MALAYSIA BILL

HL Deb 26 July 1963 vol 252 cc932-79

12.14 p.m.

Order of the Day for the Second Reading read.

THE LORD CHANCELLOR (VISCOUNT DILHORNE)

My Lords, I have it in Command from Her Majesty the Queen to signify to the House that Her Majesty, having been informed of the purport of the Malaysia Bill, has consented to place Her Majesty's privilege and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purpose of this Bill.

THE MARQUESS OF LANSDOWNE

My Lords, I beg to move that this Bill be now read a second time. Last night, for reasons which I do not know but for which I am none the less grateful, my right honourable friend the Colonial Secretary did not include me in his all-night sitting.

THE EARL OF LISTOWEL

My Lords, the noble Marquess meant the Commonwealth Secretary, not the Colonial Secretary.

THE MARQUESS OF LANSDOWNE

I meant either or both. This enabled me to go to bed a little earlier and while doing so to listen to the wireless. As I listened, I heard important news items, among others an account of the Paris collections—charming little chiffon dresses, tweed stockings, deep plunging necklines—and then, the initialling of the Test Ban Treaty. I hope that in a balanced item of news today perhaps this Malaysia Bill may also find an honourable place.

As your Lordships know, it was only on July 9 that the Malaysia Agreement was signed. We had hoped that this would have been done earlier, but there were difficulties in the negotiations; in particular, about the establishment of a Malaysian common market and the financial arrangements between the Federation and Singapore. These were very complicated matters and it would not have been right to attempt to rush them. It was essential that fairly detailed agreement should be reached, if Malaysia was to start on a sound and economic basis. This, together with the need to get this Bill through before the Recess, because the date for the creation of Malaysia is August 31, means, I regret to say, that I am asking your Lordships to pass this Bill through all its stages today.

I hope to show, however, that the arrangements set out in the Command Paper were slowly and painstakingly worked out and have been the subject of most careful and patient consideration by all concerned, so that they truly represent the wishes of the peoples of the new States, as well as of the present Federation of Malaya, and they incorporate the safeguards which local opinion in those States requires. The Bill itself provides for the relinquishment of Her Majesty's sovereignty over North Borneo, Sarawak and Singapore, so that they can federate with the existing States of Malaya in accordance with the Malaysia Agreement, which was signed by representatives of all the Governments concerned. A clause by clause description of the Bill is, I think, scarcely necessary. The clauses are the usual ones in a Bill of this kind.

The idea of a Malaysia Federation has been in the minds of many for a long time. This idea was first translated into action in May, 1961, when Tunku Abdul Rahman, Prime Minister of Malaya, proposed an understanding with Singapore and the Borneo States. This proposal evoked an immediate response in all the territories, and the idea gradually took hold of the imagination of the peoples so that now there is a real enthusiasm for the Federation of Malaysia. In July, 1961, at a regional meeting in Singapore of the Commonwealth Parliamentary Association, a consultative committee was formed under the chairmanship of Mr. Donald Stephens, one of the foremost political leaders in North Borneo, to exchange views on the form Malaysia should take. Right from this early stage the political leaders in all the territories took the initiative in working out concrete proposals for bringing Malaysia about.

From the start it was recognised by all concerned that the most important step was to ascertain the feelings of the people themselves. In Singapore the Legislative Assembly, in December, 1961, passed a motion supporting Malaysia in principle. In Borneo, with its primarily rural population, it was more difficult to find out how people responded to an idea which, to all but the leaders, was a new one. The British and Malayan Governments agreed, as stated by my noble friend the Duke of Devonshire on November 28, 1961, that agreement had been reached that the creation of the Federation of Malaysia was a desirable aim in the interests of the people concerned, and that a Commission was to be set up to ascertain the views of the inhabitants of North Borneo and Sarawak.

I am glad to see that my noble friend Lord Cobbold, who was Chairman of that Commission, is in his place today. I am sure that the peoples of North Borneo and Sarawak have every reason to be very grateful for the work of his Commission which visited their countries between February and April, 1962, and which in the course of a most arduous itinerary held 50 hearings at 35 different centres, interviewed personally over 4,000 people in some 690 groups, and carefully studied some 2,200 letters and memoranda which they received from individuals and associations. Every shade of opinion, from those hostile to the idea of Malaysia to those who were convinced it was the right solution, came forward. The Commission reported unanimously in favour of Malaysia and that Malaysia was supported by two-thirds of the peoples of Borneo provided that safeguards could be devised to meet their special conditions.

The Cobbold Report was published on the 1st August last year. On the same day, a joint statement was made by the British and Malayan Governments, in which it was agreed in principle to establish Malaysia by August 31, 1963, and meanwhile to set up an Inter-governmental Committee to work out detailed arrangements and safeguards for North Borneo and Sarawak. During August, Tun Razak, the Deputy Prime Minister of Malaya, and I (I left the United Kingdom on the 12th, I remember) visited the two territories with the primary purpose of setting up this Inter-governmental Committee, of which a preparatory meeting was held on August 30. Together we travelled the territories extensively and met as many of the leaders of the people as possible, and talked also with the expatriate and locally employed officers. He explained the concept of Malaysia and described how the Inter-governmental Committee would work.

We did not, of course, repeat the work of the Cobbold Commission, but we thought that it was important that Ministers from both Malaya and this country should themselves see and hear at first hand how people had reacted to the Malaysian concept since the departure of the Cobbold Commission. At the preparatory meeting of the Intergovernmental Committee it was agreed that sub-committees should be set up to deal with constitutional, fiscal, public service, legal and judicial, and the problems of departmental organisation. A great deal of really solid work was done by these sub-committees, and I should like to pay my tribute to the political leaders and to the officials who gave so much of their time and so much of what should have been their leisure hours to this work, and thereby made it possible to complete the task in 11 plenary meetings held between October 22 and December 20. I remember very well that our last plenary meeting was in December, and it was only when I was in the waiting room at the airport that the final decision was reached on the allocation of seats between Sarawak and North Borneo. All concerned, I think, deserved our gratitude and a word of praise for the way in which they carried out their arduous task.

Sir John Martin, the Deputy Under-Secretary of State in the Colonial Office, stayed in Borneo throughout this period and was a most able chairman of the sub-committees. An immense amount of work fell on the local Administrations, both while the Committee was sitting and also throughout the last six months. Meanwhile, of course, they had their ordinary work of administration to get on with, and this work became increasingly exacting as a result of the Brunei revolt.

The Report of the Inter-governmental Committee, which was published in February this year, was a unanimous Report. The representatives of North Borneo and Sarawak were satisfied that the safeguards which they considered necessary to meet their special conditions had been obtained. At the same time, they accepted the necessity for the Federal Government to have sufficient authority to hold the Federation together, and to build up a strong federal unity. The Malayan gesture of goodwill in agreeing that the Borneo States with a population of 1¼ million out of a total of 10 million should have 40 out of 159 seats in the Federal Parliament, was a decisive factor in convincing the Borneo leaders that there was here no question of a takeover bid, but a genuine offer of real partnership.

Partnership is the essential element in the agreement reached by the Intergovernmental Committee. The Borneo States will have, as of right, funds to maintain and increase State services. Even in a major Federal subject like education, it was agreed that the policy and system of administration should not be changed without the consent of the State Government. Medicine and health, although this would normally be a principal Federal subject, will in North Borneo (though not in Sarawak) be a concurrent subject until 1970, because this was the wish of the people's representatives. In immigration—again a subject that is normally entirely under Federal control—the States have been given protection against the unrestricted movement of people from other parts of the Federation; and, except in specified circumstances, entry into the Borneo territories will require the approval of the State concerned.

Although Islam will be the religion of the Federation, there will be no State religion in the Borneo States, and no law can be enacted restricting the propagation of other religious doctrines, even among Muslims, without a two-thirds majority of the State Assemblies. I should perhaps mention that in Sarawak 23 per cent. of the population is Muslim, and in North Borneo I think it is 37 per cent. This was a matter to which the Borneo leaders attached the greatest importance. They were also determined to maintain English as an official language, even though Malay will be the national language of Malaysia—a position which is to be maintained for ten years and cannot be changed, even then, without the argument of the State Legislature.

Citizenship too is a matter to which great importance was attached. The recommendations of the Cobbold Commission were unanimously endorsed by the Inter-governmental Committee. Any citizen of the United Kingdom and Colonies who was born, naturalised or registered in North Borneo and Sarawak and was ordinarily resident in the Borneo territories on Malaysia Day will automatically become a citizen of Malaysia. Any other person over eighteen years of age and ordinarily resident will be able to apply for registration as a citizen of Malaysia within eight years, subject to Certain qualifications, of which the main one is residence in Malaysia for seven out of the ten preceding years.

But it would be a poor Federation that was based upon negative safeguards. I am convinced, and I am satisfied that the peoples of Borneo are convinced, of the clear, positive and compelling advantages of Federation. They know about the success story of the Federation of Malaya, and they are determined that in the wider context of Malaysia there will be equal success. The political and defence advantages of federation are obvious. An Independent North Borneo and Sarawak outside Malaysia, even if they had united, might at some time in the future have offered a great temptation to acquisitive adventurers. Clearly the continuation of colonial rule would have become increasingly anomalous.

Economically, as a recently published report by a Mission of the World Bank, headed by my friend M. Rueff, has said: Unification will at the minimum create a larger economy which is more economically diverse than any of its component parts. I think the diversification of the economy of Malaysia is very important. M. Rueff goes on to say: Each territory is now heavily dependent on a few traditional sources of income and employment. With its wider resource base Malaysia's economy as a whole would enjoy greater stability than any of its components". To Borneo itself Malaysia offers the best prospect to enhance the rate of development and of bringing her standards of social service to higher levels. It is the conviction that Malaysia will mean increased development that has been one of the powerful stimuli in moving public opinion in favour of achieving independence through Malaysia. Under the arrangements worked out in the Inter-Governmental Committee, and in the recent London talks, development of the order of nearly £60 million—almost double the rate of present spending—should be possible in the first five years of Malaysia. It is not, of course, only on the unanimous agreement reached in the Inter-Governmental Committee that acceptance of Malaysia in the Borneo territories rests. Already in September, 1962, before the Committee had really got down to work at all, the Council Negri, which is the senior Council in Sarawak, and the Legislative Council in North Borneo passed resolutions, with no dissentient vote, welcoming the decision in principle to establish Malaysia by August 31. In December the North Borneo local elections resulted in an overwhelming victory for the pro-Malaysia candidates. Then in March this year, the two Legislatures adopted, again unanimously in North Borneo and with no dissentient vote in Sarawak, the recommendations of the Inter-Governmental Committee.

