1.7 million deducted from their pay during the war, or on average £6 Os. 6d. per officer per month.

If we accept that such refunds as were made account for about 40 per cent. of that money—I base my figures on such information as the Ministry of Defence has made available—it follows that 60 per cent. of the £1.7 million was held by the Government to pay back the German and Italian Governments at the end of the war. That is rather more than £1 million in terms of 1945 exchange rates.

What happened at the end of the war? Again, in the Minister's letter to me of 10 November 1981, he wrote: Money was not paid over to the Germans and the Italians after the war because in the settlement with Italy there was a mutual waiver of claims and in the absence of any settlement with Germany there was in effect a mutual waiver. I ask the House to note the words in the absence of any settlement with Germany". Therefore, the £1 million deducted from the 7,500 British officers who had the misfortune to be prisoners of war and that was deducted to cover an advance made by enemy government". was not needed for that purpose.

In equity one might then have supposed that the money would have been returned to those to whom it belonged—the officer prisoners of war. I am talking about a period five years after the war, when pay records for all three Services were in existence. Instead and inevitably, the money was paid into the Treasury, where it has remained ever since. At no time was Parliament informed that this unbelievable decision had been made and no reference was made to it in the working group's report.

Yet that is the nub of the matter. More than £1 million deducted from officer prisoners of war unaccountably was paid to the Treasury rather than to those from whom it was taken when the Government discovered that they did not have to reimburse the Germans. All that the survivors of 7,500 prisoners of war are offered by way of explanation is a working group report that avoids that issue and is full of inaccuracies. In justice, I ask my hon. Friend to consider the points that I have made. I believe that there is a debt of honour that a Government one day must pay to those brave men. Tonight my hon. Friend has an opportunity to show that this Government intend to pay that debt of honour.

I do not ask that the money should now be distributed among the prisoners of war, nor have any of those to whom I have spoken asked for that. They have said that the working group report is not good enough. An independent inquiry is needed if the matter is to be laid to rest and this debt of honour paid in one way or another.

10.26 pm
The Under-Secretary of State for the Armed Forces (Mr. Jerry Wiggin)

I am grateful to my hon. Friend the Member for Newbury (Mr. McNair-Wilson) for raising the matter this evening because I believe that there has been a good deal of misunderstanding and I welcome the opportunity to answer the points that have been raised.

Put most simply, as it was in the Sunday Express leader the other day, the allegation is that officer prisoners of war have been swindled out of money properly due to them and that successive Governments have refused to redeem that debt of honour. That is a serious allegation. However, it is, I can assure the House, a travesty of the facts. The facts are much more complex and while the outline is clear much of the detail will never be known because of the routine destruction of pay records.

In the time at my disposal, I shall not be able to cover all the points on this complicated subject, but I refer hon. Members to the speech made in another place on 20 January by my noble Friend the Minister of State for Defence Procurement. The story broke in August 1980 when The Daily Telegraph ran a series of articles making serious allegations about pay administration relating to officer prisoners of war in the Second World War. As a result, my right hon. Friend the then Secretary of State immediately set up an investigation under the direction of my hon. Friend the Under-Secretary of State for Defence Procurement. Following a detailed inquiry, my hon. Friend reported to the House on 31 October 1980 and a copy of his working group's report was laid in the Library of the House.

In brief, the Government's conclusions were that there was no evidence of gross mismanagement or impropriety, as had been alleged. All those matters had been carefully considered at the time. The Comptroller and Auditor General considered the question of prisoner of war pay most thoroughly in his report of 1945–46, which the Public Accounts Committee examined in detail. I firmly believe that there is no case for a Government, 35 years later, to re-open the matter when previous Governments have considered the question in such great detail and with the benefit of far more information than is available to us now.

My hon. Friend's recent report has been criticised as inaccurate and misleading. It is true that further research has altered our view of certain details of the report, as my hon. Friend has just said, but the general picture given is still substantially correct. As my hon. Friend explained to members of the voluntary committee of former POWs last May, the conclusions of the Government are unchanged.

