§ 3.35 p.m.
§ Debate resumed.
§ THE EARL OF LISTOWEL
My Lords, I am sure we are all grateful to the noble Duke for undertaking the truly formidable task of explaining this complex and highly controversial Order to 132 the House the day after his return from what must have been an extremely tiring visit to Kenya. I also welcome particularly the somewhat apologetic tone of the first part of his speech. This Order is in fact the last rite, so far as Parliament in this country is concerned, before the interment of the Federation on December 31. The Government are asking our approval for the final arrangements which they have made, although some of the arrangements have still to be completed for the dissolution of the Federation. These arrangements include the principal matters to which the noble Duke has referred, the Federal public debt and the Federal public service. The third matter I would mention which enters into the Order is the division of the Federal armed forces among the Territories, to which I shall come later.
First of all, I am bound to express profound regret that the Government have in fact denied us the information we need to arrive at a thoroughly informed judgment about these arrangements. They have not even allowed us sufficient time to discuss them before they were finalised in this Order. I should like to give one or two examples of the sort of information we ought to have had. We have not seen the reports of the General Committee set up after the Victoria Falls Conference, reports for which I ask in a question I put down yesterday. Although we may get these reports, they will not be in time for this debate. They set out the arrangements agreed between the Governments concerned and ourselves about the Federal public service and the Federal public debt. Nor have we seen the report which was produced by the inter-governmental Committee which sat in September about the partition of the armed forces. The arrangements for the partition of the armed forces are not set out in the Order. With a great deal of effort a certain amount of information can be acquired. It has involved me in an enormous amount of effort, and I am sure other noble Lords have been in this difficulty.
The Government have not made this information available to both Houses of Parliament in the form in which it should have been made available. We could, indeed, have forgiven the Government for not having given us an enormous mass of detailed information about what was going on in Central 133 Africa since the Victoria Falls Conference, if they had published a White Paper at least a week before the publication of this Order. That would have seemed a simple thing to do, and would follow the normal Parliamentary practice. But the Government did no such thing. The Order was published last Wednesday without any explanation or justification from the Government. The Special Orders Committee of your Lordships' House was asked to consider it the following morning. And I would remind the House that the Order contains 78 sections and runs to 51 pages. The members of the Special Orders Committee of this House were expected to digest this Order overnight. In all my experience of the work of this Committee—and I have served on it for many years, although I do not sit on it at the moment—I have never known an Order of this importance thrown at the Committee by any Government Committee at the very last moment.
Now, less than a week after the publication of the Order, without allowing any time for a debate which would enable the Government to take account of the views of noble Lords on the drafting of the Order, we are told that we must take it or leave it as it stands. Surely we all agree that the function of this House is to amend and revise legislation, not to reject measures which have been accepted or are likely to be accepted by another place. The only way in which we can exercise this constitutional function in relation to an Order, which cannot of course be amended, is by discussing the matters it will deal with before the Order has been finally drafted. The Government have denied us this opportunity, and nothing that any of us can say now will make the slightest difference to what they have already decided to do in this Order.
Nevertheless, it may be of some value to the people and the Governments of the Federation, to know that Parliament is doing its best to discharge its responsibility towards them and is far from indifferent to their future. Whatever handicap we may be under—and we are certainly labouring under a very great handicap—we shall do our best to discharge our responsibility. I am sure that this debate will also show the people and the Governments in Central 134 Africa that there is widespread public criticism and dissatisfaction in this country about the manner in which the British Government are winding up the Federation.
My Lords, I have mentioned that we do very much regret the fact that Parliament was not consulted before these decisions were taken, but it also appears that the Government have not even consulted the Federal Government and the Governments of the three Territories about the provisions in this Order. Mr. Caldicott, the Minister of Finance in the Federal Government, told the Federal Assembly on December 10 that the Federal Government had never been approached for its views on the issues in the Draft Order in Council. He drew the attention of his colleagues to paragraph 57 of the White Paper, which was signed by Mr. Butler and published after the Victoria Falls Conference. With the permission of the House, I should like to read this paragraph, the last paragraph of the White Paper:Assuming that the decisions mentioned above were taken at the time stated, the United Kingdom Government should be in a position to complete and enact before the end of December, 1963, the legal instruments necessary to give effect to the decisions agreed upon by the governments who would be given an adequate opportunity of commenting on their proposed provisions.If that is not an explicit pledge given by the Minister responsible at that time, I fail to interpret it in any other way. I should like to know whether the Government—perhaps the noble and learned Lord will be good enough to answer this question when he replies—admit this failure to honour an undertaking given at the Victoria Falls Conference.
The Federal Minister of Finance went on to say—and here I should like to make one or two comments on the Federal Republic's debt—that local stockholders in Federal loans had "virtually unanimously" rejected the British Government's proposals for dealing with the public debt of the Federation. But it is not only the stockholders in Central Africa who are dissatisfied. There has been unfavourable comment in the City, the value of Federal stock has fallen on the Stock Exchange, and British stockholders are acutely worried about their loss of security after the Federation has been dissolved. The noble Duke gave us some information, 135 but I hope the noble and learned Lord when he replies will give us much more information than we have already had this afternoon. We must know for certain a great deal more about the position and the prospects of holders of Federal stock; that is to say, those who are not in the fortunate position of having a guarantee by the British Government. I exclude, of course, the loan from the World Bank and the other loans which obviously are in quite a different category.
These stockholders will have their holdings divided into three parts, as the noble Duke pointed out, of which 52 per cent. will be guaranteed by Southern Rhodesia, 37 per cent. by Northern Rhodesia and roughly 11 per cent. by Nyasaland. I should like to ask the noble and learned Lord whether he can tell us how these proportions were arrived at. I think that is extremely important. Were they based on the wealth of these Territories, were they based on the population, were they based on their respective share of the Federal assets? I think it is most important that stockholders should know these facts.
The truth of the matter is that, however equitably the public debt of the Federation may have been divided between the Territories—and this itself is a matter of controversy; your Lordships will have read about the views of the Northern Rhodesian Government in the Press this morning—the stockholders will have less security after the dissolution than they had when they purchased their stock. Hitherto their holdings have been guaranteed by the assets of the whole Federation; in future they will be guaranteed by each Territory separately.
I should like to ask the Government this question. Have they asked the Governments of the Territories to give a joint guarantee to the stockholders? Are the Government satisfied that all these Territories, including of course Nyasaland, will be able to meet their commitments when they have to redeem these loans? And what action, if any, would the Government take if any of these Territories was obliged to default on its obligations? I submit, and I am sure the House will agree, that it is only fair to the stockholders, large and 136 small, whoever they may be, that the Government should give a frank and full reply to all these questions. When they know the Government's intentions, and only then, will they be able to decide what they should do with their investments.
My Lords, may I proceed to say a few words about Part II of this Order, which deals with arrangements for winding up the public services? As the noble Duke explained, and explained very thoroughly—I shall not repeat what he said—this Part sets up a certain amount of machinery for the payment of pensions and other terminal benefits after the dissolution of the Federation. But it says nothing whatever about the conditions under which these Federal officers will retire. These conditions have in fact been set out in a memorandum issued by the Federal Government which, again, can be discovered only as a result of rather strenuous research by any noble Lord who has been interested in this matter; although this memorandum itself leaves many questions about the future of these officers undecided.
Here, again, we are working completely in the dark, because the Government have not made available to Parliament in a White Paper, as they could quite easily have done in conjunction with the other matters to which I have already referred, the terms on which Federal officers are leaving the service. Of course we have no legal responsibility for the future of these public servants because they are employed by the Federal Government, but we do have a clear moral responsibility, and this responsibility has been accepted by the Government.
I should like, if I may, to quote a statement by Mr. Butler made in another place during the Second Reading debate on the Bill to dissolve the Federation [OFFICIAL. REPORT, Commons, Vol. 680 (No. 145), cols. 1429-1430]:I will say something about each of these, beginning with the Federal public service. Hon. Members will, perhaps agree that this is the main human problem posed by the dissolution of the Federation. I think that we shall be judged by how we solve it There are no fewer than 35,000 Federal civil servants of a variety of race—African, Asian and European—and their future lies in our hands.Without asking Mr. Butler, we do not know what he meant by using the first 137 person plural. He may have meant the British Government, he may have meant the British Government and the four Governments in Central Africa. But if the latter was in fact his meaning, and I think it probably was, then he was at any rate including the British Government in an inter-governmental responsibility for the future of these officers, and asking Parliament to judge the British Government by the way in which they have been treated.
I must say that this acceptance of responsibility for the public service made all the more astonishing to me the statement of the noble Duke, that the Government do not accept responsibility for the dissolution of the Federation. I must say that that is one of the most astonishing statements I have heard any Minister make. Surely the constitutional position is perfectly clear. This country has always been the sovereign Power in relation to the Federation. The Federation has been dissolved by a British Act of Parliament, and this Act of Dissolution is therefore the responsibility of the British Government; a responsibility which has been approved by Parliament. So I really think that all noble Lords will agree with me that the noble Duke was perhaps a little incautious in making that statement.
THE DUKE OF DEVONSHIRE
My Lords, may I perhaps elaborate on that point? What I said, or what I intended to say, was that although I made it specifically clear that legislation in this Parliament was required to bring about dissolution, the cause of dissolution was because of the wishes of the great majority of people of Central Africa.
§ THE EARL OF LISTOWEL
We are delighted that the great majority of people of Central Africa, after ten years, have at last been able to get their wishes satisfied. But I do not want to make this into a Party issue at all, and I will not say anything more on that subject.
My Lords, all I can say about the judgment of people who have heard about the Government's treatment of these men in the Federal public service is that this judgment has been almost universally unfavourable. Dissatisfaction has been expressed, not only by their own association but by Members of all Parties in both Houses who have heard their case. What seems to me, 138 at any rate, to be particularly unfair is that a man, European or African, who is refused employment by the three Territorial Governments—I am not talking of the people who get further employment, but of those who are refused employment—nevertheless receives no compensation for loss of career. The Government answer this by saying that these officers are locally-recruited employees of the Federal Government and that therefore their conditions of service are totally different from those of our own Oversea Civil Service. Of course, that is completely correct. But, although it is a correct statement, it is not the correct answer to that point.
Let us take what I think is a real parallel. I refer to the winding up of the Federation of the British West Indies. The locally-recruited officers of the Federation of the West Indies received full compensation when that Federation was dissolved, and at that time the Secretary of State, who was Mr. Maudling, took a very strong line—a line which, if it had been taken at the present time, would have meant a very different future for the public servants of the Federation. May I give the House Mr. Maudling's words? He said [OFFICIAL REPORT, Commons, Vol. 656, col. 855.]:I attach great importance to ensuring that the public servants of the Federation"—this, of course, is the Federation of the West Indies—are properly treated and properly compensated. The first charge upon the existing assets of the Federation should certainly be a compensation scheme for these public servants.Now, my Lords, can the Government tell us why the officers of the Federation of Rhodesia and Nyasaland will receive no compensation whatever for the loss of their careers in the Federal public service, even when the Territorial Governments are unable to offer them further employment? That, it seems to me, is the greatest injustice that is being done by the Government to these officers.
I still hope that something may be done for these men, for those who are to get no further employment, under the hardship provision, to which the noble Duke has just alluded. This provision states—it is an instruction from the Federal Government, the Government of Rhodesia and Nyasaland—that 139 sympathetic consideration will be given by that Government to cases of hardship which may arise among those to whom no offer of further employment has been made. I submit that this is the wrong way to help these men, because it makes them objects of charity instead of giving them rights. Nevertheless, it gives them an alternative to destitution. Therefore, I hope that as much will be made of it as possible. I should like to ask the Government—and again, perhaps, the noble and learned Lord will reply to this question—what constitutes hardship and how it will be assessed. I should also like to ask whether the staff authority referred to in the Order, and set up by the Order, will deal with hardship cases, and, if not, to what authority, after the dissolution of the Federation, officers should apply if they want to claim hardship. I think it certainly would assist them to meet their very natural requirements if they could have this information.
So far as the pensions of these officers are concerned—up to the moment I have dealt with compensation, and I now deal with pensions—there seem to be a lot of loose ends not at present tied up by the Government, and the noble Duke referred to some of them. The Order sets up this Central African Pensions Fund to be vested in trustees, and says that the trustees will be domiciled in the United Kingdom, but it says nothing about the domicile of the Fund itself. Is the money to be lodged in the Bank of England, or is it to be lodged in a bank in Salisbury, or somewhere else in Central Africa? Furthermore, in what currency will the pensions be paid? The noble Duke referred to that, and said that it was under discussion, but, surely, this is another example of taking away from Parliament something that rightly belongs to it. These are matters that have not been settled. When this Order is passed, the Federation will cease, at the end of the month, and there will be no further opportunity for Parliament to decide whether the arrangements that are being made for the Pensions Fund of the Federal officers are satisfactory or not. I understood from the noble Duke—and this, at least, was satisfactory—that the British Government will be one 140 of the guarantors for the payment of all pensions and other terminal benefits in time to come, after the dissolution of the Federation; and that, at any rate, is some small satisfaction.
But, my Lords, I would say this in conclusion about the Federal public service. Since the time after the war, when the British Government began winding up the public services of British Dependencies, since the beginning of what is now known as "decolonisation", this is the only case I can recollect in which almost everyone who knows the facts has taken the view that the treatment by the British Government of the displaced officers in a public service has been mean and unfair. My Lords, this is the first blot on our fine record in relation to public service: a record that started with India and Pakistan, for which my noble friend Lord Attlee was responsible, and which has continued, with this one exception, to the present day.
My Lords, I apologise for being rather long, but I will say only a very few words, in conclusion, about the division of the armed forces. This matter of the division of the armed forces of the Federation and of their equipment among the Territories is, I think all your Lordships will agree, a highly controversial issue. May I illustrate this proposition? The transfer to Southern Rhodesia of a powerful air force, capable of attack as well as of defence, will aggravate the explosive situation in central Africa. The burden of £4 million a year which it will impose on the revenue of Southern Rhodesia is a very heavy one for a small country to bear. We already have world opinion, as expressed at the Security Council of the United Nations, and much of Commonwealth opinion, ranged against the Government's decision to transfer this force. Surely, in the case of such a highly-controversial issue of world-wide importance—of Commonwealth and of world importance—the Government should have consulted Parliament before the decision was taken. In view of the special importance of this matter to the Commonwealth—and I believe that all the Commonwealth Governments in Africa take exception to what the Government have done—I believe the Government should have consulted, at a ministerial conference, 141 the Ministers of all the other Common wealth countries. We have not yet had any full explanation or justification from the Government of this decision, and I hope we may have it at the end of this debate this afternoon.
There was one other particular matter about which I wanted to ask—I gave the noble Duke notice but it was rather late, so I do not in the least blame him for not having been able to answer this question. I wanted to know about the future of the University of Salisbury. This is a great multiracial experiment in education in a country where education is on racial lines. Will it continue after federation to serve all of the three Territories, at any rate until the two Northern Territories have universities of their own; and will it continue to be run on multiracial lines? I strongly believe that the British Government have the right of a say in this matter, for so much British money has already been spent on the university.
