§ 3.17 p.m.
§ THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE)
My Lords, when my noble friend the Foreign Secretary made his statement on Egyptian claims on December 11 he described five proposals which he was putting before Parliament, and this Order that I am now asking your Lordships to approve covers the first two of those proposals. As your Lordships will remember, the first and most important one was the new Schedule of compensation payable to owners of Egyptianised property, and together with that there go the claims for damage inflicted upon desequestrated property which has been returned to its owners.
Under this new scale which my noble friend read to your Lordships, 100 per cent. is payable on the first £10,000 of each claimant's assessed losses; on the next £40,000, the amount payable is 75 per cent.; on the next £450,000, 50 per cent.; on the next £500,000, 30 per cent.; on the next £1 million or more, not exceeding £2 million, 25 per cent.; and on any claim exceeding £2 million, 20 per cent. That means that all claims up to £10,000 receive the whole of the amount claimed; a claim of £50,000 would receive £40,000; a claim of £500,000 would receive £265,000; a claim of £1 million would receive £415,000; a claim of £2 million would receive £665,000. Above that the compensation payable would be at the rate of 20 per cent. on the excess over £2 million; but these larger claims, of course, benefit substantially by the increased rates upon the smaller brackets of the claim when it was aggregated. As my noble friend pointed out, this new scale will give 100 per cent. payment to over 90 per cent. of the claimants; because 90 per cent. of the claims are up to or less than £10,000, and the increases to other categories will be substantial.
703 My noble friend's second proposal was to have an Order in Council that will enable the Foreign Compensation Commission to pay on the same scale claimants in respect of certain additional claims which, though arising out of the Suez incident, could only be registered and could not receive compensation under the Order in Council which followed on the Financial Agreement of 1959. My noble friend estimated that this would cost an additional £1 million for the first proposal—that is, the main increases in the schedule of payment rates he estimated at £5½ million. We have in fact combined these two proposals under one single Order in Council. I must apologise to your Lordships, because the wording of the headnote which was printed in this draft Order was found to contain a technical error in the description of the Parliamentary procedure, and it has therefore had this typed substitute pasted over it as there was no time to reprint the whole draft Order. That is the reason why, in order to save time, this correction slip has been put on.
In order to save time, the parts of this Amendment which introduce anything new that we have not seen already are printed in italics. The first of these is found in Article 2, which is on the second page, under Part II, which provides for the payment into the Egyptian Compensation Fund of the monies provided by Parliament and paid to the Foreign Compensation Commission under the Foreign Compensation Act, 1962. That is the Act which was necessary to provide for the "topping-up" provision. Then in Part III of the Order, the first paragraph introduces the new Schedule on the basis of which it is proposed that final payments out of the Fund should be made, and the Schedule itself is on page 6. I have already recited its contents to your Lordships.
Article 5, which deals with cases where interim payments of compensation have already been made under the Interim Distribution Orders, is, I think, purely mathematical. Finally, there is Article 7, which provides for the payment of compensation in respect of those claims which at the present time could only be registered under Article 8 of the Foreign Compensation Order in 704 1962. Paragraph (a) of Article 7 makes eligible for compensation all claims registered up to December 31, 1962, of which there are 983. All these claims have been carefully examined by the Foreign Office. Most of them, as I think the Foreign Secretary indicated to your Lordships in December, relate to furniture and personal effects which claimants sold under duress or on their departure from Egypt, but there is a small number of other types of claims, and we are satisfied that they are all claims which should properly be compensated from the Egyptian Compensation Fund. I beg to move.
§ Moved, That the Foreign Compensation (Egypt) (Final Distribution) Order, 1963, be approved.—(The Earl of Dundee.)
§ 3.24 p.m.
§ LORD BALFOUR OF INCHRYE
My Lords, the Order uses the word "Final"; therefore it cannot be amended, and your Lordships must either accept or reject it. It seems to me that the curtain falls this afternoon upon a very melancholy series of events, because we are putting a Conservative Government seal on a grave injustice to many thousands of our fellow citizens. I should be less than frank if I did not say to the Minister that I am convinced that if it had not been for pressure and support, both in another place and in your Lordships' House by many of your Lordships—not least the noble Lord, Lord Killearn, who is away to-day—we should not have obtained the degree of assistance given by this Order, which has been so briefly moved—and understandably so—by the Minister of State.
