LOANS FOR EGYPT AND BRITISH NATIONALS' CLAIMS (Hansard, 10 July 1962)

§ LORD BALFOUR OF INCHRYE
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE)
My Lords, my noble friend the Foreign Secretary has asked me to apologise for his not being able to answer this Question himself. He has gone to meet the President of the Liberian Republic, who is arriving this afternoon on a State visit to London. My noble friend is still having discussions with the United Arab Republic Government about the need to settle the claims of these British subjects whose property has been desequestrated but who have not yet been able to get out of the United Arab Republic the money to which they are entitled under the financial agreement of 1959. As soon as my noble friend has anything to report to your Lordships he will do so.

§ LORD BALFOUR OF INCHRYE
My Lords, while thanking the Minister for his reply, may I ask him whether he is aware that it does not in any way answer the Question I put on the Order Paper? If the Minister would kindly look at my Question, he will see that it asks whether Her Majesty's Government can give an assurance that no further monies from the British taxpayers will be paid to the Egyptian Government until the question of British nationals is settled. He has in 135 no way answered that particular question. May I ask him whether he could now give an answer to the Question which is on the Order Paper?

§ THE EARL OF DUNDEE
My Lords, I do not think it would be very sensible to give an assurance, such as is suggested in the terms of the Question, that Her Majesty's Government will not grant any loans or credit unless these claims are met in full. I do not think that that would have the desired effect.

§ LORD BALFOUR OF INCHRYE
My Lords, do I understand that the Minister is now kindly answering my Question by saying that Her Majesty's Government cannot give that assurance?

§ THE EARL OF DUNDEE
My Lords, I think so, yes. We certainly cannot give the assurance in the terms which are suggested in the Question.

§ LORD HENDERSON
My Lords, is the noble Earl able to tell us why the Egyptian Government will not pay the money that ought to have been paid?

§ THE EARL OF DUNDEE
My Lords, we have often discussed this question before. The reason given, which I think is true, is that they have not enough sterling to fulfil the obligations under the 1959 Agreement. I did mention, when I answered a Question on this subject on May 8, in reply to a supplementary, that we have in the past expressed, and we continued to express, the, view that the failure hitherto to implement the undertakings of the 1959 Agreement has prejudiced our relations with the U.A.R., and that the implementation of the agreement would greatly improve them. We are continually pressing that view upon the Government of the United Arab Republic.

§ LORD KILLEARN
My Lords, arising out of the refusal of the noble Earl to give the assurance for which my noble friend asked, is the noble Earl aware of a riddle which is now circulating in regard to British claims against Egypt, to wit: "When is a promise not a promise?" and of the answer—"When it is given to British claimants by the British Government"? To go one stage further, he talked about Egyptian lack of sterling. Does the noble Earl 136 remember that when the Agreement of February, 1959, was signed the result was a totally inadequate sum of £27½ million paid by Egypt in total fulfilment of all Egyptian obligations, and that Great Britain simultaneously released £41 million sterling? That is a fact. Is he further aware that in May, 1957 (I come back to the definition of a promise), an unequivocal promise was given to the House of Commons: The blocked accounts are our security for the claims of British subjects against the Egyptian Government. We have no intention of whittling away that position, the House can be sure of that. That assurance was given by the present Chancellor of the Exchequer, then Minister for Foreign Affairs. Am I not right in saying that the answer to the question, "When is a promise not a promise?" is: "When it is given by the British Government to British claimants in Egypt"?

§ THE EARL OF DUNDEE
My Lords, in reply to the first part of my noble friend's supplementary, the promise under the 1959 agreement was given by the Egyptian Government, and it is the Egyptian Government whom we are seeking to hold to that promise, while we all, I think, recognise the exchange difficulties which may hinder them in implementing it. In reply to the rest of my noble friend's supplementary, the quotations which he has made from the year 1957 are all of statements made considerably prior to the agreement of 1959, which was accepted by both Houses of Parliament as a settlement of our claims against Egypt. It is the 1959 agreement which we are seeking to get properly implemented.

§ LORD KILLEARN
My Lords, may I just follow that up? If the noble Earl would read the Hansard reporting the debate in which the agreement of 1959 was agreed to—I believe it was agreed to in both Houses—he will find it was done only on the strength of certain definite or almost explicit undertakings given by the Prime Minister and by the then Leader of this House. As the noble Earl has brought in the 1959 agreement, I would say it was only in consideration of certain definite commitments entered into at that time that that agreement was passed.

§ THE EARL OF DUNDEE
I think that is another question, my Lords, but whatever was said by the Prime Minister at that time in another place has not been departed from.

§ LORD SHEPHERD
My Lords, would the noble Earl not agree that many countries when short of currency indulge in barter trade; and have the Government considered making an arrangement with the Egyptian Government—if they are willing—to provide cotton over a period of years, in order that the Government could then sell that cotton and find the necessary money?

§ THE EARL OF DUNDEE
My Lords, we have considered a great many expedients of that kind and of other kinds, and we certainly hope that we shall reach a satisfactory settlement. I can assure the noble Lord that we are not leaving out of account any possible method of dealing with this problem.

LORD REA
My Lords, could the noble Earl say whether Her Majesty's Government have in mind any retaliatory measures or sanctions that can be applied, until this promise is fulfilled.

§ THE EARL OF DUNDEE
My Lords, I do not think it is particularly helpful, during negotiations which you hope may lead to some results, to start talking about punitive retaliation. What we hope to do is to persuade the Egyptian Government to honour their obligations so far as it is possible to do so, having regard to their exchange difficulties.

VISCOUNT ALEXANDER OF HILLS-BOROUGH
My Lords, is there any indication as to what is the condition of the claimants who have been kept waiting all this time? What is their condition?

§ THE EARL OF DUNDEE
My Lords, I think that is a completely separate question from the one on the Paper. As the noble Viscount is aware there are a vast number of claimants, whose conditions vary a very great deal. Under the agreement which we already have, those whose claims are the smallest and who are in the greatest need have been satisfied, as I think your Lordships have been told, to the extent of 90 per cent. With regard to the further parts of the 1959 agreement, which we are particularly considering now—that is, the 138 failure of the Egyptian Government to pay the amount of sterling to British holders of blocked sterling accounts in Egypt which they undertook to do under the 1959 agreement—I am hopeful that we may be able to make some statement before Parliament rises for the Recess, although I am not sure of that at this moment.