Under the provisions of the Geneva Convention, all British officer prisoners of war and "protected" noncombatant personnel were entitled to receive from the detaining powers, during captivity, pay at the rate appropriate to their corresponding rank in the Armed Forces of that Power. Consequently, the prisoner of war during captivity had two pay accounts, the one at home in sterling and the other in Germany in marks. Suitable arrangements had to be made to make necessary adjustments between the two during captivity and after repatriation. In order to avoid double provision, corresponding reductions were made in the pay credited to the home account, and the intention was that any money in the camp account unspent and still credited at the end of the war would be refunded to the officer's home account. on repatriation.

Mr. Michael McNair-Wilson

Before my hon. Friend leaves that point, may I ask him whether the exchange rate between the laager marks and the English pound could be described as being on an equitable basis, or were laager marks in fact far less valuable?

Mr. Wiggin

I understand that exchange was carried out through the protecting Power, which in this case was Switzerland. Presumably the Swiss had some arrangement on exchange that was satisfactory to them. I understand that the British Government received payment in adequate currency—presumably either pounds or Swiss francs, I do not know precisely. That may be how it was done in practice. I shall give examples in a moment.

The first major criticism is that, through lack of concern or inefficiency, little was done to notify prisoners of the financial arrangements. It is difficult after such a passage of time to prove one way or the other how much prisoners knew of the arrangements. There was no question of concealment. Indeed, the matter was raised in several parliamentary questions. For example, on 24 April 1941 Mr. Law, a War Office Minister, speaking of prisoners of war stated that apart from Income Tax and National Health Insurance contributions, where these are payable, the only deduction made from his pay is in respect of pay issued to him by the German or Italian Government which varies according to his rank."—[Official Report, 24 April 1941; Vol. 371, c. 260.] There was certainly no lack of concern. An interdepartmental committee, reporting to a War Office Minister, met regularly throughout the war to consider the financial problems of prisoners of war. We still have many of the papers of that committee. We know that a camp leader's guide was produced, although, we now know that this was not issued until later in the war—too late to reach Italian camps. I have already referred to the questions that were being asked in the House at the time.

My hon. Friend mentioned the rate of exchange. Under the Geneva Convention this was a matter for negotiation. A compromise rate was agreed of 15 Reichsmarks to the pound, compared with a market rate at the beginning of the war of 10.77 Reichsmarks to the pound. More importantly, the Government decided that the same rate of exchange should be used for credits of pay refunded after the war, so there could be no unfairness about that.

The detailed arrangements that were made at the end of the war to deal with prisoners' accounts on repatriation are quite well documented and were described in my hon. Friend's report. It is alleged that, in practice, these arrangements broke down under the weight of numbers and did not operate as planned. There is some evidence that the Army reception centres had to cope with great numbers in a short space of time, but there is no evidence that either the Navy or the RAF arrangements were put under serious strain.

The crux of the argument relates to the extent to which individual prisoners received refunds at the end of the war. I believe that this lies at the root of the misgivings and, I would say, misunderstandings that have arisen. Of course, we shall never know precisely how much individuals received, because most individual pay records have been destroyed, but the more we look into this, the more evidence we find that the refunds were substantial and widespread.

I should here explain that home accounts could be credited in three ways; by refund on repatriaton, by credits remitted during captivity and by a special tax-free allowance to home accounts of prisoners of the Italians to compensate for the high cost of living in Italian camps.

As regards the navy, we still hold ledgers that show that nearly all naval officer prisoners received refunds after repatriation averaging about £80. It has been said that the average refunds for those who had been prisoners of stalag luft III were comparatively small. This is probably accounted for by the fact that substantial credits were remitted home by officers from stalag luft III in 1944. It is interesting that my hon. Friend the Member for Newbury should mention Colditz, because we have recently come across an Admiralty file containing a pay record of naval officers brought back from Colditz. This shows that substantial credits were remitted home in addition to the refunds shown in the ledger for these officers. One officer, for example, who had a refund of £13 shown in the ledger, had previously remitted home about £140.

As regards the Army, a War office letter states that over half of the pay deducted from some 2,000 Army officer prisoners in Italy was refunded, taking account of the special tax-free allowance, which I mentioned previously.