Before your Lordships decide on this Order, I think it is necessary to put two things upon the Record. The first is that innocent citizens, both in Egypt and in this country, are being deprived of what is theirs by the joint action of Her Majesty's Government and the Egyptian Government as a result of a policy—to which I gave full support at the time of Suez—the declared object of which was the safeguarding of lives and property. The second point which I should like to put on the Record is this. Some Ministers in Her Majesty's Government cannot feel very proud or happy to-day at the repudiation and evasion of pledges clearly given to Parliament. I must remind your Lordships of the Prime 705 Minister's pledge on April 11, 1957, when he used these words [OFFICIAL REPORT, Commons, Vol. 568, col. 1296]:It is the policy of Her Majesty's Government to secure from the Egyptian Government restoration of those assets in full, or alternatively complete compensation.There is only one other of many pledges which have been whittled away, or which have been evaded, of which I should like to remind your Lordships, and it is this. The then Foreign Secretary, when questioned about the security we held of some £90 million of Egyptian blocked sterling, said [OFFICIAL REPORT, Commons, Vol. 570, col. 584]:The blocked accounts are our security for the claims of British subjects against the Egyptian Government. We have no intention of whittling away that position.I know that the Minister of State is not the Minister responsible, and that he has been speaking on behalf of those more responsible for the default by the Government.
It is necessary also to record the facts of those who are affected. There are many thousands who have been forced to live upon loans advanced by Her Majesty's Government. Their capital has been used, and to a large extent is now having to be repaid. Others still have properties in Egypt—some of it returned, some not. Much of it has been despoiled and damaged and hung about with built-up Egyptian tax charges and Egyptian ordnance regulations, the main purpose of which is to prevent that property from going back to the rightful claimants. All those who still have assets in Egypt are enabled to get out only a very limited amount in sterling. Now the Government come forward with this distribution scheme, and in it is embodied a new principle: that if you are suffering an injustice and have a small claim, it can be met; but if you have a big claim, then it must be whittled down.
The noble Earl, as has been done before in previous debates, made much of the fact that 90 per cent. of the claimants are to get 100 per cent. of their claims. That certainly is true and is good for the smallest claimants, but small people are involved with the larger claimants. Many of the larger claims are for companies which are to a large extent owned by small shareholders. Therefore, if you are a direct claimant 706 in a small category you get paid in full, but if you are an indirect claimant, but still a small man, you are to get only a proportion of your claim. Mr. Julian Crossley said, in a very powerful letter to The Times, that it is an extraordinary new principle which the Government have introduced as regards compensation. The Government say that the reason for this is that it cannot afford to be fair and just. It would need another £43 million, which the Government are unwilling to ask the taxpayers of this country to bear. In fact, in the scales the Government are weighing money against honest and just treatment of certain citizens. The Prime Minister has called for acceptance of change in our national life—and quite rightly. Here we have change, though not the sort of change we really like. Here we have a change, that of probity and justice giving way to considerations of hard cash.
I will say no more, feeling, as many other of your Lordships feel, very deeply about having to put the seal of Parliament upon this injustice, but I would ask the Minister one question. A scale is laid down here for compensation. As I understand it, approximately £35 million has flowed into the fund: £27½ million from Egypt; £1 million of interest; £5½ million in what I call "topping-up"; and an additional £1 million; making £35 million. Against this are the Egyptianised claims for some £65 million, and a further conservative estimate of £15 million for sequestration losses and damage to property. Beyond this there are probably further claims still to come in. If the "topping-up" monies, plus the other monies which I have cited to your Lordships coming into the fund, are insufficient for the scale laid down by the Order in Council, one of two things must happen. Either the scale of payments must be reduced or the Government will have to increase the figure of £5½ million. In that event, may I ask the Minister whether he will make very clear that it will be the Government who will make up the deficiency and that the scale laid down will not be reduced?
There is one further aspect which does not come directly under this Order in Council, but nevertheless I think that your Lordships will agree that we are entitled to ask and to seek information about it. There is a further £2½ million 707 which the Government are providing to make good claims in respect of damage or loss to British nationals on their sequestrated property. The value of the sequestrated assets blocked in Egypt, and thus to all intents and purposes lost to their owners who are unable or unwilling to go back, is estimated to be well in excess of £20 million. Therefore, the amount of £2½ million which the Government have set aside to make available for grants in respect of all such assets is in no way able to be considered an adequate provision, and it highlights the blatant inequality of the treatment between those British nationals who have had their property Egyptianised and those who have had their property sequestrated. My question is: how have the Government arrived at the figure of £2½ million?