In Sarawak new elections have recently been held, as a result of which the Sarawak Alliance, a strongly pro-Malaysia Party, has the support of 26 members out of a total of 36 elected members. Of the Opposition parties the Party Negara, with five seats, is pro-Malaysia, and its leader was one of the signatories of the London Agreement. The Sarawak United Peoples Party, S.U.P.P., with five seats, are the only ones to entertain doubts about Malaysia, and even they are not unreservedly opposed to the idea, and, indeed, the head of the Party, who I know personally quite well, is pro-Malaysia. I have taken the time of the House to explain in some detail the safeguards that have been negotiated for the Borneo territories, and to show that the wish of the peoples in those countries to join Malaysia has been repeatedly and unequivocally expressed.

I should like to say a word about Singapore. The Heads of Agreement between Malaya and Singapore, which were published in November, 1961, provided that Singapore would be a State within the Federation, but on special conditions and with a larger measure of autonomy than the existing States; that is, the eleven States of the Federation of Malaya. For example, education and labour, which in the existing Federation were Federal subjects, would be the responsibility of the Singapore Government. In order to discharge these responsibilities Singapore would retain a large proportion of the present State revenue. Taking these factors into account, it was agreed that Singapore would have fifteen seats in the Federal Parliament, a smaller number than would be proportionate to her population of 1.7 million.

A Committee of representatives of the two Governments began to work out the detailed terms of merger last December. Agreement was reached on nearly all matters during the following months, but a few matters—and these were very important ones and mainly financial—were still unresolved at the middle of June, and were finally settled at the recent discussions in London. Agreement was reached on the arrangements for establishing a common market in Malaysia, and these arrangements are set out in an annex to the Malaysia Agreement. It was also agreed that the revenue from Federal taxes collected in Singapore would be divided in the proportion of 60 per cent. to the Singapore Government and 40 per cent. to the Federal Government, and that to assist development in the Borneo territories the Singapore Government would make available fifteen-year loans totalling a sum of 150 million dollars. This happy outcome could not have been achieved but for the determination to reach agreement shown by those who took part in the final talks in London.

It is a cause of regret that the Sultan of Brunei decided not to sign the Malaysia Agreement. We have, of course, all along taken the view that it was entirely a matter for him to decide whether to join Malaysia, but we have repeatedly made it clear that, in our view, it is in Brunei's best interest to join, and we still hold this view. The door is still open for Brunei's accession, and we hope that it will decided to go in.

I am convinced that the foundations of Malaysia, which have been laid so carefully during the past two years, are solid and that politically and economically we have here all the ingredients for a repetition of the success story of the Federation of Malaya. I am sure that this will be so, despite the storm clouds that have in the past months gathered round the Malaysian horizon. In these circumstances, it is, of course, particularly important that the existing Anglo-Malayan Defence Agreement will extend to the whole of Malaysia. We in this House, and I am sure I speak for all your Lordships, wish Malaysia well, and I ask that this Bill should be given an unopposed passage through your Lordships' House to-day. I beg to move.

Moved, That the Bill be now read 2^a.—(The Marquess of Lansdowne.)

12.41 p.m.

LORD SHEPHERD

My Lords, I am sure the House will be grateful for the manner in which the noble Marquess has introduced this Bill this morning. We have no criticism of the fact that the Bill comes at this late stage; we fully appreciate the circumstances that have caused this; but I feel there is some regret that this Bill, as in another place, should have been introduced on a Friday. The House, naturally, on these days is sparse, our Benches in the main are empty, and I should not have thought that this was the manner in which either House would wish to consider what is an historic Bill.

It is strange that this small Bill of five pages, six clauses and three Schedules should open the way to the creation of a new nation. My Lords, this Bill is the key. All the protections that were desired by the States, by the Federation of Malaya and the State of Singapore, are included in this document. It is a formidable document, as the noble Marquess said, and those who have some knowledge of the negotiations will understand the amount of dedicated work that was put in, not only by the Minister but by the many officers in the various countries and we are very grateful to them.

Praise obviously must be given to Mr. Duncan Sandys, the Minister for the Commonwealth and for the Colonies. He, particularly in the last stages, brought considerable drive to bring about a conclusion. But I think it is right that in this House we should pay a special tribute to two of our own Members: in the first instance, the noble Marquess, who for a considerable time, was Chairman of the Inter-governmental Committee that was set up to negotiate and to bring this Bill to fruition. I think he brought the right and only character that would have been acceptable in-South-East Asia, a character of patience and of mastery of the gentle word. These are vital characteristics for negotiations in Malaya. I suggest, too, that we should pay a tribute to the noble Earl, Lord Selkirk, High Commissioner in Singapore and Commissioner General for South-East Asia. I have heard from my friends in Singapore great tributes not only to him but also to his wife for the way they have smoothed over some of the misunderstandings and some of the strain that existed when he went out there and which grew up as these negotiations proceeded. Therefore, we are grateful to both of the Members of this House.

Perhaps one of the two main actors in this matter is our very old friend—and I think we can refer to him as "our very old friend"—the Tunku Abdul Rahman, Prime Minister of Malaya. He is already a man of great stature and a respected Prime Minister of the Commonwealth. As the noble Marquess has said, it was he who made the declaration that a Federation of Malaysia should be created. This was not a new conception—there had been much talk about it over many years—but it needed a man of his stature and his leadership to make this possible. In my view, this Federation could not have been created at the suggestion of the United Kingdom; it had to come from the people themselves. I think we must recognise, too, that under his leadership the Federation of Malaya has made a number of concessions which took a good deal of heart-searching to make.

I think a very special word of appreciation should be given to Mr. Lee Kuan Yew, the Chief Minister of Singapore, the other main actor. He had the most difficult task and most difficult road to tread. He believed in federation but he had first to create the political climate in the State to make that possible. There were many fears, in bringing what is largely a Chinese population into the Federation, that they would be dealt with more hardly by the predominantly Malay rulers of Malaya; but, by great determination and considerable political ability, he created the climate for federation in Singapore. As we have heard from the noble Marquess, a referendum was held which was overwhelmingly in support of the Federation. I think we should give great credit to Mr. Lee Kuan Yew. He has achieved considerable concessions for the State, and, in his way, too, he has had to make some sacrifices, but he has brought it through and it is now acceptable.

It must be of considerable irony that yesterday we dissolved the Central African Federation, yet here we are to-day passing a Bill to create another Federation. The great difference is that the Central African Federation was one that was imposed upon the people there by the United Kingdom Parliament, whereas this Malaysian Federation stems from the will of the people who are involved. This is a great difference, and I suggest to Parliament that this should be the example. Before you can move forward you have to see that the peoples are behind you, and, above all else, that they themselves understand the implications of their own agreement. Therefore, we look to this Federation with considerable hope. The noble Marquess has said that, apart from Singapore, the other States themselves have declared their position, and, as we know, the Cobbold Commission reported in similar terms. May I say how pleased we are to see the noble Lord is in his place and to know that he will take part this afternoon?

The position in regard to Brunei is a matter of regret, but I suggest that there may be some advantage in it. As Brunei is a rather autocratic State, I think there would be considerable advantage if, within a short time the democratic position in the State could be extended so that when the Sultan decides to enter the Federation, as I have no doubt he will decide, it will, again, be a decision of the people. We should not wish to feel that one part of this Federation had been brought in where the wishes of the people had not been declared.

When I was out in the East a few months ago there was much argument that this Federation was part of the East-West manœuvre, that this was an attempt by the West to create a state of affairs which would be another buffer to Chinese Communists. I would suggest this is not the case. I myself believe that this is one more step in granting independence to the peoples of our Empire, a step that was started in the days of my noble friend Lord Attlee with the granting of independence to India and Pakistan. It is a continuing process, and I hope it will go on. Undoubtedly it will create stability, but I hope it will be accepted that this is not part of building of a bloc either against the Chinese or against the Indonesians.

I must say I have some doubt about the creation of a federation. I think in this case we should regard this as a first step in the creation of a united nation. Federations, particularly where many races and many religions are involved, create special problems, special strains. Where there are autonomous or semi-autonomous states in a Federation there is a long-term risk of friction and jealousy arising. In the case of the Federation of Malaya, of the nine states and two settlements of Penang and Malacca, we saw a Federation but with a fairly tight central control; and we have seen, as I think the noble Lord, Lord Ogmore, would agree, a blending and uniting together. One can hardly say that the Malayan peninsular is a federation in the usually accepted sense of the word. It has become a united nation under its King and Prime Minister, and this is something which I hope will take place in due course. I would not wish to see it hurried, but I would hope that this creation of a federation is the first step.

There was some concern in another place on the question of religious freedom. It is true that in Malaya it is against the law to convert a Moslem to another faith. It is perhaps hard in Europe to understand this, but in the East it is difficult for a nation and its religion to be separated; they are regarded rather as one. I would suggest that this is something that we should accept. But I can say, speaking from my own personal experience of living in Malaya for many years, that there is complete freedom of worship, complete freedom to preach and to enroll within one's church, except, as I say, for the bar of the Moslem religion. As the noble Marquess has said, in the case of the states this particular religious freedom is enshrined and protected.

