§ 2.47 p.m.
§ LORD COLYTONMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they will associate themselves with the guarantees to be given by the Governments of Southern Rhodesia, Northern Rhodesia and Nyasaland of their respective shares of the Federal public dept on the dissolution of the Federation of Rhodesia and Nyasaland.]
1107§ THE LORD CHANCELLOR (LORD DILHORNE)My Lords, if the noble Lord is asking whether Her Majesty's Government will give a guarantee in relation to the public debt of the Federation as apportioned to the three Territories on dissolution, the answer is in the negative.
§ LORD COLYTONMy Lords, this is an important question. The Federal debt amounts to over £280 million, of which, I understand, half is in internal loans, and this is to be divided into three tranches in the three Territories. May I ask my noble and learned friend these questions? Is it not a fact that the aggregate of the individual credits which are to be assumed by the Territories will not in any way be comparable with the credits of the existing Federation? Secondly, is it not a fact that there are thousands of small shareholders, as well as the insurance companies, banks and big corporations, who are gravely concerned at the diminution in the security which will result from these proposals? Thirdly, may I ask my noble friend whether he is aware that these loans were issued in this country through the Bank of England, who were appointed Registrar and paying agents, and that the underwriting arrangements were all made through the Government Broker? Finally—and this affects only the internal loans—is the noble Lord aware that the holders of these loans are all bound to suffer considerable currency risk as a result of these proposals?
§ THE LORD CHANCELLORMy Lords, the point raised by the noble Lord is much the same as points which have been made recently by Sir Roy Welensky, and the reasons why Her Majesty's Government are unable to agree to give such a guarantee have already been communicated to Sir Roy Welensky. It is difficult to deal with this matter adequately by way of question and answer. I understand that the draft of the Order in Council providing for the dissolution of the Federation and for other matters will be laid to-day and it would, I would suggest, be more satisfactory to deal with this question fully in the debate on the draft Order. I do not agree with the proposals put forward at the beginning by the noble Lord.
§ LORD COLYTONMy Lords, I must ask my noble friend this: is it not a fact that the dissolution of the Federation was the result of a direct decision on the part of Her Majesty's Government and that that decision has now been implemented by means of a sovereign act of the British Parliament? In these circumstances is this not a direct responsibility of Her Majesty's Government?
§ THE LORD CHANCELLORI do not accept the contention that political responsibility for the dissolution of the Federation rests with Her Majesty's Government. The fact of the matter is that two of the Territories declined to remain within the Federation, and it is against this background that Her Majesty's Government's decisions and actions are to be judged.
§ THE EARL OF LISTOWELMy Lords, may I ask the noble and learned Lord whether, when we come to debate this matter (I agree that this is not the moment), he will be willing, on behalf of Her Majesty's Government, to explain fully the reasons why the Government are not willing to give any guarantee to the bondholders in the loans of the Federation.
§ THE LORD CHANCELLORCertainly, my Lords. I should perhaps add that the Territorial Governments have accepted in full, and in agreed proportion, as from the date of dissolution, the debt obligations now resting on the Federal Government, and Her Majesty's Government do not regard themselves as under any obligation to give a guarantee in relation to stock which has never been guaranteed by the United Kingdom.
§ LORD COLYTONMy Lords, in view of what my noble and learned friend says about the possibility of discussing this matter further on the Order in Council, I will not do what I should otherwise have done; that is, to say that I should like to put down a Motion for discussion next week. But may we have at least this minimum assurance: that Her Majesty's Government will be willing to issue a statement to the effect that they will use their best endeavours at all times to ensure the servicing of these loans and to ensure that the repayment of capital at maturity will be undertaken?
§ THE LORD CHANCELLORMy Lords, Her Majesty's Government are 1109 certainly not indifferent to the legitimate interests of the stockholders and have had this matter much in mind during several months of negotiations. But that is quite a different matter from accepting the responsibility by guaranteeing these debts.