§ 3.10 p.m.
§ THE DUKE OF DEVONSHIRE rose to move, That the Federation of Rhodesia and Nyasaland (Dissolution) Order in Council 1963 be approved. The noble Duke said: My Lords, before I come to explain the details of the Order in Council, an Affirmative Resolution for which is required, I should like to offer a word of explanation and an apology to your Lordships for the short time in which those interested in this matter have had to study the Order, particularly as it is a long and complicated document. The machinery for bringing about the speedy and orderly dissolution of the Federation was set up as a result of the Victoria Falls Conference held in June, with the agreement of all five Governments concerned. At that Conference it was also decided that, if humanly possible, the date of dissolution should be December 31, 1963. Bearing in mind the conditions prevailing in Central Africa to-day, it is of paramount importance that this date should be kept. No matter what noble Lords may feel about the dissolution of the Federation, dissolution is now inevitable and an accepted fact. Therefore, the sooner this interim period of the limbo of the Federation is brought to an end the better so that the three Territories can go their individual ways.
§ The problems which the various Committees, set up following the Victoria Falls Conference, have been called upon to resolve have been manifold, complex and difficult; and that it is possible for the House to consider the Order in Council before it to-day is entirely due to the collaboration and efforts of all concerned in what has proved to be a formidable labour. I must also pay a warm tribute 113 to all the Central African Governments, particularly the Federal Government, who have shown throughout a spirit of realistic co-operation and compromise. Equally, I should like to pay a tribute to the officials of all the Governments concerned who have carried forward with the greatest urgency the detailed work which formed the necessary preliminaries to inter-Government agreement on the subjects covered.
§ Nevertheless, in spite of this truly remarkable achievement in having the Order laid before the House last week, I and my colleagues are conscious that, ideally speaking, it would have been preferable for noble Lords and others to have had longer to digest the contents of the Order. I would, however, again stress the importance for the orderly and rapid development of the three Central African Territories of maintaining December 31 as the date of dissolution; or, to put it the other way, of the likely highly unfortunate effects that would follow were dissolution to be postponed. In these circumstances, I do most humbly ask the indulgence of the House, and of all noble Lords, for the rushed timetable that has been taken in seeking confirmation of this Order. I would only add that the main work of drafting this Order was done in Salisbury, in consultation with the governmental representatives in the Committees. It was produced to Her Majesty's Government in London, and to the other Governments, at the earliest possible date which the course of the Committees' work allowed, and consultations between the Governments were in progress up to the last minute before tabling the Order. It was laid the very day it came from the printers, so that everything possible has been done to give noble Lords as much time as circumstances permitted to study the Order.
§ I would also say this. Many may regret the passing of federation. The fact is, however, that dissolution is not due in any way to any change of heart by Her Majesty's Government over the desirability of federation. It has come about because the overwhelming majority of the people of two of the three constituent Territories of the Federation had made it clear that they were irrevocably opposed to its con- 114 tinuation. Once that fact was recognised, then the sooner it came about the better, provided that sufficient time was granted for the dissolution to take place in an orderly fashion.
§ Now, my Lords, we have to look to the future. What is at stake is the welfare of the people of Central Africa. After all, they are just the same people, whether they be citizens of a Federation or citizens of the former constituent Territories. Their needs are the same; and it behoves those of us who are concerned with their fortunes to face the new situation and to do all we can to assist the Territories along the new paths they are about to take. I therefore most earnestly hope that no noble Lords will see fit this afternoon to oppose this Order, since, as I have said, any delay in the date of dissolution could affect the future welfare of the peoples of Central Africa only in a highly disadvantageous way.
§ In spite of all the immense amount of work that has been done since the Victoria Falls Conference, full agreement over the whole range of matters involved has not, in the event, been possible. I will refer later to those subjects on which differences remain. I would only say now that these differences should be looked at in perspective against the wide background of general agreement. The position is that the Order has been agreed as a whole by the British Government and by the three Territorial Governments. The Federal Government, however, were not satisfied, because the Order made certain provisions on which they were not in agreement with the other four Governments. I know that the House will be particularly interested in these matters, but before I deal with them I should like to draw attention to some of the more important aspects of the Order.
§ The effect of Clause 1 is that the Federation of Rhodesia and Nyasaland will be dissolved with effect from immediately before January 1, 1964. Clause 2 contains provisions for the continuance and adaptation of existing law of the Federation, while under Clauses 3 to 9 the Order sets up an authority, known as the Liquidating Agency, with the general function of winding up the affairs of the Federation. Under Clauses 12 to 16 the Order contains provisions apportioning 115 outstanding Public Debt of the Federation between the Territories. The winding up of authorities established by Federal law and the temporary continuance of certain Federal Courts for the purpose of disposing of proceedings pending before them at the date of the dissolution are dealt with in Clauses 17 to 19.