I think we must recognise that the economic difficulties for the Federation of Malaya will be greater than in the past. Rubber and tin are still not what they should be. There has been some strain, I believe, on overseas currency. They are taking on the heavy responsibility of Borneo and Sarawak, which are in themselves not very well developed. In the case of Singapore, they have there own problem, a large population, massive slums, considerable unemployment; they have a very large young population, many of them wonderful boys and girls passing examinations of G.C.E. standard, but with very little opportunities for suitable employment. This is a great problem. Therefore, I hope that our country and the rest of the Free World will continue to do what they can to develop the rubber and tin trade, that they will try to bring new industry into that country, and I believe that they will find a stability which in the past they have perhaps thought was not there. I think the loan that was raised in London the other day, which was very heavily over-subscribed, augurs well.

There has also been criticism that the loans and aid that the Government are making tend to give too much prominence to military aid. I think it is right that we should withdraw our own military forces, at least to the extent that they are required for internal security. I myself have never thought it right when soldiers were called upon for duty that one should be forced to use British soldiers against the local inhabitants. Therefore, I fully support the Government in this granting of aid to raise new battalions both in Singapore and, of course, in the new states. These countries will not be able to develop economically, they will not be able to get the investment they need, unless there is a strong internal security position, and because of the nature of the world and of the strains that are in South-East Asia an internal security military force is needed apart from a strong police force.

This is an historic and, I believe, happy occasion. We turn the old chapter, a chapter for which I think, so far as we are concerned, we British who have been in South-East Asia for many years, we need to have no regrets and no shame. We may have done something more; we may have done something better. But I do not believe that among my friends in Malaya, of all races, one hears of any criticism of the attitude, in particular, of the ex-patriate civil servants. Having taken note of what the leaders have done, I feel that we should remember the many thousands of expatriate civil servants who, if I may say so, have given their lives to their country. I see the noble Lord, Lord Milverton, in his place. I think he will agree that those of us who lived in Malaya had two countries, our own in which we were born and the country in which we lived and served; we still regarded them as home. We wish this Bill to go through to-day; there is no question of opposition. And we look forward to seeing a happy and peaceful Malaysia, because the people of that country deserve it.

THE MARQUESS OF LANDSDOWNE

My Lords, I beg to move that this debate be now adjourned during pleasure until two o'clock.

[The Sitting was suspended at one o'clock and resumed at two o'clock.]

2.0 p.m.

LORD COBBOLD

My Lords, I have a word or two by way of explanation, and an apology. I have a long-standing public engagement in the country this afternoon, which means that I must be away from the House not later than 2.30 p.m. The noble Lord, Lord Ogmore, has been good enough to suggest that I should precede him, and I am most grateful to him. I must also ask the indulgence of the House for saying a few words, not, I hope, controversial, on a subject with which I was closely concerned before assuming my present duties. It is, I know, unusual for the Lord Chamberlain to intervene in debates in this House, but in the circumstances, after speaking to the noble Viscount the Leader of the House and the noble Earl the Leader of the Opposition, I felt that this was an occasion on which I could properly make an exception.

I have not, of course, been concerned with the later stages of the Malaysia negotiations, and I am speaking solely from my experience up to July of last year, when our Commission reported. I set out at considerable length last year the views which I have formed about Malaysia. They will be familiar to those of your Lordships who had the pertinacity to read through the Report of the Commission over which I had the honour to preside. I will not repeat all those views now, and I wish only to make two or three brief remarks.

Your Lordships will recollect that the main finding of our Commission was that the Malaysia proposals would be in the best interests of North Borneo and Sarawak, and acceptable to the majority of the population of those two territories, provided—and I lay stress on this proviso—that adequate safeguards to meet their special needs were included in the final agreements. Inevitably there are, after a year of negotiation, some minor divergencies from what seemed to us ideal a year ago. But, in general, the constitutional arrangements now proposed for the Borneo territories follow closely the lines which we then envisaged. And, in my judgment, the safeguards which were pressed for by the weight of opinion in the Borneo territories in giving evidence before our Commission, and the safeguards which we ourselves recommended in our Report, have been substantially provided. I therefore feel able to repeat with confidence the words which I used in our Report a year ago; that Malaysia is an attractive and workable project and is in the best interests of the Borneo territory. It was the unanimous opinion of our Commission that, granted the necessary safeguards, Malaysia offered better prospects, both of economic prosperity and of security, than any alternative solution in sight.

Nobody who has studied this area and who knows this part of the world, with its geographical, racial and religious complications; nobody who appreciates the level of development and education in the various components of Malaysia, will underrate the difficulties which lie ahead. Federation, of course, involves give-and-take on all sides, and Malaysia will prove no exception to this rule. Vast problems of administration will need to be overcome with ingenuity, perseverance and good will. It will be necessary to strike, and to maintain, a correct balance between a strong central government and a high degree of local autonomy. Without strong central authority the different territories cannot be welded into one organism, with a national unity and with the vitality to withstand hostile pressures from outside. But an attempt to carry out day-to-day administration in Jesselton or Kuching from Kuala Lumpur, or to submerge the character of the Borneo territories, would only court failure. There are refreshing signs that these requirements are clearly understood. I would add my tribute to that paid by the noble Marquess and the noble Lord who spoke for the Opposition to the statesmanship which has been shown in these negotiations by all the political leaders involved, and in particular to the great vision and determination shown by the Prime Minister of Malaya.

I should like to draw your Lordships' attention to one particular phrase which I used in the concluding paragraphs of our Report: It is a necessary condition that, from the outset, Malaysia should be regarded by all concerned as an association of partners, combining in the common interest to create a new nation, but retaining their own individualities. I took leave in the Report to recommend that in the forthcoming negotiations Governments should pay close attention to that point, both in its psychological and in its practical aspects. I take leave once again to express the earnest hope that this same point will be in the forefront of the minds of all those who have the task of guiding the Federation in its formative years.

There has been some criticism of the haste with which all this has been done. It is certainly true that the Parliamentary procedures have been a bit rushed, though one can see the reasons why it had to be so. On the main issue I would not agree that things have been unduly hurried. This is no new idea. I remember myself discussing this question with friends in that part of the world as long, ago as the early 1950s. And in the last two years, as the noble Marquess has outlined in his speech, there has been a continuous process of consultation, explanation and negotiation. In my view, a long period of indecision would only have given further scope for agitation and for hostile pressures from within and from without.

In the months which I spent up and down the rivers of Sarawak and from coast to coast in North Borneo I came to have a very deep affection for the peoples of those territories. Everybody who knows those people will wish them well in this exciting venture. I commend this Bill to your Lordships, and I hope that this House will give firm support to the proposals for a Federation of Malaysia.

2.8 p.m.

LORD OGMORE

My Lords, I, too, welcome this Bill, and I was very glad that the noble Lord, Lord Cobbold, who has had such recent experience in this particular area, spoke as he did. I think he made some very wise observations on the balance that will be needed to be preserved between the rural areas of Borneo and the more advanced areas such as Singapore and parts of Malaya. I thought the noble Marquess introduced the Bill in a somewhat cavalier manner. I know that many of these Bills are rather technical, but I have never before heard any Minister dismiss it completely and say that he did not propose to discuss the contents of it. There are certain of the contents which are of great importance, such as those dealing with citizenship, and so on. No doubt many of your Lordships will follow his example and will not discuss the Bill very much. It has, in any case, been rushed through at the end of the Session, and even if anybody had wanted to put down any Amendments—and I do not believe anybody will want to do so—there would not have been the opportunity.

I know that the reason for rushing the Bill through both Houses is because the Federation is to come into existence an August 31; otherwise I should be inclined to agree with the noble Lord, Lord Shepherd, that such an historic Bill deserves a better Parliamentary occasion—which means better Parliamentary time—than this one is getting. We know how much time we rightly spend on our own affairs, but I have always felt, since I have been in Parliament, that it is a pity that many of the very important Bills relating to the Commonwealth are generally put in at a time when, to say the least, there is not a big House. They always seem either to be on a Friday morning or on the occasion of a Royal Garden Party, and that is a pity. However, those who speak do so with knowledge and with great sympathy; perhaps that makes up for the small House so far as attendance is concerned.

As this is possibly the last occasion on which we shall have an opportunity of discussing at any length the problems of Malaya, since the territory of Malaysia will be independent on August 31, and we do not normally discuss the affairs of independent countries in this House, perhaps I may be allowed to say a word or two about a man whom I consider to be a really great man of our time, the father, to a large extent, both of Malaya and of Malaysia. I refer to Tunku Abdul Rahman. I first met him 32 or 33 years ago. I was practising at that time in the Settlement of Penang. I corrected the noble Lord, Lord Shepherd, who described Penang as a protectorate; it was, of course, the oldest British settlement in the Far East. The Tunku at that time was an assistant district officer, just over the frontier; in his father's State of Kedah. We have been great friends ever since, and I have seen the growth of this remarkable man into the great leader and father figure that he is at the moment and will, I hope, continue to be.

So far as Sarawak is concerned, I should like just to recall to the House the memory of the late Sir David Gammans, who was very much interested in all these problems of South-East Asia. He served in Malaya for years, and, in the early part of 1946, he and I were sent out by the then Government of this country to advise on the desirability of the secession of Sarawak from Rajah Brooke—the White Rajah as he was called—to His late Majesty the King. We had a very interesting tour of the country at that time, which was made possible—as it was only just immediately after the war—by the kindness of the noble and gallant Earl, Lord Mountbatten of Burma, who at that time was Supreme Commander in the Far East, in placing a naval vessel at our disposal.

One point that I think is not often realised, is how much success there has been in Malaya in inter-racial harmony. I do not know of any country in the world other than Malaya where, as it were, the immigrant population, or at least the population of descendants of immigrants, is almost equal to the indigenous population. There are Chinese, Malays and, of course, a very large population of Indians. Throughout these years there has been this very happy relationship at a time when in the rest of the world it seemed almost impossible for the people of different races and religions to get on well together in one country. In Malaya, however, they have all settled down and worked for the prosperity of the country and for their own prosperity in an exceedingly amiable way.