For the RAF we have the evidence of the suspense account described by my hon Friend in his report. It has been suggested that this may also have covered Dominion officers, but even if this were so, substantial refunds must have been given on a wide scale. These would have included the remittances sent home from stalag luft III, which alone exceeded £100,000.

In short, I believe that former officer prisoners have not realised the extent to which deductions of pay were re-credited to their accounts during and after the war in the various ways I described. Outstanding questions were considered by Ministers after the war and were the subject of parliamentary questions. The then Prime Minister answered a question on the subject in January 1947.

The hon. Member mentioned an independent inquiry. If there had been firm evidence of serious impropriety or a complete breakdown of pay administration after the war, we might even now have to re-open the matter and perhaps set up a new inquiry. But as I explained, there is no evidence of this.

Furthermore, in the most unlikely and, to my mind, inconceivable event that an inquiry did turn up some evidence of impropriety, it would now be impossible to resolve this situation equitably since all pay records and much of the information that would be required have been long since destroyed. If it is accepted, as I believe it must be, that, in general, officers received substantial refunds in accordance with the policy laid down by the Government at that time, it is simply not possible to speak of valid claims for further payments now, as former prisoners are being encouraged to do by the voluntary committee. The committee is not doing former prisoners a service by raising hopes which cannot possibly be fulfilled.

In a short speech I have not been able to cover every aspect of this complex matter.

Mr. Michael Mates (Petersfield)

Is the Minister going to explain why the sum of just over £1 million, which my hon. Friend the Member for Newbury (Mr. McNair-Wilson) referred to, was credited back to the Treasury? Why was some solution not thought of at the time to give an equitable distribution of those credits?

Mr. Wiggin

I am sorry to tell my hon. Friend that 35 years ago I was not responsible for these matters. The Coalition Government of the war, the Labour Government after the war and the Conservative Administration of 1951, all thought that this matter had been correctly handled. The subject was not raised again until 1980, by which time all records and information were lost.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Will not the Minister agree one brief point? Do not honour and debts of honour have no time limit and should the edge not always be given to those who suffered in the cause of all our freedom?

Mr. Wiggin

Nobody is more sympathetic to the problems and difficulties of ex-prisoners of war than the Government, myself or any hon. Gentleman. That is understood. However, the point at issue here is whether there was an injustice. My experience and that of my hon. Friend in these matters is that, if there is thought to be an injustice, it goes forward, is constantly raised in the House and Ministers are questioned about it year after year—if it is such an issue. I cannot believe that, 35 years later, this issue should suddenly have arisen, when all the records have disappeared and when the Government of the day, with all the figures at their disposal, did not have this battle. Prima facie, I believe that this issue has been resurrected incorrectly on the basis of improper fact, as I have been trying to prove.

Mr. McNair-Wilson

Will not my hon. Friend agree that as a result of what has emerged from The Daily Telegraph article, offers of help for prisoners of war who are disabled or suffering from illness have come forward from the Government. Those offers were not on the table before the inquiry started. The Government are therefore recognising that there is a wrong that has to be put right.

Mr. Wiggin

It has been considered until now that the vast majority of prisoners, although they suffered, no doubt, great deprivation and mental anguish, did not suffer the physical damage of prisoners in the Far East. My hon. Friend the Minister for Social Security is taking special steps to identify prisoners of war and to find out whether there are likely to be special problems. It is about now 'that they are likely to be coming forward. We are keen to be compassionate and helpful. It is not, however, on this issue that we are able to assist.

I hope that I have been able to dispel the misunderstanding that exists on the issue. My noble Friend the Minister of State for Defence Procurement is to see my noble Friend the Earl of Kimberley and some members of his committee later this week. At that meeting, they will go into matters in greater detail than is possible in this debate. I must make clear, as my noble Friend said in another place recently, that the Government remain firmly of the view that there is no case to reconsider our fundamental policies. These matters were considered and settled by the three Governments that I have already mentioned. No steps were taken by the new Conservative Government in 1951 to reopen the matter. I can find no case to reopen it now 36 years after the event, particularly when we are so short of the individual pay records that have all been destroyed.

I repeat my gratitude to my hon. Friend. I hope that he will now remain convinced that this is not a matter of malice or of seeking to hide anything. There is just not the evidence available on which these allegations have been based.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Eleven o'clock.