HL Deb 31 July 1958 vol 211 cc596-603

4.16 p.m.


My Lords, with your Lordships' permission I rise to make a statement on Malta. The discussions between my night honourable friend and 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 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 their preparations for taking over the yard, and it is planned that they 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. Baileys, in association with the Colonial Development Corporation and Maltese interests, will provide £750,000 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 at 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 built 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 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 are given in the OFFICIAL REPORT.

On the constitutional side, we 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 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. We and the Governor 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.

Following are the details referred to in the Minister's statement: 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 chances 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 take-over of the Dockyard should be in two phases. During the first phase, which may last for about a year, Messrs. Baileys 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. Baileys, in association with the Colonial Development Corporation and certain Maltese interests (subject to the negotiation of satisfactory agreements) will provide £750,000. Her Majesty's Government will make available the balance of £4¾ million, partly in the form of a debenture and partly as a special giant 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. Baileys have made to Vice-Adrniral 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 are 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 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 education 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 Dockyard 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.


My Lords, we are much obliged to the noble Earl. Obviously the statement he has just submitted to us is of great importance. I believe that much of it will be received with some relief. We feel that we are well on the way to doing some things that we want to be done. I should like to ask for a little more detail about the difference between the civil shipbuilding and repair yard which is to be allocated to Messrs. Baileys, of Newport, Mon., and the Admiralty base. Is the base to continue to do their own major repairs? What is the difference here? Are the major repairs after 1960 to be done by the civil shipbuilding and repair organisation? The position is not very clear. If only part of the yard is to be converted to civil purposes, then I should have thought, unless I am thinking of the wrong part of the yard, that £5¼ million seems to be rather a large sum for conversion only. I am not saying that at the moment in any critical tone, because should like more details. From my knowledge in the Admiralty over many years I have great confidence in the firm to whom the Government propose to make a lease.


My Lords, may I say from these Benches how much we welcome the statement which has just been made by the noble Earl? I feel, however, that perhaps it would be premature to be too optimistic about the reception which this plan may get in Malta. The Maltese people, whom I know well from personal experience, during the war and since, are in rather a touchy state, and it is possible that they will view this plan with modified optimism. Nevertheless, I welcome it.

Before I sit down, I should like to ask the noble Earl a short question. I do not believe that I have ever seen a statement by a Government speaker drawing attention to the fact that, while employment at the dockyard has suffered recently, the amount of Maltese labour employed at the three great airfields must be greater than it was at one time, especially during the war and just afterwards. I do not know how the figures compare in this respect, but it has always surprised me that the Government, who are under heavy fire from various quarters on this matter, have never used the figures of the additional Maltese labour employed there, which must have provided employment for some who were formerly employed in the dockyard.


My Lords, in reply to the noble Viscount, Lord Alexander of Hillsborough, it is good to hear of his confidence in the firm. On the question of what the commercial firm are to take over, the answer is that they will lake over all the dockyard. All the work at the naval base will continue, but the repair work on naval ships will be done in the dockyard by the commercial firm. That is one of the ways by which we hope to ensure adequate work in the commercial dockyard after 1960.

I think that the point raised by the noble Lord, Lord Windlesham, is a perfectly valid and good one. Although there has been a great talk about potential unemployment, in fact, owing to other work, whether on the airfields or with other services, unemployment has been very little, if any, more than at any time since the end of the war.


My Lords, may I support my noble Leader in his tribute to the firm of C. H. Bailey and Company, who, from my knowledge, have a long and fine reputation in South Wales, and I am pleased that the Government have been able to make these arrangements with them. I am also glad that the co-operation of the Colonial Development Corporation has been obtained in this field. There are one or two points I should like to put to the noble Earl. The first is about what will be the business in the civil dockyard. Has there been any indication of the volume of business that is likely to he obtained, and have any preliminary arrangements been made for ships to be repaired there? I realise, of course, that there may be some difficulty about giving this information, but if it is possible to do so, we should be interested to have some facts. Secondly, I notice that the conference is to take place in November. In view of the situation in the Middle East., would it be possible to expedite that and have it earlier than November? And where will the conference take place: in London or in Malta?


My Lords, in reply to the noble Lord, Lord Ogmore, no specific arrangements have been made for ships to come into the commercial dockyard. It is, if I may say so, far too early. Probably the preliminary takeover will not start until 1959, and until some time in 1960, probably at the very end of the year, the commercial work will not be the real work to be done, though when occasion for it offers they will take the opportunity. Nevertheless, the question of what may may expect has been carefully examined. For example, over forty tankers outward bound and in ballast pass within five miles of Malta every day, and we believe that the prospects are very good for attracting some of these tankers for repair work at Malta.

The question of the date of the constitutional conference presents a problem, partly due to other conferences which are coming beforehand. All through October we have the conference on the future of Nigeria, and I expect that that will occupy more or less all our time. But that does not mean, because the conference cannot start until November, that we shall not be doing a great deal of preparatory work—of course, we shall. Where the conference will take place has not yet been decided.