HL Deb 15 November 1960 vol 226 cc542-56

3.38 p.m.

LORD BARNBYrose to ask Her Majesty's Government:

Whether they are yet able to report, having regard to the registered total of British Egyptianised assets in Egypt which form part of the agreed global, sum entitled to attract compensation, when further distribution by the Foreign Compensation Commission is to be expected.

The noble Lord said: My Lords, in asking leave to put the Question standing in my name I should report that I have no interest to disclose though I have a minute shareholding in one of the companies which are concerned in the subject which I am going to raise. But that is on sentimental grounds to which I shall refer later. I recognise in this matter the great difficulties that surround the problem from the Government's point of view, and indeed from all angles. My aim is to avoid any controversial ground. I speak mainly for the Egyptianised sector of the problem, and this in no way involves Egypt.

It will be within the knowledge of your Lordships that a sum has been put aside from which it is intended that distribution in the form of compensation will be made. I have taken the trouble to read most of the Questions and Answers and statements in both Houses of Parliament in the last eighteen months to two years, and I must admit that anybody looking at this question impartially would be seized with the conviction that there is a strong body of opinion in both Houses about it; and if that correctly reflects the thinkings of those in another place, there must be a strong body of feeling in the country about it.

I am motivated in raising this Question mainly to emphasise the slowness of distribution against the claims recognised as ranking. The fact is that, out of the £27½ million set aside by the Government from the amount in the Agreement, up till, at any rate, May of this year a sum of only £365,000 had been distributed in all forms.

I am going to take as an illustration one firm, although there are a great number in the category of subsidiaries of British firms who were Egyptianised. The firm which I am going to select is the Bradford Dyers Association, and I do that because they are a large firm that I know well; because they are based in Bradford, my native city, which I had the honour to represent in another place; and because I believe that a great injustice is being done to them—and I think that that is equally true of many other companies. This particular firm have had accepted, I believe, a claim for £1¾ million, against which they have to date received a distribution of only 5 per cent., or £97,000. The singular thing about this company is that they have 14,000 shareholders. I see no grounds for assuming that it may not be true that, in the case of some of those shareholders, hardship exists, perhaps not equal to but parallel to that of the other unfortunate individuals who come within this question.

This firm has done a great service to the wool textile industry, which it will be within your Lordships' knowledge is an industry which contributes very largely to exports. They were progressive; they established subsidiaries in the United States and in Canada and, subsequently, in Egypt. It is a very efficient firm, which I have reason to believe is at the present moment operating at a high activity, giving great service to the industry in the countries where it is located, including Egypt, and doubtless to the profit of the present owners. I believe that if this firm were to receive any substantial part of this money, it would be put to useful purpose; to the benefit of the United Kingdom industry, of the national economy, and, of course, of the company. It is for that reason that I have emphasised the position of companies.

This subject has been discussed by Question and Answer and by speeches in both Houses, and it has been debated with singular vigour by several Members of your Lordships' House. I think particularly of the noble Lord, Lord Killearn, who, as our former Ambassador in Egypt, must know the situation very well; the noble Marquess, Lord Salisbury, who has spoken with great feeling on this matter; Lord Balfour of Inchrye, and many others. Furthermore, on turning up the OFFICIAL REPORT of the Business in the other place, I find it impressive to see how strong was the exhibition of feeling there. In the remarks of Government spokesmen, following the general contention that it is totally inequitable that one section of the community should be made responsible for an act committed by the community as a whole, I find that the statements included one by the Chancellor of the Exchequer that [OFFICIAL REPORT, Commons, Vol. 602, col. 42]: …while the Government are unable to accept any general commitment now, that does not mean that in no circumstances are we willing to provide any further financial assistance or contributions. Then I read that the Prime Minister said [OFFICIAL REPORT, Commons, VOl. 602, col. 150]: …the Government will watch how this works out and will play their part in reaching a settlement which will be reasonable and fair, and we do not exclude a further contribution from public funds. In anticipation of the reply by the noble Earl, I would say that it is clear that the Government are not without sympathy in this matter, and I hope that raising the matter here will give comfort in many directions where there is great anxiety. It will be recognised that often the Government are assisted in doing right by emphasis laid in Parliament. My Lords, if I may be permitted to go back historically for twenty years (it is hard to think that 1940 is twenty years ago) I recollect that in this House, as well as in the Commons, there was strong pressure that the Government should assume liability for war damage. It was resisted by the then Lord Chancellor, and it is hard to believe now that the Government could have been thinking then that it was an unreasonable thing to provide for the hardships that might develop from the destruction of buildings in conditions of war. I make no suggestion that this is a parallel situation, but I think that has some analogy to the case.