My Lords, my final words are these. We on this side of the House were opposed to the imposition of federation against the wishes of the majority of the inhabitants, and we warned the Government again and again that it could not be maintained except by force. If our advice had been taken even if taken very late—this tragic exit we are now witnessing would not have occurred. Noble Lords opposite have always disagreed with us about the Federation. They have regarded it as a great multi racial experiment. But I do not believe that there are many noble Lords sitting on the Benches opposite apart from the members of the Government—who will not agree that the manner in which the Government are leaving the Federation is shabby, hasty and ill-considered, and unworthy of a Government of this country.
§ 4.3 p.m.
§ THE MARQUESS OF SALISBURY
My Lords, my purpose in rising to-day is not so much to criticise the details of the provisions of the extremely long and complicated Order in Council on the dissolution of the Rhodesias and Nyasaland which Parliament is being asked to approve to-day—though I shall have something to say about more than one of them. My purpose like that of the noble Earl, Lord Listowel, with whose 142 speech on this particular occasion I am happy to think I found myself in almost complete agreement, is to protest most strongly—as strongly, in fact, as I can—against the Government's treatment of this House over this Order, which I can describe only as having been flung at the head of Parliament in the last days before the Recess, and in a form which, as your Lordships know, means that we are given no chance at all to make amendments of any kind, however small, in it. For, as the noble Earl, Lord Listowel has already said, Orders in Council cannot be amended; they must be accepted or rejected as a whole. Nor I am sure that any of us were convinced by the arguments of the noble Duke who introduced the Order to-day, although I am sure that he did his best to make it acceptable to the House.
This particular Order in Council is a document, as the noble Earl has already said, of no fewer than 51 pages, often of extremely technical and complicated character; and although certain portions of it may no doubt be regarded as non-controversial there are others that certainly cannot be so described. There is, for instance, the portion already referred to by earlier speakers which deals with Federal loans. Neither Parliament nor the financial experts in the City who have to handle such loans have, so far as I know, had any real opportunity of examination or criticism or to suggest any amendment to the Government's proposals before they were laid before Parliament in finalised form. There has been no debate in Parliament; the proposals were slapped down upon the table on Wednesday last, and we are expected to sign them on the dotted line to-day. Nothing, I should have thought, could excuse that. Some of these proposals are certainly open to considerable criticism; not only by politicians but by the technical experts to whom I have already referred. That, I think, applies in particular to those provisions which affect the Federal loans about which I spoke just now.
Some of your Lordships may have seen, as I have, the formidable document issued by the British Insurance Association which represents the insurance companies of this country—some of the largest holders of securities of this type. It expresses preoccupations of the gravest kind. Take, for instance, 143 the question of the responsibility of Her Majesty's Government for these loans—a vital aspect of the credit worthiness of the loans themselves. My noble and learned friend the Lord Chancellor, in answer to a supplementary question in your Lordships' House last week, told the House, a little lightheartedly, I thought [OFFICIAL REPORT, Vol. 253 (No. 15), col. 1108]:I 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.…That, in his view, apparently—and the same seems to be implicit, if not explicitly stated, in the remarks of the noble Duke this afternoon—entitled the Government to wash their hands completely of any obligations, actual or moral, to those who have bought these Federal loans.
But, my Lords, what is the view of the British Insurance Association which, as I have said, represents some of the most substantial of those investors and is therefore vitally interested in maintaining British credit? The Association said:The dissolution of the Federation will be effected by legislation enacted by the United Kingdom Parliament, just as its establishment resulted from the enactment of the Rhodesia and Nyasaland Federation Act, 1953, which authorised Her Majesty to provide … for the federation of the three territories. … These facts, taken into account with the part played from time to time by various United Kingdom Governments in the establishment, in the development and in the breakdown of the Federation, lead the Association"—and, I should have thought, any normal personto feel that Her Majesty's Government must assume a substantial degree of ultimate responsibility for events following on the dissolution.Then, passing to the special question of these external loans, the Association underlined this point by adding, first, that the prospectus at the time of issue of the loans included a statement that the service of the loans was to be charged on the assets and revenues of the Federation, which, I may remind the House, was created by Her Majesty's Government; and secondly, that the loans, when issued in London, were described as authorised, trustee investments; thirdly, that the Bank of England—itself now a Government insti- 144 tution—was authorised to receive applications for the loans; fourthly, that the Bank of England was further appointed registrar of the stocks and paying agent for the interest; and, finally, that the arrangements for underwriting the loans were made through the Government broker. My Lords, in such circumstances could any investor, in this country or abroad, have had any doubt that Her Majesty's Government was closely interested in the loans?
It is perfectly true, as the noble Duke has pointed out in his speech, that the responsibility for the loans at the time of the issue was clearly stated to fall not on Her Majesty's Government but upon the Federation, on whose assets and general revenue the stocks and interest were charged. That was made clear in the prospectuses of all the loans issued in London, although it was not, I think, mentioned in the prospectuses of the one loan issued in New York, which did not contain that disclaimer. But at that time the Federation was not only alive but flourishing, and looked like continuing to do so. Now—and to the minds of many of us, as a result of direct action of Her Majesty's Government here in this country the Federation has ceased to exist, and the three Territories into which the Federation has been split are not, under the Government scheme, to have any responsibility for each other's shares. There is to be no joint and several guarantee. In other words, the United Kingdom Government have themselves largely destroyed the security on which the loans formerly rested. In such circumstances, how can they possibly now turn round and say, blandly: "These loans are nothing to do with us". How can they, with honesty, say that?
The British Insurance Association, to which I have already referred, suggests in its paper—rather optimistically, I thought—that the situation could be put right if the Government would guarantee the obligations of the three Territories in respect to the former Federal Debt. When I read that rather pathetic ally hopeful suggestion, and with a fairly long experience of the Treasury mentality, I could not help being reminded of the words of an old music hall song:You don't know Nellie like I do.145 My Lords, if I have referred, as some noble Lords may feel, at undue length to the views of this organisation, the British Insurance Association, it is be cause that distinguished organisation, representing such important interests, has been concerned to put down its views, which it holds so strongly, in black and white. But I can assure the House (and I am sure that others would support this view) Mat these same views are held equally strongly in far wider circles of the City of London. And these wider circles share to the full the words of warning contained in the last paragraph of the memorandum I have quoted:The Association would wish also to record in particular that its members feel very concerned at the effects on future loans which may be raised on the London market under Bank of England sponsorship, as a result of the attitude apparently adopted by Her Majesty's Government, the Treasury and the Bank of England to the various aspects of the moral responsibility which the Association feels lies with them, in regard to those Federation loans which were so raised.Of course, the Government may say (though no doubt in more elegant language) that they do not care "a tinker's damn" what the British Insurance Association think or for the City of London as a whole. But the most of us it must surely seem that if such views are really held by those on whom the financial credit of this country depends, that is surely a reason for having, at any rate, had a full and free discussion of the proposals of the Government in both Houses of Parliament before they were finally formalised in an Order in Council, when no Amendment or modification was any longer possible. Now it is too late. However strong the arguments we in this House or in another place may advance, we cannot alter even a comma.
I know, in what I have said this after noon, that I have touched only the very fringe of the problems raised by the Order in Council. There is the question of the internal loans, so closely allied to, although not quite identical with, the external loans problem. There is the problem of the Federal civil servants, of which the noble Earl, Lord Listowel, has spoken with such force and with such feeling. I have not tackled that, because I understood it would be dealt with by other speakers 146 and I did not wish to take up too much of the time of the House. But provisions dealing with these civil servants are, I believe, equally open, as the noble Earl has said, to charges of unworthy and even niggardly treatment of men to whom this country in fact owes very much.
If I decided to confine myself to this question of the external loans, it was because that seems to me to present a most glaring example of just how Governments should not treat Parliament. As we all know—or should know, and I think it was emphasised by a remark made by the noble Earl, Lord Alexander of Hillsborough, this afternoon in rather a different context—it is Parliament, under Her Majesty the Queen, that rules this country. Governments, both Ministers and Government Departments, are only the emanations of Parliament and responsible to Parliament.
I remember one incident in my own political life which illustrates, I think very clearly, this point. I hope, as it happened a good many years ago and is now almost ancient history, it will not be regarded as indiscrete of me to mention it. It was in the days of the Government of the noble Earl, Lord Attlee, shortly after the last World War. At that time, as I think we all remember, a position of particular political delicacy existed, for the Labour Government had a great majority in another place and the Conservative Opposition had a great majority here. As a result, the danger of a constitutional clash between the two Houses always existed, and it was the job of the late Lord Addison, who led for the Government and who had so greatly the affection and respect of this House, and of myself, who led for the Conservative Opposition, to avoid such clashes so far as humanly possible. One of our devices for this purpose was, before the Committee stage of various Bills, to meet in his room and try to find out how far, without sacrificing principle, it was possible for the Parties to meet each other by concessions on one side or the other on the various Amendments.
On one occasion, I remember, we were having such a meeting, with some expert advisers from the Department concerned, and every time the noble 147 Viscount, Lord Addison, suggested compromising on some point or another, one of these officials would pipe up and give thousands of reasons why it should not be done. Eventually Lord Addison got very much incensed and turned to the officials and said, "You don't understand the situation at all. It is not you who govern this country. It is Parliament." Lord Addison was a very wise old man, and what he said applies equally to Ministers and Governments just as much as to permanent officials.
Ministers must not try to bully and browbeat Parliament and, above all, must not try to by-pass Parliament. And that is, I am afraid it must seem to some of us, just what the Colonial Secretary is trying to do now, by bringing in this long and extremely complicated Order in Council just before Parliament rises for the Christmas Recess, It is not as though there were no alternative. There is more than one way in which he could have avoided our present predicament. He could have produced—I think the noble Earl, Lord Listowel, has already suggested it—a White Paper giving the exact proposals of the Government, and we could have debated that or he could even—I believe I can remember a precedent for this—have laid an Order in Council in draft and we could have debated that, at a time when modifications were still possible. But he adopted neither of these alternatives, and one is driven to the conclusion that he has chosen instead, quite deliberately, to put Parliament in this impossible position, in the hope that Parliament would accept his proposals just as they stand.
To plank down proposals in this way, as the Government have done, without giving Parliament a chance to discuss them, when discussion could still have any value, is, in my view, a challenge to the whole authority of Parliament, and it is a challenge, I believe, which must be resisted, to whatever party we may belong. I appeal, therefore, to the Government, most earnestly, to withdraw this Order in Council, in order to give it further consideration in the light of what has been said to-day, or, if they are unwilling to do that, if they think it is impossible for them to do that, at any rate to agree to refer the Order in Council back for further con- 148 sideration by the Special Orders Committee.
That would be both constitutional and reasonable, for any noble Lords who have perused the Second Report of that Committee will note that the Committee itself is not at all happy about the position of that Order. They say:The Committee had not time to study the Order in detail before their meeting; and there is not time to enable the Committee to consider at an adjourned meeting whether or not to make a Special Report. Such a Report if made would not be available early enough to be of practical use to the House.The Committee, therefore, report as follows:—That in their opinion the provisions of the Order raise important questions of policy and principle:That the Order is not founded on precedent:That in the opinion of the Committee the Order cannot be passed by the House without special attention.That is a pretty formidable indictment of the treatment to which the Committee has been subjected. That being the case, do let us send the Order in Council back to them, to enable them to give it the further study they obviously think it ought to have. I hope that the noble and learned Lord the Lord Chancellor will be able to announce that the Government are willing to do this, and we can then consider the matter further. I simply do not believe in the suggestion of the noble Duke, that a delay of a few weeks—and it will be only a very few weeks—will make the whole difference to the future of Central Africa.
But if the Government refuse even to do that, I am afraid that some of us will feel that we have no option, fully recognising the embarrassment that will be caused, but to challenge a Division and go into the Lobby against the Order, as being the only means that are still open to us of giving the Government the chance to think again, both with regard to the objects of the proposals themselves, as they are now revealed, and with regard to the even greater dangers of the precedents which they are now creating for the future of Parliament in this country by the present most unfortunate course of action on which they appear to be embarking.
§ 4.21 p.m.
§ LORD COLYTON
My Lords, I feel that this draft Order in Council which 149 we are being asked to consider constitutes a shabby ending to a shabby episode. I am convinced that, when history comes to be written, the betrayal and destruction of the Federation of Rhodesia and Nyasaland will be seen as unnecessary, ill-judged and retro gressive—one of the sorriest stories in our history. However, I do not intend to rake over the dying ashes to-day. Nor do I intend to add to the strictures that my noble friend Lord Salisbury has already pronounced on the timing of the Order in Council and on the way in which the matter of the dissolution of the Federation has been handled these past few months. I would say only that my noble friend has my full support. To put it bluntly, I ant afraid that Parliament has been "bounced." I would also say that I agree with the noble Earl opposite in regard to the treatment which was accorded to the Federal Government in these past few weeks in regard to their views on this Order.
I propose to confine my arguments to the detailed contents of the Order and, to some extent, to what it does not contain. I should like to devote a little time to the question of the Federal Debts and the Federal Public Service, but, in addition, in this document of more than 50 pages there is bound to be a wide range of subjects on which we have questions to ask and to which I think we have the right to expect answers. I hope, therefore, the House will bear with me if I am inevitably obliged to take a little time over this speech.
First, I should like to ask some questions about the Liquidating Agency, covered by Sections 3 to 12 of the Order. This Liquidating Agency has very wide powers, and it must be noted that on this body the Southern Rhodesian Government are in a permanent minority of two to one. I notice that there is no reference to the armed forces Can we be told whether it is the intention to entrust the question of the future of the armed forces to the Liquidating Agency?—because, if so, I can well imagine a most serious situation arising in which Southern Rhodesia might find itself out-voted on a decision which she could not possibly Accept. I also notice, in paragraph 8, sub-paragraph (3), that there is to be no right of recourse on 150 any matter affecting the Liquidating Agency to the Federal Supreme Court or to any other courts which under Section 29 of the Order will continue in existence for an unlimited period after the dissolution of the Federation. Can my noble friend say to which courts complaints against the Liquidating Agency can be addressed?
Section 17 deals with a number of statutory boards, councils and commissions on the dissolution of the Federation. Can my noble friend say who is to carry out the functions of these very important technical bodies affecting the whole economy of the Territories after dissolution? Is there, for instance, to be a complete break-up of tobacco marketing, grain marketing and so on? Are there any plans for further inter-Territorial co-operation in these objects? Can my noble friend also say what are the arrangements for pensions and compensation for the employees of these statutory boards? There is nothing at all said in the Order about this point. Turning to Section 19, dealing with the temporary continuation of the Federal Courts, I observe that Nyasaland is to be excluded. Can my noble friend say why this is; and secondly, to whom appeals, including courts-martial, income tax and patent matters affecting Nyasaland, can be made after dissolution? Is not the omitting of Nyasaland significant and serious in view of the recent evidence of the erosion of law and order in that territory?
I now turn to Section 21, dealing with the creation of a Staff Authority and a Staff Commission for the Civil Service. Can my noble friend tell us what is to be the function of these two bodies? I was under the impression that they were to take the place of the Governor-General and the Federal Public Service Commission respectively, but from a later section, Section 30, it would appear that these powers are to be entrusted to the Central African Pension Agency. Can he therefore tell us what the Staff Authority and the Staff Commission are going to do?
