§ 2.56 p.m.
THE EARL OF HOME
My Lords, I told your Lordships on July 26 that I hoped to make a statement on our discussions with the United Arab Republic Government before the House rose. I am glad to inform the House that agreement has been reached with the Egyptian Government on all the matters relating to the 1959 Financial Agreement that have been under discussion. The necessary documents have been drawn up. For technical reasons, largely connected with printing, it has not yet been possible to sign them, but signature should take place within a few days. I think, however, your Lordships would like a statement now.
The main problem has been the transfer of cash and bank balances up to the equivalent of £E5,000 as provided in the Financial Agreement. Arrangements have now been agreed upon to clear up this whole problem within a period which we hope will not exceed three years. The first £E1,000 of approved applications is to be transferred in future through the accounts of Her Majesty's Embassy in Cairo, the local currency being used to meet the Embassy's current expenditure. As regards amounts in excess of £E1,000 and up to £E5,000, the United Arab Republic will provide approximately £2¼ million which will be available in London on specified dates so as to facilitate the completion of transfers as they are applied for. This includes an immediate payment of £357,500 which will clear off the balances in excess of £E1,000 due to those applicants who have already received the lower figure. For their part Her Majesty's Government will provide a credit to the United Arab Republic of £715,000 to be used to finance transfers in the immediate future. The amounts drawn under this credit will be repaid by the U.A.R. Government over a ten-year period with a three-year period of grace and interest at the current standard rate. Arrangements have also been made to ensure that applications for transfer will be expeditiously handled.
In addition we have reached agreement on a number of other points in the 1959 412 Agreement which have given rise to difficulty. Arrangements have been made for expediting and simplifying the release of the remaining British properties sequestrated in 1956. A more exact definition has been made of property to be regarded as "Egyptianised" for the purposes of compensation claims. Dividends which fell due for payment after October 30, 1956 but were not distributed by companies that were "Egyptianised" will rank against the compensation fund. All available records will be furnished to enable claimants to establish claims with the Foreign Compensation Commission. The U.A.R. Government will pay Her Majesty's Government the equivalent in sterling of £E80,000 in respect of the balance of compensation for the officials dismissed in 1951. Effective instructions for the release of certain securities will be given. The exact liability of Egyptian Government pensions to Egyptian tax has been settled.
The documents on all these points will be published and laid before the House as soon as possible. The agreements which we have now reached with the U.A.R. Government on these matters are a sign of an improvement in our relations, which Her Majesty's Government warmly welcome. It is our hope that this development will continue.
§ THE EARL OF LUCAN
My Lords, may I, on behalf of my noble friends, thank the noble Earl for his statement, and say that we welcome whole heartedly this development, which seems to promise some redress and some relief to the hardship which has been suffered by so many people who had property and interests in Egypt. We welcome also the paragraph about relieving the ex-Egyptian officials, who also have been suffering for many years. We welcome the fact that the Egyptians have promised to improve the machinery and provide facilities for all available documents to be accessible to the claimants, which, as your Lordships will remember, was a matter which caused very great delay and difficulty. We note, however, that this is going to take place over three years—one might say, a slow-motion operation.
As to the details of the settlement, I think it is impossible for us to arrive at a conclusion; but I must tell the 413 noble Earl that on the face of it it does not look like a very good bargain. I am not a financier, but it looks to me as if we are paying the Egyptians to pay us, paying them with a ten-year loan, moreover. I hope that when the documents are published in a White Paper we shall find that the situation is rather better than it appears at first sight.
My Lords, I am sure that noble Lords on these Benches would like to endorse what the noble Earl has said, and are very glad to note the further progress made in solving problems which arose after the unfortunate Suez incident. In congratulating the Government on going forward with the settlement and pushing it well, I think the House would like to pay a tribute to the noble Lord, Lord Killearn, whose persistence has done so much for the people who suffered in this situation.
THE EARL OF HOME
My Lords, if I might answer the noble Earl, Lord Lucan, at once, of course this is only a partial operation. This facilitates the transfer of funds which the Egyptians have up till now not been paying or able to pay, and of course it does not affect the obligation I accepted the other day, that the Government would produce some more money over and above the £27 ½ million of the 1959 Agreement. I must make that clear; this is a limited, partial measure. But, nevertheless, I think it is valuable. It is true we have lent £715,000 to the United Arab Republic Government to help them to finance transfers for the first part of this £2 ¼ million deal; and so I do not think it is really a very bad bargain, and I think the people here will benefit from it.