§ THE EARL OF DUNDEE
My Lords, I wonder whether I might interrupt my noble friend. I will not answer the question until later, but I think he has misapprehended the data. This £2½ million is not given in order to pay for damage to sequestrated property returned, which is what I thought my noble friend said. This £2½ million is given to a new committee for the purpose of making compassionate payments to people who have been allowed by the Egyptian Government to transfer £E5,000 from their own money in Egypt, which belongs to them. but are considered on compassionate grounds to be deserving of further payment from the British Government because, although they may have a good deal of money in Egypt, they can get only £E5,000 out.
§ LORD BALFOUR OF INCHRYE
My Lords, I am sorry if I did not make myself clear, but I am fully charged with the facts the Minister has given. There is probably legitimate claim for £20 million, but do not let us argue as to what the figure is. On what basis is the £2½ million arrived at? Is it just that it might have been £2 million, or it might have been £3 million? There must be some logical basis in relation to the likely claims in respect of that particular fund. It does not come directly within this Order in Council but it does come within the ambit of this deplorable situation which is now drawing not peacefully but very regrettably to a close. And while I, naturally, as all your Lordships do, 708 absolve the Minister of State from any Ministerial responsibility for this situation, nevertheless I hope that in his reply we shall hear some word of regret by Her Majesty's Government for the position in which they have left these poor British citizens.
§ 3.38 p.m.
§ LORD BARNBY
My Lords, my noble friend who has just sat down used some strong words in the early part of his remarks, and those of us who have taken some trouble to follow this subject feel that they were entirely justified. Indeed, this is a subject on which many feel strongly that the Government's honour is at stake; that a question of principle is involved, and that there are strong grounds for regret, as my noble friend has just said, that the Government have not seen fit to take a more generous line in this matter.
It is difficult to avoid repetition, and difficult to say much without almost touching on some of the ground that my noble friend has just covered. He referred to the basic reasons why, as a result of statements by the Prime Minister and Chancellor of the Exchequer, the belief has been encouraged that the sums finally existing in this Order in Council ought to have been different. I have been sitting in this House now for about thirty years and I think it can be seldom that a subject of this character should have been so frequently, so persistently and so passionately raised as this has been over the past three years. I think we shall all agree in our admiration for the noble Earl, whose Parliamentary skill has been much enhanced by his patience, ingenuity and great urbanity. On Questions, he has consistently stonewalled with a skill which, if he had been a cricketer, would surely have resulted in recognition from a selection committee.
But, my Lords, all that has not brought us much beyond what my noble friend has just described as quite inadequate figures. But I must refer to one point he made, very properly, with regard to blocked sterling. The whole issue arises from a belief that when the Government had £90 million of blocked sterling in hand more skilful negotiations might have resulted in more being available for the unfortunates who are affected by this case. The actual facts have been quoted so frequently, here and in another place, that there is no point in wearying your 709 Lordships by repeating them. I can quite understand that those of your Lordships who have not had occasion or desire to dig deeply into the circumstances of this regrettable history should feel, "Well, it is complicated; how boring! Why should there be so much time of the House taken up?"—as it has been in discussions and questions, and in debates, over the past three years.
There are, as I must remind you, two divisions, the sequestrated property and the Egyptianised property. On the last occasion in this House somebody said, "Cannot we change the word 'Egyptianised'? It is a horrible word". However, I think it was the Government themselves who initiated it, and so we all follow. My noble friend has, very properly, on this and previous occasions dealt particularly with the sequestration side and the many angles of hardship on individuals which that has produced. We are all moved with compassion for the unfortunate circumstances of those who have suffered. Indeed, I do not think this case could have been supported more strongly than by a former Ambassador to Egypt, the whole weight of the prestige of the noble Marquess the former Leader of our House and all those other knowledgeable people who have seen fit to follow up this matter.