Then in Parts III, IV, V and VII the Order provides for the constitution of what one might describe as supranational authorities to deal with electric power, civil aviation, agricultural 151 research and the railways respectively. This, I think, we must all regard as most satisfactory, and I am sure we shall wish to compliment Committee B (I think it is) on their achievement. On the other hand, having gone all this way, one wonders whether it would not have been possible for the British Government to have given a lead in asking for something even more comprehensive in the form of a single organisation, on the lines of the common services organisation in East Africa, or even the old Central African Council. Can my noble friend say whether any attempt was made by Her Majesty's Government to secure the creation of a more comprehensive body? Incidentally, I notice here that Nyasaland, for some reason or other, is excluded from the Higher Authority for Power. I suppose that is because Nyasaland is not served by Kariba; but I should have thought it would have been advantageous to have representation for Nyasaland on an Authority where the whole question of the future hydro electric development would be discussed.
Section 44 implies that the Central Power Corporation is to come into effect at once, and presumably acting under the directions of the Higher Authority for Power; but in Section 42 the Federal Power Board is to be dissolved only on December 31. Are we, then, to have two bodies going on to function side by side? And what happens to the authority of the present Federal Minister of Power? There is a similar pro vision in Section 58 in regard to the new Central African Airways Corporation. But under whom does it function; and what happens to the existing Corporation and its members, and to the Federal Minister responsible for aviation?
All the sections dealing with the creation of these supranational authorities provide for revocation by a law of the Legislature of any of the Territories. Can my noble friend say what will happen to assets, patents, personnel, and so forth, of these various bodies if such a revocation takes place? In the case of the Rhodesia Railways—in which, of course, Nyasaland plays no part—there is provision for a Railways Court to include Bechuanaland. Its 152 functions, as given in Section 72(4), are extremely vague. Who is to define them in greater detail? Is it to be the Higher Authority for Railways, or the two Governments working in agreement? On this point, as on so many other matters, the present Order is lamentably vague, and I feel that we have the right to ask for answers to be given to us on these questions, either this afternoon or, if my noble friend's proposal is accepted, on some future occasion.
§ LORD SHEPHERD
My Lords, before the noble Lord proceeds, may I ask, in view of the fact that the Lord Chancellor is not here to hear these very important questions put, whether it is the intention of the noble Duke to reply? I think at the present moment it is thoroughly unsatisfactory.
§ LORD COLYTON
My Lords, I took the precaution of giving particulars of these points that I wanted to raise to the Central African Office this morning, with the request that they should be passed on to the Lord Chancellor.
§ LORD COLYTON
I hope that he has a note.
Before returning to the question of the Federal Civil Service and the Public Debt, I should like to refer briefly to the same matter to which the noble Earl referred just now, and that is the future of the University College of Rhodesia and Nyasaland, the medical school and the teaching hospital. At the inter-Governmental Conference held in September it was agreed that the problem of future finance for these three bodies should be tackled as a whole for the period up to 1970, and as a matter of urgency. I understand that the present suggestion of Her Majesty's Government is that the existing financial support of the College should be divided into two, and with interim arrangements only for 1964-65.
I do not propose to go into all the details of this question, but the fact is that unless the college is able to make financial commitments beyond December, 1965, there is a serious risk of its losing a large proportion of the qualified staff who could easily obtain posts in universities elsewhere. The same thing applies to the medical school, the 153 staffing of which is at the present time at the build-up stage, and also to the teaching hospital, with its staff and nurses. These three institutions have to be dealt with as a whole unless there is to be a risk of complete chaos. The inter-Governmental. Conference showed that £10 million was the sum needed for the three institutions up to 1970, which would guarantee their continuance. I understand that the three Territories, with private contributions, which are to be expected, would have no difficulty in raising half the required amount (and I would ask my noble friend the Minister of State if I might have his attention) and I would urge the Government very strongly that we should provide the remaining £5 million, as a parting gift, to secure the permanent survival of this non-racial university, with its medical school and teaching hospital.
My Lords, I now turn to the question of the claims of the Federal public servants which have been mentioned before. I certainly do not intend to go ever all the ground which I covered myself in a previous debate on November 27, and which has been dealt with to-day. But there has been one further feature of importance since we last debated this matter; and that is that, owing to the very large number of members of the Federal Public Service who have decided to resign and seek fresh employment, there will not be as many redundant civil servants as was expected at one time. That means that the cost of paying for proper compensation will be less. I hope that this fact will be taken into consideration. I feel that, despite the grave dissatisfaction of the Federal Public Services Association with the arrangements covered by the agreement among the five bodies to which my noble friend who opened the debate referred, they realise the difficulty of reopening questions actually covered by that memorandum. But, as he said, there are certain features of their position which were not dealt with in the memorandum or, at any rate, which could be considerably amplified. On those matters I feel that Her Majesty's Government have a strong moral obligation to secure some improvement in the position of the Federal public servants.
There is, first of all, the question of the security of pensions (and I mention 154 these points this afternoon because they have not heretofore been raised in your Lordships' House), including, of course, the matter of currency, to which the noble Duke referred. Then there is the fact that the Federal Government memorandum stated that the British Government and the three Territorial Governments had agreed to make up any deficit necessary for honouring the terminal benefits. Then there was to be a Pension Authority which was to be vested in trustees. This, of course, is referred to in Sections 24 to 32 of the Order; and I understand that it goes some way to meet the views of the civil servants. On the other hand, the important thing, from their point of view, is that the trustees should be appointed now, and that, preferably, they should be the Bank of England. Secondly, they are concerned that the Pension Agency should be domiciled in this country and not in one of the three Territories.
There is a further fact which was not dealt with in the memorandum. The Federal public servants are concerned that no provision has been made for securing, in the case of those Federal officers who had previously served with the Territorial Governments, that portion of their pension which was earned in the service of the Territories. Under the Federal Public Service regulations this service counted as pensionable. As the Federal Government will now disappear, some form of guarantee should be secured from the Staff Authority or the Central African Pension Agency covering this portion of an officer's pension.
Again, there is no provision in this Order for the application to the Federal Public Service of the Pensions (Increase) Act, 1962, and the regulations made under that Act. It has been stated in this House on an earlier occasion that members of the Southern Rhodesian and Federal Public Services would not be eligible under the Act. This is perhaps understandable in the case of Southern Rhodesia, which, having been self-governing for some forty years, may be expected to extend fair treatment in this respect to its retired civil servants. On the other hand, in the case of the Federal public servants there will be no Federal Government to make any increases, nor will there be any funds from which they can be made. It has 155 been argued that because the Federal Public Service was not recruited in this country, or under the authority of a Secretary of State, they could not be brought within the scope of this legislation. But this point, surely, has no validity, considering that the Sudan civil servants, who were far more remote from the British Government than the Federal public servants, and indeed were never in the service of the Crown, are included in the Schedule of the Act. It would appear to be only the barest justice that Federal public servants should be brought within the purview of the 1962 Act.
Then there is the question of compensation. In this connection, the Federal Government's memorandum stated that sympathetic consideration would be given to hard cases. What arrangements are being made for dealing with those hard cases? Of course, the civil servants themselves hold that this should be an undertaking of a general character, which would confer compensation on all civil servants on the basis of Her Majesty's Oversea Civil Service. I can only say that I agree with that view. I hope that Her Majesty's Government will consider the additional points which have been put forward to Mr. Sandys in a recent memorandum and which I think would help to meet some of their grievances.
Another matter that I would mentioned is the question of future employment. Here they feel that in the case of the two Northern territories there is bound to be discrimination against ex-Federal officers of European race, and in Southern Rhodesia they feel that there may well be discrimination against former Federal civil servants who are Africans. This is a real fear, and the Federal public servants have asked that the Central African Office should consider ways of meeting it.
I am concerned about these matters not merely on account of the need for just and generous treatment of the civil servants, many of whom, contrary to what has been said this afternoon, were recruited directly in this country with the encouragement of the British Government to go out to the Federation, and all of whom have given devoted service 156 to the Federation and contributed to the immense economic and social development in these past ten years.
I also gravely fear that, unless just and generous treatment is accorded to the Civil Service, further numbers of them, particularly in the technical and specialised fields, will resign and go elsewhere—very likely to the Republic of South Africa, where there are great opportunities—and thereby cause grievous harm to the three Territorial Governments who are now to inherit the responsibilities of the Federal Government. I urge Her Majesty's Government to review this whole matter again, and to secure for the Federal public servants the treatment which they have merited. It is only playing with words to try to draw distinctions between them and members of Her Majesty's Oversea Civil Service.
I would add only one further matter in regard to the Federal Public Service which has not been mentioned before. There are 64 northern officers in Salisbury who were former expatriate civil servants who were persuaded by the British Government to enter Federal service, and who at the moment are getting a minimum housing allowance of £20 a month. All of these former Northern Rhodesian or Nyasaland officers will be hit if no special consideration is given to their case. Moreover, another factor which has been brought to my attention is the effect that the recent law which has been passed in Ghana providing for income tax on pensions of retired expatriate officers has had on the Federal civil servants, who feel they may receive similar treatment.
There is another matter which is dealt with in the Order to which I wish to refer. I forget for a moment in which section it is, but it is in regard to the pensions of the Judges of the Supreme Court. I should like to inform your Lordships that the first occasion on which the Judges became aware of the proposals relating to them was on Monday, November 25. We must remember in this connection that in 1955 the present Chief Justice gave up a seat on the Supreme Court of South Africa, where he was assured of his full salary until the age of 70, followed by a pension. He did so in order to serve the 157 Federation. Similarly, Sir Vincent Quenet in 1961 gave up a secure seat on the High Court of Southern Rhodesia, where he was assured of a full salary up to the age of 70, followed by a pension. Instead of being compensated on the basis of salary loss when their present posts are terminated, the proposal is to compensate these Judges on the basis of past service. It is extremely doubtful whether any of them will be offered comparable posts in other courts, and it is also extremely doubtful whether they will be able substantially to mitigate their loss by obtaining other employment.
I feel that it is, to say the least of it, most unfortunate that these distinguished gentlemen should be put in a position at their time of life, 59 and 57 respectively, of having to seek ether employment. As I say, the worst feature of it all is that the Judges have been denied any opportunity to put their case either to Committee "A" or to Governments, other than the Federal Government, and the latter have been baulked from taking any action in the matter by the laying of this Order.
Finally, and I beg your Lordships' pardon for taking so much time, I turn to the question of the Public Debt, which is dealt with in sections 12 to 16 of the Draft Order. Her Majesty's Government must be under no illusions at all about the very strong views held by stockholders in this country, in the Federation, and no doubt elsewhere, that the terms proposed will seriously reduce the security that stockholders have in the existing Federation. The guarantees which will be given by the individual Territories for their share of the debt cannot be regarded as in any way comparable with the full guarantee of the Federal Government which has hitherto governed these loans. The shareholders both in this country and in the Federation itself include many thousands of small investors, in addition to the banks, corporations and insurance companies, to which reference has been made. Of course, it must also be borne in mind that, in the case of the insurance companies, the policyholders, many of them out in the Federation, will them selves be affected as policies are backed by the loans which are now to be split 158 up into three. This also applies to the pension fund of the Southern Rhodesian Civil Service which holds large amounts of Federal loans. The stockholders, I think, all over the world feel very strongly that the British Government should be in some way associated with the guarantees of the individual Territories so as to preserve the value of the investment.
§ THE EARL OF SANDWICH
My Lords, may I ask the noble Lord a question? It is very good of him to give way. I think he said, a sentence or two ago, that most people could not regard the individual State's guarantee as equal to the Federal guarantee. I wonder whether he would kindly elaborate on that for a minute or two and say why it would be so.
§ LORD COLYTON
I think, first of all, that the Federation was a great, solid economic entity, and, I should have thought, quite obviously, more powerful and more sound than the three individual Territories. But, apart from that, one has to consider, certainly in the case of Nyasaland, who will take up 10 per cent. of these loans, that the economic situation of that Territory is by no means sound. In fact, it is going to have to rely on payments from this country for many years to come to maintain its existing solvency, quite apart from the question of servicing these loans.
There is one point which has been made from time to time when the position in regard to the Federal Debt is compared with that in other colonial Territories which attained their independence, and it is suggested that in those cases, of course, no British guarantee or assurance has been called for. I feel that the position is entirely different because, after all, the people who in vested in Federal loans did so in the main in a Federation which had been set up by the British Government and which, from everything the British Government said, was intended to continue as an economic entity. To reply further to my noble friend, while the aggregate amount of the Territorial loans will equal the Federal obligation which is being given up, in fact, of course, there can be no doubt that the aggregate of individual credits cannot be compared with the credit of the existing Federation.
159 For all these reasons, I consider there is an inescapable moral responsibility attached to Her Majesty's Government in regard to the external loans, first issued on the London market and in New York after Federation. These loans, I understand, amount to £55.4 million. They were issued under the authority of the Bank of England, as was mentioned by my noble friend Lord Salisbury. In the case of the loans issued in the United States, there is a risk that the New York Stock Exchange may well consider that the security now being exchanged for the previous Federal guarantee is not adequate. This could lead to the de-listing of the loans and a serious fall in market value of stock, which would be bound to affect the value of other Federal loans.
Incidentally, of course, as was I think also mentioned, the £31.8 million loan of the International Bank for Kariba does, in fact, carry a guarantee by the British Government. That is a stipulation on which the International Bank insist, and I really do not see why foreign holders of Federal stock should be any better treated than British holders of Federal loans, as well as the inhabitants of the Federation itself.
I suppose it can be argued, in the case of the £86.3 million of External Debt taken over from the Territories on the establishment of Federation, that no previous British guarantee was given so that none is now required. But again I think it must be remembered that much of this stock will have changed hands and was bought on the assumption that the Federation would continue. It is difficult to differentiate. I think the same thing applies to the internal debt amounting to £139.5 million. Of this, only £7.6 million was taken over from the Territories. All the rest of these loans were raised after Federation, and the investments were made on the assumption that the Federation would continue.
I do urge Her Majesty's Government again most strongly that in these quite exceptional circumstances they should find some way to provide a form of guarantee for the ex-Federal Debt even if only limited to an undertaking that during the currency of the loans the British Government would do their best to secure 160 the servicing of the loans and the repayment of the capital on maturity. No precedent would be created since the position cannot in any way be compared with other overseas Territories. Unless this is done I feel that grave hardships will be caused to very large numbers of stock holders.
Finally, there is this further point. The effect of any depreciation in the value of these loans as a result of Her Majesty's Government failing to take action would quite clearly seriously impair the prospect of raising further funds in the London market, or elsewhere, for these three territories or, indeed, in the other under developed territories in the rest of the world.
§ THE EARL OF LISTOWEL
My Lords, before the noble Lord, Lord Alport, rises, may I appeal to the noble Duke? Would he, I wonder, be kind enough to ask his Whips to ask the noble and learned Lord the Lord Chancellor to return to the Chamber? I ask this because the next speaker is a former High Commissioner to. the Federation, and I am quite certain that the noble and learned Lord would wish to hear him. Nobody grudges the noble Lord a cup of tea, but he has had half an hour in which to have it.