§ My Lords, Part II of the Order contains provisions regarding members of the Public Service, including temporary provisions for their secondment to the service of the Territories up till January 1, 1964, and for the establishment of a Staff Authority to exercise functions with respect to the welfare and discipline of persons on secondment during this period. It establishes a Pension Fund, vested in Trustees, and a Pensions Agency with the responsibility for meeting previous obligations to past servants of the Federation or their dependants who are entitled to pensions from the Federation, and to persons or their dependants who will be entitled in the future. The Order also makes appropriate provision for the payment of special benefits from the Pension Fund to persons formerly in the service of the Federation in consequence of the termination of their service by dissolution.
§ I should now like to turn to the provisions of the Order relating to inter-Territorial matters. Here can be seen ample evidence of a wise and far-sighted approach to the future which does not discard the undoubted successes of the past but builds upon them as upon sound foundations and promises well for future joint constructive effort. Encouraging decisions have been taken by the Territorial Governments to continue to co-operate in such important common enterprises as Kariba, Central African Airways, the Rhodesia Railways and the Agricultural Research Council. I am sure the House would wish me to outline the nature and extent of the agreements reached by the Government in this field of common services, and which are covered by the Order in Council before us.
§ Part III of the Order covers the announcement made on October 24, 1963, that the great Kariba Hydro-Electric scheme will continue to be operated and fully developed as a unity 116 under the joint ownership or control of Northern and Southern Rhodesia, and that these two Territories will enter into an inter-Governmental agreement to this end. This part of the Order in Council also covers the setting up and prescribes the functions of a Higher Authority for Electric Power, composed of two Ministers from each of the two Territories. A new Corporation, to be known as the Central African Power Corporation, will be established, having much the same functions, duties and powers as those of the present Federal Power Board. The relationship of the Higher Authority, to which I have just referred, to this new Central African Power Corporation is defined in the Order, and provision is made for all the assets and liabilities of the existing Federal Power Board to pass to the new Corporation on the dissolution of the Federation.
§ Under Part IV of the Order, agreement was reached by all three Territories, under which the Central African Airways Corporation will continue as a jointly owned and operated enterprise after dissolution. This agreement was announced in a joint statement in Salisbury on December 5th. As under the agreement over Kariba, there will be a Higher Authority for civil air transport, this time consisting of one Minister appointed by each Government, as well as the establishment of a new joint Corporation. The functions of both the Higher Authority and the Corporation are set out in this part of the Order.
§ I turn now to Part V, which is concerned with collaboration between the three Governments in the field of agricultural research. This agreement, in its apparently modest way, is perhaps even more encouraging as an earnest of the spirit of co-operation than in the more ambitious schemes to which I have just referred: precisely because it is not directly related to economic or commercial gain, but rather to scientific inquiry, devoted to finding solutions to the basic problems posed by the natural resources of Central Africa. From these clauses the House will see that provision is made for the constitution and functions of a new Agricultural Research Council, to be known as the Agricultural Research Council of Central Africa, and for the assets and liabilities of the existing Council to pass to the new body. 117 Before I leave this section of the Order, I should like to pay a tribute to the splendid work done by the existing Agricultural Research Council and to say that if all this spade work, as perhaps I might be allowed to call it, is to be brought to fruition, it is vital that this work should be continued under the aegis of the new Council.
§ Part VI concerns currency. When considering this, the Committee concerned has proceeded on the basis that each Territory would in due course introduce their own currencies. However, all the Governments were agreed on the need for an orderly and responsible process of transition and to maintain, in the meantime, the credit of the existing currency and the full authority of the present Federal Central Bank. A joint announcement for these purposes was made by the five Governments on November 1. The detailed provisions on these lines are contained in Clauses 66 to 70 of the Order.
§ I turn now to the arrangements that have been made concerning the Rhodesia Railways, which are covered by Part VII of the Order. The arrangements here are relatively simple, and they are mainly concerned with the reincorporation of the existing Rhodesia Railways as a joint corporate body for Southern and Northern Rhodesia. In addition, provision is made for the constitution of a Railways Court, with the functions of settling industrial disputes and hearing appeals on railway matters. Perhaps of even greater importance, under the agreement financial responsibility for the railways will be shared equally by the two Governments; while, so far as staffing is concerned, the two Governments have accepted that there will be no break or change in the employment of existing staff.