I realise that the situation here may well not call for anything burdensome on public funds, but at least I think it can be advanced with emphasis that so meagre a distribution to date could well be replaced by a more generous distribution, even though it is kept well within the angle of caution. It is in that spirit that I ask my Question. I hope that the noble Earl who is to reply will not feel that we are pressing him too hard, but that he will reflect the feeling that action would be more acceptable than words in this reply. My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

3.49 p.m.


My Lords, I rise to support the thesis put before the House by the noble Lord, which I am sure will have the sympathy of every quarter of the House. I well know the affairs of the Bradford company to which Lord Barnby referred. They bad a big installation out there, like many others; and, like many others, they have been expropriated and have suffered grievous loss. Many of us, of course, have been doing our best over a number of years to secure what we think is equitable treatment for these unfortunate firms and individuals who were dispossessed and driven out of Egypt, many of them losing every stitch of clothing and all their belongings, as long ago as November, 1956. Many of us have felt that four years is a bit long for some of these people to have to wait.

It is true that in the interval, through representations made in your Lordships' House and in another place, ingenious devices have been evolved to meet hardship. So-called loans have been made, subject to rigorous receipts, under which the unfortunate recipient was made to pledge himself to refund any advances made as soon as he got anything out of Egypt. I felt at the time that that rigorous form of receipt was hardly justified. I still feel it. But it still exists. And I happen to know that now that the Anglo-Egyptian Agreement has been signed—I may add, much to my surprise—some of these unfortunate individuals are being called upon to refund a large proportion of what they receive.

I should like to turn from that aspect to a more general one. I was looking up papers before the debate to-day and saw that the Financial Agreement with Egypt was signed on February 29, 1959. It was debated in this House on March 19 of that year. The Agreement was introduced and was recommended for acceptance by the then Lord President of the Council. What he said in his introductory paragraph struck me as very appropriate. He said [OFFICIAL REPORT, Vol. 215, col. 80]: …whether or not the approval is wholehearted or enthusiastic, it may at least be unanimous. Your Lordships will remember that it was unanimous, but your Lordships will also remember vividly that the acceptance was certainly neither wholehearted nor enthusiastic—very much to the contrary. Reading between the lines of the debate, it is pretty clear that no one really liked the Agreement. Some of us were more outspoken than others, and the Government were severely criticised; but at any rate they got unanimous acceptance of the Agreement.

The long and short of it is that Egypt got away with a lump sum down of £27½ million in full discharge of all claims against her. Some of us raised the point of whether the Government should have given that full discharge without any prior consultation with the claimants, which there certainly had not been. We were assured by the Front Bench that that was contrary to precedent; that the Government did not worry about that sort of thing—I forget the exact phrase, but I was rather brushed off on that point. The fact remains that by paying £27½ million Egypt has got full discharge of all claims against her. We know from the facts and figures quoted on various occasions that £27½ million is totally inadequate. But, of course, there are other points covered in that agreement besides the private claims. There were Government claims. The good point about the Agree ment—and I said so at the time—was that the inter-Governmental claims were waived on both sides. I thought that this was a tremendous thing to have achieved. We all remember how contentious a good deal of it was. The Lord President made a fine case for it and emphasised that the rights of private individuals were in no measure sacrificed under the Agreement. Obviously that was what he thought; but I felt at the time, and still feel, that Egypt was very lucky to get away with this sum in total discharge; and probably the fact that inter-Governmental claims were waived had its effect. But I will not pursue this aspect any further.