THE DUKE OF DEVONSHIRE
My Lords, I shall of course pass the noble Earl's message to my noble and learned friend the Lord Chancellor. I have reason to believe, however, that he is involved in more important things. However, here he is—the wish is father to the thought.
§ 4.50 p.m.
§ LORD ALPORT
My Lords, although I am grateful to the noble Earl, Lord Listowel, for his intervention on my behalf, I am quite certain the return of the noble and learned Lord the Lord Chancellor to the Chamber at that particular moment was entirely fortuitous. I have not sought to intervene in previous debates on Central Africa, because I felt it right to allow time to elapse after my return from Rhodesia in order, per haps, to enable me to see the problems there in better perspective and, one hopes, rightly or wrongly, with a clearer judgment. But I think perhaps it would be right on this occasion to take some of your Lordships' time, in the hope that any general reflections that I may 161 have on the situation there may be of some assistance in reaching a conclusion to what has been for both Houses of Parliament over many years an extremely difficult problem, the problem of the right and proper handling of the affairs and interests of those who live in the three Territories which for the next fortnight or so will continue to form the Federation of Rhodesia and Nyasaland.
I should like to say that I was, and I still am, a firm believer in a policy which aims at creating a real partnership between Africans and Europeans, between black and white in Africa. I believe equally in the political wisdom of encouraging the smaller States of Africa to combine into larger economic and political groups, preferably on a federal basis, because by that means it is possible to get the additional strength that comes from unity while leaving to the component parts a good deal of autonomy in matters concerning them individually. Therefore, the fact that your Lordships are to-day being asked to approve an Order in Council bringing to an end an attempt to give practical effect to an experiment in both those principles in what is a key part of Africa, lying as it does between, so to speak, two political extremes, is, for me, as I know it is for your Lordships, an extremely sad occasion.
I however recognise that the need for speed, that is the need to bring the Federation formally to an end, is on account of the interests of the three successor Governments, and I think that your Lordships when you consider the proposition put by the noble Marquess with regard to delay on a decision on this matter should remember and know that it has been the wish of the successor Governments that there should be a speedy end and conclusion to the Federation once it had been concluded that the Federation was no longer likely to continue. And the reason for this was that while the Federation remained in being it was not possible, legally and for other reasons, for the successor Governments to carry out the negotiations which they wished to embark on, in some cases with each other and in some cases with other Governments as well, and which were of great importance to them. That is, if I may say 162 so, a consideration which should not be overlooked when we take into account the nature of the present Order in Council.
It has been clear for some period of time that the Federation could not go on, and the reason why it was clear was not only the opposition which existed among the African population in Northern Rhodesia and Nyasaland, but also there was growing opposition amongst the Europeans, both in Northern Rhodesia and in Southern Rhodesia, until the point was reached when it was very clear indeed that the support for the continuance of the Federation amongst all races in all Territories was less than the opposition to its continuance amongst the races concerned.
From that time onwards the objectives of policy seemed to me to be these four: first, that the dissolution of the Federation should take place in an orderly and peaceful manner; secondly, that as many as possible of the advantages which the Federation had brought to the Territories should be retained; thirdly, that each of the three successor Governments, those of the two Rhodesias and Nyasaland, should be given as good prospects as were possible of making a success of the future which lay in store for them when they "went it alone"; and, fourthly—and to me a very important objective—that the dislocation and disappointment which all this involved for people here and people in Central Africa should be faced by us all in a spirit of understanding and co-operation and not with recrimination, anger and abuse.
I think, in view of the facts and realities of the situation in Central Africa in these last months, and indeed for the last two years, that these objectives of policy have not been by any means either unrealistic or dishonourable. Indeed, I would claim that they were the only ones which were possible in the circumstances which had to be faced by people out there as well as people here during that period. I would go further and say that, so far as the interests of the people in Central Africa were concerned, the speed with which this matter could be completed was of paramount importance. It was recognised as such by all the Governments for the reasons I have already given.
163 I am not familiar enough with all the procedures of your Lordships' House to know exactly how this Order has been handled. It may well be that the time factor has given insufficient time for consideration of what is admittedly a complicated and difficult Order so that it is understood in all its detail. But I think it would be misunderstood, and seriously misunderstood, in Central Africa if it were felt that, because of some procedural difficulty here in this House, something which they out there regard as being their closest interest was being denied to them, and I can assure your Lordships that so far as they are concerned speed is the essence of the matter.
If I may return very briefly to the four objectives which I mentioned earlier on, I think your Lordships will recognise that there have been several occasions during the last three years or so when the Federation might have broken up in administrative and political confusion. To a very large extent this has been avoided by the agreement reached by the Governments at the Victoria Falls Conference last September, and now by the agreement reached, again by the Governments, for carrying into effect the provisions of the present Order in Council. It was essential in the interests of the people in Central Africa that, if the Federation was to be dissolved, the dissolution should be carried out in an orderly and peaceful way. And it was equally essential that in certain fields co-operation between the Territories should continue. It was hoped right from the beginning, if the Federation came to an end, that it would be possible to agree as between the territories on certain matters on which co-operation could continue, and that those matters would be extended with the passage of time and as the situation in Central Africa settled down.
I think there has been a considerable measure of success in the principles achieved, of continued co-operation in the field of transport and power and research; and I hope that the co-operation in research will be extended from agriculture to other forms of research—for instance, help which the resources of small territories in Africa, or indeed anywhere else, are not sufficient to maintain on anything like a practical and worthwhile scale. I hope 164 that there will be agreement with regard to the movement of labour. I hope that there will be other subjects on which the Governments of the Territories will find it possible to reach agreement, by bilateral or trilateral negotiations. The point is that the sooner they have an opportunity of getting on with this on their own, the better chance there is of their reaching satisfactory arrangements on these matters where we want their co-operation to take place. Again, it seems to me wise that we should not in any way delay the carrying through of this Order.
There is one matter which I know has been mentioned frequently already in this debate and which, naturally, is of great concern to public opinion here, as it is to those who are affected by it in Central Africa—namely, the problem of security of pensions for the Federal Civil Service. I served alongside a great many of these people over a period of over two years, and I can endorse the tributes to their integrity and devotion which have already been paid in this House. What seems to me important is that if there are any deficiencies in the present Order those deficiencies should be made good by a subsequent Order in Council, which I am assured is perfectly possible. Those deficiencies should be corrected, if corrections are needed. What seems to be even more important is that the administration of the pensions scheme, whether dealing with questions of hardship or with its general administration, should be carried out in a sympathetic and efficient manner. It is difficult, looking at it and reading it merely in cold type, to know exactly how it will work; but I am sure that that is one of the important aspects of it, and that will be the responsibility of the Governments concerned.
But there is one even more important aspect—namely, that there should be sufficient funds available to meet all the pension liabilities. I understood from the speech of the Minister of State who opened this debate, that the reference in paragraph 25(1) (c), which sayssuch sums as may be provided for the purposes of the Fund by the Government of the United Kingdomenvisages that Her Majesty's Government in the United Kingdom will actually be making a contribution, and indeed will stand behind the Fund. If 165 that is the case, and if that is what the Minister said, I personally am delighted. I am sure that that is most important, in giving to the State servants concerned confidence in their future, if they feel that what they have earned, not only perhaps their expectation, is secured for them from a financial point of view.
This brings me to the third of the objectives that I mentioned: that a Territory should have the best possible chance of making a success of its future on its own. I cannot, and I do not, think that this is the proper place to discuss the political prospect ahead of the three Territories. But what is quite certain is that each of the Territories will require considerable financial resources, not only to maintain the present level in development but also to increase it. It seems to me that it is in relation to the availability of these resources that we should see the Federal Public Debt, rather than, on political grounds, as to whose responsibility it is for the break-up of the Federation.
I may have my figures wrong—perhaps I have, having listened to the Minister of State speak—but I have worked out roughly that the allocation of the Federal Public Debt as between the Territories would be something of the order of £145 million to Southern Rhodesia, £105 million to Northern Rhodesia and £25 million to Nyasaland. I have no doubt that related to that break-up are the assets that are available, inherited from the Federation, in each of the three Territories. I do not know, and do not think many of your Lordships will know whether the economic resources of the three Territories can sustain easily the burden of debt which is involved; and I am not entirely satisfied myself that the willingness to shoulder this substantial burden of debt would be regarded as credit-worthiness by prospective lenders. I think it might be regarded possibly as a deterrent to further borrowing. If the burden is too heavy for them, the risk that a Territorial Government concerned may take some action which would have serious consequences, not only for past lenders but for those of the future—for instance, something in the nature of devaluation—would obviously be serious.
I cannot think, from any study that I have made of previous precedents in 166 this matter, that Her Majesty's Government are in a position to guarantee the whole debt. But I think it would be right, as well as prudent, if discussions were entered into, as is promised in the speech of the Minister of State and in the report of the Victoria Falls Conference, in order to see what assistance is appropriate and possible for us to give to the Territories in order to ensure that they can sustain the shock of the break-up of the Federation and also have a fair chance of maintaining financial stability, each on its own.
There is this quotation in paragraph 27 of the Report of the Victoria Falls Conference:The question whether the United Kingdom Government could and should help would have to be considered in the light of their general policies on overseas aid towards countries which showed need for assistance in the development of their economies.The point I am trying to make is this: that in the case of these three Territories it is not within the general policy of Her Majesty's Government's aid to overseas countries that this should be considered; but that they should be considered as special cases. We have been associated with them in trying to carry through a great political experiment in Africa, and therefore we have some liability to meet the consequences of the failure of that experiment.
I believe that if that were done, there would be at any rate as much practical advantage to the bondholders, but more especially to the people of these Territories, as is likely to be obtainable in the economic circumstances of the present time. I do not think it is in the interest of the people in the Territories to ask for more than it is practically possible for the people of this country to give. We know from our experience that one gets little gratitude from the provision of financial assistance to other countries, and often I fear that we in this country tend to give that financial assistance in circumstances that do not evoke gratitude easily. It is not, therefore, a question of gratitude, of being of some service, although I suppose that is a factor in the point of view I am trying to express. What is really important is that when the time comes for the Federation to end, we in this country should be seen by people in 167 Central Africa to have a continuing interest in their problems, and a continuing capacity and wish to help them to make a success of their own future.
I would say, finally, at this particular stage, after all the great controversies which have raged here, which have so often been misunderstood by public opinion in Central Africa, which have caused bitterness in the minds of people out there in respect not only of Governments but of people here in Britain, and which have tended to create barriers and divisions between us, that now that we are ending one phase and starting a new one—one in which there is considerable risk with regard to the political future of these Territories, with unknown factors ahead of them so that they need as much help and sympathy and understanding from public opinion as they can get—we should start with a new attitude towards the people of that part of Africa. We should try to give to their problems the understanding which they require; and I am sure that in return we shall receive from them not only understanding, but the continuing support which has been part of their traditional attitude to Britain in the past.
§ 5.11 p.m.
§ LORD COLERAINE
My Lords, I am sure the whole House will have listened with the greatest respect and attention, and with the utmost interest, to the speech which my noble friend Lord Alport has just made. We all realise his wide experience at first hand in these matters, and your Lordships must have been impressed, as I was, by the moderation and breadth of view with which he spoke, and in particular by his appeal at the end that we should all unite in wishing Africans of every colour well. I can assure him we all do. Whatever views some of us may hold as to the wisdom or unwisdom of Her Majesty's Government's policy over the past few years, we are all united in wishing the African well. whatever his colour may be.
During the brief period for which I will seek to detain your Lordships I want to refer to just one part of the Order in Council, and that not the most important part (the most important part is that relating to the provisions for the public servants). I want to refer 168 to the question of the Federal Debt, and in doing so I must disclose to your Lordships that I have a direct financial interest inasmuch as I am a director of one of those big financial institutions to which my noble friend the noble Marquess referred in his speech. It may conceivably be of interest to your Lordships to hear at first hand the reaction of those great institutions. Perhaps it would be an exaggeration to say that by the action of the Government today they feel cheated and bilked. They feel that the standards of conduct which have governed the Government in this respect are something less high than those to which they are accustomed in the City of London. I think that that is true.
The noble Duke defended the decision of the Government as best he could, because, like so many Ministers, as we have all experienced, he was in the position of having to defend the indefensible. I should like to examine that defence. He said that the criticism of the Government by the City of London was based on a dual misconception. The first misconception was that in some way Her Majesty's Government were responsible for the dissolution of the Federation; and the noble Duke went on to say, "Her Majesty's Government cannot accept responsibility for the dissolution of the Federation." My Lords, that is a little difficult to take. Throughout the last three or four years the Government, in their wisdom, have taken certain decisions. To take but one, they decided to send out the Monckton Commission, having given the undertaking that the Monckton Commission was not to consider even the possibility of the dissolution of the Federation. That undertaking was removed. Have the Government really no responsibility for that, and is it really the case that the Monckton Commission had no effect on the future of the Federation?
I would ask your Lordships to consider this. If you have in your garden a tender plant of which the future health is in doubt do you really improve its prospects by pulling it out by the roots and having a look at it? Of course you do not. That was the duty imposed upon the Monckton Commission, and that was the effect of that Commission: it killed the plant. I do not want to weary your 169 Lordships with back history, but I think one could find many instances where the effect of Government policy, accompanied as it was by loud protestations that its only interest was to save the Federation, was to kill it. I do not think the noble Duke can take his stand on this lack of responsibility. He has only to look at the Report of the Central Africa Conference, paragraph 27:The Chairman made it clear that Her Majesty's Government's action in dissolving the Federation was based on their assessment of the political realities of the situation.Any Government action is based on that. The assessment may be right or it may be wrong. In this case, looking back over the whole period, I myself am convinced that it was wrong. But one cannot say, at any rate if one wants to defend the Government, that they were simply at the mercy of events, that there was no decision for them to take, that they were just swept along and had nothing to do with it. That really was what the noble Duke was telling us.
A further point made by the noble Duke was on the question of credit-worthiness, as to what an unspeakable insult it would be to the Territories if any additional guarantee were given to these loans. But it is not unusual for some third party to guarantee the payment and the servicing of a loan. It is not regarded as a deadly insult. And, as my noble friend Lord Colyton reminded us, the International Bank did give the Federal Government a very substantial "insult" in the shape of a loan of £30 million which was backed by the guarantee of Her Majesty's Government —a guarantee which they now say it would be unthinkable to give in the case of these other loans.
But, surely—and I think my noble friend Lord Alport made this point—it is ridiculous in the present situation to pretend that the credit of the three Territories stands at 100 per cent. Everybody knows it does not. Indeed, in the Report of the Central African Conference, where Mr. Butler is quoted in the last sentence of paragraph 27, it is quite clear that Mr. Butler at any rate does not regard the credit of the Territorial Governments as being so high that they do not need other support. Of course they need other support. I feel myself that one of the real troubles we have had throughout this tragic story 170 has been our steadfast refusal to call things by their proper names. If a country is not fully credit-worthy it does not help to pretend that it is and to say that it is, however loudly and however often you repeat it.