§ 3.3 p.m.
§ LORD KILLEARN
My Lords, I should like very much to thank the noble Earl for his statement. We know how hard he has worked on behalf of these unfortunate people, and I am personally very grateful to him. I do not pretend the statement meets all that we want. The thought went through my mind that, if such a thing were possible, it was a cross between a gift horse and a red herring. I do not know what that would produce. We must reserve comment, naturally, until we get the agreement, but what it does, so far as I can make out, is to help the Egyptians to carry out their long overdue obligations under 414 the 1959 agreement which they ought to have done years ago, since 1959. That is all to the good, but it is British money that is going to do it. There seems rather a curious smell about it, if I can put it that way; there really is a bad smell about the whole thing.
But the real point I am after, and have been after—being pigheaded and single-minded and, if you like, not a politician—is the shortfall, the topping-up. I must not make a speech—I have done it already once in last Thursday's debate—but it is perfectly obvious that the good faith of the Government is committed. It is the British Government's good faith that I plead for. Certain formal, definite promises have been undertaken on which the Government cannot be allowed to go back. I am after the shortfall. My Lords, I fear that, after all, I am making a speech; I am sorry. The shortfall amounts to £27½ million received from Egypt, as against claims for roughly £80 million outstanding. The difference between these figures is £52½ million. I do not want to get drawn into detail; obviously we must all await the actual terms of this agreement. But I would end by repeating that I do not want to seem ungrateful to the noble Earl. I know he has worked very hard for us and continues to do so, so that in a sense it is rather ungracious to get up and speak like this and I repeat that we are indeed grateful to him.
THE EARL OF HOME
My Lords, I am most obliged to the noble Lord. I never thought anything like this would come my way. I know only too well what the noble Lord is after; if I do not know, nobody does. He said it was a cross between a gift horse and a red herring and he did not know what that would produce. My noble friend the Leader of the House suggested Pegasus. If there is a smell at all it must be the smell of the red herring. This is, I think, an agreement well worth having. I also told the House the other day that my object was to improve relations between this country and the United Arab Republic, and I hope, too, in the near future we may be able to do something to facilitate trade between the United Arab Republic and this country, which has been very near stagnation lately.
§ LORD OGMORE
My Lords, the noble Earl says in the statement thatThe exact liability of Egyptian Government pensions to Egyptian tax has been settled.Could he give any idea as to whether these claimants, if resident in this country, will be subject on this particular sum to British tax?
THE EARL OF HOME
My Lords, I think I should like notice of that question, I should like to look into it. I have never known the Treasury not subject anything to British tax. I would be very surprised if it were not.
§ LORD BARNBY
My Lords, we are all grateful for the sympathy we know, the Foreign Secretary has in this matter. He has just indicated that the settlement is contemplated over a period of three years. He has emphasised the hardship of the cases. Since his reply dealt mainly with the sequestration angle, may I ask this with regard to the Egyptianised section? Recognising the hardships that occur in that section where distribution is delayed to companies that have thousands and thousands of small shareholders, could he consider having a statement made shortly as to how soon a further distribution may he made of the amount available to the Egyptianised section to those feeling hardship?
THE EARL OF HOME
I do not know whether my noble friend was here a day or two ago, when I promised this was the next matter to which I would give my attention and would come before Parliament with a proposal on What is known as topping-up. The three-year period will clear off all matters concerned with the sequestrated property. I do not think it is very long. I have had my advisers looking at this very carefully, and we think this is a reasonable time in which to clear off for good all the claims which will be put forward.
§ LORD BARNBY
My Lords, I am grateful to the noble Earl for that. What I was referring to was the difference between the £27½ million which is admitted as the amount made available for this liability and the total amount of the distribution made from the fund up to date. In view of the Recess, could he give us any indication as to how soon there may be some further distribution, 416 without arriving at the point Where it would be necessary to distribute the supplementary amounts which it would be reasonable to expect Her Majesty's Government to give?
THE EARL OF HOME
I think we are approaching the point of very nearly exhausting the £27½ million. Therefore, the next point will be how far the Government should top-up.