I do not think it right that it should be discussed at all in this House unless everybody who speaks says, "This has nothing to do with Egypt, whatever we may feel about Egypt. Egypt is out of it. The British Government made a deal that cut Egypt out. It is with Her Majesty's Government that we are in disagreement." The noble Earl quoted again to-day that 90 per cent. of the claimants are to get 100 per cent. of their claims. It is a very tawdry juggling with figures. The argument could equally well be turned round: one might say, on the other side, that the proportion of what the larger claimants got is so small, so modest a proportion of their claims. It is that principle of discrimination which is the basis of disagreement with the terms of settlement which Her Majesty's Government have put forward. It is very unfortunate. It seems sad, as my noble friend said, that the head of a big British bank should feel impelled to write to The Times, with its great circulation and prestige throughout the world, to say that the belief in financial 710 circles is that the British Government have not acted as they should do.
The Government's defence, I feel, has been "We could not have faced payment in full. The House of Commons would not have accepted it; they would not have supported it." Those of your Lordships—and there are presumably many—who took the trouble to read Hansard, the Report of the debate in another place two days ago, will be satisfied with the depth of feeling that was expressed, the strong criticism of Her Majesty's Government, in the presence of representatives of the Treasury and the Foreign Office and other Ministers who must have felt somewhat as my noble friend said. I think that the noble Earl himself, who has so skilfully defended his case, must at times have felt slightly influenced by those in both Houses of Parliament who have taken up the cudgels in this matter.
My Lords, I have no stake at all personally in the matter—naturally, otherwise it would be disclosed. But a large firm in what was my constituency when I was in another place have suffered very unfairly. I have been kept fully informed of their experience. They are to receive about 28 per cent. of their claims. Larger claimants are to get a good deal less. Surely the principle should be that what there is available should be divided proportionately among the admitted claimants. It is said that the larger the claim the greater the capacity to bear a loss, but as my noble friend has pointed out, these companies have a great number of small shareholders. I cannot get on my feet on this matter without referring to that point. The company to which I referred, Bradford Dyers Association, Bradford, has 13,000 or 14,000 shareholders; another company has 18,000, another has 22,000, another has 200,000, and what the largest has I would not know, it is so many.
Surely it has been a policy of Her Majesty's Government to encourage the investment of funds in industrial companies. I suspect the Opposition, too, having abandoned nationalisation as a basic principle, will sensibly encourage investment of funds in industrial equities. And this is the sort of treatment they are going to get. How are you going to encourage firms to go and enterprisingly direct their funds abroad when they get 711 treatment like this, not at the hands of the Egyptian Government but at the hands of Her Majesty's Government? In a settlement in bankruptcy is it to be said that small people get paid in full and the larger people do not need anything but a small percentage? It is a principle of discrimination which so much disappoints, pains, surprises those who take the trouble to follow this question.
I suppose anybody might, almost frivolously, say, "Invert the flow of income tax. So long as the small people pay in full, the larger people need pay less". It sounds frivolous, but it is just the principle of this settlement inverted. Surely a minimum amount of 50 per cent. ought to have been given even to the larger claimants; the amount involved is relatively small. I will not quote a figure because I may be wrong, but the noble Earl at one time in our discussions said that something of the order of £10 million would have brought it up to that figure.
It is with strong conviction that this situation is regarded to-day with great sadness as well as disappointment. Having regard to the strength of feeling expressed in another place, one would have hoped that even to-day the noble Earl would be able to take out the word "final" and leave a loophole while getting assent to the Order for which he has asked us, as usual, so clearly. I wish it could be in that way that he sought our assent. Those of us who feel as strongly as I do have had our chance to register our disagreement, but the matter must remain in the hands of the Government and the disappointment that is created now will indeed be great.
§ 3.52 p.m.
§ LORD COLERAINE
My Lords, whatever the result of this debate may be—and I still hope that it is not a foregone conclusion, and that my noble friend the Minister of State might be prevailed upon to withdraw this draft Order and think again—it is not an edifying story. I think the speeches of my two noble friends show that, and the reception which your Lordships have accorded to their speeches and the attention which you have given to them show a great uneasiness of mind.
It seems to me that there are two main issues involved here. The first is the question of the global amount. I do not 712 want to go into that. It is clearly inadequate, and it clearly accords ill with the grave words that were spoken in another place by the Prime Minister and the then Foreign Secretary three or four years ago. Anyway, this afternoon I take that as final. But the second issue seems to me to be really of greater importance—the issue which my noble friend Lord Barnby spoke about a few minutes ago. The issue might be defined in this way: can a bankrupt who is forced to compound with his creditors give one creditor, or one class of creditor, preferential treatment over another? I am not a lawyer and perhaps my noble friend can advise me on this, but I would have said that he could not do so and that if he did so he would go to gaol. I may be wrong.