The second misconception which the noble Duke sought to remove was, as he said, the misconception that the security of Federal stock was better than the security of Territorial stock. With the greatest respect, I would say to the noble Duke that he is not the best judge of that. With the greatest respect, I would say to the Government that they are not the best judges of that. The only people who can judge a borrower's security are those who are willing to lend the money. It is only the investor, only the lender, who can judge security. It is no use the Government's saying, however loudly, that the security is this, that or the other. It is the investor, the lender, who will decide, and he has already decided that the security needs support.
I think we all know that the reputation of Her Majesty's Government has suffered in Central Africa by the events of the past few years. I do not think anybody would deny that. I do not want to go into the question of whose fault it was, but the plain fact remains that the reputation of Her Majesty's Government for good faith and honest dealing has been tarnished in Central Africa. It would be a great pity if the same impression got abroad in the financial centres of the world. The essence of business in the City, the real reason for the strength of the City of London as an institution and as an asset to the whole economy, is that one's word is good enough. You do not have to see what is written in small type on the back page. It is all done by word of mouth and by confidence in each other's words.
I know, we all know, that the Government gave no guarantee about these loans. Not only that, they positively disclaimed the fact that they were giving a guarantee. That is what the prospectus said. But it is equally true that these loans were subscribed under the auspices of the Government and in the belief that the Government, if they did not guarantee them, stood by them, at any rate in the sense that they stood by the future of the 171 Federation. It really seems to me indefensible that now, within ten years, the Government should pretend that they have no real liability at all. Of course they have a liability, and if they do not recognise it I am afraid their reputation, and the reputation of the City of London, will suffer. I would reinforce the appeal which my noble friend made earlier, that even now this Order in Council should be withdrawn.
I think there was only one thing in the speech of my noble friend Lord Alport with which I disagreed, and that was when he said that the essence of this particular contract was, above all, speed. If one is doubtful about the wisdom of a particular course of action—and I think all of us in this House, on either side, are doubtful in greater or lesser degree about the wisdom of this action—then the most dangerous, the most foolish and the most irresponsible action is to try to rush something through. Whatever the evil consequences of delay may be, they will be nothing to the evil consequences of precipitate, hasty and ill-considered action.
§ 5.27 p.m.
§ LORD BALFOUR OF INCHRYE
My Lords, I share with the noble Lord, Lord Coleraine, pleasure in that my noble friend Lord Alport felt able to speak on what he described in his own words as, "those matters which have concerned both Houses of Parliament over many years." But the fact is that the final decisions on "those matters which have concerned … Parliament over many years" are thrown at us tonight with a "take it or leave it" procedure, an Order in Council that cannot be amended. We know that, as well as having this thrown at us in this way, there are at the same time many decisions left unmade, as my noble friend Lord Colyton said in his speech.
My noble friend Lord Alport made a powerful plea that there should be no delay. He said that behind this Order is the wish of three Governments for a speedy conclusion. Certainly. But not at the expense of the rights and powers of Parliament, and the rights and powers of this House, to express its views on grave matters with which it is now faced by the Government; not at the expense of injustice to civil servants; not at the 172 expense of those who have trusted Her Majesty's Government, as well as the Federation, with their monies. We are told, as my noble friend Lord Alport said, that Central Africa would feel aggrieved at delay. Yet I believe that that goodwill which he expressed so strongly must rest on something stronger than a request to Parliament to abrogate its powers and pass something which is going to bring to our fellow citizens those injustices which I have just cited.
This question of the Federal debt, which is the only matter on which I wish to speak for a very few moments, is, as has been said already, a moral issue as well as a practical one. Frankly, my Lords, I can find little comfort in the words of the noble Duke when he gave what I suppose was intended to be a reassurance. I took down his words. He said that "the Government recognise the legitimate interest of stockholders". Those words sound to me unpleasantly familiar, when I think that similar words were used as regards our British nationals in Egypt. Your Lordships know as well I do—and some noble Lords better—how Her Majesty's Government had in mind the interests of the British nationals; though had it not been for the action of your Lordships' House I do not believe that such justice would have been meted out to them as we have finally obtained from Her Majesty's Government.
My Lords, the Government can, of course, deny direct legal responsibility, but they cannot deny surrounding the issues of the Federal loan on the London market with the several beneficial blessings which have been cited by my noble friend Lord Salisbury—the Government broker, the Bank of England; and even the comforting words of the then Secretary of State for Commonwealth Affairs, who said:Make no mistake about it … the Federation could never raise a penny of money by loan if it was not known whether the Federation was to continue.I think it is morally wrong for the Government to assent to a change in the security given to holders, and to a diminution—as it is in the eyes of those who judge values; that is the market—in the value of the security on which they lent their money. I think it is wrong, too, for the Government to 173 stand aside and see capital lost to investors through their Acts of Parliament, first creating and then dissolving the Federation.
We know the Government's defence of their attitude—we have heard it from Ministers: that secession was not of their doing, and that guarantee creates a precedent. Both points are very arguable, and have been argued to-day, and I am not going to re-argue them. But if one debates from the starting point of accepting (which I do not) those two arguments, the question is: What more can be done to safeguard holders against risks, which are real, beyond those vague words of good will which, quite frankly, will not impress? I would ask the noble and learned Lord on the Woolsack to recall what happened in 1933, when the Dominion of Newfoundland was about to default on trustee loans issued by Newfoundland. Like other noble Lords, I was in another place at that time. Of course, no comparison is intended by me between Newfoundland's conditions then and the conditions of the three Territories at present. The Newfoundland position arose, as Lord Amulree's Report said, from "political corruption and economic depression", and neither of those conditions applies to the three Territories we are discussing to-night—and I trust never will. But in Her Majesty's Government's handling of the Newfoundland position we might find a method of meeting the fears of the bondholders without giving that guarantee which the Government are so reluctant to give.
My Lords, accepting that risks to bondholders do exist by a change in the security backing of their loans, I suggest that Her Majesty's Government might do worse than consider the Newfoundland solution as a possible one here. In Hansard of December 7, 1933, the then Chancellor of the Exchequer said this [OFFICIAL REPORT, Vol. 283, col. 1851]:We thought that it would be unfair to the taxpayer of the United Kingdom to take over the liability to make good both the principal and the interest on the present basis … we came to the conclusion that the arrangement which would be most just and practicable would be one which gave to the borrowers the equivalent of 20s, in the pound on their principal, with interest at a reduced rate.174Accordingly, that is the proposal which I have to put before the Committee this afternoon, and, if it be accepted, the bulk of the creditors will not be paid in cash, but will receive stock of equal face value with their present holdings, backed by the Government of the United Kingdom, with interest at 3 per cent., which, we are advised, will produce a par value approximately equivalent to the nominal value of the stock".Now the Rhodesian 78-81 6 per cent. loan is down to 76 middle price, and that now yields no less than 7.9 per cent. Why not adapt the Newfoundland conversion scheme to this position in the Federation? Let the Government offer holders of the External Loan issued in London an exchange into long-term bonds of lower interest to be issued by Her Majesty's Government, at around 5 per cent. or less, depending upon the maturity date. The holders who wish for a high yield and who enjoy a high yield could continue to hold their Rhodesian loan, but those who prefer security and a lower rate of interest could convert. The Government, I submit, would then be backing their own belief in the credit and future of the territories, because they would be buying to yield 7.9 per cent. and lending the same amount at 5 per cent. or less.
In this way there would be no reflection upon the future integrity of the three Territories, but it would be a sign of confidence on the part of Her Majesty's Government that they would be glad to take over these bonds at that price and re-issue long-term low-interest bonds guaranteed by Her Majesty's Government. Thus, my Lords, the Government could fulfil their moral obligations without advancing that guarantee from which they shy away whenever it is mentioned. Some scheme such as that, or some scheme such as other noble Lords have mentioned in your Lordships' House to-day—some scheme, something better than vague words—must be framed in order that the Government may fulfil their debt of honour to those who advanced money with their encouragement.
My Lords, I conclude by saying that I hope the noble and learned Lord on the Woolsack will come forward in a generous manner with positive proposals and not just vague words such as we have heard—words which, with great respect to the noble Duke, did not impress myself or, I think, other Members of 175 your Lordships' House. But if he does not, then I personally shall support the noble Marquess, Lord Salisbury, should he consider it necessary to divide the House.
§ 5.37 p.m.
§ LORD MILVERTON
My Lords, it will not be necessary for me to detain your Lordships for more than two or three minutes. I share the general horror at the way in which Parliament has been treated in having to deal with a complex document of this type in totally inadequate time, and I also share almost the horror at the Government's insistence upon standing on their idea that they have no responsibility for the dissolution of the Federation. But those subjects have been so well dealt with that there is no need for me to elaborate on them.
I had intended, when I put my name down as wishing to speak in this debate, to devote myself solely to putting once more the case of the Federal civil servant. As a late colonial civil servant myself, perhaps I understand better than most of your Lordships what civil servants feel like and the things that impress them most in the people whom they serve. As the noble Lord, Lord Alport, said, the Federal Civil Service, recruited from various parts of the Commonwealth, including, some of them, this country, served that Government extremely well, and in serving that Government they were also maintaining the policies and the reputation of the British Government themselves. They are, as we have all urged, entitled to the most generous consideration, and not to have the very means of existence whittled down by a rather narrow adherence to the technical position that the Government are not responsible for them.
All these questions—pensions, compensation and security and the rest of them—have been so well dealt with. And once more (it is becoming almost a habit in recent debates) I find myself in complete agreement with the noble Earl, Lord Listowel, and the extremely able and, I thought, moderate way in which he put the case of this section of public servants. In fact, I agree with all that he said in his speech, with the possible exception of two sentences about the origin of the Federation. Everything 176 that the noble Earl, Lord Listowel, did not say or did not elaborate upon was dealt with by the noble Lord, Lord Colyton.
I do not wish to weary your Lordships by putting up a case with which I am very familiar, because I have interviewed the delegation which came here and I know how deeply they feel in this matter, both Africans and Europeans. The noble Lord, Lord Alport, has said—and I hope he is right—that it is possible still for the British Government to make good the glaring deficiencies, to put it mildly, in some parts of this document. I sincerely hope they will. Like the noble Lord, Lord Alport, I wish well to all Africans of whatever colour; and I also wish well to the British Government. In this tragic end of a great and noble experiment I should like to see the British Government retire from the scene of Central Africa with much more credit than they seem likely to have at the present moment.
§ 5.42 p.m.
§ LORD BARNBY
My Lords, there are many in this House who have sat for quite a long time—I myself for over three decades—during which time situations have arisen when we have listened with great interest to debates which seemed to strike at basic principles which we have been brought up to regard as fundamental to the Government of this country. There must be many of us who have listened to this particular discussion who, like myself, feel grave disquiet. I cannot pretend to know the situation intimately, but one can remember the discussions when the Federation was founded. There were those among us who had misgivings as to the manner of its formation. But, having once put our hand to it we have felt: Why could not Her Majesty's Government see it through? This afternoon we have heard speeches which in their detail show a mastery of the subject and an impressive application, and which have enabled this House to have more details of the broad picture. I see the noble Viscount, Lord Boyd of Merton, sitting here.
Many of us who feel as strongly on Conservative principles as he does—and I feel that—believe that, had he been able to stay longer in the position he formerly occupied, we should probably 177 not have found this House discussing this question in this way at the moment. On great matters where principles are concerned, it seems right that those of us who feel strongly should add just a word in their support, and that is my purpose tonight. I have listened to my former Leader in this House, the noble Marquess, Lord Salisbury. He gave us a fluent exposition of his assessment of this position. I personally accept that, as I do generally all his presentations of the situation in Africa. It is a peculiar situation that we on this side of the House should find ourselves in almost entire agreement with the noble Earl, Lord Listowel. But happily there are occasions when political partisan feelings do not arise and we can find ourselves in unison. However, it certainly seems surprising that we should find the same emphasis put on this matter from the Opposition benches as from ourselves.
I am grateful to the noble Lord, Lord Colyton, for the trouble he took to present us with all those details. Some of us in the House will say that this is a shocking story of details improperly postponed—I will not say "neglected"; I would not impute that—and that it will be the cause of grave disquiet. Debates such as this are read widely, and in situations such as this I feel that it is better that many voices should give support to those who speak with the authority and clarity of the noble Marquess, Lord Salisbury. It is for this reason that I ask for your Lordships' indulgence that I may express my entire agreement with what has been said by previous speakers.
§ 5.47 p.m.
§ VISCOUNT BOYD OF MERTON
My Lords, may I express the hope that when the noble and learned Lord the Lord Chancellor comes to reply he will be able to give some reassuring news about two of the great matters that have been raised to-day. They are, to my mind, in order of importance, the treatment of the Federal service and the security of the Federal loan. If the noble and learned Lord is not able to give that reassuring information, then with great reluctance, and provided that he presses it to a Division, I should feel obliged to follow the noble Marquess, Lord Salisbury, into the Opposition Lobby.
§ 5.48 p.m.
§ LORD ALDINGTON
My Lords, I had not intended to intervene in this debate, but as I happen to be a banker and engaged in banking in two of the three Territories concerned I thought it would be right to try to clear up what I think may be a misconception in some of your Lordships' minds about the problem of security and of the External and Internal Debt. My noble friend Lord Salisbury covered the External Debt, I thought absolutely rightly, and I have nothing to add to what he has said. But on the Internal Debt I would say that the debt is internal from the point of view of the Federation, but immediately it gets split up among three Territories, part of it becomes external.
Who is going to guarantee the stockholder against two risks which will—after the end of 1965, I think, if not before—become attached to this stock and which were never there before? First, there is the risk of a fall in exchange, if in one or more of the Territories the face value of stocks become devalued for quite good reasons; and, secondly, the risk of exchange control. Who is going to cover the stockholder against these two risks which do not now belong to that stock and which could not reasonably have been anticipated to belong to that stock? I have not heard those points referred to in this debate and I thought they should be mentioned.
I have already informed your Lordships that I am a banker in these Territories and therefore have an interest to declare. Previously, my bank has held only a small amount of Federation stock. We shall now hold part of it in stock of a Territory in which we do not bank, which, I may mention to noble Lords who are not interested in banking, is quite a wrong use of the depositors' funds. These are small points, but they are important, and I would ask the noble and learned Lord the Lord Chancellor why they have not come out in the course of consultation. I do not think that there has been sufficient consultation on this very complicated matter. The noble Earl, Lord Listowel, mentioned the way in which the debt of the old Indian Government was divided between Pakistan and India. I think that there was close consultation there, and in the end the division was done largely on the basis of where the stock was 179 registered. The stock registered in Karachi and other places in Pakistan fell to Pakistan, and the stock registered in places in India fell to India. That, of course, removed most of the exchange control risks. None of that was done here.
Though I agree wholeheartedly in principle with the line taken by Her Majesty's Government, I believe that when events have happened in which Her Majesty's Government have a responsibility (and they have acknowledged the responsibility, and, indeed, in some quarters have taken credit for the way in which it has been done) we ought to look and see whether the Government should give some kind of qualified guarantee. If, on looking into this, it became right in the eyes of the Government, that there should be a guarantee against exchange control—the kind of thing which the Export Credits Guarantee Department does in the case of exporters—I hope that, just because they have presented this Order without such a guarantee, the Government will not rule out of their minds any idea of introducing such a guarantee at a later date. My plea is that there should be further discussion between the people who understand the rather intricate problems involved in splitting up the Public Debt of the Federation.