§ Part VIII provides generally for the modification of British Acts of Parliament and instruments which make reference to the Federation, but perhaps of special importance is the provision in Clause 74 whereby the British Nationality Act is adapted so that all former Federal citizens who do not become Southern Rhodesian citizens, will become citizens of the United Kingdom and Colonies. So far as Northern Rhodesia and Nyasaland are concerned, generally speaking, until those two Terri- 118 tories reach the stage of enacting their own citizenship rules inhabitants will either be United Kingdom citizens under this provision or will retain their present status of British-protected persons.
§ My Lords, I turn now to the Schedules, and it is here that we come to matters that have not been finally agreed by the Federal Government and have been the subject of some controversy here in this country. Schedule 1 concerns the Public Debt of the Federation. This, apart from certain short-term borrowings amounts to approximately £246 million. This includes loans from the International Bank, for Kariba, of £26 million, to be shared, as I have said, between Northern and Southern Rhodesia, as will be the liability for certain Federal Loans raised for railway purposes. There should also be taken into account reversion to the Territories of loans originally raised by them and subsequently taken over by the Federal Government. These amount to something in the region of £90 million. There is left, therefore, a balance of some £118 million of General Funded Debt. The three successor Governments have accepted liability for this in the following approximate proportions: Southern Rhodesia, 52 per cent.; Northern Rhodesia, 37 per cent.; Nyasaland, 11 per cent.
§ With regard to the Internal Debt, the Order provides that where the responsibility for Federal Internal Debt is divided between two or three Territories, as indicated above, the Territories concerned shall issue their own stock in replacement of their share of Federal stock. Apart from the fact that interest and redemption payments will be in the currency of the issuing Territory, the holders of the Territorial stock will enjoy the same terms in respect of interest rates, date and manner of redemption, and provision of sinking funds, as the Federal stock which is being replaced. Any sinking fund related to an Internal Loan is apportioned to the Territories in the same manner as the Loan itself.
§ As regards the Federal External Debt, the same principles apply to the transfer of responsibility for the Territories. Liability for External Loans raised for general purposes, both from the public and from institutional lenders, is divided among the three Territories in the same fixed proportions as the 119 Internal Debt raised for general purposes. In the case of External Debt, the Order provides that existing bonds or stock shall remain valid, the liability of the Territories being to honour the obligations in the proportions I have given. There is, however, an alternative provision under which, if the three Territories so agreed before dissolution—that is before December 31—they may issue their own stock in exchange for their shares of the existing stock. As interest and redemption payments in respect of External Debt are expressed and payable in sterling or dollars, no provision is made for the Territories to meet these obligations in any other currency. The other existing rights of lenders in respect of interest rates, redemption periods, sinking funds, et cetera, are preserved.
§ I am of course aware that these arrangements have come in for considerable criticism, as I understand it, primarily because it is thought that to apportion the Federal Public Debt proportionately between the Territories will be injurious to the interests of the stockholders, and that therefore it is the duty of the British Government in some way to underpin these liabilities. Such a view is based on a dual misconception. The first is that Her Majesty's Government are responsible for the dissolution of the Federation, and are therefore under some obligation, moral or otherwise, to the holders of Federal stock. As I have said earlier in my speech, Her Majesty's Government cannot accept responsibility for the dissolution. It came about because the majority of the people of the Federation wished it.
§ In those circumstances, the only proper course for the British Government was to use their good offices to bring about dissolution in an orderly and speedy fashion. This, I venture to suggest, they have succeeded in doing. To suggest, however, that because the dissolution of the Federation requires legislation in our Parliament it is therefore requisite upon Her Majesty's Government to give a guarantee for former Federal External Debt is quite out of accordance with Her Majesty's Government's responsibilities.
§ Having said that, I should wish to make it quite clear that the British 120 Government have the legitimate interests of these stockholders very much in mind, and in the recent changing circumstances we have been much concerned to watch over these interests in the discussions that have been going on since the Victoria Falls Conference last June. And furthermore, we have informed the Territorial Governments of our readiness, once dissolution has taken place, to review with them the financial situation in which they find themselves in the changed circumstances, including their debt burden, with a view to establishing their reasonable needs and the means whereby they might be met. This is in accordance with the undertakings given by my right honourable friend the then First Secretary of State at the Victoria Falls Conference. Before I leave the question of the British Government underpinning the former Federal External Debt by some form of guarantee, I would say this. The Territories concerned, naturally and indeed wisely, are anxious to show the world their creditworthiness, and I can think of nothing more damaging to that credit-worthiness than for it to be considered necessary for their loans to have to be guaranteed by the British Government. Surely such a guarantee would be taken to mean that the undertakings of the Governments concerned were not to be relied upon.