This, of course, raises at once the issue of the rule of law. I take it that the rule of law means that there is one law which applies to everyone—the citizen, the civil servant, the Minister; and it is the essence of the rule of law, as we understand it, that the Government should not by executive decree or ukase put itself above the Common Law of the land. That is what is happening under this proposal. The Government propose to do something which the private citizen would be legally prevented from doing—namely, favouring one class of creditor over another. I remember when I was a student reading the lectures of Lord Acton and I recall one most pregnant phrase that Lord Acton used:Never debase the moral currency.I think, with great respect to my noble friend, that that is what he is seeking to do with this draft Order.
It is all very well to say that there are cases of hardship and that you must take account of those cases of hardship. If you are going to put yourself above the law, certainly you can consider cases of hardship. You may say, "We shall treat creditors with grey hair more favourably than creditors with black hair, because they have less time in which to enjoy their compensation". Or you may say, "We will treat creditors who voted Conservative more favourably than those who did not". It seems to me that once you get into the position of distinguishing between one creditor and another you are getting into dangerous water.
I can see that there is a case for dealing with hardship. What I cannot 713 see is why the burden of that should fall upon one class of creditor. If the Government in their wisdom say, "As a result of our failure to negotiate a more satisfactory settlement, or because it was impossible to do so, we cannot give equal treatment; there are bound to be cases of hardship", then it seems to me that the Government, as representing the people of this country, should deal with those hardship cases. They should not put the burden of that on what are loosely called the larger creditors, because, as both my noble friends have explained, they are in fact large in a global amount but in effect they are probably people who are just as small as the people whom the Government are trying to safeguard. If it is right to protect people from hardship in this situation—and it may be right—then that is the responsibility of the Government, of the citizens of this country; it is not the responsibility of selected shareholders. It is exactly as if there were a shipwreck and the passengers were taken off on a raft and, when they got back, they found they had lost all their possessions and the insurance money covered only half the amount, and the shipping company went to them and said, "You are well off, but you are not so well off. Therefore, you will get less and you will get more." That, I would suggest, is grossly unjust.
I think this point of principle is immensely important. It is exactly the point of principle which was raised the other day in the Richard Thomas & Baldwins takeover. I do not know what truth there is in it, but the rumour was that this nationalised industry, having made an offer of a certain figure for the shares, having got their 51 per cent., then wanted to pay the remaining shareholders less than the offer that they had made. That smelt; it stank—and, my Lords, I think this does too. But it is not just a question of principle, although that is immensely important. There is also the practical question: do you want to encourage overseas exports or do you not? Are they of value to the country, or are they not? If they are of value to the country, you really cannot treat the people who are trying to carry on this highly difficult trade in a dangerous world, in the way Her Majesty's Government propose to treat the larger creditors here. I hope very much that my noble 714 friend will reconsider this matter. I hope that he will consider withdrawing this draft Order for further consideration. If he does not, I hope your Lordships will give him advice.
§ 4.2 p.m.
§ THE EARL OF LUCAN
My Lords, I think it would be wrong if this Order passed through the House without a few words from this side. It should not be forgotten that the whole of this problem arises from one of the most ghastly errors any British Government has made in foreign policy for many years past. I cannot match the eloquence of the noble Lord, Lord Balfour of Inchrye, or that of Lord Coleraine, in the measured condemnation of the Government and the talk of "broken pledges", of which we are hearing quite a lot in other parts of the world, too. The Government must not be allowed to get away with treating this matter as just an ordinary financial transaction that is now being wound up. It is the final winding up of a shameful episode in British history.
As to the fairness or otherwise of the settlement, I do not think that we on this side would agree with the noble Lords who have spoken about the unfairness of the division of the money. It seems to me that the test of hardship is a very fair one, and the test of the size of the fortune is also a fair one. Noble Lords talked about discrimination against the "big boys" financially, but, my Lords, is this not well accepted in our tax system to-day? The people who are well off are taxed more heavily than the people who are badly off; many people who are badly off are exempt from tax altogether. It seems to me exactly on all fours that compensation should be paid on that basis.