There is one other point that I would make to your Lordships: it arises from what my noble friend in front of me said. If, in fact, the Federation's stock quoted in London is a trustee security, what answer has the noble and learned Lord the Lord Chancellor to this point? Stock issued by the Government of Nyasaland would not be a trustee stock—at least, I cannot imagine that it would be. How, then, can a transfer of stock, as a result of legislative action taken by Her Majesty's Government, from trustee stock into non-trustee stock, be justified without any arrangements being made to help the stockholders? It may be that my noble and learned friend will say that the stock was not trustee stock in the first place. But if it is (and I assume that the noble Marquess is right), then I think that there is a point of real substance to be met.
My final point to your Lordships is this. I regret, as much as all your 180 Lordships do, the necessity for this Order, but I am sure that the decision to dissolve the Federation was rightly taken. It is because I am sure that that decision was rightly taken in the circumstances that I look with a sense of even greater urgency and importance to the manner in which that dissolution is conducted. I do not wish to subtract anything from the points made by my noble friends in front of me about the importance of good faith in financial dealings by Her Majesty's Government.
§ THE MARQUESS OF SALISBURY
My Lords, if I may answer that question, so far as I am able, I was not speaking from my own knowledge but from the document of the British Insurance Association. What the Association said was:The loans were authorised trustee investments.
§ 5.56 p.m.
§ LORD WALSTON
My Lords, it must be a long time since the House has listened to a debate on a matter such as this where, without exception, every single speaker from the Government side has spoken against the Government; and almost without exception they have been former Ministers. It must be an unprecedented occurrence, and one which I hope will not recur for a very long time. We on this side of the House do not oppose the aim of this Order. We should have been happy had federation been possible, but we accepted, long before Her Majesty's Government did, the view that federation was not possible, and we urged that it should come to an end. Therefore, we welcome the principle behind this Order. But when we come to the manner of the presentation of the Order, we are in wholehearted agreement with the objections which have been voiced so cogently on the other side.
I am not in any way blaming these civil servants whose job it was to try to bring this ill-fated Federation to an end. They worked hard, and they had an impossible task. But I am blaming the Government for giving them that impossible task, so that it was not conceivably possible for Her Majesty's Government to come before Parliament in good time and present a well-thought-out method of winding up the Federation, 181 with all these complicated and involved questions properly considered, so as to give ample time for both Houses of Parliament to consider these matters and to express their views. I believe that it is an abuse of the powers of Government that we should be confronted with this document at this stage and that no time should be given for due consideration of all these matters. The noble Marquess, Lord Salisbury, put forward the strongest point when he spoke of the powers of Parliament, as opposed to the powers of Ministers or civil servants. The greatest indictment in to-day's debate has been the point that Her Majesty's Government have treated both Houses of Parliament with complete disrespect.
If I may say so, we have a further example of that disrespect of this House in the absence, during the important speech of the noble Lord, Lord Colyton, who raised many questions of the greatest importance, of any senior Cabinet Minister and, in particular, of the Cabinet Minister who was to reply to this debate. I do not share the view of my noble Friend Lord Listowel that the noble and learned Lord the Lord Chancellor had gone out for a cup of tea. I am quite certain that he has very many important duties which go with his office, and I am sure that it was for this reason that he left the Chamber, just as I am quite sure that he has gone out now, at nearly six o'clock, the normal time for a whisky and soda, because he has important duties to perform. But I maintain that it is a very considerable disrespect of this House that in an important debate of this sort the Government have failed to supply a Cabinet Minister who is able to attend and listen to the points that have been raised. I do not think it is any excuse to say, as the noble Lord, Lord Colyton, said, that some of the points have been put in writing this morning. After all, if we were to conduct our affairs simply by correspondence with Ministers, why need we bother to come here and make speeches at all?
Is it the case that the Government have so made up their minds that they are impervious to any arguments, no matter from which side of the House they are put forward? Have they decided already that this document is to be bulldozed through, regardless of any of the arguments put forward; or are they prepared to listen and to pay some 182 regard to what is said? I think we need an answer to that question. Because if they are prepared to listen to the arguments, then it is the duty of the Government to see that there is a Minister here who is listening and who is prepared to answer. I say this with no disrespect to the noble Duke. He is not to answer; I wish that he were. But so long as we are presented with a Front Bench of distinguished gentlemen, but with no Cabinet rank, and when the Minister to reply has been absent during a large part of the debate. I maintain that that is a very grave reflection on the autonomy and dignity of this House and a very grave insult by the Government.
My Lords, in effect what we are being asked to do at the present time is simply to put a rubber stamp on a blank cheque. The Government have made out the cheque; they have decided to whom it is to be paid; but they have not yet had time to add up the total amount or to work out what the sum is. But they want to go away for their Christmas holidays, and they want to put this through before we come back. Therefore, we are to-day given the blank cheque made out to the payee, and we are told: "Put your signature on it, and in due course we, the Government, will fill in the essential details." My Lords, that is not the way to conduct business; nor is it the way to conduct Government. It is no good the noble Duke saying, as he did in his speech, that the Government bear no responsibility for this. This is a responsibility of the Government from which they cannot wriggle free under any pretext whatever.
There was one point in the speech of the noble Duke with which I found myself in complete agreement. He said that we are primarily concerned with the people of Central Africa. That is so, of course. We must not spend too much time on recriminations—and there is plenty to recriminate about—but must look forward to the future to see what we, as the people of Great Britain, still responsible for Central Africa, can do to fulfil our responsibilities to the people, regardless of colour or race, who live in those areas.
I agree wholeheartedly with the noble Viscount, Lord Boyd of Merton, that 183 there are two points here which are of major importance. We must first of all ensure that the best people, Europeans and Africans alike, remain in the territories in Central Africa now that there will no longer be a Federation; and we must ensure that there is adequate capital in order to develop the potentialities of those Territories. Those are our two prime responsibilities for the future. The auguries up to the present time are not good. How can we ensure that the best people remain when the Federal civil servants have been treated, and are being treated, in the shabby way that your Lordships have heard described both this afternoon and on previous occasions? I will not repeat the arguments that have been put forward by many noble Lords: I think enough has been said to make it abundantly clear that the treatment of these men and women is not of the sort that any good employer would be proud, and is not of the sort that would encourage any prudent employee to seek once more employment with similar people.
I will say no more about this aspect, except that, if we are sincere in saying that we wish good people to work in and help these Territories in the struggles they will have to face, this is not the way to set about it; it is not the way in which we shall get those good and devoted people to continue their work. So I would urge on the Government that they reconsider, if not because they feel it is their duty as employers or as those indirectly responsible for employment, and if not for reasons simply of moral responsibility, then on the purely practical grounds of the need for getting the best people in the future.
My Lords, what about capital? What are we doing now to help capital to come into these Territories? The Federal debt is the kingpin of this whole argument. Before going on to the general principles of it, let me make one point, which has not so far been mentioned, with regard to the allocation of the Federal debt. I do not know how this allocation was arrived at, and the document we have before us to-day is singularly silent on that point. But, in my opinion, and in the opinion of many others far better qualified to judge than I am, Northern Rhodesia has been 184 treated in a most inequitable manner over this. The Northern Rhodesian Government issued a statement the other day in which they said:Northern Rhodesia has reluctantly acquiesced in accepting a burden of more than £96 million"—that is what they have been given as their allocation of the National Debt. They say:This is more than five times the debt Northern Rhodesia had before the Federation was set up in 1953.And, according to the Daily Mail on December 17:This public protest by a Colonial Government against a British decision is believed to be unprecedented.I think we ought to hear more about how this debt was allocated, and what reasons there are for asserting that the allocation has been a fair one. But, setting that aside, even assuming that the allocation was a fair one, is this treatment of the debt a good way of encouraging more capital to flow into the Territories, now that they are individual Territories?
In the course of the speech of the noble Lord, Lord Colyton, there was an interruption by the noble Earl, Lord Sandwich—I am sorry he is not now in his place. The noble Earl asked why the security of the Federation might be considered better than that of the three individual Territories. Surely that is a simple question to answer. I am quite certain that if the noble Earl, Lord Sandwich, the noble Lord, Lord Colyton, and I went along to a bank in order to raise a loan we should have less difficulty if our joint financial and personal assets were put together as security than if each one of us went along and tried individually to raise an equivalent amount of money. Surely that does not need great explanation. It is not in any way a reflection upon the credits of the individual countries.
I believe that in at least two of the Territories their credit long-term—in fact, it is true of all three—is good. If I were younger, and if I had more leisure, I should have no hesitation to-day in buying a farm either in Northern Rhodesia or in Nyasaland, and in being pretty confident of making a reasonable living there. But I should have doubts (and the noble Lord, Lord Aldington, made this point, I think) as 185 to whether I should be able, for the whole of the next ten years, to bring out such profits as I made in those individual Territories. We know already to-day that both in Nyasaland and in Southern Rhodesia there are restrictions on the movement of capital. So far as I know, there are no restrictions on the movement of capital from the Federation; the money invested in Federal loans can be taken out. But I should imagine that money invested in Nyasaland and Southern Rhodesian securities alone could not, as the law stands at present in those Territories, be taken out. Perhaps the noble and learned Lord will elaborate that point.
There is far more to it than details such as this. We believe—and other noble Lords have made this point—that it is not only physical security that is important when dealing with transactions involving credit. Equally important are the good standing, the good will and the honesty of those who raise the loan or who sponsor the loan. Her Majesty's Government cannot get away from this fact. The noble Lord, Lord Balfour of Inchrye, quoted briefly from a statement of the noble Earl, Lord Swinton, in 1953. I would, if I may, quote rather more at length from that statement, because I believe it is of very great importance. It is published in a White Paper entitled The Federation of Rhodesia and Nyasaland, dated February, 1963. The extract from the statement from the 1953 Conference record, by the then Commonwealth Secretary said:At a time when we all want everyone to concentrate on making federation a success and bringing the union into the most real partnership, it would be odd to invite people to look to secession, but there is one absolutely overriding economic objection to this which rules it out from the very start. The Federation has got to raise loans and to raise them on federal assets and federal securities. Make no mistake about it—if you doubt my words ask anybody in the City of London—federation could never raise a penny of money by loan if it was not known whether federation was to continue, and therefore whatever views you take about what I may call the moral side of the thing, there is an economic argument to which there can be no possible answer.That is surely an explicit statement by a senior member of Her Majesty's Government at the time: that the loan to be raised in the City of London was to be based on the permanence of Federation. I put it to you, my Lords. I put 186 it to the individual members of Her Majesty's Government, and the noble and learned Lord who is to reply: if, as individuals, any noble Lords here had made that statement and then, at a later stage, circumstances made it necessary that the merger, the combination, whatever it was, which they had been advocating, and on the strength of which people had been persuaded to invest money, had broken up, to some extent at least, through the direct action of those same individuals, would they not feel morally obliged to those who had put money into this particular grouping or working together? Of course they would. The noble and learned Lord would; the noble Duke would; all members of the Government would; and so would all noble Lords in this Chamber.
We cannot have double standards in running our life. We cannot have one standard for private individuals, and a second and lower standard for Her Majesty's Government. If anything, Her Majesty's Government, if only out of respect to Her Majesty herself, must have a higher standard than individuals; and to suggest that an action which would be frowned upon and spat upon by individual members is good enough for Her Majesty's Government is not the way that this country should be run. So we hope, as other noble Lords have done, that Her Majesty's Government will reconsider this point and will do what still remains in their power—to establish the good name of her Majesty's Government for Our sake, for this country's sake, and also for the sake of Central Africa and the people there, so that it will be possible in the future for those countries to continue to raise the money which they so badly need and continue with their economic development.
Before that can be done, however, there are still uncertainties which must be resolved. Those uncertainties are, in particular, in Southern Rhodesia. People may not like what is happening in the other two Territories, but at least the outline of the political future is assured. We know about independence; we know the form the Governments are taking; we know the personalities of the people who will run those Governments. Some noble Lords may not have all the confidence in them that 187 we on this side have, and that I personally have, but at least there has been an end to uncertainty. But when we come to Southern Rhodesia, there is nothing but uncertainty. We do not know when they are to have independence; we do not know when they are to have a revised Constitution, and we do not know when they are to have majority rule. All we know—and we have it on the authority, not only of the noble and learned Lord, but also of the Prime Minister is that they will not have independence until they have majority government. But when that is to come we do not know.
While that uncertainty continues, there can be no possibility of raising money, no matter what is said in the City of London, and no matter what is said in this Chamber. Therefore, it is incumbent upon Her Majesty's Government at this stage, regardless of the political uncertainties in the future in this country, and the limited life of the present Government, immediately to call a Constitutional Conference and to bring the leading statesmen from Southern Rhodesia to this country to resolve all those difficulties. I would suggest that not only should the leading members of the Southern Rhodesian Government be invited—and, of course, the leading members of the African Opposition Parties—but also prominent and able citizens who have already given service to Southern Rhodesia; people who are now to some extent outside of politics, yet have the confidence of many of the Europeans, and of many of the Africans, too. I refer to such people as Sir Robert Tredgold and Mr. Garfield Todd, both of whom are men of the highest integrity and respected on all sides. I believe that gentlemen such as those should be invited to come to this country and help to smooth out the problems which confront it. While that is going on will be the time for Her Majesty's Government to repair some of the damage which has been caused by their hesitancy and their fumbling in this matter, by bringing about some rapprochement between these dissenting parties, and by helping that rapprochement with the promise of further credits and further capital to help the development of Southern 188 Rhodesia and to safeguard the interests of those who have already invested there.
I should not like to leave this subject without paying a personal tribute to many of those people who have worked so hard, although unavailingly, for the success of federation and for so many of the services, some of which, I am happy to say, are to be continued. In particular, perhaps because of my own personal interest in agriculture, I would pick out the Federal Agricultural Research Council, under the very able chairmanship of Sir Ronald Crane, as being one of the services which is beginning to make a real impact on the economic life of those Territories, to say what good work it has done and how much work, even after the breakdown of the Federation, it will be able to go on doing. I should also like to pay tribute to the Acting Governor General, Sir Humphrey Gibbs, who has worked so very hard and, I am afraid, to some extent thanklessly, in this very difficult task, has kept tempers as even as they could be under such difficult circumstances, and has given all of his very great ability to trying to rescue something out of this vain endeavour.
I believe that in the co-operation of such men with the various Territorial Governments, and with the leaders of those Territorial Governments backed by the majority votes in their country, lies the best assurance for the future of these three Territories; and that we all wish they will have. I sincerely hope that we shall hear from the noble and learned Lord the Lord Chancellor that he will be able to meet some of the very cogent points that have been raised, and that he will be able to give us hope that the Federation, when it soon disappears, will be succeeded by three Territories which have the full backing and support, physical and moral, of Her Majesty's Government.
§ 6.23 p.m.