We must pay tribute not only to the Tunku, who I think is most responsible for that harmony, but also to Tun Abdul Razak, Mr. Tan Siew Sin, Mr. Lee Kuan Yew, to whom the noble Marquess paid due and proper tribute, and to Mr. V. T. Sambanthan, the Leader of the Indian Congress in Malaya. Like the noble Lord, Lord Shepherd, I, too, wish to congratulate Malaya on the success of the £5 million issue of Federation of Malaya 6½ per cent. stock, which was oversubscribed within one minute of the stock opening. That, I think, is a very good indication of the strength of Malaya in the financial market, in the City. It shows what the City of London thinks of Malaya, and also of the future of this territory—a very handsome tribute; and I congratulate Malaya, and particularly the Governor of the Bank Negara, the State Bank of Malaya.

We must not suppose that this is the last we shall see of Malaya. I hope that our associations with Malaysia will be long-continuing and as close as they have always been in amity, friendship, and also in co-operation. There is still a considerable need for aid and trade with this area, as with many others. North Borneo (or Sabah, as we now call it) and Sarawak will certainly need a tremendous amount of help from Her Majesty's Government in the years to come. They are, in many respects, of course, developing—to use the polite expression we use nowadays; they are underdeveloped. They are a very small population spread over this considerable area of Borneo; and it is our duty, and I hope it will be our pleasure, to do everything we can for them. We shall be much aided, as I said yesterday when speaking on the Rhodesia and Nyasaland Bill, by the determination of President Kennedy to make adequate provision, or to agree to join in making adequate provision, for the growth of international liquidity to expand world trade over the years ahead. This determination of the President is a highly important statement, and, of course, will help tremendously the economies of the underdeveloped nations.

In Borneo, I think that more than anything they will need smallholder schemes. They are also going on with smallholder schemes in Malaya, where I know the Tunku and Tun Razak are particularly interested in these features. But in Borneo they will also need them. It will be a great part of their economy to get the rural areas prosperous, and that is the best way of doing it. Many areas, such as in Singapore and other parts, will need more light industry, and there, too, we can help. Singapore, Kuala Lumpur and Hong Kong (which is not in this, but which I mention because it has some of the same problems as these other cities) can give us a great lead, and show an example to us in housing. When I hear of the difficulties of housing a few thousand immigrants in Paddington and in North Kensington, it seems very odd to me when one realises the way in which Hong Kong and Singapore manage to house their people. Take Hong Kong, with the hundreds of thousands of immigrants they have had in the last few years. They put the houses and the flats up. In Hong Kong, they even build flatted factories, which means that factories are built on the flat principle, because land is so scarce. They have all sorts of ideas in these countries which we could adopt here. The traffic should not be one way by any means. In housing and in the provision of factories, and that sort of thing, Singapore, Kuala Lumpur and Hong Kong can teach us a tremendous lot; and I would suggest to Sir Keith Joseph that in the very long Recess we are going to have he pays a visit to Singapore and Hong Kong, and perhaps Kuala Lumpur, to see how they house their people in congested areas—and he will have a surprise.

So far as trade is concerned, it is very important that we take the products. I said this yesterday, and I say it again to-day: we must take the products of these countries as soon as any of these countries, any of these cities, begins producing anything. Whenever they produce anything, even with money provided by us, there is almost immediately a howl from over here and an immediate demand for a tariff, a barrier, or for some sort of quota. Even this week in this House, on the Finance Bill, Members from both sides were moaning about imports from Hong Kong. What does the Commonwealth mean unless we can help them by taking their products? What is the good of trying to help developing countries unless we take their goods when they make them?

The World Bank has just made an interesting Report on Malaysia and it said that the creation of a common market in the new Federation of Malaysia is "highly desirable" and will give a powerful stimulus to industrial growth, but special arrangements will be needed to protect the entrepôt trade of Singapore and Penang. I am certain that the Government of Malaysia will look at this Report carefully and will have regard to the entrepôt trade—and particularly that of Singapore—because this trade is very important; and I see no reason why, through bonded warehouses and so on, it could not be combined, even though a common market is established.

I was interested to hear what the noble Marquess said about Brunei. I am sorry, as he is, that Brunei is not part of the new Malaysia; but I think it was right not to bring undue pressure in that direction. In time it will come in, but it is a matter for the Government of Brunei to decide. I see that in a statement the other day the Sultan of Brunei said that he required certain assurances about external defence and internal security. That is a problem for this country; because Brunei will still be in Treaty relations and will still be a Protected State of Great Britain, and presumably Her Majesty's Government will have some responsibility for external defence and internal security. But that is a matter upon which I shall not expand at this moment. We must, however, bear in mind that we are not at this moment leaving all these problems in the hands of the new Malaysia. This is one that will remain with us.

The great question mark in this part of the world is Indonesia. In fact, President Sukarno seems to be following the example of a predecessor of his in an inland sea, Mussolini; because he has now described what used to be called the Indian Ocean as the "Indonesian Ocean". It is rather bold of him to call it the Indonesian Ocean. He is reputed to be extremely angry about Malaysia on two grounds; first, because he did not believe it would come into being and that the Governments concerned would agree to it; and, secondly, because he has to placate his Communist wing—and there are quite large numbers of Communists in Indonesia. I trust that Indonesia will not do anything foolish but will retain friendly relations with Malaysia. It would be most unfortunate if any trouble were to be caused in that part of the world. At the same time, I am quite sure that the new Malaysia cannot do other than take steps to protect themselves, in view of the sort of speeches made by President Sukarno and others.

This means that, so far as Borneo is concerned, there must be adequate forces guarding the very long frontiers, all of which go through jungles and across mountains tops. That is best done—and I am glad to see that the new Malaysia is prepared to do it—by irregular forces. The Iban and other tribes of Borneo make extremely good irregular troops, and it will be cheaper, and far more efficient, to enlist forces of this kind to contend with the long frontiers that run down the whole length of this enormous Island of Borneo.

As to the other part of Malaysia, it will have to retain light naval forces and perhaps add to them, and also an Air Force. We must remember that in Malaysia there is part of the Common- wealth Brigade Reserve, so that altogether there will be quite a satisfactory number of forces of the conventional type, though it is unfortunate that a new venture like this should have to spend an appreciable part of its income on defence when there are so many other items of development and social service on which I am sure they would rather spend the money. I think it would be highly dangerous to neglect altogether the necessity of having forces in this area of a kind adequate to secure its defence. Recently off the North of Borneo there has been a certain amount of piracy. The pirates have been coming from various places, which there is no need to name at the moment, and, though not on a large scale, they have been a bit of a pest. The best means of combating this piracy are light naval forces and aircraft to spot the pirates as they leave their lairs to prey on the traffic in the North Borneo area.

On behalf of my Party and on my own behalf, I most sincerely wish this wonderful new venture every possible success. Before I conclude, I would express my thanks and my Party's thanks to the noble Marquess for the efforts he has put in, both in South-East Asia and here, to bring this about, and also to the staff of the Colonial Office, who have worked extremely hard in this field. I hope within the next six months, God willing, that my wife and I will be making an extensive tour of the Federation and Borneo, and it will be a great joy to us to go back again to Penang, where we spent the first years of our married life over thirty years ago, and meet many old friends, both in Penang and elsewhere in the Federation. It is a lovely land, with a most interesting and remarkable people, and I am very proud to have been able to speak to-day in your Lordships' House and commend this Bill to your Lordships.

2.28 p.m.

THE LORD BISHOP OF LEICESTER

My Lords, I am quite sure that your Lordships would have wished that any words from this Bench to-day might have come from my right reverend friend the Lord Bishop of Birmingham, who has such wide experience of this area, but in his quite unavoidable absence I am afraid your Lordships will have to endure a few words from me. I feel I must apologise to the House for addressing it no fewer than three times on varied subjects about which my knowledge is also very varied.

It is a fact that Christian opinion in this country has welcomed the establishment of the Federation of Malaysia, in the belief that it will make for stability and prosperity in the area as a whole. In building up the bonds between the different races within this vast geographical area, an essential element is the building up of confidence in every part of the community, confidence that every part will be able to develop its life in freedom. The Christian community in Singapore, as in North Borneo and Sarawak, is among those groups which make a valuable contribution to the life of the community. It is therefore important that they should be able to give the Federation their full support and work wholeheartedly for its success. For this to be the case, they must not feel that there is a continual threat hanging over them concerning freedom to practise their religion, which must include the preaching of the Gospel in which they believe.

For this reason, Christian opinion both in the Borneo States and in this country has welcomed, in particular, the provision of Article 161 D of the new Constitution, which reads as follows. Notwithstanding Clause 4 of Article 11, there may be included in the Constitution of a Borneo State provision that an enactment of the State Legislature controlling or restricting the propagation of any religious doctrine or belief among persons professing the Muslim religion shall not be passed unless it is agreed to in the Legislative Assembly on second or third reading or on both by a specified majority, not being a majority greater than two thirds of the total number of members of the Assembly. That provision has already been referred to by the noble Marquess, Lord Lansdowne, and by the noble Lord, Lord Shepherd. This, however, does not cover the position in Singapore. For there the existing provisions of the Federation of Malaya will apply without any such entrenched constitutional safeguards as will be enjoyed by the Borneo States.

These provisions are essentially two. By virtue of Article 3: Islam is the religion of the Federation; but other religions may be practised in peace and harmony. In Article 11 it is laid down: Every person has the right to profess and practise his religion and, subject to Clause 4, to propagate it. It is to Clause 4 that Article 161 D refers, and it reads as follows: State law may control or restrict the propagation of any religious doctrine or belief among persons professing the Muslim religion. With such a provision everything turns on the manner in which it is implemented. It has been the implementation of it which has given rise to some difficulties for the missionary work of the Christian church in Penang and Malacca, following the passage of the Muslim Law Enactment Bills in those States. In consequence, the Council of Churches in Singapore expressed fears concerning the introduction of similar legislation in the future in Singapore. As the Christian community forms only 3 per cent. of the Singapore population, no entrenched constitutional clause could meet this case. It therefore seems all the more essential to obtain, if possible, from the Singapore Government some declaration of intent.