One can be glad that all the small men are getting full compensation. Do not let us forget that to those small men it was probably the whole of their life savings. Some of them may have been born and bred outside the United Kingdom. This was their livelihood and that of their family, and it is right that if they have had it all taken away they should be fully compensated. But I cannot look upon people who were shareholders in the big companies in the same light. Are we to suppose that any of those shareholders had the whole of his life savings in one company? Are we to believe that a lot of them were the proverbial widows 715 and orphans who have their money invested on the Stock Exchange? No, my Lords. It seems to me eminently fair that these companies should get what is, after all, a not inconsiderable payment of compensation. If they get £660,000 for a declared loss of £2 million, they are getting something, and surely it is the essence of private enterprise overseas that one takes risks.
§ LORD COLERAINE
Yes, my Lords, but not, surely, that they have to count the Government of their own country among those risks.
§ THE EARL OF LUCAN
The Government might be drawn into war with a country in which British capital is invested, and that capital might be sequestrated or confiscated entirely. It is one of the risks of overseas investment. Nobody would suppose that the profits British companies have made overseas are remitted to the British Government. Indeed, some companies have been known to go overseas in order to avoid British taxation. All in all, my Lords, I think we can say that this sad episode is being wound up by the Government—given the situation in which they found themselves, and the exceedingly weak bargaining position in which they were in 1959—in as just a way as possible.
§ 4.7 p.m.
§ THE EARL OF DUNDEE
My Lords, I do not want to prolong an argument which has been recurring in your Lordships' House for the last three or four years, an argument which has been repeated many times in my hearing, without, so far as I can recollect, anything very much being added to the statements on either side. Since two of my noble friends have again raised the accusation of bad faith against the Government and have referred to the Prime Minister's statement in 1957, I must, in fairness, remind your Lordships first of what I said in our debate seven or eight months ago on this question. Last July I said [OFFICIAL REPORT, Vol. 242, col. 1203]:I must refute and rebut the suggestion that the words used by the Prime Minister in 1957 ought to be taken, or ever have been taken, or could be supposed by any reasonable man to be taken, to involve the undertaking that the Government would be fully responsible for paying compensation, and for making up the full gap between what the Egyptian Government 716 pay and what the compensation claims amount to.I think that would be evident to any fair-minded person who reads the Prime Minister's words, which said that we would endeavour to get full compensation from the Egyptian Government. We did not succeed.
§ LORD BALFOUR OF INCHRYE
My Lords, might I say that I never put such an interpretation to the argument? I was interpreting the Prime Minister's words as a pledge that we should get full compensation from the Egyptian Government, which the Government failed to get.
§ THE EARL OF DUNDEE
Then the blame is not against the British Government, but against the Egyptian Government for not having agreed to larger compensation. I cannot see what charge of bad faith lies against the Prime Minister. I mentioned to your Lordships, too, that at that time the Leader of your Lordships' House made a statement on this matter in which he disowned any possible interpretation in the sense that the Government were under any obligation to pay full compensation to those who had suffered loss on account of the Suez incident. I also quoted what the Chancellor of the Exchequer said in 1959, when this question was debated very fully again in another place. Mr. Heathcote Amory said [OFFICIAL REPORT, Commons, Vol. 602, col. 41]:… that neither this Government nor any other Government in this country have ever accepted a commitment to make good losses suffered by British subjects in foreign countries. We could not possibly accept a general commitment of that kind, but we are anxious to see a fair outcome of the matter".My Lords, I cannot agree to discuss this matter on the assumption that the Government are under any financial obligation, and we should not be talking the same language if I were to try to argue with any of your Lordships who make this comparison between the Government and a bank which has to pay money to its creditors. That involves a legal financial obligation which does not exist in this case. What we have tried to do is not to fulfil any financial obligation, but to pay sums of money calculated and intended to relieve hardship. That is a very different thing from discharging a legal financial debt. My noble friend Lord Coleraine—
§ THE EARL OF DUNDEE
Would the noble Lord please wait a minute? I want in this connection to consider what my noble friend Lord Coleraine said. One of the arguments he used—I hope I am not misrepresenting him—was that full compensation would encourage exporters to invest their money or send their goods to foreign countries. I just ask your Lordships to think for a moment what would happen if the Government announced to the world that, if British traders exported capital to another foreign country, and if that foreign country went to war against us, or chose to default on its obligations, or chose to nationalise or confiscate the property of those people who had sent it there, the British Government would pay full compensation to all these exporters. What effect do you imagine that would have on world trade, on our credit abroad, and on the behaviour of a large number of Governments which we can easily think of? No, my Lords.