§ THE LORD CHANCELLOR
My Lords, the noble Lord, Lord Walston, began his speech to your Lordships, I gather, by commenting on my absence, for the space of a few minutes only, from the Woolsack. I am sorry he thought it necessary to do that. The noble Lord, Lord Colyton, would have 189 had more legitimate grounds for complaint, but I am sure that he understood that I had to be absent for a short time and I took advantage of the fact that he had been good enough to give me notice of some of the points he was likely to raise. I am sorry I was not able to listen to the entire debate, but I do not think the comment of the noble Lord, Lord Walston, was justified.
I have listened to the greater part of the speeches and it is quite obvious that, depite the excellent exposition of this Order in Council by my noble friend the Duke of Devonshire, I have a great deal to deal with. I shall endeavour to deal as fully as I can with the subjects raised, though there are, if I may say so, a number of points which I think in another House we should describe as Committee points and which would take me a considerable time to deal with in the course of a speech. I will deal with these, if I may, in correspondence. I should like to start, if I may, with the question of how this Order in Council comes to be before your Lordships today, and then deal with the two main subjects of debate which I think have been touched on by nearly every speaker.
In relation to the first question I would say just this. Some comment has been made on the observation made by my noble friend the Duke of Devonshire with regard to the Government's responsibility for dissolution. Of course, the Government are responsible for the legislative Act which brings about dissolution. My noble friend's point was really that this was not a dissolution which we were seeking to impose against the wishes of the population, but rather a dissolution which we felt it our duty to bring about, having regard to the assessment of the political realities of the situation, as stated in paragraph 27 of the Report of the Victoria Falls Conference. That assessment has been confirmed fully, in my belief, by the speech of the noble Lord, Lord Alport, to which I would pay tribute.
It was because of that assessment that your Lordships passed the Rhodesia and Nyasaland Act, 1963, which provided for, among other things, the dissolution of the Federation, and the way in which that was to be provided for was by Order in Council. Of course, one always 190 knows that one cannot move amendments to an Order in Council, but that was the manner in which it was to be achieved. May I now just point out, too, while I am dealing with that Act, that the power to make an Order in Council for dissolution was wide enough to include powers dealing, among other things, with the apportionment and transfer of property rights, liabilities, et cetera, and other matters such as joint institutions, with the consent of the three Territories or any two of them. Secondly, by Section 2 of the Act power was given to bring in another Order in Council amending the first one, varying the first one, or dealing with further particular matters.
Having said that, I want, if I may, to remind your Lordships of Chapter 10 of the Report of the Victoria Falls Conference. Paragraphs 52 and 53 say this:It was obviously not possible for every consequence of dissolution to be settled and new arrangements implemented within a matter of months, but there was general agreement that given the necessary willingness and determination it should be possible to reach not later than the end of the year a stage at which the main range of Federal functions would have been, or would be in the position to be, transferred to the territories, including the transfer of fiscal powers. When that stage was reached would appear to be the appropriate time at which the Federal Legislature and Executive could be brought to an end.The Conference agreed to set a target date of the 31st December, 1963, for the dissolution of the Federation. This must be conditional on the substantial settlement by that time of such important general issues as the apportionment of the public debt and other liabilities and assets and the future of the Federal Public Service. All delegations agreed on the need for the greatest degree of collaboration and effort.I should like to pay my tribute to those who took part in this work. The target date being set at December 31, 1963, and the Report of the Victoria Falls Conference being of July, 1963, left, as the House will recognise, very little time indeed in which to deal with the many questions, some of them very difficult questions, which had to be resolved. But I would agree wholeheartedly with what the noble Lord, Lord Alport, said—which I think is confirmed by the agreement to set a target date at December 31—that if there was to be dissolution speed was of the 191 essence, not, it may be, to some individuals in this country, but speed was of the essence in the interests of the people who live in the three Territories. And I entirely agree with the words of the noble Lord, Lord Alport, that if by reason of our Parliamentary procedure, or for any other reason, we now postpone the date of dissolution, which failure to approve this Order must inevitably mean, we shall be striking a grave blow at the interests and frustrating the desires of the majority of people in those Territories.
The main object of this Order, the fundamental object, is to give effect to that target date. None of the three Territories is asking that it should be postponed. The Federal Government has not asked that it should be postponed; and the reasons I suggest are obvious—because they know that postponement of the date of dissolution would be disastrous to the interests of those Territories in the future. I say that in all seriousness. The noble Marquess, Lord Salisbury, has said he wishes to divide against this Order and hopes it will be postponed. He suggests it will not have any serious consequences. I completely disagree.
I have rather diverged from the particular point with which I wanted to deal, and deal, if I might, fully: the point raised by the noble Earl, Lord Listowel, and others, as to why it was this Order came before your Lordships at such short notice, and why the Committee of your Lordships' House was asked to perform a very heavy task at very great speed. If one looks again at the Report of the Victoria Falls Conference one sees the timetable set out. In fact, it did not prove possible to adhere to that timetable of work as outlined in that chapter, and, by agreement, a different procedure was adopted. The procedure adopted, and it is the only procedure which has made it possible to present this Order to your Lordships, was this: that the Committees would work together and we would send out from here someone to draft the necessary provisions of a draft Order in Council embodying whatever had been arranged or agreed upon. And those bits, as they were drafted, were seen by the representatives of the Governments and presumably communicated to the 192 Governments concerned. It was, of course, not until the task was completed that one could really put those pieces together to make them into the draft Order in Council. That process of putting it together was completed at a very late stage indeed. In fact, this Order was laid before your Lordships' House the very day it was received from the printers.
We had to take that course if we, for our part, were not going to fall down and fail to accomplish the target date agreed upon by the Territories as the target date they wanted, and that was the reason for the rush. It is easy to accuse Ministers, as the noble Marquess did, of seeking to bully Parliament or browbeat Parliament or by-pass Parliament. That is an easy sort of accusation to make. There is no justification for it. We should have liked to give your Lordships a great deal more time, but if we, for our part, were not to fall down on the target date, we had to lay the Order as soon as we could and ask your Lordships to consider it before the House rose for the Christmas Recess.
Those are the facts of the situation. And there is another fact in relation to the contents of the Order in Council to which I want to draw your Lordships' attention. With, I think, one—maybe two, but I think only one—exception, to which I will refer, the draft Order in Council constitutes a draft which has been agreed between all the Governments; and the one exception constitutes a draft agreed between four out of the five Governments. The Federal Government on that particular issue reserved their position; but I will come to that later.
§ LORD COLERAINE
My Lords, I am much obliged to the noble and learned Lord for allowing me to intervene. I wonder whether he could enlighten me on one point. He said that if the Government were to keep their word to the Territorial Governments, then this procedure, the speeding up of the Order in Council, had inevitably to be followed. But what was the word that the Government gave? According to the Report of the Central African Conference, paragraph 57, what they said was that provided these agreements had been 193 reached at the time stated—that is, provided the agreements on the debt and everything else had been reached by mid-October—then they could fulfil the date at the end of the year. But the agreements were not reached by mid-October but the end of November.
§ THE LORD CHANCELLOR
The noble Lord has raised the point on paragraph 57 to which I was going to come and which Mr. Caldicott referred to in his speech. I am obliged to the noble Lord for reminding me. But I would ask him to bear in mind that in construing that paragraph you really ought to read the timetable chapter to which it is attached. It is certainly true, and indeed was the fact, that all the Governments were to have, and did have, an opportunity of considering what was decided upon at the meetings of the Committee. I do not share the noble Lord's view that there has been any breach of any obligation entered into under paragraph 57 when correctly understood and read in its context. If the noble Lord and Mr. Caldicott are right, then it means, on their interprepretation of paragraph 57, that the Federal Government would have a right of veto to prevent the dissolution from ever taking place; because his argument leads to the conclusion that unless and until you have the agreement of all five Governments upon everything, you cannot have the Order in Council and therefore you cannot have the dissolution. I venture to assert that that was never within the contemplation of those who engaged in the drawing up of the Report of this Conference, and really, taken in this context, it is not a proper construction.
§ THE EARL OF LISTOWEL
My Lords, may I draw the noble and learned Lord's attention to the words at the end of paragraph 57 of the White Paper. The words there written and this was signed by Mr. Butler—are that the Governments…would be given an adequate opportunity of commenting on their proposed provisions.That is, the provisions of the legal instruments. There is no suggestion of a veto.
§ THE LORD CHANCELLOR
The veto point isthe legal instruments necessary to give effect to the decisions agreed upon by the governments.194 As to the second point about adequate opportunity of commenting upon the provision, I would say this to the noble Earl. The draft provisions, not attached together but dealing with each Chapter, were seen, and indeed in all cases except one were agreed, by all representatives of the Government and the Governments concerned. In that one case the Federal Government were fully aware of those provisions, so they did have an adequate opportunity of commenting on the proposed provisions. I can give your Lordships an instance, if one likes, of the provisions with regard to Federal judges. I think it was some date early in November when these provisions were agreed. The Federal Government stated that they did not feel entirely satisfied about it, but, apart from that, the comment upon it has not yet, as I understand it, been received.
I have endeavoured to deal as shortly as I can with the reasons why the Order in Council has come before your Lordships to-day. If one recognises that procedure—that the Governments were to agree the contents of this Order—then it seems to me quite impossible and impracticable to adopt the noble Marquess's suggestion: that when the agreement of the Governments has been obtained to the content of this Order it should then be embodied in a White Paper and brought to this House, so that the House should be able to suggest amendments to that White Paper, and the draft Order, which would then have to go back to be agreed between the five Governments. If speed of dissolution was of the essence of the day, in the interests of the people of Northern Africa, that procedure would have denied the solution, and denied the separation of these three Territories for an infinite duration of time. Surely it is an unusual procedure.
Having explained that, and having explained why, with the greatest reluctance, I have to disagree with your Lordships' suggestions, I must make it plain that Her Majesty's Government cannot agree to the postponement of this Order, because that would have to be, not just for a few weeks, but probably for a good deal longer than that; and it would certainly mean postponement of the date of dissolution. On that matter the noble Lord, Lord Alport. 195 is the greatest expert of all of us, and your Lordships have heard his views as to the effect of any postponement.
May I now come to the question which has occupied your Lordships for a good deal of the debate—
§ THE MARQUESS OF SALISBURY
My Lords, do I understand the noble and learned Lord to say, quite clearly and definitely, that there can be no postponement of the Order in Council?
§ THE LORD CHANCELLOR
My Lords, I thought I had made it quite clear and definite that there can be no postponement of this Order in Council, for the reason—I make it quite clear—that any such postponement means the postponement of the date of dissolution. I did say to your Lordships—and I ask the noble Marquess to pay attention to this—that there is power under the Act, as your Lordships will see, to make further Orders in Council amending and varying this Order, but of course not varying the date of the dissolution. That is part of the power of Parliament, of the Government, if they can get the Order approved under this Act.
I come now to the contents of the Order. In addition to dealing with dissolution, it was obviously contemplated at the Victoria Falls Conference that the Order in Council itself would deal with the division of assets and liabilities, as indeed this Order does. The noble Earl, Lord Listowel, asked me about this matter. The division of the shares of liability on the stock is proportionate to the division of the assets; so that, if we take the corpus of the whole assets of the Federation which were behind the Federation stock, the stock which now goes to each Territory is backed by the same proportion of assets. It was obviously right and inevitable that the Order in Council should deal with that distribution.
A great deal has been said in the debate about underpinning the stock and about guaranteeing it, and things of that sort. I want to say to your Lordships—I may be wrong—that I have never seen an Order in Council guaranteeing stocks; I have never seen an Order in Council doing any of the underpinning arrangements which your Lordships have been discussing this 196 afternoon. What your Lordships are being asked to do is to approve the contents of this Order in Council. Of course there are a number of matters which have to be dealt with on dissolution, and are dealt with by arrangement and by administration, but which do not have to be embodied in an Order in Council; and it may well be, because there are some matters still to be dealt with, that we may have to consider in your Lordships' House a further Order in Council. But it is not every matter which has to be dealt with in an Order in Council. All I am asking your Lordships to do to-day is to approve this Order in Council.
I come to the question of a guarantee of this stock. It is an interesting fact that not even the Federal Government (I am not wishing to criticise them at all) have asked that the British Government should guarantee this stock; indeed, I think the only request for anything in the nature of a guarantee has come from people in this country and in your Lordships' House. I answered questions on that point the other day, I think only about a week ago, and I had to say that there was no ground here for giving a guarantee to stock which had never been subjected to a guarantee by the British Government. The view has been challenged in some respects to-day. I must say that you can approach this question in several ways. You can approach it on the assumption (as I think the noble Lord, Lord Balfour of Inchrye, did) that the value that would attach to the stock when held by the individual Territories would be less than the value attaching to it when it was stock in the Federation. But I wonder whether that is so, if we take into account the likely course of events had we endeavoured to hold this Federation together against the wishes of the majority of the people within the Federation. I should have thought there might then have been disunity, indeed strife, and all kinds of trouble. I wonder, then, whether this security of the Federation or its credit would have stood so high. That is one factor which has to be taken into account.
My Lords, the first fact which, in my submission, has to be borne in mind is, as I told your Lordships in reply to a Question on December 10, that the three 197 Territorial Governments—and this, of course, includes Northern Rhodesia—have accepted in full, in agreed proportions, based on their respective inheritances of the assets of the Federation, the debt obligations now resting on the Federal Government. All three Governments have undertaken this liability in a spirit of determination to maintain their financial standing and to meet their own due obligations. This has been made clear in a recent statement by the Southern Rhodesia Minister of the Treasury and also by the Northern Rhodesia Government who have informed the British Government categorically of their intention to meet their obligations.
It has been alleged that this apportionment of debt as between the Territories does not go far enough. The argument is, I think, that the interests of the stockholders must necessarily suffer in consequence—though I am not at all sure, however, whether that will prove to be the case. Then the argument goes on that there is need for Her Majesty's Government, if not to guarantee, at least in some way to underpin the liabilities. The noble Lord, Lord Coleraine, went so far as to suggest that the reputation of the Government for good faith was involved in this matter. It is true that the Federal Government have made strong representations, not for a guarantee but for some form of underpinning. I can tell your Lordships that the representations they made were most carefully examined before the decision to proceed with the Order was reached. We have also given the fullest consideration to similar representations from stockholders in this country and in Central Africa.
The main contention is that this Order, by laying down the proposed division of debt, fundamentally alters the nature of the existing security. I have dealt with that I hope sufficiently, but I must say that I do not think any case has been made out for a United Kingdom Government guarantee for these stocks. Throughout the months of negotiation which the British Government consider have resulted in as sound arrangements for continuing security to the stockholders as could reasonably be obtained in the realities of the situation in Central Africa, we have had the interests of the stockholders very much in mind. The possi- 198 bility which has been suggested to-day of the Territories assuming joint and several responsibility for the Federal Debt was not ignored, but such an arrangement was neither practicable nor wise. As the Southern Rhodesia Minister of the Treasury said in his recent statement:…dissolution of the Federation cuts across the whole concept of joint and several responsibility.No Territory could be expected to pledge itself in the new situation to meet the liabilities of the other two Territories. I believe that joint and several liability could be interpreted only as a reflection on the credit and good faith of each of the three Territories.