For this purpose the application of the British Council of Churches, led by the Bishop of Birmingham, waited upon the Prime Minister of Singapore during the recent Constitutional Conference in London. The Prime Minister was asked whether, on his return to Singapore, he would reaffirm publicly that it was the intention of his Government to pursue a policy of religious toleration, and that there was no intention of introducing legislation to control or restrict the propagation of any religious doctrine or belief; that the status quo in matters of religious liberty would be maintained, and that it would be the wish of his Government that there should be no difference in the way this was interpreted in practice between Singapore and the Borneo territories.

The Prime Minister, Mr. Lee Kuan Yew, showed full understanding of the position and undertook to make a declaration concerning this issue in the light of the representations which had been made to him. This is much to be welcomed, and although Her Majesty's Government no longer bear responsibility in these matters, I would express the hope that the United Kingdom representative in Singapore will continue to show interest and concern for these important issues of religious liberty. It will obviously be necessary to recognise beyond all possible doubt the complete independence of the country in which he is stationed. He will pay full attention, obviously, to the particular need of Muslim communities, to which wise reference was made by the noble Lord, Lord Shepherd. But it is to be hoped that as a representative of this country he would never forget what we have tried to maintain and to spread in the world in the way of religious liberty, and will believe that this is something for which all nations of the world should eventually be grateful.

2.36 p.m.

LORD MILVERTON

My Lords, I should like to begirt what I have to say in a brief intervention in this debate, by expressing my admiration to the noble Marquess for the way in which be introduced the Second Reading of this Bill. It seems to me to-day that I have had the privilege of listening to what I would consider, with my usual arrogance of judgment, to be an ideal introduction to the Second Reading of a Bill, and an ideal speech from the Opposition Front Bench, which in this case, of course, is not in opposition to but in approval of the Bill. What I mean by that is that all the facts of the situation and What led up to the Bill were so well and so lucidly explained that there was nothing more that needed to be said on that line, and the speech from the representative of the Opposition Front Bench dealt in a wide and statesmanlike manner with the problems which confronted the new nation. It was informed in this case by a wide personal knowledge of the countryside and the people of whom he was talking. That, of course, frees somebody like myself from the necessity of repeating or going over ground which has already been so well covered.

So in rising to give an unqualified support to this Bill, I hope your Lordships will forgive a certain reminiscent and nostalgic tone in my remarks. I am one of the happy band of pilgrims who knew and loved the Malay States and remember them as a country where Malays, Chinese, Indians and Europeans lived in mutual amity, and we indeed who know that country can say, Et ego in Arcadia vixi. The Malay States, federated and unfederated, the Straits Settlements and the Borneo territories from 1908 to 1933 were my second home, as the noble Lord, Lord Shepherd, has already mentioned. I served for 25 years in Malaysia, and I was married in Kuala Lumpur when I was Under-Secretary to the Government there in 1927. So with an intimate, personal knowledge of all the Malay States as well as Penang, Malacca, Singapore, North Borneo, Brunei, Sarawak and Labuan, it is difficult for me to express adequately my appreciation of the statesmanship of Tunku Abdul Rahman and Lee Kuan Yew and their colleagues in bringing about this Federation.

The basic idea, of course, as has already been said, is not new. For many of us it is a dream come true. Thirty years ago, when I was serving as Governor of North Borneo, having been lent by the Colonial Office (perhaps as the person they could best spare) to the last of the chartered companies as their Governor, I remember an attempt we made to effect a union with Malaya, which ultimately failed because it did not win the approval of London. It was premature and it left out Sarawak, which, at that time, was an anachronism under the Brooke family next door to an anomaly under the chartered company with me as its Governor. In those days we dreamed of a greater Malaya, such as this Federation envisages, which would develop to the benefit of all its constituent parts and work in amity with its great neighbour, now the Republic of Indonesia. That would have been a largely Moslem bloc linking South-East Asia with the Pacific. Of course, we did not foresee at that time the problems which would overshadow that sort of dream.

I had a geographical vision of Malaya and Indonesia in the shape of a rather outstretched hand linking South-East Asia with the Pacific. I happen to know the area at both ends very well because I was, at a later period, the Governor of Fiji and High Commissioner for the Western Pacific, where one looks north towards the Solomon Islands and the Gilbert and Ellice Islands up to Malaya, and east across the Pacific even to Pitcairn; and one was in charge of the islands scattered over 2 million square miles of sea, all of which have a kind of human sympathy with the people of Malaya. In the dim and distant future perhaps that, not so much a Federation as a mutual agreement will stretch even as widely as that. But events have moved in a different direction and one may still hope that the Indonesian Government of to-day will modify its rather hostile suspicions and recognise the benefits which will accrue to Bornean territories.

I am familiar, too, with the basis of the Philippine claim to North Borneo territory, based on an old nebulous claim of the Sultan of Sulu to a somewhat piratical hegemony which he and his predecessors claim to exercise, although the claim had very little substance in reality. But I do not wish to detain your Lordships with these memories. I am convinced that the linking of North Borneo and Sarawak with Malaya will be of great economic benefit to all the people of those two countries and, in modern circumstances, will give cooperative security against Communist advance. It will also render possible a comprehensive development plan for the Bornean States and will afford a guarantee against infectious influences front Communist sources in neighbouring countries.

It is a matter of deep regret, of course, that the Sultan of Brunei has been unable to associate his country at present with the Federation, but I am also confident that the early future and the natural tendency of his geographical position will bring Brunei into the Federation on terms which, I am sure, will ultimately satisfy His Highness and his people. The union of Singapore with the Federation of Malaya was, and is, obviously beneficial as a step for both countries, politically and economically. Singapore in days gone by always was part of the same country, and politically and economically their trade is so interlocked that the need of unified financial planning and economical operation is too obvious to need any stressing by me. It is interesting to note that the World Bank is already recommending and ready to support a scheme for the creation of a common market for the Federation of Malaysia, a scheme which would reconcile the interests of the entrepôt trade of the great free port of Singapore with the agricultural and mining and growing industrial economy of the Malay States.

So, my Lords, the foundation of this new State will carry our warmest good wishes. There are two Malay proverbs which occur to me in this connection and which may perhaps appeal to the noble Lord, Lord Shepherd, if not to others of your Lordships. The first of them is: "Tali yang banyak lembar-nya ta'senang putus", which being translated means: A rope of many strands is not easily broken". The other one, which the Malays are doubtless applying to this situation is: Kalau pokok banyak akar-nya, lagi tegoh, apa di-Takutkan ribut", which also being translated means: If a tree has roots, many and firm, it need not fear a tempest. In conclusion, those of us who know the countries of Malaysia so well may echo the sentiment behind Kipling's famous words about India: I have eaten your bread and salt, I have drunk your water and wine, The deaths ye died I have watched beside, And the lives that ye led were mine. Was there aught that I did not share In vigil or toil or ease, One joy or woe that I did not know, Dear hearts across the seas? My Lords, we give our most hearty support to the Second Reading of this Bill.

2.48 p.m.

LORD TWINING

My Lords, I propose to confine myself to some remarks on North Borneo, where I had the honour to serve as the first Governor appointed by the Crown when it became a Crown Colony in 1946. Although I know that numbers of your Lordships are familiar with the affairs of that territory and several have visited it in recent years, it is a subject which has been neglected in your Lordships' House. I have done some research in Hansard, and between 1946 and 1961, when the first mention of the idea of a Federation of Malaysia was made, I have been able to find only two references to North Borneo. One was in 1951 in connection with a project of the C.D.C., and the other in 1958 when it was mentioned that his Royal Highness the Duke of Edinburgh would be visiting the Colony. The reason for this apparent neglect was probably that the affairs of the Colony were going smoothly and that the reconstruction and development plans were proceeding satisfactorily. If your Lordships will be good enough to forbear with me I should like to say something about this delightful country, and I hope my remarks may facilitate the appraisal of our responsibility towards the people of North Borneo.

From 1882 to 1942 the country was administered by the British North Borneo Chartered Company, having been ceded by the Sultans of Brunei and Sulu. I should like to pay tribute to the work done by the Chartered Company. Its resources were slender, but it did a great deal to develop the country and to provide it with a good administration. The officers of the company were recruited quite differently from those of the Colonial Service, but they managed to build up a fine esprit de corps, and, to their great credit, they gained the trust and affection of the people. In my experience, I have not found anywhere such good race relations as existed there. The policy was not multi-racial but non-racial, and though the staff was thin on the ground—Parkinson's law was not applicable to North Borneo at that time—they gave most devoted service, and many of them elected to stay on when the administration was transferred to the Colonial Office in 1946. They have made a considerable contribution to the recovery of the country since the war, especially by providing continuity to the good human relations which have been such a source of strength in the history of our administration there.

In 1942, when we were in no position to defend it, North Borneo was occupied by the Japanese. The territory was surrendered without a shot being fired. The European officials, traders and missionaries were interned and suffered great hardship. The native population, although dismayed, accepted the position as best they could, and many of them showed great courage in doing what they could to alleviate the conditions of their former masters. The Japanese administration was most rigorous and severe, and as time went on the position of the people became almost intolerable. In 1944, the occupying forces administered a devastating blow by the mass execution of all the intelligentsia on whom they could lay their hands. Several thousands perished.

In 1945 the tide of the fortunes of war turned and the. Japanese occupying forces came under strong Allied attacks. It was considered necessary to subject the important centres to aerial bombardment and the towns were completely destroyed and communications disrupted. Allied forces were landed, and after hard fighting the country was liberated. I have always felt that the fact that the enemy was physically defeated on the ground had a great psychological effect on the people, which was manifested in their subsequent attitude towards us. The people gave their liberators a great welcome. They accepted the change to Crown Colony status, and, despite the pitiable conditions—the majority were without housing, clothing or personal possessions, and money and even foodstuffs were in short supply—they got down to the restoration of their country with determination and a splendid spirit. Their trust in the British was unbounded, and this made the task of the Administration, which was of great magnitude, much the lighter.