British properties were seized in November, 1956, four long years ago, and since then we have wrung this £27½ million out of them and it is now in the hands of the Foreign Compensation Commission, a body which was legally instituted to deal with such matters. It is their task to administer the £27½ million and I think that they have been doing their best. The particular case raised by my noble friend is no doubt covered by the rates which are laid down in the Order in Council. Where the claim exceeds £25,000, an interim distribution is made of £9,750 down and 5 per cent. of the balance of the amount assessed over £25,000, which no doubt corresponds with the figure which my noble friend Lord Barnby mentioned. The point I should like to make is that I do not see how the Foreign Compensation Commission, a legal body bound by their instructions, can vary a scheme which I suppose has been laid before Parliament and has been imposed on them for them to administer. A very eminent lawyer is Chairman and I am sure that the Commission does extremely well.


My Lords, may I ask my noble friend a question about something that is not quite clear? Have Egypt paid the £27½ million in one lump sum? Or how much has been paid?


My Lords, rather elaborate arrangements are laid down in the Agreement. I understand that the money is in the hands of the Foreign Compensation Commission, but I am subject to correction.

I come to this point, which in a sense is accidental. There are two classes of property which are the subject of claims: property which has been Egyptianised—that is, nationalised—and property which has been sequestrated and on which claims for damage have to be met. My noble friend's case comes under the first class of nationalised property. The second class, I imagine, is more difficult to deal with, and there is the question of how far the Egyptian Government have been implementing the procedure which is prescribed in the Agreement for de-sequestration, which, of course, takes place in Egypt. According to our information, there has been a considerable delay over this in one way or another, quite apart from the fact that if and when the unfortunate claimant gets through the whole rigmarole of desequestration he is then faced with the rule that only £E5,000 can be transferred to this country. It is true that the Agreement said that Egypt might consider further grants—a sort of pious hope. So far as I know, only a very few have got as far as the £E5,000. If you have been ejected from a country, so that the whole of your existence there has come to a full stop and you have no intention whatever of going back, what is the good of having your desequestrated property, which has been recovered only with the greatest difficulty, blocked, and only £E5,000 allowed to be sent home? That is one of the problems which Her Majesty's Government will have to face—no doubt they are facing it—because it is very serious.

I have strayed a little, and I would revert to what I was saying. There is the Egyptianised, which is a little difficult to deal with, and the sequestrated, which is local, and in which there are considerable delays. Until the total due for desequestration has been assessed, the unfortunate Foreign Compensation Commission cannot estimate how to distribute the £27½ million, because it has to cover both. One can well understand their perplexities and difficulties. It is true that £E5,000 is very little. What I personally hope that we shall get is the short-fall of the two classes. Until these unending delays in Egypt are overcome, and we know what the full amount of the desequestrated damage is, that holds up the whole thing, including the Foreign Compensation Commission.

In intervening in this debate I thought I should try to remind your Lordships of the two classes of property and the complications which have arisen as a result. I suppose that the only thing one can do—and I am sure Her Majesty's Government are well aware of this—is to press the Egyptians to get on with this matter. I do not know whether it is true, but I was informed the other day that the Agreement about which we are talking was negotiated and signed in English, but that it has never been translated into Arabic. These departments and so on are doing their work in Arabic, and to this day half of them do not know what is in the Agreement. I have been told that as a fact. Whether it is true or not, I cannot guarantee, but it may account for some of the delay.

I have delayed your Lordships for long enough. I have no doubt that the noble Earl is well seized of all these complexities, and I have no doubt that we have his goodwill in full measure. I would simply add a plea to that which my noble friend Lord Barnby has already made, that all possible pressure should be brought at the other end to get on with the desequestration procedure so that those here can get on with the full distribution. That, it seems to me, is where the shoe is pinching at the moment. As regards the actual amount of the distribution, I cannot criticise that; it has been done -by the Foreign Compensation Commission, no doubt on a fixed scale.