§ LORD COLERAINE
My Lords, my noble friend was good enough to refer to an argument which I was trying to put to him, and he said that he hoped he did not misrepresent me. I think he did, if he will allow me to say so. I was not arguing at all that, in the interests of the balance of payments, invisible exports, and so on, full compensation should be paid. In fact, I said that, though I regretted it, I accepted the global amount. What I was arguing, and this was a very different point—and it seems to me to be the main issue here—was that to discriminate against these people who are engaged in overseas trade is not only morally wrong, as I believe it to be, but practically very undesirable. It is a question of discrimination—not that you should pay them in full. I never suggested that for one moment.
§ THE EARL OF DUNDEE
My Lords, I do not accept that there is any discrimination. The only principle which any sensible Government must follow is that there is no compensation payable by the taxpayer to those who lose their money abroad. In this case, recognising the special circumstances to which the noble Earl, Lord Lucan, has referred, and which I do not think your Lordships would wish me to argue about now, there 718 was a reason for trying to relieve hardship resulting from those circumstances. It is that which causes the exceptional character of the steps which the Government have been taking to try to relieve hardship resulting from loss of property in Egypt, or, in some cases, from the necessity of leaving Egypt. It often happens that people have to leave a country in which they have property, but in this case the departure from Cairo was due either directly or indirectly to what happened at Suez.
I fully agree with those of your Lordships who have stated that some large companies have some small shareholders. It may be that the small shareholders are rich men who have a small investment in this company, or it may be that they are poor men who have a small investment in this company and nothing else. On the basis, which is the only one I can accept, that we are trying to relieve hardship and not to give full compensation, it would not be possible, without an almost infinite amount of labour, to discover which persons who were shareholders in certain companies in 1956, and may no longer be shareholders in it—they may have sold their shares and bought something else instead—were persons of very small means.
You can deal with a company only as an entity. You treat it as an entity owning £1 million, £2 million, £3 million, £4 million or £5 million with a claim—it may be a large claim—for loss incurred in Egypt. One of the large companies whose figures I have examined had no more than 15 per cent. of their assets in Egypt. How far, if at all, their losses affected their dividends is a very arguable question. If they receive compensation you cannot, by any legal means, compel them to make a cash distribution among their shareholders. The only benefit which the shareholders could receive by giving the company larger compensation would be, indirectly, the possibility of a larger dividend; or, conversely, the possibility that a dividend might not be reduced. It would be very difficult to determine whether, and if so to what extent, the dividend of any company had been reduced as a result of losing 10 or 15 per cent. of their assets which happened to be invested in Egypt. Therefore, although I do not wish to evade the question that some large companies may have people of small means who own shares, 719 I think the only possible way in which you can deal with this is to treat a company as an entity.
My noble friend Lord Balfour of Inchrye asked me two questions and I will deal with his second question first. I am afraid he will not be particularly satisfied with the answer to it. We have both agreed that it is not in order on this Motion, but that does not matter; we do not have such strict rules of order in your Lordships' House and I see no reason why, with your Lordships' permission, I should not deal with it. I was not at first quite sure if my noble friend had the data right, but I think he had. Of course, it has nothing to do with this Order. This Order covers only three things; first, compensation for property which has been sequestrated; secondly, damage to property which, after having been sequestrated has been given back to the owners; and, thirdly—the category mentioned by the Foreign Secretary last December—those who may have lost furniture or have been forced to sell things in an unfavourable market, and who were not previously eligible for compensation.
This sum of £2½ million, which is an entirely new thing, is for quite a different purpose. We do not think that the Government can compensate holders of property in Egypt which is still in their possession, although it is a very unfortunate and often a very hard thing that, owing to currency difficulties and the fact that they are living here and not in Cairo, they are not able to get any benefit out of that property. It might be, of course, that if trade improved and the sterling difficulties, the exchange difficulties, of Egypt and other countries were to disappear, then they would be able to get their money. Of course, any of them who are living in Egypt are able to get it now: we are considering here only those who are not able to live in Cairo but who have a very large proportion of their belongings, maybe the whole of their belongings, in Cairo.