In the immediate post-war period North Borneo, like the whole of South-East Asia, was saved from famine by the organisation of the Special Commissioner for South-East Asia, under the noble Lord, Lord Killearn, who ensured that each territory in the area received a fair share of the limited supplies of rice and other primary foodstuffs which were available. The gratitude of the people of North Borneo was unmistakable.

The task of the British Administration was indeed formidable. We literally had to start from scratch. Everything was in short supply—money, materials and technical staff. The damage that had to be made good was valued at many millions of pounds. Despite the strongest representations and the sympathetic attitude of the Colonial Office, the funds that the British Government provided for rehabilitation were quite inadequate and at the time I thought ungenerous. True, the situation in the United Kingdom was difficult; but we had been responsible for the devastation and we were also responsible for the welfare of the people. But there was no complaint; only a realisation that Great Britain, despite its own enormous problems, was doing what it could. Unlike an attitude which I have found in some other places where financial assistance has sometimes been regarded, if not as a right, at least as fortuitous—in one place I was in it was known as "pennies from heaven", an attitude that tended to soften the moral fibre of the people—the population of North Borneo set to work with a will and toiled hard, whether at rebuilding or at cultivation. They lived thriftily and used their savings to re-establish their homes.

We had the pleasure of a visit from the noble Earl, Lord Listowel, who was Minister of State for the Colonies. He may remember inquiring from me whether we had been able to establish a 48-hour week. I had to reply that many people, especially the Chinese, seemed to be working a 148-hour week and no power on earth could stop them. The results were staggering and the country rapidly made a wonderful recovery. It was an outstanding example of what self-help can do.

I have tried to give a brief survey of the story of North Borneo in recent times, so that your Lordships may appreciate the great qualities of the people who inhabit it. In their eyes, at least, the British Administration has discharged its responsibilities to their satisfaction. It is against this background that we must consider the proposal for including North Borneo in the Federation of Malaysia. The total area of North Borneo is some 30,000 square miles, or about the size of Ireland. It is a mountainous country, and over 23,000 square miles, or 80 per cent. of the land area, is covered with forests, of which about 10,000 square miles is known to be productive or potentially productive. Some 200 miles of the southern border is contiguous with the Kalimantan, the former Dutch Borneo, which is now part of the Republic of Indonesia. The nature of the terrain along this border is very broken, and the fact that there is a deep belt of impenetrable forest makes communications by land between the two territories very difficult—in fact, limited to a few jungle tracks.

To the north and east there is an archipelago which is part of the Philippines. Many of the islands are scarcely administered, which makes the North Borneo seas susceptible to piracy which even to-day is endemic, and, despite the assistance given by the Royal Navy, is difficult to deal with. Except in the West, the hinterland is populated only in a series of enclaves served by seven ports. The population is only 450,000, or 16 to the square mile, and of these some 300,000 can be described as indigenous people—the Dusans, the Bajaos and the Muruts. There are about 105,000 Chinese and 45,000 others, including 2,000 Europeans.

The paucity of population has been an important factor in restricting the pace of economic development. In the days of the Chartered Company the immigration of Chinese was encouraged, and certainly these immigrants have played a big part in the economy of the country and have settled down as good citizens. There has been constant pressure on the Government to encourage immigration from other places, such as Timor. Owing to the shortage of skilled labour an agreement has been made with the Hong Kong Government to permit the recruitment of skilled men, who are allowed to settle in North Borneo with their families. The indigenous people are very concerned about the immigration of workers on a large scale, and fear that if it is allowed to continue they will be left as a minority among foreigners. It is a matter on which they want assurances and safeguards.

Economically, the country is potentially rich and the exports are running at about £30 million per annum, or some £60 per head of the population. The principal exports are timber, rubber, copra and hemp; and in recent years the Commonwealth Development Corporation have been playing a useful part in the development of export crops. But the economy is capable of diversification, and the list of exports contains a unique and fascinating number of exotic items which is characteristic of a country which has been called by the romantic name of "the Land Below the Wind". Among these we find the outer wrapper leaf of the cigar; cutch—which is an extract used for tanning, the preservation of fishing nets, the coloration of whisky and beer and as an ingredient of lung tonic. Then there are birds' nests and sharks' fins which are delectable items in the Chinese cuisine. We also find dragon's blood (whose trade name is damar) rhino horns, armadillo scales and, most bizarre of all, the gall stones of honey bears. The noble Lord, Lora Ogmore, suggested that we might take more of the products from Malaysia. Perhaps we might try to sample some of these. I have mentioned these, although they may be oddities, not only because they make a valuable contribution to the livelihood of many people, but because I think they are characteristic of the way of life in North Borneo.

Although taxation is not unduly burdensome, the budget is regularly in balance at round about £8 million per annum, and 25 per cent. of the revenue is devoted to the capital development plan. The indigenous population naturally fear that if they are under control from the mainland the potential wealth will be exploited by outsiders and that they will be subjected to higher taxation.

Finally, I must refer to the political aspect of the proposed Federation. Until recently there has been little or no political activity. When North Borneo became a Crown Colony it was the policy of Government to take all possible steps to associate the people more closely with the affairs of Government. Marked progress has been made with the development of local government institutions, but the progress at the centre has been slower. To-day there is a Legislature with eight officials and ten unofficial members, but there are no elections. This may seem to be rather old-fashioned, but it must be remembered that at the end of the war practically the whole of the educated class had been annihilated, all the school buildings had been destroyed, and most of the school teachers had been murdered. A new start had to be made and progress was inevitably slow. Even to-day there are under 4,500 boys and girls in secondary schools. Moreover, the people were so preoccupied in the work of rehabilitation that they had little time or inclination to devote to public affairs. They were content to leave this to the administration. But things are changing and the pace is quickening. The proposal for the inclusion of the country in the Federation of Malaysia not only aroused interest and concern but stimulated political activity.

These proposals, as we have heard, are not altogether new. I recollect that even in 1947 consideration was given as to what steps could be taken to bring the three Borneo territories into closer association with Singapore and Malaya, with which they already had special relationships. There had, in fact, always been close links with the mainland territories under British administration. Labuan, for instance, which was incorporated in North Borneo in 1947, had been a depen dency of Malaya before the war. When, in May, 1961, Tunku Abdul Rahman, the Prime Minister of Malaya, publicly put forward a proposal for a Federation of Malayasia to include the Borneo territories, the initial reaction was one of shock tempered with suspicion and anxiety.

In these days when we are acceding to popular demands for granting our colonies independence, Her Majesty's Government must have found themselves in a dilemma with regard to the Borneo territories, because the normal democratic ways of ascertaining the views of the population were not available. The fact that there were no elections made it difficult to appraise the true feelings of the people. It was for this reason that Her Majesty's Government appointed the Commission under the chairmanship of the noble Lord, Lord Cobbold, to ascertain the views of the people of North Borneo and Sarawak on this question and, in the light of that assessment, to make recommendations. This was a somewhat unusual method to employ, but probably the best in the circumstances. The assessment of the Commission was that about two-thirds of the population were either strongly in favour of the proposal or, at least, not against it, provided that there were adequate safeguards.

Despite some doubts, I find myself able to support the conclusions of the Cobbold Commission. I am convinced that the idea of a Federation of Greater Malaya is ultimately the right one, but it is a question of timing. The majority of the people would have preferred to see this step deferred for a period of ten years or so; but if we let this opportunity go by default, it might not recur. It is therefore expedient that we should abdicate our responsibilities now. I am convinced that, in the long run, it will be in the best interests of the people of North Borneo. It has been made clear to the people that they cannot continue to be under British rule for ever, and I believe that they are willing to accept our advice that this proposal will be beneficial for their future welfare.

The agreement between Her Majesty's Government and the Governments of the component parts of the proposed Federation has been most carefully drafted, and includes reasonable safeguards. I have already mentioned that the people have certain fears, especially about the danger of being swamped with immigrants and exploited by outsiders. They also have anxieties about religion, about which we have heard. Nearly one-third of the people of North Borneo practise the Moslem faith, while some 17 per cent. are Christians. The remainder are either pagans or the followers of other religions. Under British rule, they have enjoyed religious freedom, and they naturally want this to continue. In supporting the policy of Her Majesty's Government, I should like to express my best wishes to the people of Sabah, as the new State of North Borneo is to be called, for whom I have a sincere and lasting regard. I am sure that, with their great qualities and good sense, they can make a great success of their future.

3.7 p.m.

LORD GRANTCHESTER

My Lords, like my noble friend Lord Ogmore I would say a word of welcome to the rulers and people of the new Federation of Malaysia, and congratulate Her Majesty's Government, and particularly the noble Marquess, Lord Lansdowne, and the noble Lord, Lord Cobbold, on the completion of a task which has been no easy one. The new Federation brings together peoples whose homes are in a wide and scattered region, and, as we have heard, peoples of varied racial origin and religions. Federations are notoriously difficult to work. Above all, the Government of a Federation is called upon to exercise restraint and to show tolerance to its constituent parts. I should like to join in wishing the new Federation well, and a long and happy existence. Although I regret that I have not yet been able to visit this area, I have very much enjoyed the company and, I believe, the confidence, of many of its representatives and students. With them, I have taken an interest in following the developments which have led to this Bill.

I have only one regret, and it is upon this that I wish to say a few words which I hope all concerned may find helpful. It is a regret which, as the noble Marquess, Lord Lansdowne, has said, is shared by Her Majesty's Government: that the Sultan of Brunei has not found it possible to join the Federation. Some two years ago the Sultan flattered me by wishing to know my opinion of the proposals which were then coming under discussion. I listened to the understandable fears of the many students who were in this country, and who were looking forward, as soon as they became qualified, to taking up positions of responsibility in their home State. They felt that developments were coming too fast for them, and hoped, as they told me, that we, the British, would not abandon them before they had more locally-born trained administrators to take over. Although I did not feel competent to offer advice (because I had not studied the problems on the spot) I said that it seemed to me that Brunei would be well advised to join an area Federation, provided they secured the necessary safeguards so that the wishes of the Brunei community were respected.