4.4 p.m.


My Lords, the Question which my noble friend Lord Barnby has put on the Order Paper is in its terms a narrow one, in that it deals with the narrow point of the distribution of the Foreign Compensation Commission, and my noble friend has said that it has nothing to do with Egypt. But, with respect to him, I do not think we can divorce this narrow point from the wider issues of the Anglo-Egyptian Agreement which has just been touched upon by my noble friend Lord Killearn. The reason why the comparatively derisory amount of £365,000 out of £27½million is the total distributed to date by the Foreign Compensation Commission lies hi the matters which were raised in your Lordships' House when the Anglo-Egyptian Agreement was debated on (I think it was) March 19, 1959. It was pointed out in that debate that the £27½ million total has to meet claims of Egyptianised property estimated at £45 million and sequestrated property estimated at no less than £130 million. Until the Foreign Compensation Commission have been able to assess in full and in detail the rectitude of the claims put forward, they are unable to make a distribution beyond the small sum which your Lordships have been told about to-day. One then naturally asks: "Why have the claims not been assessed?", and one is brought straight back to the working in Egypt of the Anglo-Egyptian Agreement.

My noble friend Lord Killearn cited certain difficulties. There have been up to October of this year, I understand, some 4,822 claims for sequestration put forward, of which some 2,536 have been admitted. That means that nearly four and a half years after Suez and nineteen months after the signing of the Anglo-Egyptian Agreement something approaching 50 per cent of sequestration claims have been admitted. But I would ask your Lordships not to think that admission means any satisfaction to the claimant, because the Agreement is not working out as I am sure Her Majesty's Government had hoped and your Lordships also had hoped When it was signed.

I will not go into any great detail, but I would cite five aspects where the Agreement seems not to be working satisfactorily. The Agreement lays down that all tax claims must be met in Egypt. The claim ants cannot obtain from the Egyptian authorities details of what those tax demands are. Then in regard to the £E5,000 transfer, grave difficulties are being met by the claimants in getting anything like £E5,000 transferred. The Agreement said that favourable consideration would be given to transfers of further funds. I have never heard of a case—I hope that Her Majesty's Government will be able to tell me that I am wrong—where any favourable consideration has been given to sums beyond the £E5,000.

There is refusal in certain cases to allow claimants to go to Egypt to put forward their claims. Some of these refusals may be on racial or on other grounds, but it is deplorable that they should exist. Then there is the unfortunate position of some people who have had desequestrated property finding that they are unable to get possession because it has already been requisitioned, or directly it is desequestrated it is requisitioned, by the Egyptian authorities. The five reasons which I have given to your Lordships quite briefly seem to me cogent ones as to why the sequestration claims cannot be completed and, therefore, the Foreign Compensation Commission cannot make this distribution.

In the original debate I asked the Government—and my noble and learned friend the Lord Chancellor replied—whether in the £271½ million there was priority for the Egyptianised claims or priority for the sequestrated claims or whether they went pari passu. My noble and learned friend on the Woolsack said that, so far as he understood, they went pari passu. That being so, it means that until all the sequestrated claims are cleared up and the Egyptianised claims are cleared up, the position about which my noble friend Lord Barnby complains to-day must continue.

Her Majesty's Government are talking now—and I think we are all glad of it—of closer relations with Egypt. We read in the newspapers that our Prime Minister saw the head of the Egyptian State at the United Nations. All to the good, But closer relations must mean closer relations on both sides; it cannot be all giving on our side and receiving nothing in good will in return. I hope that when the Foreign Secretary comes to reply to the narrow point raised by my noble friend Lord Barnby he will also feel it necessary, as I have, to touch on the wider aspects, because you cannot deal with a narrow issue without embarking on the wider issues. I hope the Foreign Secretary will also tell us that the Prime Minister received reassuring information from the chief of the Egyptian State that the present what I would call rather obstructionist attitude of the Egyptian authorities will be changed for one of co-operation.