As your Lordships know, under the Financial Agreement of 1959 the Egyptian Government undertook to allow the transfer of £E5,000, which is rather less than £4,000, by all of these claimants—I beg your Lordships' pardon; I should not call them claimants; there is no question of claims: I should say these 720 owners of property in Egypt who are now living in Britain. The Egyptian Government undertook to do that, but they did not carry out their Agreement owing to currency difficulties. As a result of the loan arrangements which were made at the beginning of last August, they are now able to carry them out. It has often been represented by many of your Lordships that the position of an owner of desequestrated property in Egypt who cannot go to Egypt himself, who has not got anything to live on except his assets in Egypt and who can get only less than £4,000 out of Egypt, is far more deserving of compassion than the position of many persons whose property has been nationalised. What the Government decided to do was to appoint a new committee called the Egyptian Grants Committee, which has now been set up under the chairmanship of Sir Hugh Ellis-Rees. That Committee will examine applications based on a plea of special hardship arising from the fact that the owner of Egyptian property who can get only £4,000 out of Egypt finds it very difficult to earn his living, or to fulfil his obligations and carry on in his accustomed way of life in Great Britain.
I have often seen the estimated figures of the total amount of Egyptian property, which vary a great deal. The statements made by the owners are sometimes wildly different from the statements ascertained of their real value; and, with respect to my noble friend, I do not think there is enough evidence really to criticise the figures he mentioned, either favourably or adversely. There is not enough evidence to give what I think my noble friend asked for—I think he called it a logical, reasonable basis for this amount of £2½ million for the purpose of relieving hardship. It is what I would call an informed conjecture, based on the best information we can get, as I think the Foreign Secretary told your Lordships.
§ LORD BALFOUR OF INCHRYE
My Lords, as my noble friend says that the evidence is such that he cannot say whether the amount is too much or too little, may I assume that Her Majesty's Government are still open for representations for an increase if it is found that the figure is quite inadequate?
§ THE EARL OF DUNDEE
The answer to that at present my Lords, is certainly, 721 No; because this is a fixed sum which is paid into this fund and administered by this committee. What would happen in the hypothetical event of their determining that a reasonable performance of the duties which have been imposed upon them was incapable of being carried out, I do not know. But we do not want any delay in this matter. Any claims for hardship are supposed to be in, as I think your Lordships know, by July of this year, and the committee will then do whatever they think best with this fixed sum.
§ LORD BARNBY
My Lords, before the noble Earl leaves that point, would he be able, in this connection, to give comfort to those anxious claimants in those cases where claims have been put forward, assessed and approved, that, in the event of the sums mentioned in this Order having been used, there would still be the intention to meet those claims from a special fund?
§ THE EARL OF DUNDEE
My Lords, no claims have yet been assessed or approved in regard to this new fund, which is for a totally new purpose. My noble friend may be thinking of the other question which my noble friend Lord Balfour of Inchrye asked, about the Foreign Claims Commission Fund, the £35 million.
§ LORD BARNBY
Might I again interrupt the noble Earl? If he would forgive me, this is something which has caused great concern. I do not think he has referred to it in this House before, but in another place it was said by the Minister in charge that it is quite right that claims not yet finalised, assessed and approved will be paid according to the scales laid down in the Order.
§ THE EARL OF DUNDEE
My noble friend is, as I thought, referring to the other question, which I am now proceeding to answer. It is a different question, because it involves this sum which was £27½ million and which my noble friend Lord Balfour of Inchrye correctly totted up to £35 million, including interest and the new money. What we have done here in this Order is not to provide a specific sum of money at all, as we have done for the new Claims Committee on owners of desequestrated property. What we have done is to provide for the payment of claims by the Foreign Compensation Commission at certain rates, and no question of deficiency or surplus can arise. 722 The figures given to your Lordships, which add up to £35 million, are an estimate, and they are not a fixed sum. The claims will be paid, anyhow, and if it proves that the estimate is too little, then, of course, it will follow that more money than the amount of the estimate will be paid out. But that is the difference between the two things: one is a fixed sum and the other is a fixed amount of payments at certain rates which I have explained to your Lordships and which are contained in this Order.
My Lords, I am sorry to have been so long on this matter, which has been debated so often. I should like to say that I appreciate and understand the depth of feeling which has animated many of my noble friends who have so often spoken on this side of the House, and I am also grateful for the helpful moderation with which the views of his side of the House have been put by the noble Earl, Lord Lucan. I hope your Lordships will see your way now to approve this Order.
§ On Question, Motion agreed to.