In some ways Brunei is a lucky community. It has a small population, and during the last ten years has enjoyed a large income derived from the development of its natural resources. These, however, are not inexhaustible and certainly cannot be counted upon to last for ever. Diversification is almost nonexistent.

I have had the opportunity of some long and frank discussions with His Highness since he decided, with the support and advice of the Brunei delegation, that he was unable to join the Federation. The Sultan in these talks with me paid tribute—and I believe all noble Lords will appreciate the spontaneous expression of his feeling—to the understanding that successive British Governments have shown to the people of Brunei during the protectorate. He also paid tribute to the patience and fairness which, he told me, the noble Marquess had shown during the negotiations.

It was, I think, in 1959 that His Highness made over to his people the considerable personal revenue he had enjoyed, reserving for himself and his wife only a modest allowance. In 1961, when federation was first mooted, Her Majesty's Government, were aware, I think, that the people of Brunei were rather reserved in their attitude, and that it would not be possible for Brunei to join the Federation unless the Sultan could assure his people that they would be fully safeguarded. At that time His Highness believed that it would be possible to do this. I feel that a visit and study by the noble Lord, Lord Cobbold, when he went to Malaya, would have been useful and helpful, and I believe that the failure of Brunei to invite him and his colleagues was a great pity.

His Highness is anxious that the reasons for the decision of Brunei not to join the Federation at present should be fully understood. I feel that I cannot do better than refer to the statement issued by the Brunei delegation announcing their decision on July 8 last; and, with your Lordships' permission, I will read the relevant short paragraphs. The statement says: To-day the Government of the Federation of Malaya have informed the Brunei delegation that they now find themselves in a position where they are unable to give effect to terms previously agreed or to assurances repeatedly given. In these circumstances, His Highness and his Government are left in doubt of the ability of the Government of the Federation of Malaya at the present time to give effect to the negotiated terms governing the entry of Brunei into Malaysia. They are unable, therefore, to take part in the signing of the Malaysian agreements. Reading between the lines of this statement, it is obvious that an unfortunate lack of confidence had crept into the minds of the Brunei delegation. Confidence is as important as a Constitution, for suspicion can wreck the mutual respect which is necessary between those who are to work together.

While I was trying to understand what went wrong, His Highness invited me to study a number of documents. I do not think that it would help the cause of Brunei, or of the new Federation, to say more about these documents than that I satisfied myself that they contained a number of suggestions and statements which, however well-intentioned, were capable of being misunderstood, and that they were, in fact, misunderstood in Brunei. Unfortunately, such things happen.

It is possible that if Her Majesty's Government had used their protecting powers to hold the hands of the Brunei delegation more firmly, misunderstandings which started at an early stage of the talks might have been removed as they arose; but it cannot be held against Her Majesty's Government that they wished the Brunei to make their own decision without influence, which, had it been exercised, might itself have provoked misunderstanding. So, for the moment, I would prefer to leave it at that, as the decision has already been announced by the Sultan in Brunei—a decision which, as Her Majesty's Government will know from the High Commissioner, was received there with enthusiasm, rather than with regret.

I am sure that Her Majesty's Government will give every sympathy and assistance to His Highness when he comes to present his plans (I believe next week) for constitutional progress in Brunei. The working of our relationship in the light of the coming into being of the new Federation will also need to be reviewed at this meeting. We may hope, I think, that after a period of friendly co-operation between Brunei and the Federation the representatives of Brunei may be ready to reopen discussions with new confidence and conviction of benefit both to the Federation and to Brunei. After all, the advantages to Malaysia would be considerable. A yearly contribution of 40 million dollars to the Federation was agreed. Brunei has already invested in Malayan developments, and could do much more under proper safeguards. Malaya is short of money for development and is at this moment, as we have heard, raising £5 million on the London market. I fear that the failure to attract Brunei into the Federation will involve a heavier financial burden upon this country than would otherwise have been necessary. As one or two noble Lords have already mentioned, a report on the financial position in the Federation was recently made by M. Jacques Rueff, at the request of the World Bank. I have not been able to obtain a copy of this report here, and I wonder whether a copy could be made available to us in this House.

In concluding, may I say that I am sure that Her Majesty's Government will give every assistance possible, both to Malaysia and to Brunei? The Sultan told me that it was his wish that relations between Brunei and the new Federation should develop in the most friendly way. I am sure that the Government of the new Federation will respond in the same spirit and that there will soon develop an atmosphere of confidence and respect which will bring Brunei, at no distant date, into the Federation.

3.20 p.m.

LORD SHACKLETON

My Lords, I think there is little more to say. The unanimity in this debate has been most striking and, indeed, the intensity of feeling of all your Lordships who are familiar with these territories has, I think, been rather moving. I was very moved by the speech of my noble friend Lord Shepherd but it has been matched by others of your Lordships, and I am surprised that we had to wait until the speech of the noble Lord, Lord Milverton, for some noble Lord to break into Malay. It is obvious that rather more than half of your Lordships who have taken part in this debate would have been able to conduct it into Malay. Unfortunately, the only Malay I can remember is the word tid 'apa, which means "never mind". It is a fact that this is a part of the world in which many people of our race have lived and for which they have a deep affection.

My first night in Singapore was actually spent in gaol; it was my 21st birthday. But this did not dim my affection for the country, and I have remained closely in contact with some of my friends there, and particularly in Sarawak. There has been a spokesman for each one of the territories—in fact, British North Borneo has had two. It was certainly the view of those of us who spent a considerable time in Sarawak that this was the incomparable territory. Without wishing to go back over the interesting historical survey of the noble Lord, Lord Twining, it is a fact that the rule of the white Rajahs was a disinterested one, in which there was a maximum degree of protection for the people, and I think Europeans in most areas were not allowed more than four miles inland. I used to think that the best two territories—perhaps I am prejudiced by the fact that I happened to visit both—were Sarawak and Greenland. And in Greenland the Danes would not allow any Europeans in at all. But perhaps I should keep to the more equatorial climates.

I remember standing—it was one of the most remarkable moments of my life—after the first assent of the highest mountain in Sarawak, looking across those cloud-capped mountains and having a feeling of wonder—indeed, almost a mystical experience; I wondered what would happen to those territories and those people. Although many of the people in Sarawak—and I am sure this is true of British North Borneo—would be described as primitive and pagan, this does not mean in any way that they are in the slightest degree inferior to their more civilised Malaysian compatriots. Although they are not Malay, they are a delightful and, I would say, civilised race.

There are many anecdotes for those who have been up river and visited long-houses, with which perhaps it would be inappropriate to waste your Lordships' time. But the excellence of the relationship—and this is not, I believe, a sentimental view—between the European officer and the people of those countries was most striking: the really close affection and understanding the ability to cross any race or hierarchical distinction. There is no doubt that it is a part of the world in which it will be easier to build a multi-racial society; and, indeed, it is to a large extent already a multi-racial society.

Before the war, in the days when Somerset Maugham was writing about Malaya, I remember how people used to grumble on one occasion that he told lies, and equally how they grumbled because he told the truth. It was difficult to establish which was the really objectionable side of him. Many of my friends and, indeed, relations, have come back from Malaya with an attitude which seemed to me to have changed out of all recognition. I was not hopeful, immediately after the war, about the future of Malaysia. I had not perhaps the hope and enthusiasm that the noble Lord, Lord Milverton, had in those years. One saw little chance of the creation of a real political modern State. One was confronted with Communist revolt in the jungles of Malaya, and yet we are now looking at one of the most encouraging developments in the modern world.

In the last two debates on foreign affairs, I have urged Her Majesty's Government to put their maximum effort into achieving success. Although I am sure it was not as a result of my urging that that they have done it, there is little doubt that this was one area where it was worth making every effort to achieve a solution. There is no need for me to repeat the congratulations, both to Her Majesty's Government and in particular to the noble Marquess, as well as to those statesmen in Malaya and Singapore. This has been adequately done by those of your Lordships who know Lee Kuan Yew and the Tunku, and who are much more familiar with them than I am.

I think there has been an act of courage also by some of the people in Borneo. Singapore and the Malay States are foreign territories to them. Many of them are not Malay people at all. Those splendid people—and I really mean "splendid"; it is not just a sentimental thing—those admirable people who live rather more in the interior, would prefer, undoubtedly, to have gone on being ruled by the British. I have said before in this House that it is a great pity that the whole world does not consent to be ruled by the British. We have to accept that it does not, and to believe otherwise is a mistake that we made in certain parts of Africa. It is rather annoying that we should have to leave the one territory where the people would like us to go on. I wrote to a friend of mine with whom I was in Brunei many years ago, and he wrote a rather guarded reply. I wrote back and said, "I take it from this that you are in favour of Malaysia". I had a postcard back saying, "I hate the idea, but what else is there to do?". I think we take a more optimistic view of it.

I believe there is absolutely no question that this is the right policy for these territories. I am only regretful that Brunei has not joined in. I can see possible trouble lying at that direction, and I am wondering whether the noble Marquess could answer some of the points of the noble Lord, Lord Grantchester. If there has been suspicion or misunderstanding, that, of course, happens in all negotiations, and one had rather got the impression that the breach took place in respect of certain arrangements over oil revenues. The situation has not been too happy there. We have recently had the Kadyan rebellion, which affected a relatively small group of the population but clearly people who felt very strongly. I think it is dangerous that the Brunei situation should continue too long. Whereas one would be reluctant to see us twisting the arm of the Sultan too hard, it may be that there should be some extra pressure to indicate, as the noble Marquess put so gently, that it would be in his own interests or in the interests of his people—and I think it would be in his interests also—that they should join this Federation.