4.12 p.m.


My Lords, I am grateful to my noble friend Lord Barnby, and noble Lords who over many months have taken an interest in this problem, for raising this matter to-day. The noble Lord, Lord Barnby, said that he wished to avoid all controversy. Certainly that is the desire of myself, and indeed of all of us, because I think we all realise that in difficult circumstances we have to try to do our best for people who have had an extremely harassing time through no fault of their own.

The noble Lord, Lord Barnby, mentioned certain assets which had been Egyptianised, and he raised the case of a particular firm. Indeed, that is paralleled by the experience of other companies, but it shows that this is not an impersonal matter when you are dealing with companies or firms. As the noble Lord said, the company which he had in mind had 14,000 shareholders, each one of whom no doubt suffers in some respect for the loss of the company. And, of course, we know of many cases where people who had small one-man businesses or family businesses in Egypt have equally suffered. Therefore, we look within limits to a settlement which is both reasonable and fair.

Without going into the merits or demerits of the 1959 Agreement with the United Arab Republic, of course the noble Lord, Lord Killearn, was right when he reminded us that the total which Egypt agreed to hand over—and they have handed it all over at this time—is the sum of £272½ million. This, of course, covered the two types of claims: first, the property which was sold between 1956 and 1958 under an Egyptian Order—those, as your Lordships know, were called the Egyptianisation claims—and, secondly, property which suffered loss, injury or damage as a result of certain Egyptian measures of sequestration or restriction, and these are known as the sequestration claims. I agree with my noble friend Lord Balfour of Inchrye that we cannot separate the two, and for the purposes of the short discussion this afternoon I propose to take them together.

May I deal with the Egyptianisation claims first? The latest position is that the Foreign Compensation Commission has assessed under this heading claims valued at some £23,437,483. That is no measure of the total claims; that is what the Foreign Compensation Commission has assessed at the present moment. May I turn to the other type of claim, the sequestration claim? Before the second type of claim can be made, the claimant has to get his property back in order to find out the extent of the loss or damage. This, as various noble Lords have said, is a slow process. When I was in New York I saw the Foreign Minister of the United Arab Republic, and I impressed upon him the importance of getting on with this job, and he promised to give it his personal attention on his return. I think that lately there are signs that progress is faster.

The position to-day, or at least up to the end of October, was this. There has been an interim distribution by the Foreign Compensation Commission who have paid out £1½ million for the Egyptianisation claims and just under £100,000 for the sequestration claims. I do not think I need repeat to your Lordships the basis on which that was calculated, although it may perhaps help if I go through it. Claims up to £5,000 have received 70 per cent. of the accepted claim. Those between £5,000 and £10,000 have been paid £3,500 plus 50 per cent. of the remainder. Those between £10,000 and £25,000 have been paid £6,000 plus 25 per cent. of the remainder, while those over £25,000 have received £9,750 plus 5 per cent. In all, 256 Egyptianisation claims and the 175 sequestration claims have received payment.

I take it that the wish of the noble Lord, Lord Barnby, and the wish of your Lordships, is for two things: first of all, that we should get on more speedily with the desequestration—and that, I hope, will follow the conversations I had in New York—and, secondly, that there should be before very long another distribution, because your Lordships have expressed your anxieties about the slowness of the advance and the fact that the last distribution was some way away—I think it was last May. I can tell your Lordships now that a further distribution by the Foreign Compensation Commission is being considered, and I hope that I shall be in a position to make a further statement dealing with an increased distribution before the Christmas Recess. Although I cannot go further this afternoon, I hope that that will show willingness by the Government, as the noble Lord, Lord Barnby put it, to be assisted to do right.

4.18 p.m.


My Lords, I do not wish to keep the House long over these matters, but I am one of those who has taken considerable interest in them since the very start. I do not wish to repeat all that has been so well said by my noble friends Lord Killearn and Lord Balfour of Inchrye as well, of course, by the asker of the Question, my noble friend Lord Barnby, but I should like to impress once more on the Foreign Secretary the deep feeling of anxiety, and the increasing feeling of anxiety, which many of us have over these matters. I think he has given a more encouraging answer to-day, and we are all grateful for that.