What the Territories are prepared to do is to pledge themselves to meet the share of the total obligations which they are each about to assume. I really do not think there is any reason to doubt their determination to honour this pledge. In those circumstances, I feel that the suggestion that Her Majesty's Government should underpin those arrangements would not only cast doubt upon the ability and perhaps the intentions of the Territorial Governments to honour their obligations, but might also work seriously to the disadvantage of those Territories.
It has been suggested that an obligation rests upon Her Majesty's Government because, for example, the London debt of the Federation ranks as trustee stock and was issued in this country through the Bank of England. It is the normal practice either for the Bank of England or for the Crown Agents to act as issuing house for Commonwealth issues in London. This surely is well known to investors, and it has never been the case that any guarantee was thereby implied. The Federal stocks issued on the London market will remain trustee stocks but, as has been said by the noble Marquess, it was explicitly stated in the prospectuses when the loans were raised that they carried no British Government guarantee.
§ THE MARQUESS OF SALISBURY
Yes, but the noble and learned Lord has not said that that was at a time when circumstances were quite different; that is to say, when the Federation was in existence—which it is not now.
§ THE LORD CHANCELLOR
Circumstances change with regard to every investment. Nor is there anything in the suggestion that has been made that the British Government are discriminating in favour of certain kinds of loans, by guaranteeing loans made to the Federation by the International Bank. Such loans are the only exception to the general rule that Her Majesty's Government do not attach their guarantee to the borrowing of other countries, even our own Dependencies. In the case of the International Bank loans, however, it is necessary under international agreement to provide such a guarantee in respect of borrowing by Dependencies. The Federal loans from the International Bank were guaranteed under this arrangement, and will remain so. But there is no change in the situation as between such loans and other Federal debt which has never been guaranteed.
The noble Lord, Lord Balfour of Inchrye, put forward a suggestion that something might be done upon the lines of what was done in 1934 in Newfoundland. As the noble Lord, said, there was really no analogy. There the United Kingdom really assumed control of the country and therefore, of course, assumed obligations in relation to its debt. It was an interesting suggestion which has been carefully considered.
Having said what I have had to say about the guarantee and about joint and several liability, which is not acceptable to the Territories, I myself do not think that the case for a guarantee is made out. I would ask your Lordships to bear in mind—and this has already been communicated to the Territories, and, of course, covers the whole field of the financial position of the Territories —that Her Majesty's Government will be ready to enter into discussions with the Southern and Northern Rhodesian Governments as soon as may be conveniently possible with the specific object of establishing, in the light of the nature and extent of the financial burden assumed by Southern and Northern Rhodesia and the resources available to meet them, the reasonable needs of the Territory and the means whereby the burden might be lightened, including British aid where necessary, in accordance with Mr. Butler's undertaking in 200 paragraph 27 of the Victoria Falls Report.
The Government of Southern Rhodesia have indicated that they expect to be ready for a meeting with us within six months. At such a meeting, when the dissolution procedure transfer has taken place and there has been time to review the whole position, then the whole question of the Territory will be subject to review in relation to the specific undertaking that has been given. That is my answer to your Lordships on this part of the argument.
I do somewhat resent the suggestion that Her Majesty's Government are not concerned with the interests of British overseas investors. The Treasury fully appreciate the importance of such investments; and it is our desire to secure that British investors throughout the world get fair treatment, and the Government are willing whenever practicable to support with their best endeavours British investors' legitimate claims. Our ability to do so should not be underrated.
So I would say, in conclusion on this matter, that it would not be right now to give any guarantee of the stock for which responsibility is now taken over by the three Territories; a joint and several liability by all three Territories is really not practicable. Finally, I would ask your Lordships to bear in mind what I have just said about the possible meeting in a few weeks' time with the Southern Rhodesian Government. I ask your Lordships to remember that it was stated at the Victoria Falls Conference that the basis of apportionment of the Federal Debt does not prejudice consideration at a later stage of the capacity of the three Territories to carry the burden, and to bear in mind the statement which I have made to your Lordships on that matter.
I want to say a little about the Federal Public Service. I appreciate the concern felt by your Lordships about it, but it is important to bear in mind that the provisions contained in the Order affecting Federal public servants are those agreed and announced last September by all the five Governments for the future employment, retirement, terminal benefits and pensions of past and present officers. Your Lordships may take the view, as did one of your Lordships, that the 201 United Kingdom Government are being mean about this. I ask your Lordships to bear in mind that all five Governments, including the Federal Government, agreed to those provisions.
These arrangements were described by my noble friend Lord Lansdowne in the debate on the Address on November 14, and on November 27 I myself dealt at some length with essentially the same criticisms as have been raised to-day. I explained then that the British Government could not accept the claim that Federal public servants should be afforded lump sum compensation in the same way as members of Her Majesty's Overseas Civil Service, because the Federal Public Service has always been regarded as a locally based service on local terms, and containing no officers with what might be called expatriate status. Moreover Her Majesty's Government are under no commitment to pay compensation of this kind, except to members of Her Majesty's Overseas Civil Service for whom they accept responsibility.
I also explained that it seemed the right course, when considering what claims to recompense individual officers might have in the circumstances of dissolution, to distinguish—as the agreement between the five Governments does—between officers who might decline to accept continuing employment possibly in their existing posts in their home Territory, and officers who became genuinely redundant because of dissolution. Representatives of the Federal staff associations came to London a few weeks ago and were concerned to press similar criticisms. They were informed by my noble friend the Duke of Devonshire, who talked with them on behalf of the Commonwealth Secretary, and later by letter from the Commonwealth Secretary himself, that the British Government saw no reason on these grounds to suggest to the other Governments concerned the reopening of the agreement reached. My Lords, I would repeat that we regard this agreement as a fair and equitable settlement for the individual officers concerned, considering the terms of their service, the circumstances of dissolution, and the desirability of securing that as many Federal officers as possible should be able to continue their careers in one or other of the three Territories when the major departments 202 of Government, operated previously by the Federal Government, reverted to Territorial control.
I would also draw your Lordships' attention to the provisions of the Order designed to secure the terminal benefits and pensions of officers for the future: the establishment of a new pension fund to be invested in independent trustees domiciled in the United Kingdom. I was asked where the fund would be domiciled apart from the trustees. I am not in a position to give the answer to that question at this moment—it may not have been settled—but I will communicate it to the noble Lord as soon as I am in a position to do so. In addition, there is a pensions agency to administer the pensions and terminal benefits, which will in fact be the Pensions Officer of the Southern Rhodesian Government. The House will recall that the British Government have agreed to share fairly with the three Territorial Governments in making good any deficit to the fund to the extent necessary for honouring the terminal benefits.
There are a number of further matters affecting the Public Service not covered by this agreement, or by the Order, which have been the subject of recommendations by the main Dissolution Committee since this draft Order was laid. They are concerned with the treatment of cases of hardship among redundant Federal officers, which all of the Governments agreed should be sympathetically considered; with detailed arrangements for dealing with any future deficiency in the pensions fund; with proposals regarding the currency in which pensions should be paid; and with dealing with taxation problems in connection with pensions. It will be our purpose to reach conclusions on these outstanding matters in consultation with the other Governments as quickly as possible. In doing so, we shall take into account representations left with the Commonwealth Secretary by the Federal staff associations on points which, in their opinion, the Governments could be asked to consider further without reopening the agreed settlement. My Lords, I have dealt fairly fully—
§ LORD COLYTON
My Lords, before my noble friend on the Woolsack leaves that point, will he say a word or two about the pensions and compensation 203 for the Judges of the Federal Supreme Court, which matter is covered by the Order, but which was not accepted by the Judges and was not accepted by the Government?
§ THE LORD CHANCELLOR
I have reason to suppose that the points of difference have been eliminated, but I do not think I am at liberty to go further than that at the present moment. I am hopeful that they have been eliminated. I was not aware of the position about the Federal Judges. I knew that the Federal Government—which was the other matter I had in mind—had not agreed but in fact had not commented or made any alternative proposals.
My Lords, I hope I have traversed now the main issues raised in this debate. I should like to say this in conclusion. I cannot, of course, speak for the Labour Party, but I think that all of us who remember the situation when the Federation started, all of us who played any part in politics—Lord Boyd of Merton and the rest of us—had great hopes that that grand design would grow to fruition. I do not think it was a case of the Monckton Commission pulling up the plant as was suggested. I think the causes may lie deeper than that, until the situation was reached which my noble friend Lord Alport described so clearly to us. I believe it was right for us, with our responsibilities, which I am not seeking to shirk—nor is anyone—then to seek to bring about dissolution to meet the wishes of the majority of the population. There were times, and I am sure they are within your Lordships' memories, when it looked impossible to proceed with agreement, when it looked impossible to get representatives of all the Governments sitting round the same table, as they did at the Victoria Falls Conference. There were moments of despair. And yet how vital was it, in the interests of Central Africa, that, if there was to be dissolution, the dissolution should be brought about by agreement and with the least possible friction!
We have now reached a stage, after the work of the Committees appointed under the Victoria Falls Conference, where the Territories are saying, and the Federation are not saying that it is 204 not, that the time has come, the stage has been reached, when effect should be given to dissolution. It is because of that, and because of the serious results of not giving that effect and of not playing our part when the Territories and the Federation have played their part to carry out the agreed programme of the Victoria Falls Conference, that, despite all the criticisms that have been put forward in to-day's debate, I ask your Lordships seriously to consider the wisdom now of dividing on account of the position of stockholders, of dividing with the consequences in Africa that such a Division would entail; and bearing in mind, too, that it may well be that we shall have opportunities of further discussion about the processes which are entailed in dissolution.
It may be—I do not know—that we shall have to consider later a supplemental Order in Council. But, my Lords, because of the points raised about the stock, points which would not need to be covered by the Order in Council at all, let us not refrain now from carrying out the obligation which rests upon all of us of honouring what was agreed upon at the Victoria Falls Conference.
§ 7.9 p.m.
§ EARL ALEXANDER OF HILLSBOROUGH
My Lords, I think it is due to me, having listened to many of the speeches, and especially to the moving and challenging speech of the noble Marquess, Lord Salisbury, to state my position and that of my colleagues when it comes to the question of dividing or not. The noble Marquess quite rightly referred to the agreement to which he was a principal partner with the late Lord Addison, on what should be the attitude in regard to delegated legislation in this House. We have often had reason to thank the noble Marquess for the agreement he entered into then, and we may well be thankful to him on other occasions, if we do not now make a precedent of breaking that agreement. I think that is fundamental to the whole future conduct of the House. I should like him to observe—I am sure he has observed —that we laid no restrictions whatsoever upon the members of my Party as to the views they might express upon this delegated legislation with regard to dissolution, and they have said just what 205 they think about the matter. But I think I should not be doing my duty as Leader of the Opposition, in the light of the very agreement about which he was so helpful to us in the making of our delegated legislation, if I were to do anything else than ask my colleagues to abstain.
§ 7.11 p.m.
§ THE MARQUESS OF SALISBURY
My Lords, I hope that I may be allowed, with the permission of the Leader of the House, to say a word.
§ THE MARQUESS OF SALISBURY
I am in the hands of the House. If the House does not wish me to speak again, I will not.
§ THE MARQUESS OF SALISBURY
My Lords, nobody in my position to-night can speak without a very grave sense of responsibility, and I can promise your Lordships that I will do that, although I shall be extremely brief. The noble and learned Lord the Lord Chancellor has made a very full and interesting speech, but he did not, to me, give a satisfactory answer on what I regard as the two main issues of the debate. In all the years I have been in the. House I have never heard a greater unanimity—and from all parts of the House—than has been shown on these two issues. It is, in my view, the clear view of the House that the present proposals in the Order in Council with regard to both the External and Internal Debts will not do; and that the present proposals with regard to the Federal Civil Service also will not do. It was the view of the House that the proposals of the Order in Council on these and other matters that have been raised should be taken back and modified. That was said in speech after speech from the Conservative Benches.
We asked whether the Government could give that assurance. That is the main question which the House has been asked this afternoon in this debate. The answers to that question, and to certain other questions on which the House had hitherto not been consulted at all, I regard as unsatisfactory. We asked whether the Government could give an assurance that the Order in Council would be taken back and those proposals modified.
206 I questioned the noble and learned Lord the Lord Chancellor in the middle of his speech—I think I was justified in doing it—whether he was saying that there could be no postponement of the Order in Council (and that means no modification of the Order in Council, either on these points or on any others). And, in reply, he said quite clearly, quite definitely and quite frankly, that there could be no postponement. I listened to the rest of his speech, and I did not find any immediate comfort from it: just a number of vague promises given for the future—and, if I may say so, given far too late. If these things had been said a few weeks ago, they might have been valuable. Now they are too late. I am very sorry—I do not know what noble Lords on this side of the House will do—but, in these circumstances, I am afraid that I have no option but to divide the House.
§ 7.15 p.m.
§ THE MINISTER WITHOUT PORTFOLIO (LORD CARRINGTON)
My Lords, I think it will be a sorry day when your Lordships refuse to listen to the noble Marquess. At the same time, and particularly since (as he knows very well) he was completely out of order in making his last observations, I do not think it would be right, if I may say so, to allow him on this occasion to have the last word. I feel that perhaps it is a little awkward for me, because I have not been able to be present in the House all this afternoon and to hear all the speeches, though I did listen to my noble friend Lord Salisbury and to several other speeches, including that of the noble Lord, Lord Walston, and finally to the very powerful speech made by my noble and learned friend on the Woolsack.
All I want to say can be said in a very few sentences. I do not wish to go into the matter of guaranteeing the loan, into the question of pensions for the public servants or into anything of that kind, since these matters have been dealt with very well by my noble and learned friend. I should have thought it was open to the noble Marquess and his friends, if they so wished, to put down a Motion after Christmas to discuss these things again; and if he then convinced the House and the Government that he was right and we were wrong, it would be possible to move an Amending Order in Council.
207 But what I want to say to the House, and say very seriously, is this. I would ask your Lordships to consider what would be the consequences of rejecting this Order. In the first place (I do not know what the timetable is), it may well be that this Order has already been passed in another place; and in any event it may be passed in another place later to-day. I think we should be careful before we find ourselves in conflict with another place. Secondly, by rejecting this Order we should, in effect, be keeping the Federation in being—something which nobody now believes is possible, or even desirable. Certainly, as the noble Earl the Leader of the Opposition says, the Opposition could not vote in that sense, since they never wanted the Federation and do not want it now. If we were to reject this Order in Council, I have a feeling that all the issues which over these last months have been settled by the three Governments concerned and the United Kingdom Government might well be reopened, involving further delay.
Then, my Lords, there is the question of the effect on African opinion—and not, perhaps, only on African opinion, but on other opinion as well—of the rejection of this Order by this House. I do not believe that it would be understood; and I do not believe that the motives which I know move my noble friend Lord Salisbury to vote against this Order would be understood. I think it would be taken that Her Majesty's Government were going back on their word, and I do not believe that that would redound to the credit of this country, of Her Majesty's Government or of this House. It would be interpreted as a deliberate act to continue a Federation which nobody now believes to be possible. I ask your Lordships most earnestly, before you vote this evening, to consider the consequences of your vote, because I believe this to be a most serious matter.
§ On Question, Motion agreed to.