I think it was either the noble Lord, Lord Milverton, or the noble Lord, Lord Twining, who said that it was a pity we could not have waited another ten years, but agreed, as we all must agree (and he made this clear) that this was the time to do it. It really is just in time, for I do not like to think what might have happened in regard to this situation, even if we were only another year behind, because of the unexpected reaction of Dr. Sukarno. When I say "unexpected", I mean because it changes. On the last occasion I had to speak on foreign affairs I was congratulating Indonesia on coming into a more moderate phase, and recently we have found ourselves back in what has been called, and rightly called, a neo-colonialism. It is depressing, the way, when countries get their independence, they always want to grab somebody else's territory. Even the Argentine and Chile want part of the Antarctic. This is something, I suppose, that the ex-imperial powers, who have got this bug out of their system, find rather difficult to understand; but although we may have been allowed to get away with it—and I am not making any moral claims in regard to this matter—clearly, Malaysia must be independent and it must be made abundantly clear that she will have support.

I hope, too, that the idea of a wider Federation of the whole South-East Asia territories will not be abandoned. Now may not be the best time, but there is little doubt that if it could be achieved it would be to the great benefit of the peoples there. They could then trade freely with one another, be able to build their countries up, and, possibly, even overcome the anxieties of those peoples of areas which are under-populated and get them to accept more population. But one can appreciate that while there is this suspicion around it will be very much more difficult to achieve. Therefore, I add my words of congratulation and of good wishes to the new Federation of Malaysia, and say that I am sure all your Lordships who have taken part in this debate will continue to watch and, if necessary, prod the Government to give such further help as may be necessary.

3.33 p.m.

THE MARQUESS OF LANSDOWNE

My Lords, I should like to thank all the noble Lords who have taken part in this debate for the way in which they have received this Bill. In particular, I should like to refer to the speeches of the noble Lords, Lord Shepherd and Lord Shackleton, both of whom spoke with knowledge of the area, the noble Lord, Lord Shepherd, I think, in particular. I should like to pick up one of the observations made by the noble Lord, Lord Shackleton. That is, although perhaps some might have wished that the creation of this Federation of Malaysia could have been deferred for, say, ten years, he in his belief thinks it may be that Malaysia has only just been created in time.

In this debate many noble Lords have been good enough to pay tribute to me for such part as I have been able to play in this, and I assure noble Lords that I am deeply appreciative of this. I should like myself to add my tribute to some of the principal architects of this Malaysia who have been mentioned by noble Lords in the course of this debate. I should like to pay my tribute to Tunku Abdul Rahman, a very remarkable statesman with a particular touch of genius which has enabled him to help bring this idea—an idea which has been in many people's minds for many years—into reality.

I would also pay my tribute to my friend and my associate, his Deputy Prime Minister, Tun Abdul Razak, who throughout the time we have worked together—and it has now been nearly a year—has been consistently fair, co-operative and helpful; it was in very large measure due to his statesmanlike approach that it was possible to reach agreement in the Inter-Governmental Committee which was concerned with the affairs of North Borneo and Sarawak. I would also pay my tribute to another very remarkable man, the Prime Minister of Singapore, Lee Kuan Yew, and also to the two Finance Ministers, the Finance Minister of the Federation of Malaya, whom I know very well, Tan Sien Sin, and another friend, Doctor Goh Keng Swee, the Finance Minister of Singapore.

In referring to these gentlemen I might perhaps be allowed to say two or three words about the common market. I referred to the common market in my opening remarks. As your Lordships, I think, are aware, the Governments of Malaya and Singapore have agreed in principle to the creation of a common market which would extend to the whole of Malaysia, and this idea has been accepted by North Borneo and Sarawak. Indeed, one of the reasons for the difficulties which we encountered over the financial arrangements which we were discussing in London was exactly how the common market could be worked out, how the entrepôt trade of Singapore could be safeguarded, and, of course, very important, how the small traders in Singapore, who in fact are trading in what amounts to a low-tariff area rather than in a free port, could be taken care of. These were very difficult and complicated questions which had to be gone into in great detail. This is not news to your Lordships, and really it was this problem which made the negotiations in London rather slow and perhaps go on rather longer than some had expected.

However, I am happy to be able to inform your Lordships that satisfactory agreement was reached. Great patience was shown on all sides, and I am convinced that the bringing into effect of this common market—which will of course not happen at once; it will take a period of years to develop—will be to the great benefit of all peoples of Malaysia. So this was a great step forward, and I think all of us should perhaps pay our tribute to the World Bank, and to M. Rueff in particular, who was the author of the report which dealt with this question of the common market for Malaysia.

In this debate have spoken noble Lords with intimate knowledge and clearly great affection for this part of the world. I have not had the benefit of knowing this area so long or so well as many of the noble Lords who have spoken, but since August of last year I have visited this area no fewer than five times and I have travelled something over 90,000 miles. I have had the benefit of close personal relationships with people in North Borneo and Sarawak and throughout the territory of Malaya and in Singapore.

Like noble Lords who have spoken—the noble Lords, Lord Milverton, Lord Twining, Lord Shepherd, Lord Shackleton and Lord Ogmore—and many of the other noble Lords who know this part of the world, I have found myself becoming increasingly attached to the people who live in these countries. It has been said with great truth that the peoples in North Borneo and Sarawak have a deep affection and respect for the British people. This I found again and again, and I may tell your Lordships that of course that feeling is mutual.

Tribute has been paid already, but I should like here particularly to pay my own tribute to the present Governors of North Borneo and of Sarawak, both men who have followed in the tradition of noble Lords who have spoken in this House, and to the British expatriate officers. I think I must have met practically all of them, and I tried to have personal conversations with as many of them as possible. I think it is perhaps unnecessary to say this, but I should like to put on record that those officers, like others who serve this country overseas, as has been said in the course of this debate, have two homes—they have their home here and they have their home in the country which they serve. Their concern throughout all these negotiations has been that nothing should be done which was against the interests of the people of North Borneo and Sarawak. This has been their one consideration throughout all these negotiations, and this is something which all the people of North Borneo and Sarawak fully realise.

I think that one can say with absolute justice that the safeguards to which the noble Lord, Lord Cobbold, referred as being necessary for the people of North Borneo and Sarawak have, in fact, been achieved, and I believe that one can look forward to real happiness for these people living in this greater brotherhood of nations and, who knows!, as somebody said, this association may become greater yet—one cannot tell. I should like to say how much I regret that the Lord Bishop of Birmingham was unable to be in your Lordships' House this afternoon. However, we were most interested in the contribution of the right reverend Prelate the Lord Bishop of Leicester and grateful for what he was able to tell us. There is, of course, complete freedom of worship and of propagation of religion in North Borneo and Sarawak. I was greatly pleased to hear from the right reverend Prelate that in the discussions that were held with the Prime Minister religious toleration in Singapore is going to be the order of the day.

The noble Lords, Lord Ogmore and Lord Shepherd both referred to the recent loan which was floated in London and which, within less than a minute, was oversubscribed. I think that this is a clear indication of the idea that the financial world has of the prospects of Malaysia. Had these countries not come together, their ability to raise funds in the open market would certainly have been nothing like so great. So I think we can hope that not only aid that we are able to give from this country will come to them, but also that they will attract aid from other sources, and so their rate of development will be considerably increased.

The noble Lord, Lord Grantchester, spoke in particular about Brunei. The noble Lord, Lord Shackleton, wondered whether I might be able to answer, or perhaps refer in some way to, some of the observations made by the noble Lord, Lord Grantchester. I do not this afternoon propose to try to enter into the rights and the wrongs or what may have transpired between the Federation of Malaya and the Sultan of Brunei but, as I said in my opening speech, it was a disappointment to us all that the Sultan and his advisers felt that they were unable to go into this Federation of Malaysia. The exact reasons for not doing so are not entirely clear, although it may be that there was a degree of misunderstanding over something which, to us, may not appear important, but to which I understand His Highness, and perhaps his people in Brunei also, attached great importance. This was the question of precedence.

There was, I believe, a degree of misunderstanding over this. I do not think there was any misunderstanding at all over the question of oil. I myself hope that in the fullness of time—and I hope that it will be sooner rather than later—the Sultan and his advisers will see that the path of wisdom lies in going into Malaysia. As your Lordships know, the Sultan is at present in London. It is not for Her Majesty's Government to exercise pressure on the Sultan of Brunei, but we can try to explain to him where we believe his best interests lie; and this, of course, we shall do.

There was one point I think that I must correct, and I do it with great diffidence, speaking to an ex-Governor. I think the noble Lord, Lord Twining, was quoting from some publication of last year, because the present legislative arrangements in North Borneo are not as the noble Lord described. They have taken quite a considerable step forward. I will not weary the House with the details, but I thought that I should just correct the noble Lord, and if he cares to have the exact position now I shall be only too pleased to give him a note of it afterwards. I think we may be on the brink of something which will help to bring peace and security and prosperity into a part of the world which is liable to be unstable.

Reference has been made to Indonesia, and of course there is nothing in this idea of Malaysia which is in any way antagonistic to Indonesia. There is no reason whatsoever why Malaysia and Indonesia should not live in amity, side by side. There is no reason whatsoever why they should not find common interests, because, indeed, they have many. And it would be in the interests both of Indonesia and of Malaysia if the present rulers of Indonesia would realise that there is nothing in Malaysia of which they need be afraid. I do not wish to speak about the Sulu claim which has been referred to. This is an immensely complicated legal conundrum. I myself do not believe that this is a matter that is in any way insuperable or insoluble.

I believe that we are now on the brink of something great, and I know that all your Lordships in this House would like to join with me in giving our good wishes to all those who will go to make up a united people of Malaysia—a people who, if ever there were, are multi-racial. I have never in my travels been to any part of the world where multi-racialism was more a reality. In this, of course, there is great hope for a happy people, an industrious people, a friendly people, a people who deserve all the good that they have around them and all the prosperity which I believe Malaysia will give them.

On Question, Bill read 2^a: Committee negatived.

Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 23), Bill read 3^a, and passed.