Of course, there are the improving relations between Britain and Egypt with which other speakers have dealt already. But up to now, even with the figures which the noble Earl has given, remarkably little has come back to these people for all they have lost. There are, to many of us, special considerations. When we originally embarked on our policy towards Egypt four years ago, one of the reasons given by the Government, of which I was then a member, was the wish to protect British interests in Egypt. These are the people who were to have been protected, and certainly the larger claimants among the people whose property has been sequestrated and who have not yet got it back—those who had more than £35,000, very often the earnings of a lifetime—have got only, I think the Foreign Secretary said, 5 per cent. back. That is a very small proportion, and they are getting older and weaker every year. I therefore urge on the noble Earl not to weary in well doing. He has so much respect from us all and we had so great high hopes of what he might be able to do when he came to the Foreign Office that I make this plea with special force. We shall, of course, wait and hear what the result is of the further distribution of which he spoke, but I hope he will realise that to many of us this is a debt of honour and until it is paid we shall not sleep happy in our beds.


My Lords, could the noble Earl say something about a point which I have raised before in this House and which is creating great hardship? It is that when claims are paid there is a very strict limit on the amount which can be transferred to the United Kingdom or outside Egypt.


My Lords, as one who has taken a great interest in the matter for a long time, I should like to take this opportunity of saying two short words on a matter which most of us feel strongly about. We are all grateful to the Foreign Secretary for the statement he has made; possibly it is the most encouraging statement we have had for some time, though I would remind your Lordships that this situation has continued now for four years, and every time we have been told that there was some favourable portent on the horizon and have hoped for better things, accept that all these statements were made in good faith, but I merely remind your Lordships that it has been a very long time, and we do hope that this new portent, the meeting between the Foreign Secretaries and the new relationship we are hoping to establish with Egypt, will mean something; because, frankly, the other portents have meant little. There has been some talk about Egyptianised property and sequestrated property. But of course the basic difference, apart from anything else, is that nobody who has had property sequestrated can hope to put in a claim until he has got his property back. In point of fact, it is the people with sequestrated property who are the people in the greatest need; they are the small people and the small businesses. The Egyptianised properties are the bigger businesses whose need, if one looks at it from an objective point of view, is probably less.

I do not know on what basis this new distribution is going to be made; but, quite clearly, unless something is done to enable the claimants with sequestrated property to make some progress—and that depends largely on the Egyptians—they cannot in the nature of things expect anything more in the new distribution. They cannot have their property de-sequestrated, because the Egyptians—and I am sorry to say this—appear to have made very little attempt to fulfil the terms of the Treaty we signed in 1959. I do not know whether the Foreign Secretary feels able to say anything about that, but I do think, when we are looking at need, that it is the sequestrated people whose need is greatest. They are the people who are still going to be under this appalling handicap, and they are getting older and poorer every day.

4.24 p.m.


My Lords, on a point of Order, and with the indulgence of the House, may I ask the noble and learned Viscount the Lord Chancellor whether I should be in order now (since before the noble Earl the Foreign Secretary sat down I said "Before the noble Earl resumes his seat, may I,…" and he made a gesture that I should properly make way for the noble Marquess the former Leader of the House) in putting one question to the noble Earl? When he said in regard to the Egyptianised property that there was a wide margin between the amounts on which these properties had been assessed for compensation and the amounts which it had been alleged they should claim, do I understand that it is not to be accepted from the statement he made that there cannot be a reopening of those claims in the event of the smaller amount not being considered to meet the reasonable claims of the larger amount?


I hope there is no misunderstanding. What I said was that a certain number of claims had been assessed giving a certain figure, but I made it quite clear that it probably bore little relation to the total amount of claims yet to be assessed


I thank the noble Earl and the House for its indulgence