§ The second argument put forward by the critics of this arrangement is that security enjoyed by the holders of Federal stock was greater than that which they will enjoy holding Territorial stocks. Here again, I find myself unable to agree with this contention. Security enjoyed by the holders of Federal stock when the Federation is a stable, going concern is one thing. It is quite another matter to think of the security of a Federation torn by disunity. We come back to this point again and again when talking of the dissolution of Federation. What would have been the situation had Her Majesty's Government refused to face facts and resisted the wishes of the majority of the people of Central Africa?
§ The Federation would have sunk into ever-increasing chaos and disorder. Any form of cohesion could have been maintained only by force, and in such circumstances the value of Federal bonds would surely then have become virtually 121 worthless. The alternative to the steps that have been taken to dissolve the Federation would have placed the holders of Federal stock in a far less happy situation than they are under the present arrangements.
§ The other main point of criticism over the Order concerns the arrangements for the Federal Public Service. These are covered by Schedule II. Noble Lords will recall that an announcement was made in September regarding the terminal arrangements, the future employment, retirement and pensions of all past and present officers of the Federal Government. These arrangements were formulated after most careful and exhaustive discussion in Committee and in the view of Her Majesty's Government constitute a fair and equitable balancing of all the complicated factors which had to be taken into account. They were agreed and accepted in full by all the Governments concerned; that is, by the Federal Government, as well as by the three Territorial Governments and by Her Majesty's Government.
§ The basis of this settlement now embodied in the Order is that those officers becoming redundant as a result of dissolution receive recompense for the abolition of their office, generally in the form of an additional one-third of their pension. If an officer is offered continued pensionable employment in his home Territory (for many officers such continued employment is certainly available) but does not wish to accept this, he will be entitled to his full earned pension, but not to the additional one-third. In addition, to provide security for these terminal benefits and the pensions of Federal civil servants in the future it has been agreed between all the Governments, including the British Government, that the Federal Pension Fund will be retained and administered by a Pension Agency and Trustees and that the British Government and the three Territorial Governments will share, fully and fairly, in making good any deficit in the Federal Pension Fund to the extent necessary to honour commitments to Federal officers.
§ The Federal Public Services Association, since this agreement was announced, have made a number of representations to Her Majesty's Government; and I myself saw a delegation of the Association. It has become clear that 122 a fundamental difference exists between the Association and the British Government over the Association's form of claim that Federal public servants should be treated in the same way, as regards compensation, as members of Her Majesty's Oversea Civil Service.
§ The British Government cannot accept this contention; since the terms of service of Federal public servants involved and admitted no connection with any country ouside the Federation and were based on Federal citizenship. The Federal Public Service was recruited on local terms and contained no officers with overseas status. I accordingly informed the delegation that the British Government saw no ground for suggesting to the other Governments concerned a review of the statement accepted by all of them.
§ Nevertheless, the Association have now submitted to my right honourable friend the Secretary of State a number of matters, including that of the treatment of genuine hardship cases of their members, which the Association considered could be met without reopening the general inter-governmental agreement. While all Governments concerned have already agreed to give sympathetic consideration to such cases of hardship, these representations will be taken into account in the course of further consultation with the other Governments. The Inter-governmental Committee concerned in these matters have just submitted further detailed recommendations as regards hardship cases, in addition to such other matters as the currency in which pensions are to be paid. All this will be settled in conjunction with the other Governments concerned as quickly as possible.
§ That brings me to the end of my somewhat cursory detailed examination of the Order. With the passing of this Order there comes an end of a chapter of African history. I hope, therefore, that your Lordships will forgive me if I have dwelt on it at some length. I regret, and I believe noble Lords in all parts of the House in their hearts also regret, the passing of the Federation after a life of only ten years which, viewed in historical terms, is but a moment of time.
§ In this chapter we attempted a new development in the political evolution 123 of Africa. We did not succeed, but it was an honourable attempt in an immensely worthwhile course, and it may be that in years to come those charged with the responsibility of conducting the affairs of Central Africa will find themselves profiting from the fact that the attempt was made. Now the Territories of Central Africa are going their own separate ways. I know the House will join with me in wishing the people of all the Territories every success in grappling with the many problems with which they are faced, so that they may enjoy peace and ever-growing prosperity. My Lords, I beg to move.
§ Moved, That the Federation of Rhodesia and Nyasaland (Dissolution) Order in Council 1963 be approved.—(The Duke of Devonshire.)